Consultant entitled to performance fee as specified in contract

An investment consultant has won a dispute with a developer over performance fees arising out of a joint venture.

The court heard that the venture involved using money raised from investors to purchase commercial properties and convert them into residential properties.

The consultant raised the money and the developer was responsible for refurbishing and management.

Upon the eventual sale of the properties, the developer would receive a "performance fee" from the investors, calculated by reference to the return on investment. The consultant was to be paid 40% of the performance fee received. In all, five properties were acquired and converted before the joint venture came to an end.

A dispute arose as to when the contract between the two parties began and ended.

The High Court found in favour of the consultant. It held that despite the looseness of the arrangement, a contract arose from the conduct of the parties in the light of their written and oral communications and so fees were due.

The court also rejected the developer’s submission that the consultant had repudiated the agreement. It held that he had not renounced the agreement, either by statements made in an exchange of emails, or by failing to continue working on the joint venture from around January/February 2015.

The failure by the developer to ask him to perform work after those dates was consistent not with an acceptance of repudiation, but rather a jointly agreed position in which the consultant withdrew from his duties in the venture.

The court ruled that the consultant was entitled to a payment of £12,500 in performance fees, as claimed.

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