Background
Tangent Properties and Nigel Chambers disputed whether they were entitled to a 10% share of profits from development of the Skelton Site. Chambers began promotional work on the site in the 1990s, spending thousands of hours facilitating planning and regulatory approvals from 2001 onwards, primarily ending by 2009. The parties disputed whether a fax from December 1996 created a binding contract for profit-sharing. After 13 years of silence, the Defendant explicitly denied any contractual obligation in March–April 2016 letters. The site became commercially valuable around 2022 when profits emerged.
In the main judgment ([2026] EWHC 298 (Ch), February 2026), Mr Justice Leech dismissed Tangent’s claims for breach of contract and estoppel but held that Tangent’s claim for restitution based on unjust enrichment succeeded subject to resolution of a limitation question. The central issue before the court in this follow-up judgment was when the cause of action accrued under section 5 of the Limitation Act 1980 (six-year period).
The parties disagreed fundamentally on timing: Tangent argued the cause of action accrued only in 2022 when profits materialised and payment was refused; the Defendant argued it accrued by 2009 (when services ended) or at latest in 2016 (when the contractual claim was formally denied). The judgment also addressed whether it was procedurally fair to decide the remuneration basis (value-based vs. hourly-rate) at the liability stage without expert evidence, given the parties had agreed quantum would be determined separately.
The Court’s Holding
Mr Justice Leech addressed both procedural objections raised by the parties before proceeding to the substantive limitation question. The Defendant had argued Tangent should not be allowed a second opportunity to argue limitation after failing to raise it at trial; Tangent contended it was procedurally unfair to decide the remuneration basis without expert evidence, given that quantum issues were reserved for a later hearing.
The core substantive issue concerned when the cause of action in unjust enrichment accrued where the unjust factor was “failure of basis.” The court had to determine whether the basis—the state of affairs on which the profit-sharing arrangement was premised—failed when: (1) Chambers ceased providing services in 2009; (2) the Defendant formally denied any obligation in 2016; or (3) profits were realised in 2022. This distinction was critical because any cause of action arising before February 2018 would be time-barred by the date the claim was issued in February 2024.
The judgment sets out the competing arguments on limitation grounded in established principles: in failure-of-basis cases, the cause of action accrues when the state of affairs on which the agreement was premised fails to materialise. The court examined whether the basis failed prospectively (preventing future profits from being shared) or retrospectively (rendering past enrichment unjust), and the consequences of each analysis for the six-year limitation clock.
Key Takeaways
- In unjust enrichment claims based on failure of basis, the timing of when that basis fails—and becomes known to the claimant—is dispositive for limitation purposes.
- A distinction exists between enrichment that occurs through services rendered (which may accrue when benefit is received) and unjustness that crystallises only later (when a promised contingency fails).
- Procedural fairness concerns arise where parties agree to split trials and reserve quantum for a later stage, yet one party seeks to decide substantive questions (e.g., remuneration basis) at the liability stage without expert evidence.
- The court signalled that an unjust enrichment claim characterised as “failure of basis” requires specific pleading of that unjust factor, not reliance on generic appeals to justice.
- In property development disputes involving long-term promotional work, the characterisation of the claimant’s role (land promoter entitled to value-based fees vs. consultant entitled to time-based fees) has material consequences for both liability and quantum.
Why It Matters
This judgment clarifies a critical threshold question in unjust enrichment law: when does a cause of action accrue in “failure of basis” cases? The ruling directly affects long-running commercial disputes—particularly in property development, joint ventures, and profit-sharing arrangements—where promised contingencies (e.g., profit-sharing “when profitable”) fail to materialise years after the relationship ends. Claimants who fail to challenge denials of obligation in real time may find their claims time-barred even if profits eventually emerge, as the basis will be deemed to have failed earlier than commercial realisation.
The judgment also illustrates tensions between modern civil procedure (split trials, reserved quantum hearings) and traditional pleading rules (requiring parties to identify specific unjust factors and quantification bases early). It provides guidance on when procedural indulgences (opportunities to revisit issues post-trial) are warranted despite parties’ prior silence, and underscores the importance of contemporaneous assertion of rights in long-term commercial relationships to avoid limitation traps.