Avintair Ltd v Ryder Airline Services Ltd
| Jurisdiction | Scotland |
| Judgment Date | 30 December 1993 |
| Date | 30 December 1993 |
| Docket Number | No 28 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION
Lord Sutherland
Contract—Constitution—Contract for services—Implied terms—Remuneration—Whether implied term of reasonable remuneration—Pursuers performing services while agreement on remuneration yet to be concluded—Whether agreement on remuneration essential to constitution of contract—Whether distinction between contract yet to be performed and one which had been partially executed
Aviation consultants sought declarator that a contract existed between them and an aircraft engineering company whereby the consultants were entitled to a reasonable rate of remuneration for services rendered in obtaining for the engineering company contracts for engine overhaul and similar work for an airline. Work had proceeded on the purported contract although the question of remuneration was still under negotiation. At procedure roll the consultants contended that in the absence of express agreement the law imposed an implied term that a reasonable rate of remuneration was payable for work done, for agreement as to remuneration was not essential in a contract for services. The Lord Ordinary (Sutherland) dismissed the action, holding that, as the parties were in dispute as to the remuneration rate from the beginning, it was of some considerable importance to the contract's implementation and that no implied rate could be imported into the contract. The consultants reclaimed.
Held (rev. judgment of Lord Sutherland) (1) that although consensus in idem was required upon all essential matters before there could be said to be a contract between the parties, it did not always follow that there was no contract where something which affected the parties' contractual relationship had not yet been agreed; (2) that the question of whether that was the case was dependent upon what the parties had agreed and it was for the party who sought to show that that was the basis of the contract to set out in his averments the stipulations or actings from which that could be inferred; (3) that a distinction existed between a case where the alleged contract had yet to be performed and one where performance had been made and payment sought, for in the latter case, if agreement as to remuneration had not been reached, the law implied that a reasonable rate should be paid; (4) that the fact that the parties were negotiating the rate of remuneration at the material time was not inconsistent with their relying upon the implied term, for the purpose of the implied term was to provide a basis for payment where there was no agreed rate in circumstances where there was an entitlement to payment for goods or services rendered; so that (5) the reason why the contract made no express provision for payment was unimportant, for what mattered was that goods and services had been provided which should be paid for and in those circumstances the claim could be based on either recompense or implied contract albeit that where, as here, the work was done under an averred contract, the appropriate claim was on implied contract on the principle ofquantum meruit; and (6) that a claim for payment quantum meruit might be measured by the ordinary or market rate of payment for the goods or services, but where there was no such rate the rate of remuneration had to be assessed by other reasonable evidence; and reclaiming motion allowed.
Dicta in British Bank for Foreign Trade Ltd. v. Novinex Ltd.ELR [1949] 1 K.B. 623 at pp. 629–630 perDenning L.J. approved.
Avintair Limited brought an action in the Court of Session against Ryder Airline Services Limited in which they sought declarator of the existence of a contract between the parties and count, reckoning and payment.
The cause called in procedure roll on the preliminary pleas-in-law of the defenders before the Lord Ordinary (Sutherland). At advising, on 18th February 1993, the Lord Ordinary dismissed the action. The terms of his Lordship's judgment appear sufficiently from the opinion of the court [see also: Avintair Ltd. v. Ryder Airline Services Ltd.UNK 1993 S.L.T. 1339].
The pursuers reclaimed, the reclaiming motion calling before the First Division, comprising the Lord President (Hope), Lord Allanbridge and Lord Clyde, for a hearing.
At advising, on 30th December 1993, the opinion of the court was delivered by the Lord President (Hope).
Opinion of the Court—This is a reclaiming motion by the pursuers in an action of declarator and count, reckoning and payment. The pursuers seek to establish in terms of the declarator sought in the first conclusion that there was a contract between them and the defenders, whereby they acted as aviation consultants for the defenders in relation to the obtaining of contracts for engine overhaul and similar work from Pakistan International Airways. They maintain that they are entitled to reasonable remuneration for the work which they did under that contract by way of commission on all contracts obtained by the defenders from Pakistan International Airways assessed at the rates of commission set out in the first conclusion. The other conclusions of the summons are ancillary to the first conclusion. They depend upon there...
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