Commercial Disputes Weekly – Issue 14831 January 2023

Contract interpretation
Foxpace owned a property called Nash House and made an oral contract with Mr Barton that he would receive £1.2m if he introduced Foxpace to a party who bought Nash House for at least £6.5m. There was no express contractual term requiring Foxpace to pay Mr Barton a fee if it was sold for less than £6.5m. A sale at £6.55m was agreed but matters came to light which reduced the price to £6m. The Supreme Court allowed the appeal by a majority decision and held that in the absence of an express term there were no other grounds for Mr Barton to be paid reasonable remuneration where the property sold for less than £6.5m. There was no obviousness or necessity to imply a term for business efficacy. Section 15 of the Supply of Goods and Services Act 1982 was not applicable because consideration was determined by the oral contract and Mr Barton was not contractually obliged to supply a service. The claim in unjust enrichment failed because it was at odds with the oral agreement reached.
Barton v Gwyn-Jones [2023] UKSC 3, 25 January 2023

Maritime – Off hire
A vessel carried a cargo of iron ore pellets from India to China. Delay occurred at the discharge port when the vessel was not able to obtain a berth and crew members then tested positive for Covid-19. Charterers alleged the vessel was off hire and withheld hire; owners disputed this on the basis that the time trip charter contained an anti-deduction clause providing that “ no deductions from hire may be made for any reason under Clause 17 or otherwise”. The Commercial Court upheld the tribunal’s decision that the anti-deduction clause obliged the charterers to pay hire upfront and in full irrespective of whether the vessel might ultimately prove to have been off hire and the obligation to pay hire had otherwise ceased at a given instalment date.
Fastfreight Pte Ltd v Bulk Trident Shipping Ltd [2023] EWHC 105 (Comm), 24 January 2023

Landlord and Tenant
The Upper Tribunal has held that section 11 of the Landlord and Tenant Act 1985 does not prevent a landlord (Anchor) from recovering service charge contributions towards the cost of repairs and maintenance of the lift in a block of flats from Mr Cox and his fellow assured tenants. The lift does not fall within the landlord’s statutory repairing obligation. Mr Cox was therefore liable to contribute his share of the costs in connection with the repair and maintenance of the lift. However, the court clarified that under section 20C, Landlord and Tenant Act 1987 Anchor may not include costs it had incurred in this appeal in any service charge payable by Mr Cox, and made an order under paragraph 5A of Schedule 11 to the Commonhold and Leasehold Reform Act 2002 that any liability on Mr Cox’s part to pay any administration charge in respect of the costs of the appeal was extinguished.
Anchor Hannover Group v Cox [2023] UKUT 14 (LC), 17 January 2023

Aviation – Joinder of defendant
The claimant issued proceedings against its insurers after those insurers rejected policy claims following the refusal of Russian lessees to return the leased assets after termination of the leases due to sanctions. AIG (first defendant) was sued on its own behalf and on behalf of the other all risks insurers. Lloyd’s Insurance Company SA (second defendant) was sued on its own behalf and on behalf of the other war risks insurers. Fidelis was both an all risks and war risks insurer and was successful in its application to be joined to the action. The purpose of representative proceedings is not to shut out someone who is ready and willing to appear to represent their own interests. Where a party has a direct and significant financial interest in the litigation such as Fidelis’ interest here, then, exceptional circumstances apart, if that party wishes to conduct its own defence at its own risk as to costs it should ordinarily be allowed to be joined to the proceedings and not be represented against its will. However, the court made clear that it would not permit unnecessary duplication of evidence or argument and would ensure that the joinder of Fidelis does not impose unnecessary costs on other parties.
Aercap Ireland Ltd v AIG Europe SA and others [2023] EWHC 96 (Comm), 25 January 2023

Contract formation – Restitution
Fenchurch, an investment banking and corporate finance advisory firm, provided advice and assistance in relation to the potential sale of the insurance division of the AA. The terms of Fenchurch’s engagement were extensively negotiated but no engagement letter was ever signed. Further, the sale did not ultimately occur. The court held that no binding agreement had been reached between the parties and there was no implied contract because the parties clearly envisaged coming to a binding agreement on the fees. However, it would be unjust for the AA to take the benefit of Fenchurch’s work without paying for it. Benefit was not to be construed too narrowly. Although the sale did not go ahead, the AA did receive a valuable benefit. Fenchurch was therefore entitled to a restitutionary payment equal to the price a reasonable person would have had to pay for the services. This should involve consideration of the fact that the fee was going to involve a contingent element as was typical for advisers such as Fenchurch.
Fenchurch Advisory Partners LLP v AA Ltd (formerly AA Plc) [2023] EWHC 108 (Comm), 24 January 2023

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: