Courtney & Fairbairn Ltd v Tolaini Brothers (Hotels) Ltd

JurisdictionEngland & Wales
JudgeTHE MASTER OF THE ROLLS,LORD DIPLOCK,LORD JUSTICE LAWTON
Judgment Date28 November 1974
Judgment citation (vLex)[1974] EWCA Civ J1128-3
CourtCourt of Appeal (Civil Division)
Date28 November 1974
Between
Courtney & Fairbairn, Limited
Plaintiffs Respondents
and
Tolaini Brothers (Hotels) Limited
First Defendants Appellants
and
The Thatched Barn Limited
Second Defendants

[1974] EWCA Civ J1128-3

Before:

The Master of the Rolls (Lord Denning),

Lord Diplock and

Lord Justice Lawton

In The Supreme Court of Judicature

Court of Appeal

Appeal (by leave of Mr. Justice Shaw) of first named defendants from order of Mr. Justice Shaw on trial of preliminary issues on 12th March 1974.

Revised.

Mr. DAVID SULLIVAN (instructed by Messrs. Pollards of Boreham Wood, Hertfordshire) appeared on behalf of the Appellant First Defendants.

MR. JOHN DYSON (instructed by Messrs. Doyle Devonshire & Co.) appeared on behalf of the Respondent Plaintiffs.

THE MASTER OF THE ROLLS
1

The question in this case is whether two letters give rise to a concluded contract.

2

Mr. Tolaini wanted to develop a site in Hertfordshire. It was The Thatched Barn Hotel together with 5 acres of land. He got in touch with a property developer, a Mr. Courtney. It appears that Mr. Courtney was well placed to obtain finance for building development. He was also a building contractor himself. The two met and discussed ways and means at the office of Mr. Sacks, an architect. The proposal was that Mr. Courtney should introduce some one to provide the money and lend it to Mr. Tolaini. Mr. Tolaini was to develop the site by building a motel and other things But he was to employ Mr. Courtney or his company to do the construction work. After the meeting, on 10th April, 1969 Mr. Courtney wrote to Mr. Tolaini this letter:-

3

"

4

"I am now in a position to introduce you to those who are interested in your proposals and have access to the necessary finance….

5

I think I should mention, at this point, that my commercial interest in this matter is that of a Building Contractor. I am interested in it due to the fact that Mr. Sacks, whom I have known for some years, is aware that I work for a number of large investing and development concerns, and thought it possible that I might be in a position to be of service to you.

6

"You will understand, therefore, that in addition to making myself useful to you, my objective is to build the three projects mentioned, namely, the Motel, the Filling Station, and the future Hotel, or other development, on the 'Green Belt' area of your site." Then follow these important words: "Accordingly I would be very happy to know that, if my discussions and arrangements with interested parties lead to an introductory meeting, which inturn leads to a financial arrangement acceptable to both parties you will be prepared to instruct your Quantity Surveyor to negotiate fair and reasonable contract sums in respect of each of the three projects as they arise. (These would, incidentally be based upon agreed estimates of the net cost of work and general overheads with a margin for profit of 5%) which, I am sure you will agree is, indeed reasonable."

7

On 21st April 1969 there was a meeting between the parties at the Thatched Barn Hotel. Mr. Courtney said he wanted to have something in writing from Mr. Tolaini before he went further. Accordingly Mr. Tolaini did write a letter on 26th April 1969, in the terms:

8

"In reply to your letter of the 10th April, I agree to the terms specified therein, and I look forward to meeting the interested party regarding finance."

9

Those are the two letters on which the issue depends. But I will tell the subsequent events quite shortly. Mr. Courtney did his best. He found a person interested who provided finance of £200,000 or more for the projects. Mr. Tolaini on his side appointed his quantity surveyor with a view to negotiating with Mr. Courtney the price for the construction work. But there were differences of opinion about the price. And nothing was agreed. In the end Mr. Tolaini did not employ Mr. Courtney or his company to do the construction work. Mr. Tolaini instructed other contractors and they completed the Motel and other works. But then Mr. Tolaini took advantage of the finance which Mr. Courtney had made possible, but he did not employ Mr. Courtney's company to do the work. Naturally enough, Mr. Courtney was very upset. He has brought this action in which he says that there was a contract by which his company were to be employed as builders for the work, and it was a breach of contract by Mr. Tolaini or hiscompany to go elsewhere and employ somebody else. Mr. Courtney's company claimed the loss of profits which they would have made if they had been employed as builders for this Motel. At the trial the parties agreed to proceed only in the following question:

"Whether there was concluded any enforceable agreement in law between the plaintiffs and the defendants or one of them and if yes who were the parties to...

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