Estate agent claims right to be appointed sole selling agent, ‘at any rate in the first instance,’ for houses erected on sites found by him for developer–Developer said to have no right to terminate this arrangement by any length of notice–No such agreement, written or oral, express or implied, made out on the evidence–‘Would in any case be subject to so many exceptions as to be uncertain’–Further point on agent’s conduct–Judgment for developer
This was a
claim by Mr William Knight FSVA FRVA FLArb, sole principal of the firm of
Knight, Benjamin & Co, estate agents, of Cathedral Chambers, Tombland,
Norwich, against Calderlodge Developments Ltd, Mr Lloyd Brian Summers, property
developer, of 415 Unthank Road, Norwich, and Norfolk Garden Estates Ltd, for
damages for breach of an agency contract or contracts relating to sale of
houses on sites developed by the defendants.
The plaintiff
appeared in person. Mr J Wood QC and Mr G Draycott (instructed by Mills &
Reeve, of Norwich) represented the defendants.
Beginning his
reserved judgment, JUDGE WINGATE said: This action concerns a dispute between
an estate agent and a property developer. The plaintiff, Mr Knight, has carried
on the business of an estate agent under the name of Knight, Benjamin & Co
in the city of Norwich for a number of years. Mr Knight is an energetic man, a
city councillor with many contacts and interests, and has been successful in
his business. Mr Summers, the second defendant, to whom I have referred as a
property developer, is a solicitor who ceased to practise as such in 1962 and
since that time has built up a property company group. It is sufficient to say
that by virtue of either of his own holdings or of his wife’s, he directly or
indirectly controls both the defendant companies, Calderlodge Developments Ltd
and Norfolk Garden Estates Ltd, and has been the moving spirit in all their
affairs. He has been very successful in the acquisition, sale and development
of land through these companies, which have operated for the most part in the
Norwich area. Each of these men had much to gain from their association in
business, which, as far as this case is concerned, started in March 1967, when
Mr Summers, on behalf of Norfolk Garden Estates, wrote a letter on the 14th of
that month to the plaintiff appointing him as sole agent for all sales of
housing units arising out of the development by Norfolk Garden Estates of the
Blithewood estate on the terms set out in the letter. The relationship of
principal and agent was expanded into other fields and continued until 1973,
when it terminated in very unhappy circumstances giving rise to these
proceedings. During the six years and more of their association the plaintiff
acted for the defendant in a number of different transactions involving the
acquisition of land, the sale of land and the sale of housing units on land
developed by one or other of the defendant companies, and also on occasions in
the obtaining of finance to further the operations of the defendant companies.
The way in
which the plaintiff has put his case against each of the defendants in these
consolidated actions has made it necessary to go into a number of matters, some
of which in the final event can be seen to be irrelevant to the issues which I
have to decide. My task of eliminating irrelevant matter during the trial has
not been made any easier by the fact that the plaintiff decided to withdraw his
instructions to his solicitors and counsel soon after the commencement of the
proceedings and has conducted his case in person, which he did with ability.
The plaintiff is a very intelligent person and has considerable appreciation of
what is and is not material to his case. I understand that he is interested in
law and is a student of one of the Inns of Court. But none the less, in a case
of some complexity, such as this, the judge trying the case must be careful not
to exclude matters from his consideration as irrelevant before he has a clear
picture of the issues in the case. Let me say at once that it has not been easy
to ascertain and state with precision the various ways in which the plaintiff
has sought to put his case against each of the defendants. There are two
actions by the plaintiff, one against Calderlodge Developments, Mr Summers and
Norfolk Garden Estates, and the other against Norfolk Garden Estates and Mr
Summers. Stated in simplest terms, the issue I have to consider is whether at
the material time, that is to say in January of 1973, there was in existence a
contract of agency or sole agency between the plaintiff and the defendants, or
one or other of them, and if so, what were its terms. The plaintiff’s case is
that the agreement between himself and the defendants advanced far beyond the
terms of the original agreement stated in the letter of March 14 1967, which
stated the usual terms on which an estate agent is employed to sell properties
on behalf of his principal.
Some
examination of the pleadings becomes necessary at this stage to see how the
case on paper has been developed by the plaintiff, making due allowance for the
fact that, save in the early stages, he settled the pleadings himself without
experience in such matters. He first began proceedings in December 1973 in the
Norwich County Court against Calderlodge Developments Ltd only. It was pleaded
by his solicitors as a simple claim for fees, calculated at 2 per cent, due to
the plaintiff as sole selling agent for the defendant company in respect of the
sale of five housing units at a site named Templemere, otherwise known as the
stadium, which was being developed by Calderlodge. The defence denied, inter
alia, the plaintiff’s appointment as sole selling agent for the sale of the
housing units, and counterclaimed a declaration that the plaintiff was never at
any material time appointed as sole selling agent. In answer to a request for
further and better particulars of the agreement, the plaintiff alleged that it
was oral and written and to be implied from the conduct of the parties. The
oral agreement with Calder-
Mr Summers, acting on behalf of Calderlodge. It may be noted in passing that
Calderlodge was not incorporated until October 1971. Reliance was also placed
on a document called the heads of agreement, dated February 10 1969, which was
made between the plaintiff, Norfolk Garden Estates and Mr Summers, to which
agreement Calderlodge was not and could not have been made a party, and on a
letter dated January 28 1972 from Bird & Partners, accountants, written on
behalf of Calderlodge, which stated that it was the intention of that company
that the plaintiff should act as sole agent in respect of an estate at
Martineau Lane and the stadium, the latter being the site known, when
developed, as Templemere. Finally it was alleged that the plaintiff would rely
on the course of conduct between the plaintiff, Mr Summers and Norfolk Garden
Estates from about 1965, and that Calderlodge by conduct approved the
agreements made between the plaintiff, Mr Summers and Norfolk Garden Estates.
Soon after the
delivery of these particulars the action was transferred, on March 5 1974, to
the High Court. On April 23 1974 the plaintiff dispensed with the services of
his solicitors. On April 26 1974 the plaintiff delivered an amended statement
of claim in which he added Norfolk Garden Estates and Mr Summers as defendants,
alleging that the selling agency agreement was with all the defendants. On June
10 1974 particulars were delivered alleging an additional oral agreement, on
September 12 1972, between the plaintiff and one Meadows, a director of
Calderlodge. I think I should mention here that in the course of the trial for
the first time the plaintiff alleged a further oral agreement to have been made
with him by Mr Meadows on September 18 1972. In further particulars dated July
29 1974 reliance was placed by the plaintiff, in relation to the agreement
alleged on September 12 1972 with Mr Meadows, on the production by Mr Meadows
of a brochure on which the name of the plaintiff’s firm was printed and shown
as selling agents. In a yet further set of particulars delivered by the
plaintiff on October 14 1974 the plaintiff stated that Mr Summers at all times
exercised absolute authority on behalf of the two companies, Calderlodge and
Norfolk Garden Estates, and that when Calderlodge was formed Mr Summers assured
the plaintiff that this would not affect the plaintiff in his agency
agreements. The plaintiff also alleged that Mr Hart, the signatory of the letter
of January 28 1972 on behalf of Calderlodge, in various conversations prior to
January 28 1972 made it clear that the plaintiff would act and continue to act
as agent for Calderlodge.
Other
allegations are made by the plaintiff in the pleadings in this action against
Calderlodge, Mr Summers and Norfolk Garden Estates, but I think I have stated
those which are directly relevant to the issues of fact relating to the alleged
existence of an agency agreement between the plaintiff and the defendants. On
November 25 1974 the plaintiff began a second action against Norfolk Garden
Estates and Mr Summers. Taking together the allegations made in the statement
of claim and in particulars which were delivered on February 14 1975, the
plaintiff states that he was appointed selling agent to act in futuro in
respect of about 535 houses to be erected on a site referred to in these
proceedings as Eaton, at a fee of 2 per cent on the selling price; that this
agreement was made jointly and severally with Norfolk Garden Estates and Mr
Summers; that it was oral and in writing, and that in so far as it was oral, it
was made on divers dates between December 1967 and December 1972 between the
plaintiff and Mr Summers at the latter’s home, 415 Unthank Road, Norwich, and
in so far as it was in writing, it was contained in the heads of agreement
dated February 10 1969. When asked to particularise further the oral part of
the agreement, a number of meetings with Mr Summers are relied on in the
particulars dated March 12 1975, namely, meetings on December 29 and December
30 1967, May 26, June 10 and November 11 1970, March 30 1971 and April 18 1972.
It is clear
from these pleadings–and this became even clearer in the course of the
trial–that it is impossible to spell out from the documents referred to the
contracts of agency alleged by the plaintiff, and that if he is to succeed, it
must be by the evidence relating to the alleged oral agreements and the conduct
of the parties. I should perhaps explain here that in referring in some detail
to the way in which the plaintiff’s case has grown and been substantially added
to during the interlocutory stages, I have in mind the defendants’ submission
that this has been on account of the absence of any clear evidence of the
agreement alleged by the plaintiff, so that he found it necessary to
reconstruct and add to his case as it progressed. Furthermore, it is clear from
the pleadings, and from his presentation of his case before me, that the agency
contract or contracts alleged by the plaintiff confers or confer rights and
obligations which go far beyond those arising from the usual form of estate
agency agreement, such as that created by the letter of March 14 1967. However,
the exact terms of the agreements relied on by the plaintiff do not clearly
emerge from the pleadings, nor did the plaintiff find it easy to elucidate them
in the course of the case.
As I have
said, the agency agreements alleged by the plaintiff differ in important
respects from what one might call the norm. First of all, it is said that
whenever the plaintiff found a suitable site for development and successfully
introduced it to the defendants, he had a vested right to be appointed as the
sole selling agent, at any rate in the first instance, for the sale of all
units erected on that site in the course of development by one or other of the
defendants. Such a term would really have to come into existence at the time of
the employment of the plaintiff to find a site and then be incorporated as a
term of an agency agreement once the site had been introduced to the defendants
and acquired by them. The plaintiff alleges that by the time the relationship
between the parties came to an end in 1973 the stage had been reached in the
case of the relevant sites, which were Eaton, Martineau Lane and the stadium,
when his right to act as agent had vested in him and had been admitted and
confirmed by the defendants. Again, it is said that this agency was to be
performed in the future and over a considerable period of time. The plaintiff
conceded that in the event of a site being sold in whole or in part, as
happened in several instances, instead of being developed by the defendants, he
would have no cause for complaint. In other words, his vested right to
commission as selling agent on the sale of housing units on the sites could
properly be defeated by the defendants’ decision to sell the land instead of
developing it. Again, the performance of the contract of agency might have to
be postponed indefinitely for want of finance for development, or want of
demand for houses. The right to be appointed as sole selling agent has also to
be considered in this context, because, as the history of the association
between the plaintiff and the defendants shows, there were occasions when other
agents were employed by the defendants to sell houses on their behalf along
with the plaintiff without protest from the plaintiff that it was in breach of
his vested right to act as sole agent. It is also the plaintiff’s case that the
defendants had no right to terminate his contract of agency by any length of
notice, as would normally be their right in the case of the usual estate agency
contract. So any termination by them of his agency without just cause would be
a breach of contract, entitling him to damages.
So far I have
been concerned to outline the plaintiff’s case as to the contracts of agency
alleged by him, and in doing so I have not distinguished at this stage the case
against one defendant from that alleged against another, although of course I
bear such distinctions in mind. I must now mention an important issue which was
raised by the defence in answer
defendants in January of 1973. The plaintiff alleges that the defendants in
January 1973 committed a breach of his agency agreement, and in particular he
claims that on January 24 1973 at an interview with Mr Summers, then acting on
his own behalf and as agent for Calderlodge and Norfolk Garden Estates, Mr
Summers informed the plaintiff that his commission of 2 per cent was to be
reduced to 1 per cent. He (the plaintiff) contends that this purported
reduction was a breach of a term which went to the root of the contract of
agency, entitling him to treat the defendants’ conduct as a repudiation of the
agency agreements; alternatively, that the defendants wrongfully thereafter
terminated the agency. The defendants allege that if, which they deny, they
committed any breach of a term of the agency agreement in 1973, the plaintiff
so conducted himself at the time, and thereafter, that they were entitled to
and did terminate his appointment as selling agent. The conduct complained of
may be described shortly as making repeated threats to disclose information
about Mr Summers to the press, to the Law Society and to RMC Ltd, a company
which had control of Norfolk Garden Estates, and to other persons, and to ruin
the second defendant, Mr Summers, unless certain financial demands, which the
plaintiff was making upon the defendants, were met. These are serious
allegations, of which further particulars were given in the course of the
interlocutory proceedings. The plaintiff’s reply to these allegations in the
course of the trial I can only describe as qualified, that is to say, it fell
well short of an unqualified denial that he made statements of the kind
complained of, but he denied that the word ‘threat’ was justified. His case is
that such statements as he made in this respect were to achieve a meeting with
Mr Summers with a view to a settlement, and not to exert pressure to gain a
financial advantage.
As already
indicated, in the course of the hearing of this consolidated action it has been
necessary to go into a large number of matters. I say ‘necessary’ because I
found no reasonable way of avoiding doing so, although in the final event many
of these matters turned out to be irrelevant to the real issues in the case. I
am sure that the plaintiff, however, would have felt very dissatisfied had I
prevented him from bringing these matters to my attention, and it may well be
that they have played a part in explaining the history of the relationship
between the parties and its final breakdown, and have helped me to decide where
the truth lies. I do not, however, propose to deal with all the various side issues
in this judgment. I now come to the history of this dispute as I find it to be
upon the evidence in the case, dealing with the salient facts only. When
referring to the main events of the years 1967-73, I do not propose to deal at
this stage with the various meetings between the plaintiff, Mr Summers and Mr
Meadows at which it is alleged oral agreements as to the plaintiff’s agency
were made. I shall deal with these all together after dealing with the history
of the parties’ relationship and its final demise.
The story
starts, as I have already indicated, with the letter of March 14 1967 signed by
Mr Summers on behalf of Norfolk Garden Estates and addressed to the plaintiff’s
firm, appointing him as sole agent for all sales at the Blithewood estate. This
conforms with the usual pattern of such agreements, except that by clause 1 it
is terminable by either side at any time without any period of notice being
required. Commission of 2 per cent is payable in the event of the plaintiff
introducing a purchaser who actually completes. In 1967 the question of a
public flotation of Norfolk Garden Estates was considered, and the plaintiff
carried out inquiries and negotiations on the instructions of Mr Summers with a
view to obtaining a quotation on the Stock Exchange. In particular, in 1968 the
plaintiff made contact with G F Nash Securities, of Kettering, with a view to
that firm giving advice and assistance to enable a public flotation to take
place late in 1968. It is sufficient to say that nothing came of this, but that
was through no fault of the plaintiff, who at the time in question was a
director of Norfolk Garden Estates and as it turned out spent time and effort
with no direct reward. I say ‘no direct reward,’ because the plaintiff’s
association with the defendants over the years yielded very substantial
rewards, and had it continued would no doubt have yielded even further rewards.
However, although the plaintiff at the time accepted what might be called the
luck of the draw, namely, work without pay where the project was unsuccessful,
in the circumstances of the final breach he undoubtedly felt a deep sense of
grievance that in some cases, of which the negotiations with Nash are an
example, his work went unrewarded either directly or indirectly, and finally
that this association with the defendants was terminated unlawfully, thus
robbing him of the opportunity of earning further commission. I shall, again,
have to refer later to this aspect of the plaintiff’s complaints of the
defendants’ treatment of him. It is convenient to mention here that in July
1968 the plaintiff became a director of Norfolk Garden Estates and was entitled
to an honorarium of £500 a year as director’s remuneration.
Towards the
end of 1968 Norfolk Garden Estates experienced a cash crisis, and the plaintiff
played a part in obtaining some temporary finance for the company from a
company called Mesco. There was a disagreement between the evidence of the
plaintiff and Mr Summers as to the importance of the part played by the
plaintiff, and particularly with regard to an important meeting which took
place on December 24 1968 between Mr Summers, the plaintiff and the chairman of
Mesco, following which further time was obtained for the repayment of a loan
which Mesco had made to Norfolk Garden Estates of £100,000. While Mr Summers
may have underrated the contribution made by the plaintiff in obtaining
valuable time for repayment from Mesco–and in saying this I have regard to the
report by Mr Summers outlining the history of Norfolk Garden Estates in
November 1968, which is document 402/1–I think the plaintiff has exaggerated
his part, but I do not find it necessary to say more than that. This is one of
a number of peripheral matters which have been the subject of evidence and
argument. At about the same time, that is to say late 1968, approaches were
made to the Gulf Oil Company to obtain finance for Norfolk Garden Estates, and
again the plaintiff played a part in this, the extent of which is in dispute.
In January 1969 Gulf agreed to make a loan of £250,000 to Norfolk Garden
Estates which greatly assisted to relieve the financial embarrassment, but the
directors of Norfolk Garden Estates were required to guarantee the loan. The
plaintiff was unwilling to enter into such an agreement, and meetings took
place between the plaintiff and Mr Summers on January 18 and January 19 1969. I
find upon the evidence that the plaintiff made it a condition of his entering
into such a guarantee that Mr Summers should transfer to the plaintiff 5 per
cent of the company’s equity by transferring shares to the plaintiff from his
(Mr Summers’s) own shareholding.
The evidence
of the plaintiff as to what passed at this interview differed from that of Mr
Summers, but I prefer the latter’s evidence. Mr Summers was able to refer to a
contemporaneous note to refresh his memory as to what passed between him and
the plaintiff on Saturday January 18 and Sunday January 19, and following this
Mr Summers wrote a letter of January 19 1969 to the plaintiff which I find
correctly summarises the points which were at issue between them. The plaintiff
asserted that it was not justifiable to ask the directors to give a guarantee
and that Gulf were only asking shareholder directors to give guarantees, and he
(the plaintiff) tried unsuccessfully to persuade other directors to support him
in this attitude. I prefer the evidence of the defendants that Gulf required
all directors to give guarantees, whether shareholders or not. The plaintiff’s
refusal put Mr
company desperately needed the Gulf loan, and I think the plaintiff was using
the situation to obtain a share in the equity of Norfolk Garden Estates. I
should perhaps mention that the defendants’ evidence was–and I accept it–that
before accepting directorships the plaintiff and others were told that they
might have to give guarantees of this kind. The letter of January 19 1969,
written by Mr Summers, sets out his account of this disagreement. The
disagreement was eventually resolved, and after negotiations the parties
entered into the heads of agreement dated February 10 1969. This provided for
the resignation of the plaintiff as a director, a continuation of the business
association between Norfolk Garden Estates, Mr Summers and the plaintiff, and
the payment of a proportion of the fees claimed by the plaintiff to be due to
him. So far as it affects the issues in this case, the significant clause in
the heads of agreement is clause 9. The words ‘It is hoped’ make it clear that
no binding obligation to appoint the plaintiff as agent is entered into under
this agreement, but it is provided that in the event of further work being
undertaken by the plaintiff’s firm, the scale of fees contained in the fourth
schedule is to apply. This provides for 2 per cent commission.
On February 24
1969 the plaintiff wrote a letter to Mr Summers regarding a shop site called
Flower Pot Lane for acquisition by Norfolk Garden Estates, the last sentence of
which is directly relevant to the contention of the plaintiff that he had a
right to be appointed as agent for the letting or sale of units erected on a
site introduced by him to the defendants. The reply by Mr Summers, writing on
behalf of Norfolk Garden Estates, makes it clear that the practice of the
company was not to enter into any binding obligation in this respect, and the
plaintiff made no reply, nor any kind of challenge, to this clear statement. On
June 3 1969 the plaintiff wrote to Mr Summers with regard to a proposed
acquisition of land by Norfolk Garden Estates, and in the last sentence assumes
that in the event of an acquisition and development taking place, he (the
plaintiff) will have the opportunity of reselling the finished units in the
usual way. In the light of the whole of the evidence, I find this to be an
expression of hope rather than an assertion of a legal right. On July 18 1969
the plaintiff wrote a letter setting cut the services he claimed to have
rendered to Mr Summers, and the matter appears to have been resolved by an agreement
set out in a letter of July 31 1969 from Mr Summers.
On September
24 1969 Mr Summers informed the plaintiff of the appointment of another agent,
Mr Alan Ebbage, to act as selling agent in the sale of the remaining units at
Eaton Village, and informed the plaintiff that he could, if he wished, continue
as selling agent in competition with Mr Ebbage. The plaintiff’s reply on
September 29 1969 regrets the appointment of another agent, but in no way
suggests that this is in breach of his own right to continue to act as sole
agent or at all. A similar situation arose at Tithe Barn, another site being
developed by the defendants, as appears from a letter of October 21 1969 from
Mr Summers to the plaintiff, and by a letter of March 24 1970 Mr Summers notified
the plaintiff of his intention to instruct another firm of agents, Alan Ebbage,
to act as agent at the Tithe Barn estate, so that the plaintiff and Alan Ebbage
would be selling in competition with each other. Furthermore, in the
penultimate paragraph Mr Summers contemplates one or other of the two firms
being appointed as sole agents. The plaintiff’s reply on March 25 1970 accepts
this situation, stating that he had no alternative but to do so. It may be that
these examples are not exact parallels of the situation which existed in
January 1973, but in my judgment they are significant.
For some years
the possibility of Norfolk Garden Estates acquiring Norwich City Stadium for
development had been under consideration by both the plaintiff and Mr Summers.
This project involved the purchase of the shareholding in the company owning
the stadium. Letters of October 19, November 25 and December 2 1970 from Mr
Knight show that matters were progressing towards a final stage. On April 26
1971 the plaintiff wrote a letter to Mr Summers at the latter’s request,
describing the site and giving a valuation figure of £74,000. As appears from
the plaintiff’s letter of November 25 1970, Mr Summers had not decided which of
his companies was going to buy the stadium, and indeed it was contemplated that
a new company might be formed for this purpose. The plaintiff stated in
evidence that he assumed in the summer of 1971 that it would be acquired by
Norfolk Garden Estates, and a letter of July 22 1971 shows that the plaintiff
was looking to that company for his fees on the acquisition. The plaintiff was
then informed by Mr Summers that the stadium would be acquired by a company
controlled by Mr Summers’ wife, and in response to a request by Mr Summers the
plaintiff wrote the letter of August 4 1971 to Mrs Summers. In the event, the
stadium was acquired by Calderlodge, which was a wholly-owned subsidiary of a
company that was controlled by Mrs Summers but for all practical purposes
operated by Mr Summers. I should mention here that the shareholding in Norfolk
Garden Estates had been taken over by the Poynter Group in 1969, which company
was in turn taken over by RMC, a public company, in April 1972. RMC remained in
control of Norfolk Garden Estates until January 3 1973, when Mr Summers again
acquired the shareholding. There was a service agreement between Mr Summers and
the Poynter Group (later RMC). The plaintiff considered that the acquisition of
the stadium by Calderlodge had deprived Norfolk Garden Estates of a valuable
asset and that this deal was carried out by Mr Summers in breach of his
obligations to Norfolk Garden Estates and to its parent company, and also in
breach of the service agreement between Mr Summers and the Poynter Group (later
RMC). The plaintiff suggested that Mr Summers had thus involved himself in a
conflict-of-interest situation.
On January 28
1972 Mr Hart wrote a letter to the plaintiff on behalf of Calderlodge
Developments Ltd. This letter dealt with the plaintiff’s entitlement to
remuneration for his part in the acquisition by Calderlodge of an industrial
site at Martineau Lane, the stadium company and site, and a site near Swansea
known as Llansamlet. The plaintiff was paid a sum of £2,000 in full settlement
of his fees in connection with all three acquisitions. The letter sets out what
the payment is intended to cover. This payment was accepted by the plaintiff,
although he claimed that the sum was far less than he should have been paid.
Two points arise here for comment. First of all, it is to be noted that the
plaintiff is being paid a fee for acting in the acquisition of sites, as indeed
he was in a number of other instances where he was instrumental in the
acquisition of land, but he was not always paid a fee on such acquisitions.
However, it seems to me to be relevant, as a matter of probability, to the
question whether there was an agreement between the parties that whenever the
plaintiff had been instrumental in the acquisition of a site, he should later
be appointed sole selling agent if and when it was developed by the defendants,
that the plaintiff was in a large number of cases–and the case of the stadium
is immediately in point here–paid fees for his work in the acquisition of the
site. It seems to me that it cannot be argued convincingly, as the plaintiff
attempted to do, that without the alleged agreement the plaintiff had
insufficient consideration for what he did for the defendants. In this regard
the schedule of payments put in by the defendants, showing what was paid to the
plaintiff over the years between 1965 to 1973, totalling a sum of £67,500, is
in point. Some of this was paid on acquisitions; more on the sale of houses.
The second point for comment is this. The letter from Mr Hart makes it clear
that no further agency is going to be offered in respect of the Welsh site, and
having regard to its distance from Norwich
the letter, Mr Hart, on behalf of Calderlodge, states that it is the intention
of the company that the plaintiff should act as sole agents in the development
of the estates at Martineau Lane and the stadium. The plaintiff did not comment
on this in his reply. It seems to me that here again we find evidence of
intention on the part of the defendants but not of any binding agreement.
However, both sides certainly conducted themselves on the basis that the
plaintiff would be the selling agent of housing units built on the site, and a
letter of June 6 1972 from Mr Meadows to Mr Bennett is consistent with this,
though in that letter it is made clear that formal instructions had not yet
been given.
Throughout
1972 the plaintiff continued to act as the defendants’ agent in respect of
various matters, of which the acquisition of nos 10 and 11 Tombland by Norfolk
Garden Estates and the subsequent sale of the property is an example. At this
time, however, there was little or no selling of new houses on the defendants’
estates, as few were available for sale. Indeed, at the time of the break between
the parties in January 1973, of the three sites in respect of which the
plaintiff claims to be sole selling agent, that is, Eaton, the stadium and
Martineau Lane, the last one, an industrial site, was the only one which had
any immediate prospect of sale. On September 12 1972, according to the
plaintiff, there was a meeting between the plaintiff and Mr Meadows of
Calderlodge, and there was a discussion about the development of the site of
the stadium, to be known as Templemere. According to the plaintiff, he informed
Mr Meadows that in view of the fact that Mr Summers had a service agreement
with RMC, and of the conflict of interest which had arisen, it would be
inappropriate for his firm to place housing units on the open market until this
had been cleared up. He also stated that Mr Meadows appointed him to act as
selling agent for Templemere and confirmed this later on September 18 in an
oral conversation, when he (Mr Meadows) handed him (the plaintiff) a brochure
for Templemere which carried the plaintiff’s name as selling agent. Mr Meadows
denied handing the brochure to the plaintiff, and denied giving the plaintiff
instructions to act as agent on these occasions. I accept the evidence of Mr
Meadows in preference to that of the plaintiff. Though I have no doubt that up
until January 1973 both Mr Meadows and Mr Summers intended to give the
plaintiff the opportunity to act as selling agent for Templemere, I find that
there was nothing said at these meetings which carried the matter any further.
The mention in the brochure of the plaintiff’s name as selling agent is
consistent with the then admitted intention of the parties, although, in the
light of the plaintiff’s evidence of his reservations because of the
conflict-of-interest situation, it would seem that any firm offer which might
have been made to appoint him as agent would not have been accepted by him. It
is also to be noted that the plaintiff’s name never appeared as selling agent
on the board at the site, although again it is clear from a letter of January
12 1973, signed by Mr Meadows’ secretary, that it was believed that the
plaintiff would be the selling agent for the flats to be offered for sale in a
few weeks at the stadium site.
At the
beginning of January 1973 Mr Summers acquired the shareholding in Norfolk
Garden Estates. This came as an unwelcome surprise to the plaintiff, who had
been in touch with two possible purchasers of Norfolk Garden Estates, namely,
Wilson Connelly Ltd and Francis Parker Ltd. The plaintiff said that when he had
discussed the conflict-of-interest question with Mr Summers in the previous
autumn, they considered that a way out of the difficulty would be for Mr
Summers to obtain a purchaser for Norfolk Garden Estates and thus obtain a
release of Mr Summers from his service agreement. The plaintiff said that it
was clear from this conversation that Mr Summers had discussed with RMC the
purchase from RMC of their interest in Norfolk Garden Estates. As I have said,
on or about January 3 1973 the plaintiff learned from RMC that Mr Summers had
purchased the equity of Norfolk Garden Estates. On January 5 the plaintiff saw
Mr Summers. According to the plaintiff, Mr Summers said that he was now the
owner of Norfolk Garden Estates but that this would make no difference to the
plaintiff. On January 24 the plaintiff called at Mr Summers’ house at 415
Unthank Road, Norwich. The plaintiff’s account of this important interview
differed in material respects from that of Mr Summers, whose evidence I prefer.
In particular, the plaintiff denied making any threats, and said that Mr
Summers stated that the company had decided to pay only 1 per cent to all
agents, and that when he referred to the heads of agreement of February 10 1969
Mr Summers said, ‘You can refer to that at your peril.’
The plaintiff
has made it part of his case that Mr Summers committed a breach of contract on
behalf of himself and the two defendant companies at this interview on January
24 1973 by a unilateral reduction of the plaintiff’s commission from 2 per cent
to 1 per cent at a time when his contract of agency was on foot. Mr Summers
denied that. He denied that he said anything which could be construed as a
final decision by the defendants to cut the commission to 1 per cent at that
stage. He said he informed the plaintiff that he was considering such a
reduction, and I prefer his evidence to that of the plaintiff, although it is
quite true that within a matter of a day or so, as appears from the
correspondence, Mr Summers had decided on behalf of the companies that some reduction
would have to be made. It is to be noted here that it is clear from his
subsequent actions that the plaintiff thought that the amount of future
commission was negotiable. The importance of this finding arises from the
contention relied on by the plaintiff that on January 24 1973 the defendants,
by their purported reduction of commission, committed a breach of the contract
of agency which he was entitled to treat as a breach going to the root of the
contract, and that nothing that he may be found to have done thereafter can
affect his claim to damages.
As I have
said, I prefer the evidence of Mr Summers as to what passed between these two
men at this interview. Mr Summers said that on January 24 the plaintiff called
on him at about 8 o’clock in the evening. He said that he mentioned to the
plaintiff as sympathetically as he could that the Swansea contracts had been
exchanged, and that this was a big disappointment to the plaintiff, as Mr
Summers appreciated it would be, because, as this sale had been arranged
through other agents, the plaintiff would not get the substantial commission he
was hoping to do as a result of the efforts he had made to find a purchaser.
The plaintiff became excited and said he would take his file and papers to
Feltham–the offices of RMC–if Mr Summers did not pay him £36,000. Subsequently
the sum of £35,000 was mentioned by the plaintiff. Mr Summers became upset. He
understood what the plaintiff meant by his reference to Feltham, and realised
he might be embarrassed by the revelations the plaintiff might seek to make as
to the profits on the sale of Swansea. Mr Summers said that the plaintiff said
he would ruin and destroy Mr Summers’ businesses, and that he spoke of pulling
them apart. Mr Summers said that at some stage the rate of agents’ commission
was raised and that he (Mr Summers) told the plaintiff that they were
considering alterations to the level of fees they were paying. Mr Summers said
that they were prepared to discuss this question with the plaintiff, but that
they had agreed 1 per cent with another firm as the basic level, with a minimum
of £100 per housing unit. Mr Summers made some notes of this conversation and
that which followed, and was able to refer to them to refresh his memory. There
was another interview, probably on January 26, when Mr Summers said the
plaintiff soon became excited and made the same threats and the same demands
and mentioned the press. The plaintiff referred to
editor’s waiting room. He again made it clear that he wanted £35,000. On
January 27 there was a further meeting between the plaintiff and Mr Summers at
about noon. The plaintiff made the same sort of threats and then referred to
legal proceedings. The plaintiff again demanded £35,000 and said that if Mr
Summers did not agree, he would go immediately to RMC and the Sunday Times.
As I have
already said, I accept the evidence of Mr Summers with regard to his account of
what passed between him and the plaintiff on these occasions, and I need not
refer in further detail to his account of what the plaintiff said, except to
note that for this interview on January 27 Mr Summers had prepared a statement
referring to blackmail. He said to the plaintiff, ‘What you are doing is blackmail
in the full criminal law sense, a threat to disclose information and a demand
for money coupled with the threat to disclose.’
The plaintiff said, ‘Maybe you are right, but there is nothing you can
do about it; you have got to do what I say.’
Mr Summers refused and requested the plaintiff to leave. He said he
would not leave, and Mr Summers left him in the lounge for about a quarter of
an hour. Mr Summers then returned, and the plaintiff left soon thereafter. Mr
Summers said that the plaintiff referred to his services to himself and the
companies, and that the plaintiff was clearly upset and different from his
normal self. I accept this account of what occurred. Both men then on January
29 1973 wrote letters which crossed. In his letter, which is the first
statement in writing of his claim, the plaintiff placed reliance on the heads
of agreement of February 1969 and suggested that the reduction of fees from 2
per cent to 1 per cent was a breach of that agreement. He also was clearly very
upset about the outcome of the sale of the Swansea site, with which much of the
letter was concerned, and in effect he charged Mr Summers with bad faith. Mr
Summers’ letter of January 29 1973 is in my opinion absolutely consistent with
his account of the interview which had taken place between the plaintiff and
himself. After references to the threats made by the plaintiff, he makes a very
fair and indeed generous offer to the plaintiff to mend the breach in their
relationship.
A number of
letters followed, which speak for themselves. I am satisfied that the plaintiff
continued to make threats against Mr Summers and that these became more
specific in character as time went on. The letter of February 26 1973 from Mr
Summers to the plaintiff’s solicitors is a sufficient indication of how the
plaintiff’s conduct was making any kind of future relationship impossible. The
plaintiff’s solicitors denied these allegations, but I am satisfied that the
plaintiff never told them the truth. The evidence that the plaintiff was engaged
over a period of time from January 24 to the end of June 1973 in a campaign of
threats against Mr Summers is overwhelming. In addition to the evidence of Mr
Summers and what appears in the correspondence, I had the evidence of Mr Hart,
Mr Meadows, Mr Chaplin, Mr Warren and Mr Pooley that on many different
occasions the plaintiff repeated his threats to these witnesses to injure Mr
Summers and his companies one way or another. I do not propose to refer in
detail to the evidence of these gentlemen, some of which is supported by the
evidence of tape recordings. It is sufficient to say that I found the witnesses
to be reliable and in no way prejudiced against the plaintiff, as clearly
appeared from the way in which they gave their evidence. Like Mr Summers, they
regretted very much that the plaintiff had resorted to the tactics of threats.
The plaintiff in his evidence admitted uttering most of the statements
attributed to him, but denied that they amounted to ‘threats,’ a word he took
exception to, and insisted that by making such statements he was only trying to
bring pressure to bear on Mr Summers in order to achieve a meeting with him
when a settlement could be arrived at, and not to extract money or a financial
bargain of benefit to himself. I find this interpretation of his actions
impossible to accept. In my opinion his threats–and I think the word is
abundantly justified–were made to force Mr Summers and his companies to come to
an agreement with the plaintiff under which the plaintiff would be entitled to
considerable financial benefits.
Before stating
my conclusions as to what follows from this finding of fact, I must deal with
the allegation that on various dates from 1967 onwards the plaintiff had
entered into oral agreements with Mr Summers, Mr Meadows and the companies
represented by them whereby he was appointed selling agent for the sites being
developed, or to be developed, by one or other of the defendants, and also that
from conduct such agreements are to be implied. In the final result, my conclusion
as to this may be of little practical effect, having regard to what I find must
be the consequences of the plaintiff’s conduct on and after January 24 1973,
but since it has been an issue throughout the long trial, I feel I should deal
with it. I find that there was no agreement that the plaintiff should have a
vested right to be appointed agent where the site in question was one which he
had introduced to the defendants. That this was the policy of the defendants
was admitted by Mr Summers, but in my judgment there is no evidence, save the
plaintiff’s, which I reject, to support the existence of an express or implied
agreement to that effect. Furthermore, as I have already pointed out, such an
agreement would be subject to so many exceptions, for example, where the
defendants resold the site without development, as to be too uncertain in its
operation to be defined and enforced.
The plaintiff
sought to support his contention as to the oral agreements alleged on the
various dates by reference to entries in his diaries for the years in question.
The existence of such diary entries appears to have been first raised by the
plaintiff in a letter of March 14 1975 addressed to the defendants’ solicitors.
These diaries were submitted for inspection by the defendants in May 1975, and
by a letter dated June 3 1975 the defendants’ solicitors stated their wish to
check the claim by the plaintiff that these entries were made contemporaneously
with the events they recorded. By a letter of June 11 1975 the plaintiff gave
detailed information as to his practice in making such entries, and under
paragraph (d) of his letter he stated that they were used for making essential
notes of meetings normally within a very few days after the event. Under
paragraph (e) he referred to his practice of transferring items of importance
from his pocket diary and local-authority diary at convenient intervals, and at
the end of each year in particular. Finally, under paragraph (f) he stated that
all other entries would be found to have been made contemporaneously. The
defendants submitted these diaries to a handwriting expert, and in the light of
his opinion they were not prepared to accept that the entries were in any sense
contemporaneous records. In a letter of July 9 1975 the plaintiff began to
resile from the position he had undoubtedly taken up with regard to the
importance of these entries as giving valuable support to his assertion of oral
agreements on the various dates alleged in the pleadings. In the course of his
evidence, while denying that all the relevant entries–which are conveniently
set out in the first report of Mr Wallace, the handwriting expert–were made in
1974, he agreed that they could not be regarded as a contemporaneous record,
but stated that they were not handed over as such. He further admitted that the
entry for December 29-30 1967 was probably put in by him two or three years
later and that it was possible that these entries were entered at the same time
as the entries made for 1972, that is to say, five years after the events
recorded under 1967.
Mr Wallace
said that in his opinion the characteristics and qualities of the relevant
entries in the diaries for December 1967 and December 1972 satisfied him that
they were written under the same conditions, the same circumstances and the
same environment, and he thought the writer was in the same
written. I accept his opinion. With regard to the other entries, Mr Wallace was
not prepared to go so far, but was of the opinion that they were all written by
the same pen. The plaintiff agreed that this was probable, but contended that
during these years he had kept the same Parker biro pen and only used it
occasionally, for reasons which he explained, and that the fact that the same
pen might have been used to make all these entries did not show that they were
all entered up at the same time. I do not think that that evidence enables me
to reach a final conclusion on this point, nor is it necessary for me so to do,
although it is to be noted also that the entries made by this same pen are all
in respect of matters material to this action. I think it is sufficient for me
to say that I am unable to attach any importance whatever to the entries as
supporting the plaintiff’s oral evidence. I think that there are very good
reasons why the plaintiff should now regret that he put these entries forward
to buttress his case. Clearly, the only probative effect they could have would
be on the basis that the entries were contemporaneous, or nearly so, and this
was the basis, I think, on which they were put forward. I think the intention
was to impress the defendants with the strength of the plaintiff’s case. The
plaintiff, in my judgment, withdrew from the brink just in time after he
appreciated the effect of the handwriting expert’s opinion.
The
plaintiff’s conduct in relation to these entries has not enhanced his claim to
be treated as a credible witness. On the dates, or some of the dates, in
question there were probably discussions between the plaintiff and Mr Summers
about business matters, and these may have included the prospects of selling
houses to be built on the defendants’ sites, but I accept Mr Summers’
evidence–and indeed that of Mr Meadows–that on none of these dates were any
specific instructions given to the plaintiff to act as selling agent on behalf
of the defendants. In my judgment such business discussions as took place from
time to time over the years between the plaintiff, Mr Summers and Mr Meadows added
little or nothing to the relationship recognised by the heads of agreement,
that is to say, that so long as it suited both parties, the plaintiff would act
as selling agent for the defendants’ companies as and when they acquired sites
and developed them, but that this was at all times subject to the right of
either party to give reasonable notice to terminate the arrangement and to the
right of the defendants to vary its terms by appointing other agents to act
jointly with the plaintiff, or altering his rate of commission. If the
plaintiff was unwilling to act as agent on the terms proposed by the defendants
then he would, of course, be at liberty to terminate his agency. I find that
this was the situation in January 1973 and that the agency then in existence
with the two companies was on the terms I have outlined. I find, however, that
at no material time was there any contract of agency between the plaintiff and
the second defendant.
I have said
that the agency was determinable by reasonable notice, the length of which
would depend on the relevant circumstances at the time it was given: see the
case of Martin Baker Aircraft Co Ltd v Murison [1955] 2 QB 556. I
have not overlooked the fact that in the letter of March 14 1967, by which the
plaintiff was appointed to act as sole agent by Norfolk Garden Estates in
respect of Blithewood, it was expressly provided that no period of notice was
required on either side, but there was no such express provision in the heads
of agreement on February 10 1969 or subsequently agreed, and I think it is
reasonable to imply that to determine the agency which existed in January 1973
a reasonable notice was necessary on either side. If it had become
necessary–which I do not think it is–for me to decide what length of notice would
have been reasonable in January 1973, I should have had regard to the business
actually done by the plaintiff for the defendants at the material time, and to
other relevant facts. As already mentioned, no sales were actually proceeding
in respect of the Eaton or stadium sites, though preparatory work was being
done, such as the collection of names of interested persons in the case of
stadium, so that Martineau Lane, an industrial site, was the only one in
respect of which the plaintiff was active in trying to find a purchaser. From
the available information, which was considerable and not in dispute, I
consider that a notice specifying weeks rather than months would have been an
adequate period of time to determine this contract of agency. However, my conclusion
as to this issue is of little practical importance in view of the course of
events in 1973.
Mr Summers
refused to negotiate a settlement of the dispute with the plaintiff unless the
latter withdrew his threats and allegations. This was made clear in Mr Summers’
letter of February 26 1973, and was repeated again and again in the
correspondence between the parties and their respective solicitors. The
plaintiff, far from withdrawing his threats, took action in respect of them.
For example, in June 1973 he reported some of his complaints to his
professional body, the Incorporated Society of Valuers and Auctioneers, with a
serious innuendo as to the conduct of Mr Summers. Inevitably the Law Society,
to whom the matter was referred, refused to take it up. Relations were finally
terminated in July 1973 by a letter of July 23 from the defendants’ solicitors.
This letter, and the one to which it is a reply, speak for themselves. In my
judgment, the defendants were abundantly justified in bringing the relationship
of principal and agent to an end. Indeed, I think they would have been so
justified at any time on and after January 24 1973. Mr Summers said that he
regarded the plaintiff’s demand for £35,000, coupled with the threats, as an
outrage. In my view, Mr Summers’ reaction was fully justified. The plaintiff
thereafter had conducted a campaign of threats and allegations of bad faith
against Mr Summers, and by his actions undermined the basis for the
relationship of principal and agent. I think the defendants, and Mr Summers in
particular, showed considerable patience and forbearance in giving the
plaintiff ample opportunity to withdraw his threats and allegations following
January 24 1973. However, the plaintiff made it clear beyond any doubt whatever
that the relationship which had existed between them for so long, and which he
had destroyed, could not be rebuilt. By his actions he repudiated the contract.
The plaintiff
argued that by their agent, Mr Summers, the companies committed a breach going
to the root of the contract by a unilateral variation of his right to
commission at 2 per cent by a reduction to 1 per cent, and that the court is,
therefore, not concerned with what happened thereafter, because the plaintiff
was entitled to treat this purported reduction as a breach going to the root of
the contract and as entitling him to damages in the action. This submission
ignores my findings of fact and also, in my judgment, the principles of law
applicable in this situation. In this context I was referred to the case of The
Mihalis Angelos [1971] 1 QB 164 and particularly to the passage in the
judgment of Edmund Davies LJ, as he then was, which is to be found at the
bottom of p 202 and the top of p 203. In my judgment the principle there
expressed is applicable here. I have found that at the first interview between
Mr Summers and the plaintiff on January 24 1973 the plaintiff’s hostile
attitude arose from his learning from Mr Summers that the Swansea site was sold
without any regard to him. I have also found that a reduction of his commission
from 2 per cent to 1 per cent was put forward for consideration only in the
first instance. I do not find that this amounted to a breach by the defendants
of the contract of agency or one going to the root of the contract. In any
event, the conduct of the plaintiff in this very first interview, and persisted
in thereafter, entitled the defendants in my judgment to treat the plaintiff as
having repudiated the contract, although it is true that the
him the opportunity to mend the relationship. In the same way, the plaintiff
did not treat the alleged breach by the defendants, that is to say, the alleged
reduction of his commission to 1 per cent, as entitling him to treat the
contract as at an end, but on the contrary made counter-proposals, as appears
from the correspondence, on the basis of a continuing relationship.
I should add
here that it was submitted to me that in any event I ought not to hold that a
unilateral reduction of the plaintiff’s commission from 2 per cent to 1 per
cent was a breach which went to the root of the contract. Having regard to the
evidence, which I accept, that other agents at the material time were prepared
to act as agents for the defendants for 1 per cent commission, and that at this
time it was not difficult to sell houses, it may well be that it was not such a
breach as would have entitled the plaintiff to treat the contract as
repudiated. However, the plaintiff did not treat the contract as such, and in
the light of my findings it seems to me unnecessary for me to state my
conclusion as to whether the proposed reduction of the rate of commission would
have been a breach going to the root of the contract.
If, contrary
to my findings, there was any breach of contract by the defendants or any of
them such as was alleged by the plaintiff, he failed to prove that any damages
flowed from such breach. On the contrary, the evidence satisfied me beyond any
doubt that any damages which the plaintiff has suffered as the result of the
termination of his contract of agency with the defendants are the result of his
own conduct, which was of such a grave and serious nature that in my opinion
the defendants had no alternative but to bring their business association with
the plaintiff to an end. This was, in my judgment, the inevitable consequence
of the conduct of the plaintiff. It may seem surprising that an association
which had for so long been profitable to the plaintiff should have been so
recklessly put at risk by him. The explanation, I think, lies in an obsessional
sense of grievance against Mr Summers which the plaintiff has nursed for a long
time, as appeared from the evidence. Although an intelligent and able person,
the plaintiff appeared to be blinded by envy and dislike of Mr Summers, so that
he persisted to the end in a course which was ruinous to his own interests,
despite the advice of third parties such as Mr Hart, who had a regard for the
plaintiff and for whom the plaintiff professed to have a regard. The plaintiff
in 1969 had unsuccessfully attempted to bring pressure on Mr Summers to obtain
a share in the equity of Norfolk Garden Estates, and throughout the years which
followed it is clear that he was dissatisfied with his rewards. In 1973 he
employed somewhat similar but rougher tactics to those employed in 1969 to
obtain a larger share of the profits which the companies were making, and which
he thought he deserved, having regard to his work over the years in helping to build
up Mr Summers’ position. These proceedings are a final attempt by the plaintiff
to obtain what I am sure he has convinced himself is his due. The plaintiff has
had every opportunity, in a hearing which has lasted many days, to put his case
forward, and by evidence and argument to persuade me that he has a claim for
substantial damages against the defendants. I hope I have indicated
sufficiently in this judgment the reasons for my finding here that the
plaintiff’s claim fails, and that there must be judgment for the defendants.
The action
was dismissed with costs.
