CL-2022-000522 - [2025] EWHC 2739 (Comm)

APPLICABLE PRINCIPLES

The starting point is the general principles of contractual interpretation, which were summarised in Arnold v Britton [2015] UKSC 36; [2015] AC 1619:

“When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean”, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101, para 14. And it does so by focussing on the meaning of the relevant words … in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party’s intentions.” (§ 15)

“… the reliance placed in some cases on commercial common sense and surrounding circumstances (eg in Chartbrook, paras 16-26) should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract. And, again save perhaps in a very unusual case, the parties must have been specifically focussing on the issue covered by the provision when agreeing the wording of that provision.” (§ 17)

As to the admissibility of pre-contractual negotiations, Leggatt LJ in Merthyr (South Wales) Ltd (FKA Blackstone (South Wales) Ltd) v Merthyr Tydfil County Borough Council [2019] EWCA Civ 526 said:

In Prenn v Simmonds, cited in the above passage, Lord Wilberforce had among other things provided an illuminating explanation of why evidence of pre-contractual negotiations about particular terms of the contract is generally inadmissible:-

“There were prolonged negotiations between solicitors, with exchanges of draft clauses, ultimately emerging in clause 2 of the agreement. The reason for not admitting evidence of these exchanges is not a technical one or even mainly one of convenience, (though the attempt to admit it did greatly prolong the case and add to its expense). It is simply that such evidence is unhelpful. By the nature of things, where negotiations are difficult, the parties' positions, with each passing letter, are changing and until the final agreement, though converging, still divergent. It is only the final document which records a consensus. If the previous documents use different expressions, how does construction of those expressions, itself a doubtful process, help on the construction of the contractual words? If the same expressions are used, nothing is gained by looking back: indeed, something may be lost since the relevant surrounding circumstances may be different. And at this stage there is no consensus of the parties to appeal to. It may be said that previous documents may be looked at to explain the aims of the parties. In a limited sense this is true: the commercial, or business object, of the transaction, objectively ascertained, may be a surrounding fact. Cardozo J. thought so in the Utica Bank case [Utica City National Bank v. Gunn (1918) 118 N.E. 607, NY Court of Appeals]. And if it can be shown that one interpretation completely frustrates that object, to the extent of rendering the contract futile, that may be a strong argument for an alternative interpretation, if that can reasonably be found. But beyond that it may be difficult to go: it may be a matter of degree, or of judgment, how far one interpretation, or another, gives effect to a common intention: the parties, indeed, may be pursuing that intention with differing emphasis, and hoping to achieve it to an extent which may differ, and in different ways. The words used may, and often do, represent a formula which means different things to each side, yet may be accepted because that is the only way to get “agreement” and in the hope that disputes will not arise. The only course then can be to try to ascertain the “natural” meaning. Far more, and indeed totally, dangerous is it to admit evidence of one party's objective — even if this is known to the other party. However strongly pursued this may be, the other party may only be willing to give it partial recognition, and in a world of give and take, men often have to be satisfied with less than they want. So, again, it would be a matter of speculation how far the common intention was that the particular objective should be realised. …

In my opinion, then, evidence of negotiations, or of the parties' intentions, and a fortiori of [one party’s] intentions, ought not to be received, and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the “genesis” and objectively the “aim” of the transaction.” ([1971] 1 WLR 1381, 1384-1385)

The recitals to a written contract may be taken into account as an aid to interpretation, at least if they are capable of being read consistently with the operative parts of the contract (see, e.g., Lewison, The Interpretation of Contracts, 8^th ed., § 10.37 citing Attorney General v River Doree Holdings Ltd [2017] UKPC 39). There is authority indicating that if the operative parts of the document are clear, then the recitals will not control or cut them down (ibid., §§ 10.41 ff). However, the position is often more nuanced than that, and Lewison points out that “[m]odern methods of interpretation, in which background plays a far larger part than used to be the case, may have tempered the apparent rigidity of older statements of principle requiring ambiguity before recourse could be had to recitals” (§ 10.47, citing Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407 at [380], Russell v Stone (t/a PSP Consultants) [2017] EWHC 1555 (TCC), [2017] P.N.L.R. 34, and Restaurant Brands Ltd v QSR Ltd. [2021] NZCA 680).

The reversal of unjust enrichment is premised on the defendant having received a benefit from the claimant such that the claimant has incurred a loss as a result of the provision of the benefit: Investment Trust Companies v Revenue and Customs Commissioners [2017] UKSC 29, [2018] AC 275 at [43] per Lord Reed.

It is well-established that four questions arise in respect of a claim for unjust enrichment (Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221, 227):-

Lord Reed in Investment Trust Companies said:-

“if [the four questions set out above] are not separately considered and answered, there is a risk that courts will resort to an unstructured approach driven by perceptions of fairness, with consequent uncertainty and unpredictability. At the same time, the questions are not themselves legal tests, but are signposts towards areas of inquiry involving a number of distinct legal requirements. In particular, the words “at the expense of” do not express a legal test; and a test cannot be derived by exegesis of those words, as if they were the words of a statute” ([41])

An unjust enrichment claim cannot properly be based on a wide-ranging and open-ended assessment of fairness or justice in the round. Rather, it requires the claimant to make out an established category of ‘unjust factor’ in order to trigger the claim: Dargamo Holdings Ltd v Avonwick Holdings Ltd [2021] EWCA Civ 1149 at [59]-[64]; Investment Trust Companies at [39].

Examples of unjust factors recognised by English law include: (a) mistake, (b) duress, (c) undue influence, (d) failure of basis, (e) necessity and (f) legal compulsion. These unjust factors are recognised because they establish that the claimant did not intend the defendant to receive a benefit in the circumstances, either because the claimant never had an intent to benefit the defendant in those circumstances or the intent was vitiated or qualified in some way: see Dargamo at [58].

The Supreme Court’s decision in Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, [2019] AC 119 upheld contractual provisions denying validity to variations or changes that had not been agreed in accordance with a contractually mandated process. In so doing, the Court acknowledged the importance, as a matter of English law, of enforcing and giving effect to the parties’ autonomy to bind themselves (see [10]-[11]). Lord Sumption explained such clauses’ purpose thus: “in circumstances where oral discussion can easily give rise to misunderstandings and crossed purposes, it avoids disputes not just about whether a variation was intended but also its exact terms” (§ [12]).

A subsisting contract between the parties may leave no room for an unjust enrichment claim. This may be the case for one of two reasons.

First, such a claim cannot be brought inconsistently with a valid and subsisting legal obligation of the claimant to confer the benefit on the defendant. As Lord Leggatt (dissenting in the result) observed in Barton v Morris [2023] UKSC 3, [2023] AC 684, “a party cannot be said to have been unjustly enriched by the receipt of a benefit to which he or she was legally entitled. Put another way, the existence of a contractual or other legal obligation to confer the benefit necessarily means that the resulting enrichment at the claimant’s expense is not unjust” ([190]).

Secondly, the scheme of the contract as a whole may be inconsistent with an unjust enrichment claim:-

“… there is also another broader reason why the existence of a contract precludes a claim based on the law of unjust enrichment. This is that there already exists a system of law for determining what rights and remedies contracting parties have in relation to the subject matter of their contract. It is called the law of contract. In relation to the subject matter of the contract, the law of contract determines, and governs the consequences of, not only the existence but also the absence of an obligation on one contracting party to confer a benefit on the other. To redistribute the allocation of benefits and losses provided for by the law of contract by applying another set of legal principles would undercut this regime” ([191] per Lord Leggatt).

Cases falling within this category include Howard Houlder and Partners Ltd v Manx Isles Steamship Co Ltd [1923] 1 KB 110 and The Trident Beauty [1994] 1 WLR 161.

Different considerations may apply where work is done outside the scope of the contract. Lord Leggatt in Barton said:-

“As Lord Goff noted in The Trident Beauty, different considerations may arise where the contract is discharged or is shown never to have been binding. So too where work is done under an anticipated contract which never materialises. Even where there is a valid and subsisting contract, questions may arise about the scope of the applicable contractual regime as, for example, where a party performs or claims to have performed services additional to or different from those covered by the contract. In such cases the law of unjust enrichment may have a part to play.” ([193])

I do not, however, accept RMK’s submission that an unjust enrichment claim will always be available, absent an express exclusion in the contract, if additional services are provided. In my view, it is always necessary to consider whether the claim is consistent with the contractual regime to which the parties have committed themselves. The question is the parties have expressly excluded or limited remedies in unjust enrichment, or whether “the terms of their contract … lead to the conclusion that a remedy in unjust enrichment has been displaced” (Goff & Jones § 3.11). As Lord Burrows put it in Barton:-

“… Clearly restitution for unjust enrichment may be contractually excluded by the parties (whether by an express exclusion clause or, more generally, by inconsistent contractual terms): see, e g, Pan Ocean Shipping Co Ltd v Creditcorp Ltd (The Trident Beauty) [1994] 1WLR 161, 164; MacDonald Dickens & Macklin v Costello [2012] QB 244, paras 23—35; Go› & Jones, paras 3-28—3-38. The parties’ own allocation of risk can override the law of unjust enrichment that would be imposed if there were no such exclusion. If the unilateral contract was an “if, but only if” contract in the strong sense, restitution for unjust enrichment would have been excluded.” (§ 237)

Equally, I do not accept that restitution is excluded only where there is an ‘if, but only if’ contract (nor that that is what Lord Burrows implied). What matters is the effect of the contract considered as a whole.

In Barton, the parties had agreed that a claimant would be paid £1.2m in the event that a particular property was sold for £6.5 million to a buyer introduced to the defendant seller by the claimant. The property was eventually sold to a buyer introduced by the claimant for £6 million, with the result that on the express terms of the contract, the claimant was not entitled to any payment. Further, the Supreme Court rejected the argument that a term should be implied to the effect that the claimant would be paid a reasonable fee if the defendant sold the property for less than £6.5 million.

The claimant alternatively sought quantum meruit on the basis of unjust enrichment. In rejecting that claim, Lady Rose (with whom Lords Briggs and Stephens agreed) considered previously authorities, including MacDonald Dickens & Macklin v Costello [2012] QB 244, where Etherton LJ (with whom the other members of the Court of Appeal agreed) said:-

“The general rule should be to uphold contractual arrangements by which parties have defined and allocated and, to that extent, restricted their mutual obligations, and, in so doing, have similarly allocated and circumscribed the consequences of non-performance. That general rule reflects a sound legal policy which acknowledges the parties’ autonomy to configure the legal relations between them and provides certainty, and so limits disputes and litigation. The following cases support its application to the present case.” (§ 23)

On the facts, the majority in Barton concluded that the effect of the contract was to exclude such a claim. Lady Rose rejected the Court of Appeal’s conclusion that the contract did not exclude a claim for unjust enrichment because it was silent as to what would happen when the property was sold for less than £6 million:-

“I disagree with that analysis for reasons which mirror the reasons for rejecting the implication of a contractual term. 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. The “silence” of the contract as to what obligations arise on the happening of the particular event means that no obligations arise … This excludes not only an implied contractual term but a claim in unjust enrichment.” ([96])

“McCardie J [in Howard Houlder] cited a number of Court of Appeal authorities supporting his analysis that a plaintiff cannot claim on a quantum meruit where they have chosen to tie themselves down by the express terms of an agreement. There, as in the present case, the contract covers the ground so far as concerns when Mr Barton is entitled to receive a commission for the introduction of the purchaser and there is no room for an unjust enrichment claim.” ([101])

“I do not consider that there is to be found in this court’s judgments on this appeal any fundamental disagreement about the underlying legal principles, although they may be given different levels of emphasis. The real difference between us concerns whether the express term, that Mr Barton was to receive £1.2m if the property was sold for £6.5m to a purchaser introduced by him, was a complete statement of the circumstances in which he was promised some reward under the agreement, or only a partial statement, leaving it to be implied that he would also receive some unspecified reward if the property was sold to such a purchaser, but for less than £6.5m. If it was a complete statement, then a lesser reward for a sale below £6.5m could not be implied, because it would be inconsistent with the condition for the reward expressly agreed. Nor could there be a remedy in unjust enrichment, because a nil reward for such a sale was what the parties had agreed. The enrichment consisting of the benefit to Foxpace of a sale to a purchaser introduced by Mr Barton, for no reward to him, would not be unjust, because it was an outcome provided for by the agreement. Unjust enrichment mends no one’s bargain.” ([107])

Lords Leggatt and Burrows dissented on the question of whether the contract in question provided a complete statement of the circumstances in which the claimant was to be paid. Lord Leggatt considered that the claimant was entitled to recover pursuant to the ordinary term implied by law into a contract for services to pay a reasonable sum where no sum is fixed by the contract (§ 194). Lord Burrows was of the same view, and also would have concluded that an unjust enrichment claim was available in the alternative, the ‘unjust factor’ being failure of basis.

Lady Rose in Barton quoted Carr LJ’s summary of this concept in Dargamo:-

“The core concept of 'failure of basis' is that a benefit has been conferred on a joint understanding that the recipient's right to retain it is conditional. If the condition is not fulfilled, the recipient must return the benefit (see Goff & Jones [sc. Goff & Jones on the Law of Restitution, 7th ed (2007)] at 12-01). Whilst failure of basis ranks alongside the unjust factors of mistake, duress and undue influence as a factor negativing consent, it differs in that it is concerned with qualification of consent, as opposed to impaired or vitiated consent (see Burrows, The Law of Restitution (3rd edn, 2011)).” (Barton § [78] quoting Dargamo § [79]).

Accordingly, the basis of the transfer that is said to have failed must be one that was jointly understood or shared as such by both parties. If only one party has a particular basis in mind, and that basis fails, no claim in unjust enrichment can arise: Goff & Jones at §13-02. 316. The basis must be ascertained objectively, with the parties’ subjective thoughts being irrelevant: see Goff & Jones at §13-02.

In H&P Advisory Ltd v Barrick Gold (Holdings) Ltd (formerly Randgold Resources Ltd)[2025] EWHC 562 (Ch) (“Barrick Gold”), a boutique investment bank brought a quantum meruit claim on the basis of unjust enrichment following the merger of Randgold Resources Ltd and Barrick Gold Corporation. The claimant was awarded US$2 million as it had communicated the expectation of remuneration at a meeting with the defendant, but the defendant had remained silent ([262]). Mr Simon Gleeson, sitting as a Deputy High Court Judge, cited with approval a passage from Virgo, The Principles of the Law of Restitution (4th edn, 2024) including the following:-

“The basis is to be determined objectively by reference to whether a reasonable person in the position of the defendant would have understood that receipt of the enrichment was conditional, rather than by reference to the subjective motives of the claimant...” ([247])

However, in an appropriate case, it may be legitimate for the court to look beyond the terms of the contract for a wider understanding of the context of an unjust enrichment claim. Thus, the Court of Appeal in Dargamo said:-

“132.

I would accept as a matter of principle that in an appropriate case, it may be legitimate for a court to look beyond the terms of the contract for a wider understanding in the context of an unjust enrichment claim, even though there is a valid and subsisting contract. (There may of course be no contract, as in the deposit cases). As developed by Frederick Wilmot-Smith in Replacing Risk-Taking Reasoning 127 LQR (October) 2011, 610 – 730, the underlying rationale for a claim in unjust enrichment differs from that of a contractual claim, and different policy considerations will arise. For example, in unjust enrichment, the practical policy reasons for excluding previous negotiations in the interpretative exercise do not arise. It may be that the “best way forward” is to “build on those principles developed to interpret contracts, bearing in mind the different context of a claim in unjust enrichment” (at 620-621). Frederick Wilmot-Smith suggests that “the agreements and understandings of the parties are crucial elements in the exercise of construction. They help to establish whether the enrichment was conditional and the conditions attached to the transfer” (at 623).

133.

However, where the basis of the consideration is expressly and unconditionally spelt out on the face of a valid and subsisting contract, as here, there is no proper scope for inquiring into an alternative basis that is plainly contrary to the express basis freely agreed between the parties. It is not an inquiry that was carried out in Roxborough [Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; [2001] 208 CLR 516] or Barnes [Barnes v Eastenders Cash & Carry plc [2014] UKSC 26] where the basis that failed was one not at odds with (and indeed in the case of Roxborough expressly reflected in) the relevant contractual provisions. ”

The shared basis of the transfer of the benefit need not be express; it may be implied form the circumstances of features and context of the transfer: see Goff & Jones at §13-08.

The failed basis may be that the services will be paid for: see Goff & Jones § 16-07 quoted in Barrick Gold at [249]:

“[i]f the services are of a kind which would normally be provided free of charge, that suggests that the transfer is gratuitous; if, conversely, the services are of a kind not normally given free of charge, that suggests that they have been provided for on the basis that they are to be paid for. What is the norm in a particular industry may need to be shown by expert evidence”

As a possible alternative to failure of basis, RMK relies (if necessary) on what Goff and Jones and some of the cases referred to as the principle of “free acceptance”. Goff and Jones § 17-03 states:-

“[A defendant] will be held to have benefited from the services rendered if he, as a reasonable man, should have known that the claimant who rendered the services expected to be paid for them, and yet did not take a reasonable opportunity open to him to reject the proffered services. Moreover, in such a case, he cannot deny that he has been unjustly enriched.”

albeit the authors in § 17-05 go on to cite criticisms of the (suggested) principle, including the critique by Andrew Burrows in “Free Acceptance and the Law of Restitution” (1988) 104 L.Q.R. 576 more recently reflected in Lord Burrows’ dissenting judgment in Barton.

RMK relies on a series of cases concerned with benefits conferred in anticipation of a contract: in particular, MSM Consulting Limited [2009] EWHC 121 (QB), Benourad v Compass Group [2010] EWHC 1882 (QB), Fenchurch Advisory Partners v AA [2023] EWHC 108 (Comm) and Jones v Griffiths [2025] EWHC 797 (KB).

Where a party does work at the other’s request in anticipation of a contract that does not materialise, he may be entitled to payment of a reasonable sum for that work: see, e.g., British Steel Corporate v Cleveland Bridge and Engineering Co Ltd [1984] 1 Al ER 504 (Robert Goff J). The authorities in this area were reviewed by Nicholas Strauss QC in Countrywide Communications Ltd v ICL Pathway Ltd [2000] CLC 324. His analysis was then cited and elaborated upon by Christopher Clarke J in MSM Consulting, whose summary it is convenient to set out:-

“170.

In Countrywide Communications Limited v ICL Pathway Ltd [1996] C No 2446 Mr Nicholas Strauss, Q.C., considered the authorities bearing on the question of whether or not a claim can successfully be made for work done in anticipation of a contract which does not materialise. Having considered William Lacey (Hounslow) Ltd v Davis [1957] 1 WLR 932; a number of academic writings; Jenning and Chapman Ltd v Woodman Matthews & Co [1952] 2 TLR 406; Brewer Street Investments Ltd v Barclay Wool & Co Ltd [1954] 1 QB 428; British Steel Corporation v Cleveland Bridge and Engineering [1984] 1 AER 504; Regalian Plc v London Docklands Development Corporation [1995] Ch 212; Marston Construction C Ltd v Kigass Ltd [1989] 15 Con L..116, he concluded:

“I have found it impossible to formulate a clear general principle which satisfactorily governs the different factual situations which have arisen, let alone those which could easily arise in other cases. Perhaps, in the absence of any recognition in English law of a general duty of good faith in contractual negotiations, this is not surprising. Much of the difficulty is caused by attempting to categorise as an unjust enrichment of the defendant, for which an action in restitution is available, what is really a loss unfairly sustained by the plaintiff. There is a lot to be said for a broad principle enabling either to be recompensed, but no such principle is clearly established in English Law. Undoubtedly the court may impose an obligation to pay for benefits resulting from services performed in the course of a contract which is expected to, but does not, come into existence. This is so, even though, in all cases, the defendant is ex hypothesi free to withdraw from the proposed contract, whether the negotiations were expressly made “subject to contract” or not. Undoubtedly, such an obligation will be imposed only if justice requires it or, which comes to much the same thing, if it would be unconscionable for the plaintiff not to be recompensed.

Beyond that, I do not think that it is possible to go further than to say that, in deciding whether to impose an obligation and if so its extent, the court will take into account and give appropriate weight to a number of considerations which can be identified in the authorities. The first is whether the services were of a kind which would normally be given free of charge. Secondly, the terms in which the request to perform the services was made may be important in establishing the extent of the risk (if any) which the plaintiffs may fairly be said to have taken that such services would in the end be unrecompensed. What may be important here is whether the parties are simply negotiating, expressly or impliedly “subject to contract”, or whether one party has given some kind of assurance or indication that he will not withdraw, or that he will not withdraw except in certain circumstances. Thirdly, the nature of the benefit which has resulted to the defendants is important, and in particular whether such benefit is real (either “realised” or “realisable”) or a fiction, in the sense of Traynor CJ's dictum 22 . Plainly, a court will at least be more inclined to impose an obligation to pay for a real benefit, since otherwise the abortive negotiations will leave the defendant with a windfall and the plaintiff out of pocket. However, the judgment of Denning L.J. in the Brewer Street case suggests that the performance of services requested may of itself suffice amount to a benefit or enrichment. Fourthly what may often be decisive are the circumstances in which the anticipated contract does not materialise and in particular whether they can be said to involve “fault” on the part of the defendant, or (perhaps of more relevance) to be outside the scope of the risk undertaken by the plaintiff at the outset. I agree with the view of Rattee J. that the law should be flexible in this area, and the weight to be given to each of the factors may vary from case to case.”

171.

I regard this as a helpful analysis of the authorities from which I also derive the following propositions:

(a)

Although the older authorities use the language of implied contract the modern approach is to determine whether or not the circumstances are such that the law should, as a matter of justice, impose upon the defendant an obligation to make payment of an amount which he deserved to be paid (quantum meruit ): Lacey; for that reason it does not seem to me that section 18 of the Estate Agents Act 1989 has any application to this claim;

(b)

Generally speaking a person who seeks to enter into a contract with another cannot claim to be paid the cost of estimating what it will cost him, or of deciding on a price, or bidding for the contract. Nor can he claim the cost of showing the other party his capability or skills even though, if there was a contract or retainer, he would be paid for them. The solicitor who enters a “beauty contest” in the course of which he expresses some preliminary views about the client's prospects cannot, ordinarily expect to charge for them. If another firm is retained; he runs the risk of being unrewarded if unsuccessful in his pitch.

(c)

The court is likely to impose such an obligation where the defendant has received an incontrovertible benefit (e.g. an immediate financial gain or saving of expense) as a result of the claimant's services; or where the defendant has requested the claimant to provide services or accepted them (having the ability to refuse them) when offered, in the knowledge that the services were not intended to be given freely;

(d)

But the court may not regard it as just to impose an obligation to make payment if the claimant took the risk that he or she would only be reimbursed for his expenditure if there was a concluded contract; or if the court concludes that, in all the circumstances the risk should fall on the claimant: Jennings & Chapman;

(e)

The court may well regard it as just to impose such an obligation if the defendant who has received the benefit has behaved unconscionably in declining to pay for it”

Those statements were then quoted (in part) and followed in Benourad and Fenchurch Advisory Partners.

In the latter case, Sean O’Sullivan QC (sitting as a Deputy High Court Judge) also stated – in substance following § 171(c) of MSM Consulting – that:-

“The court is likely to order restitution where the defendant has received a benefit (e.g. a financial gain or saving of expense) as a result of the claimant’s services; or where the defendant has asked the claimant to provide services, or the defendant accepted them (having the ability to refuse them) when offered, in the knowledge that the services were not intended to be given freely.” (§ 308)

The judge also quoted the statements in Goff and Jones §§ 16-08 and 16-09 that:-

“The dealings between the parties may show that the basis of any transfer that it shall not be paid for unless a binding contract is entered.”

and:-

“An alternative way of approaching the issue of whether benefits have been conferred on the basis that they are to be paid for, is to ask who took the risk of a contract failing to materialise.”

As to the application of these principles, the judge in Fenchurch Advisory said:-

“320.

Put simply, at the time at which the AA was asking Fenchurch to provide advice and assistance with the drafting of the IM, neither party anticipated, or expected Fenchurch to be taking the risk, that the terms of Fenchurch's engagement might never be agreed. It seems to me that both parties were confident that the EL would be agreed; indeed, they were so confident that neither party saw any particular need for urgency. To use the phrase preferred by Nicholas Strauss QC (as he then was): what happened was outside the scope of the risk taken by Fenchurch.

321.

Other factors which seem to me important (using the list set out by Christopher Clarke J in MSM ) include the quantity of work performed and its nature. No-one in their right mind would imagine that Fenchurch would devote hundreds of hours to drafting an IM free of charge, or just in the hope of securing the engagement (like a solicitor engaged in a beauty parade). The fact that the work was ongoing for such a prolonged period while the EL was being negotiated seems to me to make clear that this was not akin to Fenchurch incurring some initial cost while a "subject to contract" negotiation was carried out.

322.

In those circumstances, it seems to me that it would be unjust if the AA was able to take the benefit of the work done by Fenchurch without paying for it, in the entirely unanticipated scenario in which no EL ended up being signed.”

(RMK highlights §§ 321 and 322 in particular.)

Lord Burrows in Barton stated (obiter) that:-

“230.

In my view, free acceptance is not an unjust factor in English law. It appears that past authorities supposedly embracing free acceptance as an unjust factor are better explained as examples of different unjust factors, in particular failure of consideration. And in terms of principle, free acceptance is flawed as an unjust factor because it entails giving restitution to a risk-taker. The objection to free acceptance as an unjust factor was well-put by William Day and Graham Virgo in their note on the Court of Appeal decision in this case, "Risks on the Contract/Unjust Enrichment Borderline" (2020) 136 LQR 349, 354:

"The problem with free acceptance is that it is a watered-down version of a claim for failure of consideration (or failure of a mutual basis for the transfer), which is a long-established ground for restitution that does not undermine the allocation of risk between parties to a contract. The dilution arises because failure of consideration requires the claimant's condition for conferring the benefit to be shared by the defendant. For free acceptance, however, it suffices that the defendant is merely aware that the claimant expects to receive a quid pro quo for the benefit. Because the claimant need not have secured the defendant's agreement to that exchange, it follows that free acceptance rewards risk-taking … Thus, rather than respecting the parties' autonomy, free acceptance cuts across it."”

Those observations were followed by the judge in Barrick Gold, who suggested that Professor Birks’ original formulation of the concept of free acceptance referred to acceptance of the offer of the benefit, thus making the concept indistinguishable from failure of basis (§§ 200-204). Conversely, mere acceptance of the benefit itself, without any express or implied agreement, was insufficient to found a restitution claim (§§ 205ff). In the course of his analysis, the judge distinguished the statement in MSN Consulting § 171(c) quoted earlier on the ground that it did not support the idea of mere receipt as a ground of injustice, “not least because, in the absence of an “incontrovertible benefit” (broadly, a money receipt), it is explicit that it is considering only situation where those services have been explicitly requested” (§ 236). The analysis, in this passage and taken as a whole, does not in my view call into question the statements in MSN Consulting and later cites citing it insofar as they deal with services that have been expressly requested.

Finally, in Jones v Griffiths, Sir Peter Lane stated that, despite Lord Burrows’ observations in Barton, it was clear that free acceptance remained a discrete way in which the principle of unjust enrichment could operate (§ 25). However, the claim failed because the claimant had not shown that he expected to be paid for the services in question, still less that the defendant should have known that (§§ 49 and 57).