Estate agency — Actions by agents for damages for anticipatory breach of contract and for commission — Claim based on sole agency — House sold to purchaser introduced by another firm of estate agents — Original sole agency instructions resulted in an agreement subject to contract for the sale to a purchaser introduced by the plaintiffs, but the defendant vendor then withdrew for reasons connected with his wife’s health — Contact between the parties was, however, maintained — There was a question as to whether the sole agency had been terminated by the withdrawal or merely suspended — The judge decided that it had been terminated, although it appeared to be anticipated by both parties that, if the defendant should decide to remarket the property, the plaintiffs would be reappointed — A few months later the defendant made contact with the plaintiffs and there was a conflict of evidence (one of many in this case) as to whether a telephone conversation resulted in a new sole agency appointment — There were further telephone conversations and after one of them the plaintiffs wrote to the defendant to record an arrangement that if the other agents introduced an applicant before a certain date the defendant would pay their commission ‘and you have also agreed to pay our fee as sole agents as previously agreed’ — The letter also mentioned that the plaintiffs had sent photographs of the property to Country Life and referred to further contact in regard to advertising — No reply was received to this letter — Contracts were exchanged before the date mentioned with a purchaser introduced by the other firm — Plaintiffs submitted their account for commission on the sole agency basis and this litigation resulted — Held that the evidence pointed to a new sole agency agreement having been made when the contact between the parties was resumed — Among the indications were conversations on photographs, a request to ‘feel the market’, preparation by plaintiffs of brochures, expenses incurred in advertising to the knowledge of the defendant, a contemporaneous note by plaintiffs of a material telephone conversation, and the letter above referred to ‘which screamed out for a reply’ but received none — Plaintiffs were entitled to commission on the sole agency basis of 2 1/2 per cent of the sale price plus VAT
In these
actions John D Wood & Co sued the defendant J D Bardiger for damages for
anticipatory breach of contract, and alternatively for commission, in respect
of the sale of a house at 145 Gloucester Road, London SW7, by the defendant.
Richard Slowe
(instructed by Jaques & Lewis) appeared on behalf of the plaintiffs; Edward
Cohen (instructed by Salter Cartier & Co) represented the defendant.
Giving
judgment, SIR DOUGLAS FRANK QC said: In these actions the plaintiffs claim
respectively for damages for anticipatory breach of a contract for estate
agency and estate agents’ commission in respect of the sale of a house at 145
Gloucester Road, London SW7. The house was, in fact, sold to a purchaser
introduced by another firm of estate agents, Robert Bruce & Partners, but
the plaintiffs allege that at all material times the plaintiffs were sole
agents.
In July 1982
the defendant appointed the plaintiffs agents to sell the property for
£350,000. It was agreed that the plaintiffs would act as sole agents in consideration
for which their commission would be two and a half per cent instead of three
per cent. That arrangement, which was made over the telephone, was confirmed in
writing by the plaintiffs and is not disputed. Thereupon the plaintiffs carried
out the usual services such as the printing of brochures and advertising
required for the marketing of a property.
On October 4
1982 one Teltscher offered the asking price which was accepted, and solicitors
were instructed. The agreement was subject to contract. On December 2 the
defendant withdrew because his wife was pregnant and, as she had a history of
miscarriages, it was important for her to rest and not concern herself with
moving home.
In a letter
dated December 2 Mr A A Buchanan, the partner in the plaintiffs dealing with
this matter, said ‘I am very much looking forward to helping you with the house
in the future and I shall keep all my sales particulars and photographs on the
file’.
I pause there
in the narrative to deal with the plaintiffs’ first contention that the effect
of the withdrawal of the house was to suspend and not terminate the agency
agreement. In my opinion, it is necessary to look at and only at the
circumstances at that time and not to posterior events unless they throw light
on what was intended at that time. The material facts were: first, that the
property had been withdrawn from the market; and, secondly, that no decision
had been made whether it would be reoffered in the future. In my judgment, prima
facie those factors amount to the termination of the agency, albeit it was
thought on both sides that should the defendant decide in the future to
remarket the property the plaintiffs would be appointed as selling agents. I do
not think that any subsequent event, such as the present of champagne at
Christmas, shifts the prima facie assumption.
The next
material date was March 17 1983. It is common ground that the defendant
telephoned Mr Buchanan from London Airport. It is the plaintiffs’ case that if
the previous agency did not continue in force, then a new agreement on
identical terms was entered into as a result of that conversation. It is common
ground that the defendant stated that he was considering moving from the house
in the autumn of that year. The defendant says that he asked Mr Buchanan to let
him know if Teltscher was still interested in buying and that Mr Buchanan
replied that he would speak to Teltscher and then inform the defendant of the
position. The defendant denies that any agreement was entered into. Mr
Buchanan’s version of the conversation is that the defendant asked him to get
ready to reoffer the house and that he inquired whether Teltscher was still in
the market. He understood that he had been reinstructed to sell the house by
preparing sale particulars and advertisements. A few days later Mr Buchanan
showed the Teltschers and another potential purchaser over the property, but
neither took the matter further.
The next
conversation was on March 30 when Mr Buchanan told the defendant that the
Teltschers were no longer interested. It seems to be common ground that Mr
Buchanan thought the asking price should be just below £400,000 whereas the
defendant had in mind about £425,000. It was left, to use the defendant’s
expression, that the plaintiffs would ‘feel the market out’. That was to be
done by stating that the price would be given on application. There was a
discussion about taking photographs of the house. The plaintiffs prepared
amended sale particulars and an advertisement which
Mr Buchanan
said that on April 18 the defendant telephoned and they had a further
discussion. The defendant denies that this conversation took place. Mr
Buchanan’s version of it is that the defendant said that he had seen a magazine
called Portrait showing properties for sale in advertisements by
Chesterfield & Co and Robert Bruce & Partners of whom he had inquired
whether they had comparable properties for sale and were asking higher prices.
He told Mr Buchanan that he had been unethical in speaking to the other agents,
but Mr Buchanan had replied that that was not so but that any discussions about
the sale should take place through him as sole agent with a reduced fee. He was
not told that the defendant had appointed other agents. The defendant denies
there was any conversation on that day, but he agrees that he had heard of
Robert Bruce from advertisements seen in Portrait magazine.
On April 19 Mr
Buchanan telephoned the defendant about taking photographs of the property —
that had been postponed pending the relaying of the lawn. During the
conversation there was a discussion about the other two agents. Mr Buchanan’s
version is that the defendant said he had allowed Chesterfields and Robert
Bruce to see the property, and that Robert Bruce had shown two people over it
but he (the defendant) had then withdrawn his instructions. He confirmed that
he wished Mr Buchanan to prepare the particulars and to advertise in Country
Life. Mr Buchanan said that he asked the position of the plaintiffs if one
of Bruce’s people bought and was told that they would get their fees
irrespective of arrangements with other agents. He (Mr Buchanan) explained that
there was a fee-sharing agreement between agents, but the defendant replied
that he thought Bruce’s applicant was not interested. On the same day Mr
Buchanan, at the suggestion of his partner, wrote a memorandum of the
conversation as follows:
AB had
telephone conversation with JDB on 19 4 82. He agreed to pay our fee if other
agents were charging separate fee for introducing a purchaser. JDB also agreed
to pay for Country Life Adv. June 9 — (?) — we would take payments out of
eventual fee.
The
defendant’s version of that telephone conversation is that Mr Buchanan was
clarifying his position as he was perturbed about his sole agency. He said he
concluded an arrangement with Mr Buchanan that after 10.15 that day the
plaintiffs would become sole agents and that Robert Bruce would become
subagents. He denied that he had agreed to pay two commissions although he
accepts that he agreed to reimburse the cost of advertising if the property was
sold to a purchaser introduced by Robert Bruce before 10.15 that day. There was
a letter of that day from Robert Bruce to the defendant in which they recited
the arrangement I have just described.
On April 20 Mr
Buchanan wrote a letter to the defendant in which he said:
Following our
conversation on the telephone on Tuesday, I understand that if Robert Bruce
& Partners introduce an applicant to 145 Gloucester Road, prior to 10.15
a.m. on 19th April, you have agreed to pay them a fee of 3%, plus VAT at 15%,
and you have also agreed to pay our fee as sole agents as previously agreed.
With regard
to Country Life, I have now sent our copy together with two good
photographs for their issue dated 9th June. In the meantime, I will keep in
contact with you regarding response to our advertising.
There was no
reply to that letter. On the same day the plaintiffs paid Country Life
£600 for an advertisement which appeared in a later issue.
On June 9 Mr Buchanan
learned that a contract for the sale of the house had been exchanged with a
purchaser introduced by Robert Bruce prior to 10.15 on April 19. Accordingly,
they (the plaintiffs) submitted their invoice for £10,375, being 2 1/2% of the
sale price plus VAT. On July 28 the plaintiffs issued the writ in the first
action, claiming damages for anticipatory breach of the contract of agency, and
on January 30 1984 they issued their writ in the second action for the fees
alleged to be due on completion of the sale.
I have already
held that the admitted sole agency granted in 1982 was terminated. Therefore,
the next question is whether a new sole agency was granted on March 17 1983. I
start with the premise that it is unlikely that a person would telephone a
house agent and discuss arrangements for selling his house unless that agent
had already been retained or was then being retained. The defendant’s
explanation for the telephone call was that he merely wanted to know if the
Teltschers were still interested, but that inquiry could not have been made out
of idle curiosity. Indeed, the defendant conceded in cross-examination that he
instructed Mr Buchanan to ‘feel the market’ and to find out what a purchaser
would pay, and said that if he accepted an offer he would feel a moral
obligation to pay the fee. He also thought there was a discussion about
photographs for the purpose of preparing particulars and advertisements. He
said that that was one of the outgoings of an agent, from which I deduce that
what he meant was that the plaintiffs paid those expenses at their own risk in
anticipation of being appointed agents. That seems to me to be inherently
unlikely. The evidence given by the defendant seems necessarily to demonstrate
that the defendant was asking Mr Buchanan to carry out the functions normally
carried out by an estate agent.
The defendant
had a reason for wanting to sell his house, namely, that he had been offered
another house in the area in which he wished to live and had made an offer for
it which was subsequently accepted. Mr Buchanan’s subsequent conduct, such as
advertising at considerable expense, was consistent with the assumption that
his firm had been appointed agents. The defendant, knowing what the plaintiffs
were doing, did nothing to disabuse them. I, having heard both Mr Buchanan and
then the defendant give evidence and having considered that evidence, have come
to the conclusion that whatever were the precise terms of the conversation on
March 17, there was no doubt in the minds of the parties to it that the
plaintiffs were being instructed to market the house. By the verb ‘market’ I
mean to try to find somebody willing to pay a price acceptable to the
defendant.
The subsequent
events tend to confirm that the plaintiffs had been appointed sole agents. I
have already mentioned that Mr Buchanan took two potential purchasers round the
property, that he prepared particulars for a brochure, that he advertised in The
Observer and Country Life at considerable cost, and that the
defendant stood by and allowed him to do these things without demur. Then there
was the conversation of April 19. Any doubt as to whose recollection is most
reliable seems to me to be removed by the memorandum made by Mr Buchanan on the
same day and the fact that there was no reply to his letter of April 20, a
letter which screamed out for a reply if what it related was inaccurate.
Mr Buchanan
concedes that no terms were discussed on March 17, but that is not surprising
having regard to the admitted agreement in the previous year that the
plaintiffs would be appointed sole agents at a reduced commission of 2 1/2%. As
Mr Slowe said, had the plaintiffs introduced a purchaser and then charged
commission at 3%, there is little doubt that the defendant would have protested
that he was relying on the sole agency agreement for commission at 2 1/2%. I
think that by the previous agreement between the parties it necessarily implied
that the reappointment was to be on the same terms as the previous agency. If
an officious bystander had asked them what were the conditions of the agency,
that is what they would have replied.
That, I think,
is sufficient to dispose of the matter, since it is not pleaded or argued that
if the plaintiffs were appointed agents the agency was to be terminated.
