Barton & Ors v Morris & Anor [2023] UKSC 3

Mr Barton introduced a buyer for Nash House which sold for £6 million rather than the £6.5 million that would have triggered payment of £1.2 million under an oral agreement. The Supreme Court held that the contractual silence about sales below £6.5 million meant no payment was due, and unjust enrichment could not override the parties' contractual allocation of risk.

Facts

Mr Barton, a property dealer, had previously lost approximately £1.2 million in forfeited deposits from two failed attempts to purchase Nash House from Foxpace Ltd. He then orally agreed with Foxpace that if he introduced a purchaser who bought Nash House for £6.5 million, he would receive £1.2 million. Mr Barton introduced Western UK (Acton) Ltd as a purchaser. Initially Western offered £6.5 million, but after discovering potential HS2 railway issues affecting the property, the price was renegotiated to £6 million. Foxpace refused to pay Mr Barton anything, though they offered £400,000 as a goodwill gesture which he declined.

The Agreement

The trial judge found that the parties had concluded a binding oral agreement that Foxpace would pay Mr Barton £1.2 million if Nash House was sold to a purchaser introduced by him for £6.5 million. Crucially, the judge found that the parties had not discussed or contemplated what would happen if the sale was for less than £6.5 million.

Issues

The key legal issues were: (1) Whether Mr Barton was entitled to any payment under the express or implied terms of the contract when the sale price was less than £6.5 million; (2) Whether a term should be implied requiring payment of a reasonable fee in such circumstances; and (3) Whether Mr Barton could recover on the basis of unjust enrichment.

Judgment

Majority Decision

The Supreme Court, by a 3-2 majority (Lady Rose, Lord Briggs, and Lord Stephens), allowed the appeal and held that Mr Barton was not entitled to any payment.

Lady Rose held that the express terms of the contract meant that Mr Barton would only be paid if the specified trigger event occurred – a sale at £6.5 million. There was no basis to imply a term for reasonable remuneration:

When parties stipulate in their contract the circumstances that must occur in order to impose a legal obligation on one party to pay, they necessarily exclude any obligation to pay in the absence of those circumstances; both any obligation to pay under the contract and any obligation to pay to avoid an enrichment they have received from the counterparty from being unjust.

Lady Rose distinguished this case from typical estate agent arrangements, noting that Mr Barton was not an estate agent, the £1.2 million was not calculated as a commission but related to his previous losses, and he had taken a calculated risk similar to that in Cutter v Powell:

Mr Barton bargained for here. What would be strange, in my judgment, would be for Foxpace to agree to what would become a one-way bet for Mr Barton; that he should receive a fee of almost three times the reasonable fee if the sale price were £6.5 million or more and still receive the full reasonable fee of £435,000 if the sale price were something less than that.

Dissenting Judgments

Lord Leggatt and Lord Burrows dissented. Lord Leggatt held that there was a term implied by law that reasonable remuneration was payable for services provided at another’s request unless expressly excluded. The express agreement about £1.2 million for a £6.5 million sale did not negative this default obligation for sales at other prices. Lord Burrows similarly held that a term implied by law entitled Mr Barton to reasonable remuneration, and alternatively, even without such an implied term, unjust enrichment would provide a remedy based on failure of basis.

Implications

This decision clarifies the relationship between contract and unjust enrichment, establishing that where parties have agreed specific conditions for payment, the law will not supplement their bargain with additional payment obligations. The case confirms that contractual silence on a matter typically means no obligation arises, rather than creating a gap to be filled by unjust enrichment. It emphasises party autonomy and the importance of express contractual terms in allocating commercial risks. The decision has significant implications for commission and introduction agreements, suggesting that parties must expressly provide for alternative payment scenarios if they wish to be protected against the risk of non-payment when specified conditions are not precisely met.

Verdict: Appeal allowed. Mr Barton was not entitled to any payment as the contractual condition for payment (sale at £6.5 million) was not fulfilled, no term could be implied for reasonable remuneration, and the claim in unjust enrichment failed because it would undermine the contractual allocation of risk agreed by the parties.

Source: Barton & Ors v Morris & Anor [2023] UKSC 3