Aviva Life & Pensions UK Ltd v Strand Street Properties Ltd (2010)
The judge had been entitled to find that the claimant and defendant had agreed to make an equal contribution to professional fees incurred in relation to a commercial development.
The appellant (S) appealed against a judgment in favour of the respondent (N). The action related to the development of a site comprising commercial premises in which both N and S held leases. S appointed another company (L) as project manager in relation to its interest in the proposed development. Some 15 firms of consultants were engaged. N sought to recover from S half of the consultants' fees which it had incurred. The issues were (i) whether the judge had been right to find that L and N had agreed at a meeting on July 2, 2001 that the consultants' fees up to that date and thereafter up to July 16, 2001 would be split equally between the two sides; (ii) if he had been right so to find, whether the agreement was invalid for lack of consideration; (iii) whether any agreement reached was binding on S as having been entered into by L as its agent with actual authority; (iv) whether S had ratified the agreement; (v) whether N's claim was a claim in debt or a claim for an account.
(1) The judge had been entitled to find that an agreement had been reached in the relevant terms. His finding in that respect was properly reached and properly explained. (2) There had been consideration. S had argued that N was already legally bound to pay the consultants in question and that the other party to the agreement, whether L or S, derived no benefit from N's agreement to do that which it was already obliged to do. The judge had correctly answered that submission by stating that it presupposed that it was completely clear that only N and not L or S had a liability to the consultants to pay their fees. The judge found that the identity of the party who had instructed the consultants was completely obscure, and that the benefit which L or S obtained from an agreement that N would pay 50 per cent of all of the fees was that they avoided a situation where they could end up having to pay the full amount of a fee claimed by a consultant who asserted that he had been instructed by them. N had also been correct to point out that there had in any event been a benefit to L in N's agreeing to perform its obligation to pay, even if that was clearly its own sole obligation, or secondly because there was a pre-existing agreement to share the fees equally and there was benefit to L in that being brought to an agreed end as at July 16, 2001. (3) The judge had been correct to hold that L had authority on behalf of S to enter into the fee-sharing agreement. (4) In any event, the evidence showed that S had ratified the agreement. (5) The claim was a claim in debt. The judge had been correct to conclude that L or S owed an obligation to N under the fee-sharing agreement to pay to N when demanded 50 per cent of the fees paid by it.
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29 Apr 2010
Court of Appeal
Ward LJ, Jacob LJ, Lloyd LJ
LTL 29/4/2010 :  EWCA Civ 444