IQ EQ (NTC) Fiduciary Services (Jersey) Limited (as Trustees for the Roger Learmonth (No 3) Life Interest Settlement) v Andrew Hunt & Anor.

The parties to a commercial agreement are identified by construing the agreement objectively, in its admissible factual context, and by considering what the parties said and did at the time. Later conduct may provide evidence about earlier events, but it does not form part of the relevant factual nexus and subjective intention is not determinative.

An agent cannot rely on an alleged variation or replacement agreement made by an employee who lacked authority to bind the principal. False or unsupported accounts, persistent failures to account and conduct showing an intention not to perform fundamental obligations may amount to repudiatory breach. The principal may accept that repudiation by clear communication or, alternatively, by commencing and serving proceedings.

The claimant, a Jersey trustee, appointed Andrew Hunt Residential Lettings under a 2010 agency agreement to manage five flats in Crawley. Andrew Hunt and Carolyne Hunt disputed whether Mr Hunt was a contracting party. Mrs Hunt also alleged oral agreements permitting an additional block-management fee, less frequent accounting and a rent-guarantee tenancy of the block through one of her companies.

The claimant alleged persistent failures to account, misappropriation of rents and fabricated documents. After repeated demands for statements and payment, it terminated the agency agreement and issued proceedings seeking accounts, damages, injunction-related relief and consequential orders. The central issues were the identity of the contracting parties, the validity of the alleged variations and tenancy, the defendants’ breaches, and whether the claimant had validly accepted repudiation.

1. Contracting parties. The 2010 Agency Agreement, read objectively in its admissible context, was made with both Mr and Mrs Hunt. The use of Mr Hunt’s name, office, website and established business goodwill, together with his introduction of the claimant and his knowledge and encouragement of Mrs Hunt’s role, showed that she was operating the lettings side of his business rather than an entirely separate business. Later conduct could cast evidential light on the earlier position, but was not itself part of the relevant factual nexus.
2. Alleged variations. The court rejected the alleged agreement for an additional annual block-management fee and the alleged agreement to replace monthly accounting with annual statements. The contemporaneous documents did not support them. The annual statements were false and knowingly so. Ms Ferguson lacked authority to bind the claimant on matters of that nature, which required approval by the claimant’s directors.
3. Rental Agreement. The purported 2019 Rental Agreement was never agreed or authorised by the claimant and was not binding on it. It was manifestly disadvantageous to the claimant, involved a conflict of interest and was supported by knowingly false statements and documents.
4. Remedies and termination. The defendants were liable to provide a complete and accurate monthly account under the Agency Agreement, without credit for the alleged block-management fee or reliance on the purported tenancy. They were also liable, if necessary, for damages for breach, interest and costs. The defendants’ conduct constituted repudiatory breach, and the claimant had accepted termination by its solicitors’ letter of 8 June 2020 or, alternatively, by commencing and serving proceedings.
5. There was judgment for the claimant. Any further allegation of fraud against Mrs Hunt was left for possible determination at a further hearing. The parties were directed to submit a draft order and written consequential submissions within 14 days.