Whether a claim for a share of profits succeeds depends on the terms agreed between the parties. There can be no claim to a quantum meruit in respect of services which have been paid for.
A claim for a share of profits arising from the acquisition, redevelopment and disposal of four properties in central London or alternatively a claim for a quantum meruit has failed in Al-Rawi v Sidawi and others [2023] EWHC 1415 (Ch).
The claimant alleged that in 2009 he reached agreement in principle with the first defendant that he would identify properties, develop plans and budgets, manage the development and help sell the properties in return for a percentage share on each project. He claimed a share of the profits in respect of the acquisition, development and sale of four properties in Kensington and Chelsea. Alternatively, he claimed that he was entitled to a quantum meruit for services provided in relation to the development of the properties.
The court was satisfied that no contractual agreement was reached in 2009 but that the relationship between the claimant and the first defendant was one of honourable and fair dealing. Each of the four properties were acquired by the first defendant or companies controlled by him, subsequently developed and sold. In the case of three of the properties the claimant played a part in the development and design, and fees were paid to companies controlled by him. The companies were also paid a finder’s fee commission. However, the court found the claimant was not entitled to a profit share or that he believed there was any such agreement. On one property there was an agreement that the claimant was entitled to a 12.5% profit share, which the court decided was to be calculated by reference to the holding company’s profits, with a loan facility and interest deductible as an expense.
The claim for a quantum meruit also failed. Such a claim is for services that have been provided which if not paid for will mean that the recipient has been unjustly enriched at the expense of the provider. It arises where there is no contractual entitlement to payment. The companies had charged significant fees and commissions in respect of each project including finder’s fees, commissions on sale and management, handling and other fees. The claimant was unable to prove on the balance of probabilities that there were any services provided which were not remunerated by payments to the companies.
Louise Clark is a property law consultant and mediator
