A businessman who agreed a £1.2m introduction fee for helping in the sale of a multimillion-pound London property has been told he is entitled to no payment whatsoever, after the property was sold for less than its expected price.
Philip Barton has been suing property-owning company Foxpace over the 2014 sale of Nash House in Northolt.
Barton, who claimed to be close to a company interested in buying the property, negotiated a £1.2m introduction fee from Foxpace if the property was sold for £6.5m. Barton successfully introduced a purchaser who agreed to buy the property for £6.5m. However, it came to light that Nash House was affected by the construction of the HS2 rail link, so the price was reduced to £6m.
As a result, Foxpace refused to pay Barton’s introduction fee and Barton sued Foxpace for reasonable payment.
Barton lost in the High Court, which said he was entitled to nothing. The Court of Appeal disagreed and awarded him around £435,000 for his services. Foxpace appealed and, in a majority ruling handed down on 25 January, the Supreme Court agreed Barton was due nothing.
“There are three routes through which this court could hold that Foxpace is contractually bound to pay a fee to Mr Barton for his services,” Supreme Court judge Lady Rose said.
“The first is that it was an express term of the contract between them that he should be paid to commission in the circumstances. The second route is that a term should be implied into this particular contract, as a matter of fact, to give effect to the unexpressed intention of the parties. And the third is that there is a term implied by law as an incident of this kind of contract.”
Barton also argued he was due money under the law of unjust enrichment.
“The majority of the Supreme Court hold that none of these avenues, contractual or non contractual, leads to the conclusion that Mr. Barton should be paid a fee,” Lady Rose said.
The judges found that there was no express contractual term to pay Barton anything if the property was not sold for £6.5m. Therefore, it is impossible to say what fee they might have agreed had they pre-negotiated what would happen if the property was sold for less. There was therefore no implied term. In addition, the law of unjust enrichment can’t be used to circumvent an existing contract, the court found.
The court said that much of the case law used by Barton was not relevant. For example, as Barton was not an estate agent, and the fee was much larger than an estate agent would charge.
The decision is likely to leave Barton significantly out of pocket. According to earlier rulings, Barton claims to have lost around £1m due to previous unsuccessful attempts to sell the properly that he had been involved in.
Barton and others (Respondents) v Morris and another in place of Gwyn Jones (deceased)
Supreme Court (Lord Briggs, Lord Leggatt, Lord Burrows, Lord Stephens, Lady Rose) 25 January 2023
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