Dear Colleagues,

 

Barton v Morris [2023] UKSC 3, decided yesterday, is the latest UK Supreme Court decision to consider aspects of the law of unjust enrichment, and in this case the interaction with the law of contract and the allocation of risk. The case concerned an oral agreement between the parties that the Claimant to introduce a buyer for a property owned by the Defendant – the Claimant was to be paid £1.2million if the purchaser bought the property for £6.5million. In the event, the purchase price paid by the buyer whom the Claimant introduced was only £6million. The contract was silent on what was to happen in such a scenario, and the Defendant argued that it was not obliged to pay the Claimant anything; the Claimant argued that he was entitled to a reasonable fee. The Supreme Court therefore considers whether there was any term to be implied so as to provide for that scenario. There is also a disagreement over whether there is scope for an alternative unjust enrichment claim, and if so on what basis.

 

The majority, led by Lady Rose holds that the Claimant was not entitled to succeed on any of the possible bases: [106] “The analysis proposed by Mr Barton appears to be at base, an appeal to what Lord Reed deprecated in Investment Trust Companies v Revenue and Customs Comrs [2017] UKSC 29, [2018] AC 275, para 39 as a claim based on perceived requirements of fairness applied on a case-by-case basis” and [107] “The enrichment consisting of the benefit to Foxpace of a sale to a purchaser introduced by Mr Barton, for no reward to him, would not be unjust, because it was an outcome provided for by the agreement. Unjust enrichment mends no-one’s bargain.”

 

There are two separate dissenting judgments, from Lords Leggatt and Burrows. Lord Burrows would have held that both an implied term and an unjust enrichment approach justified the Claimant succeeding on a quantum meruit basis. His Lordship also rejects (judicially) the unjust factor of free acceptance, and points instead to failure of basis being the relevant factor here:

 

[233] “On the facts of this case, there has been a relevant failure of basis. Mr Barton rendered the beneficial services to Foxpace on the basis, objectively shared with Foxpace, that he would be paid £1.2m for those services if Nash House was sold to Western for £6.5m. That basis failed (in Birks’ words, the basis failed to materialise) when the sale to Western was for a price lower than £6.5m so that Mr Barton was not entitled to, and was not paid, the promised £1.2m. It is this failure of basis that supplies the unjust factor that Asplin LJ left unclear having (correctly) put to one side free acceptance.”

 

Several list members are cited in the judgments. The case can be found here: https://www.supremecourt.uk/cases/docs/uksc-2020-0002-judgment.pdf

 

Best wishes,

James

 

 

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James Lee

Professor of English Law

The Dickson Poon School of Law

Somerset House East Wing, room SW1.12
King's College London
Strand
London WC2R 2LS

 

E-mail: james.lee@kcl.ac.uk

  

Profile: https://www.kcl.ac.uk/people/james-lee

Forthcoming: "Pragmatic modernisation? Judicial directions in trusts and wealth management" in R Nolan, HW Tang & M Yip (eds) Trusts and Private Wealth Management: Developments and Directions (Cambridge University Press, 2022) https://www.cambridge.org/gb/academic/subjects/law/private-law/trusts-and-private-wealth-management-developments-and-directions