Estate agents earning two commissions — Sale and a letting — Introducing unsuitable occupier — Purported license to cricket club — Occupier not having authority to enter into license on behalf of club — No enquiries as to financial means of occupier — No inventory taken prior to occupation — Occupier allowed into possession before license signed by licensor — Claim for possession and damages against occupier — Claim for damages in negligence against estate agents
Two brothers, Dr and Mr Faruk inherited a dwelling-house, 53 Grove Crescent, London NW9. Following legal advice they decided to let the property to a company and instructed Kennedy Law, a local firm of estate agents in the area which claimed letting experience, to find a suitable tenant at about £120 per week. The partner responsible was Mr Wyse, the first defendant in this action, but a young lady of 20 years of age was entrusted with the lettings and dealt with transactions from beginning to end. She had no training and used the firm’s standard forms, licence or lease agreements, as she thought fit. She had no understanding of the contents of these forms.
A Mrs Murphy, the third defendant, who was divorcing her husband and selling the matrimonial home, expressed interest in taking a letting of the Faruk property. She had two children and was a part-time barmaid at a cricket club earning £50 per week. Realising that he would earn two commissions, one for selling her own house and one for securing a letting to her, the first defendant instructed his assistant to make the necessary arrangements. The assistant made no enquiries about the third defendant’s means, and on October 4 1984 the third defendant was persuaded to enter into a licence agreement purporting to be between the plaintiff, Mr Faruk, expressed as licensor, and the third defendant’s employer, the cricket club, expressed as licensee. The third defendant was allowed into possession before an inventory was taken, the cheque for the deposit was cleared or the agreement was signed by the plaintiff. In due course the third defendant fell into arrears with the rent and allowed the property and its contents to fall into a poor condition. It also emerged that the cricket club denied that the third defendant had any authority to enter into an agreement on its behalf. The plaintiff claimed possession of the property as against the third defendant and damages in negligence against the first and second defendants, members of Kennedy Law.
Held The young assistant in Kennedy Law should never have been allowed to deal with lettings unsupervised. She had used a license agreement which was unsuitable for an arrangement with a club and had made no enquiries as to whether the third defendant had authority to enter into the transaction on behalf of the club. The third defendant was in any event a most unsuitable tenant. The plaintiff was entitled to possession of the property as against the third defendant on the grounds that no agreement was entered into on October 4 1984 between the plaintiff and the third defendant and Kennedy Law had authority only to find a suitable company tenant. The third defendant was also liable in damages representing the full rental value of the house for the period of her occupation (less sums actually paid) and for the damage to the property and contents.
The plaintiff also succeeded against the first and second defendants, as they failed in their duty of care to see that the third defendant had authority to enter into a transaction on behalf of the cricket club. They failed to enquire as to the ability of the third defendant or the club to pay the rent; they irresponsibly allowed the third defendant in before the cheque for the deposit was cleared, an inventory had been taken or the licensor had signed the agreement. They were concerned to earn the two commissions on the sale of the third defendant’s house and on the letting. They showed total disregard of their client’s interests. The first and second defendants were ordered to pay the difference between the full rental value of the property let to a suitable company and the sums received or likely to be received from the third defendant, damages to the property and indemnification of the plaintiff’s costs in the action.
Karl Scholz (instructed by Lee Davies & Co) appeared for the plaintiff; Andrew Prynne (instructed by Davies Arnold & Cooper) appeared for the first and second defendants; and Miss Siobhan McGrath (instructed by Daniel and Harris) appeared for the third defendant.
