Burgess v Kempson  EWHC 2216 (Ch) and the construction of oral contracts
Mr Richard Farnhill (sitting as a Deputy Judge of the Chancery Division) has now handed down judgment in the case of Burgess v Kempson  EWHC 2216 (ChD) in which a surveyor had claimed 15% of the increase in the value of a farm following its sale for redevelopment as a housing estate.
Dismissing what he described as a £7.5 million claim arising out of a “10-15 minute meeting that is said to have taken place …almost 10 years ago …[and] turns on what they both said” the Judge found that whilst the meeting had indeed occurred, the resulting agreement had not been made in the terms alleged in the Particulars of Claim and had not entitled the Claimant to a share of the increased value of the farm. Rejecting much of the Defendant’s testimony, the Court held that:
- the (oral) contract had been one for the Claimant to receive 15% of any increase in the “terms” (price/offer) that the Defendant was offered for the farm by a prospective developer;
- it had been an express, or alternatively an implied term, of the contract that the Claimant should be the effective cause of this offer; and
- the Claimant had not shown that he was this cause, because planning consent had been obtained after the determination of his retainer and the farm had been sold as a result of the efforts of another surveyor.
Adopting the approach applied by the Court of Appeal in Zymurgorium v Hammonds of Knutsford  EWCA Civ 52 and Maggs v Marsh  EWCA Civ 1058 the Court found that, unlike the case with written contracts, the terms of an oral contract were a question of fact not law in which it was entitled to look at the parties’ conduct after the agreement was made in order to determine these terms. Here the evidence and in particular the Claimant’s initial correspondence showed that the agreement had been one in which the Defendant’s liability was based on any increase in the “terms” that were offered for the farm and not its market value. Furthermore, the whole raison d’être for this contract had been that the Claimant should be the effective cause of any increase in these “terms”.
Please click on this link to read the full article by Clifford Darton KC