Barton and others v Morris and another in place of Gwyn Jones

A contract which promises payment upon a specified event ordinarily excludes payment if that event does not occur. The absence of express provision for another outcome usually means that nothing is to happen.

A court cannot imply a term for reasonable remuneration where it contradicts that bargain or is unnecessary for business efficacy. Nor may unjust enrichment impose payment where the contract has already defined the circumstances in which payment is due. Contractual silence does not create a restitutionary gap when the express payment condition covers the ground.

Mr Barton introduced Western UK (Acton) Ltd to Foxpace Ltd as a prospective buyer of Foxpace's property. Their binding oral agreement provided that Foxpace would pay him £1.2 million if a purchaser introduced by him bought the property for £6.5 million. Western ultimately bought it for £6 million after an issue concerning the HS2 project emerged.

The High Court held that no payment was due under the contract or in unjust enrichment: [2018] EWHC 2426 (Ch). The Court of Appeal allowed Mr Barton's appeal and awarded a reasonable fee of £435,000, principally in unjust enrichment: [2019] EWCA Civ 1999, [2020] 2 All ER (Comm) 652.

The central issues were whether a reasonable-fee term could be implied and whether failure of basis or another unjust factor permitted restitution despite the express payment condition.

1. Appeal allowed by a majority of three to two. Lady Rose, with whom Lord Briggs and Lord Stephens agreed, held that the oral agreement was a unilateral contract. Foxpace promised £1.2 million only if a purchaser introduced by Mr Barton bought the property for at least £6.5 million. The stipulated event did not occur, so no contractual payment was due.

2. No term for a reasonable fee on a lower-priced sale could be implied in fact. Such a term contradicted the express condition and was neither obvious nor necessary for business efficacy. Although a narrower term preventing Foxpace from manipulating the price to evade commission might have been implied, the price reduction was genuine. A court must imply only the least onerous term necessary.

3. Supply of Goods and Services Act 1982, section 15, did not assist. The contract determined the consideration for the introduction. It was also doubtful that the unilateral arrangement was a relevant contract under section 12(1), because Mr Barton never promised to provide the service.

4. No reasonable-remuneration term arose as a legal incident of the relationship. Mr Barton was not an estate agent, did not conduct a business of introductions, and had negotiated an exceptional payment linked to recovering earlier forfeited sums. The estate-agent authorities therefore did not establish a common understanding applicable to this one-off arrangement.

5. The unjust enrichment claim also failed. A failure of basis requires a shared conditional basis for conferring the benefit. The parties had no shared expectation about payment if the sale price fell below £6.5 million. More fundamentally, the contract defined the circumstances in which Foxpace had to pay. Imposing a reasonable fee in other circumstances would contradict that allocation. Unjust enrichment cannot repair a bargain.

6. Lord Leggatt and Lord Burrows dissented. They considered that a term implied by law required reasonable remuneration for the requested and successful introduction, and that the express term did not exclude it. Lord Leggatt considered that a subsisting contract left no room for unjust enrichment. Lord Burrows would alternatively have allowed restitution for failure of basis.

1. United Kingdom Supreme Court: By a majority, allowed the appeal and set aside the Court of Appeal's order: [2023] UKSC 3.
2. Court of Appeal: Unanimously allowed Mr Barton's appeal and awarded £435,000: [2019] EWCA Civ 1999, [2020] 2 All ER (Comm) 652.
3. High Court: Dismissed the contractual and unjust enrichment claims, while assessing a reasonable fee at £435,000 if liability existed: [2018] EWHC 2426 (Ch).