Blyth & Anor v Nelsons Solicitors Ltd

An appellate court should interfere with factual findings based on oral evidence only in rare cases, such as where there was no supporting evidence, the evidence was misunderstood, or no reasonable judge could have reached the conclusion. The terms of an oral contract are ordinarily a question of fact. Evidence of the parties’ subjective understanding and subsequent conduct may assist in deciding what was agreed. Contractual construction rules do not apply to a document which merely evidences an alleged oral agreement. Estoppel requires the relevant representation, assumption or promise, reliance and other essential elements to be established on the evidence. The appeal was dismissed because the Costs Master was entitled to find that no binding costs cap had been agreed and that no estoppel arose.

The claimants retained the defendant solicitors in contentious probate litigation under a conditional fee agreement. They alleged that an oral agreement made on 16 June 2014, confirmed by email on 5 August 2014, capped their liability at the sums in the costs budget. They alternatively relied on estoppel.

Master Whalan rejected those arguments, but found that at a mediation on 2 March 2015 the parties agreed a maximum liability of £400,000, inclusive of success fee and VAT, plus disbursements, subject to detailed assessment rights. The claimants appealed the findings on contract and estoppel, and sought permission on a further ground concerning the 2015 agreement.

The appeal was dismissed. Permission to appeal on the remaining ground was refused.

1. Appellate approach to facts. The Master had heard and assessed the witnesses and documentary evidence. The appellate court could interfere only in the rare circumstances identified in Re B (A Child) [2013] UKSC 33, including absence of evidence, misunderstanding of evidence, or a conclusion no reasonable judge could reach. The same approach applied to the evaluative assessment of the evidence.
2. Alleged oral costs agreement. The email of 5 August 2014 was evidence of an alleged oral agreement, not part of the contract. The Master was entitled, and required, to consider the surrounding evidence and Mr Roberts’ subjective intention when deciding what, if any, oral agreement had been made. The principles of construction for a written contract therefore did not govern the email. The Master was entitled to find that the parties’ confusion about the relevant budget, the contemporaneous records and the wider communications did not establish a binding cap.
3. The alternative finding that the alleged assurance lacked sufficient offer, acceptance and certainty did not arise for decision because the primary factual finding was upheld.
4. Estoppel. The Master had correctly considered estoppel by convention and promissory estoppel separately. The evidence did not establish a sufficiently clear or unambiguous representation, a common assumption, or sufficiently clear reliance. The challenge to those findings therefore failed.
5. The 2015 agreement had been construed by the Master as a cap rather than a fixed compromise, subject to detailed assessment rights. The claimants’ counsel had accepted below that misrepresentation and undue influence need only be addressed if the agreement were a fixed-fee compromise. Ground 4 therefore could not proceed.

The court observed that the subsequent costs incurred in pursuing the appeal were unfortunate, given the relatively limited difference between the earlier budget and the agreed cap.

• High Court (Queen’s Bench Division): Master Whalan’s judgment in the Senior Courts Costs Office dated 13 June 2018 determined the preliminary issues. Mr Justice Stewart dismissed the appeal and refused permission on the remaining ground.