UK Supreme Court · [2023] UKSC 3

Barton v Morris

An introducer was promised £1.2 million if a property sold for £6.5 million. His buyer completed at £6 million after an HS2 issue emerged.

UK Supreme Court25 Jan 2023

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Quick read

A conditional fee can be all or nothing.
An introducer was promised £1.2 million if a property sold for £6.5 million.

Use this to check

Define success by more than one headline condition
Add a fee scale for lower price, partial completion or changed deal structure
State whether the fee is exclusive or additional to reasonable remuneration

Decision snapshot

What happened
- Foxpace owned Nash House in London.
- It orally agreed to pay Philip Barton £1.2 million if he introduced a buyer who purchased for £6.5 million.
- The fee reflected deposits and expenses Mr Barton had lost on two earlier attempts to buy the property.
- His introduction led to documents for a £6.55 million sale, but discovery that the property lay in an area safeguarded for HS2 reduced the final price to £6 million plus VAT.
What the court had to decide
- When an express oral agreement pays a specific fee only if a stated price is achieved, can the introducer claim a reasonable fee through an implied term or unjust enrichment after a sale below that price?
What the court decided
- By a three-to-two majority, the Supreme Court allowed the appeal and restored the conclusion that Mr Barton was not entitled to a fee.
- The contract fixed the circumstances for payment.
- A reasonable-fee term would contradict that allocation of risk, and unjust enrichment could not be used to bypass the existing bargain.

Practical impact

Practical read

A conditional fee can be all or nothing.
If the parties want a reduced fee for a near miss, a different sale price or a changed transaction structure, they need to say so before the work is done.

Useful next steps

Define success by more than one headline condition
Add a fee scale for lower price, partial completion or changed deal structure
State whether the fee is exclusive or additional to reasonable remuneration
Do not expect unjust enrichment to repair an express risk allocation
Put unusual high-value commission arrangements in writing

This was not an ordinary estate-agent commission

Mr Barton had twice tried to buy Nash House himself and had lost deposits and expenses. The oral agreement gave him a chance to recover £1.2 million if he introduced a buyer who acquired the property for £6.5 million.

The fee was therefore tied to his previous losses, not calculated as a normal percentage commission. The trial judge later assessed an ordinary reasonable fee at £435,000, which showed how unusual the £1.2 million promise was.

The introduction worked, but HS2 changed the price

Mr Barton introduced Western UK Acton. Sale documents were prepared at £6.55 million, above the agreed threshold. The parties then discovered that Nash House was within an area safeguarded for construction of the HS2 rail link.

Western still completed, but at £6 million plus VAT. The commercial purpose of the introduction had been achieved, yet the express price condition had not.

Event	Effect under the oral agreement
Introduced Western	Satisfied the buyer-introduction element
Draft sale at £6.55 million	Would have exceeded the threshold if completed
HS2 safeguarding discovered	Reduced the agreed sale price
Completion at £6 million plus VAT	Did not trigger the £1.2 million fee

Why the majority refused to add a reasonable fee

A court may imply a term where the legal tests are met, but it cannot use implication to contradict an express bargain. Here the parties had fixed both the reward and the condition for earning it.

The majority found no obvious amount they would have agreed below £6.5 million and no need to imply a fee to make the arrangement workable. The statutory reasonable-charge term did not help because consideration had already been determined. Unjust enrichment also could not be used to avoid the contract's allocation of risk.

How to draft a conditional fee without a cliff edge

Success fees should anticipate the ways a transaction may change. The buyer may acquire assets instead of shares, use a related company, defer part of the price or renegotiate after due diligence. A single price threshold can create an arbitrary cliff edge.

Decide whether the introducer receives nothing below the threshold, a base fee, a sliding percentage or reasonable remuneration. The agreement should also explain whether VAT, assumed debt, earn-outs and non-cash consideration count towards the target.

Key points

Define the introduced party and connected entities
Define completion and the value counted as purchase price
Use a tiered fee if near-threshold outcomes should still be rewarded
Address renegotiation caused by due diligence or external events
State what happens if the structure changes
Set a clear post-termination tail and evidence process

Common questions

Why did Mr Barton receive no reasonable fee for a successful introduction?

The majority held that the parties had already decided when he would be rewarded: a sale to his buyer for at least £6.5 million. Paying a separate reasonable fee below that threshold would contradict the risk they agreed.

Would an ordinary estate agent receive the same result?

Not necessarily. The majority stressed that Mr Barton was not acting under an ordinary estate-agency arrangement, the deal was one-off and the £1.2 million fee was many times the assessed reasonable commission.

What did the dissenting judges think?

They considered that the law could imply a right to reasonable remuneration for the successful introduction without contradicting the separate £1.2 million price condition.

How Sprintlaw can help

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