Estate agents — Whether estate agent negligently failed to display ‘for sale’ boards and failed to advertise or market the property properly
In September
1988 the plaintiff estate agent agreed to find a purchaser for a site owned by
the defendants for a commission of 1.25% and in a letter set out how the site
would be marketed, including a board, mailing other agents and advertising. At
a meeting between the parties and because the defendants were involved in
litigation with a past director of the company, and wished to keep confidential
the sale of the site, the plaintiffs alleged that they were instructed not to
put up a board or to advertise. Particulars were circulated to other agents and
eventually an offer was received from D Ltd, who purchased the site for
£300,000 and shortly afterwards entered into an option to resell at £550,000,
which was exercised in June 1990. In the court below, Tudor Evans J allowed the
plaintiffs’ claim for unpaid commission in the sum of £4,312.50 and dismissed
the defendants’ counterclaim for £250,000 for breach of contract for negligence
in the marketing of the site and for advising the defendants to accept an offer
below market value. The defendants appealed.
evidence before him, to prefer the account of the date and terms of the
plaintiffs’ instructions put forward by its negotiator on its behalf. The
plaintiffs had received specific instructions not to use a board. They had
discharged their contractual duty to market the property properly given their
instructions about limited advertising. Having regard to other valuations of
the site at the time and later, the plaintiffs were not in breach of any duty
in leaving the matter of the acceptance of the offer to the defendants to make
up their mind one way or the other.
The following
cases are referred to in this report.
Hontestroom,
The v The Sagaporack [1927] AC 37
Powell v Streatham Manor Nursing Home [1935] AC 243
This was an
appeal by the defendants, Super Cement Ltd, from the decision of Tudor Evans J,
who on July 31 1992 gave judgment to the plaintiffs, Letgain Ltd, on their
claim for unpaid commission and dismissed the defendants’ counterclaim for
damages for breach of contract.
Augustus
Ullstein QC (instructed by Crellins) appeared for the appellants; Simon Brown
(instructed by Kennedys) represented the respondents.
Giving the
first judgment at the invitation of Butler-Sloss LJ, STUART-SMITH LJ said:
This is an appeal from a judgment of Tudor Evans J given on July 31 1992 by
which he gave judgment for the plaintiffs in the sum of £4,312.50 on the claim,
being the value of their charges for services rendered to the defendants in
connection with the sale at a price of £300,000 of premises at Spelthorne Lane,
Ashford, Middlesex, that being a freehold property which was then owned by the
defendant company. He dismissed the defendants’ defence and counterclaim, the
defence being that the value of the plaintiffs’ services were nil with a counterclaim
in the sum of about £250,000 for breach of contract. The purchasers of the
property from the defendant company was a firm called Doyle Brothers (Bedfont)
Ltd, a company which was controlled by a Mr Payne.
The property
in question was somewhat odd-shaped. The judge described it as ‘funnel-shaped
with a relatively narrow entrance where the factory was placed and to the rear
of which there was some unused land’. It was about half an acre in extent. At
the material time the defendants were manufacturing and sold epoxy-resin-based
flooring material from the premises. A contract was made in 1988 between the
plaintiffs and the defendants by which it was agreed that the plaintiffs would
provide their services in exchange for 1.25% commission on the sale price.
That, as the judge pointed out, was how the amount of the claim was calculated.
The defendants
denied that they were in breach of any of the express or implied terms of the
contract and, as a result, the plaintiffs thereby lost the chance of selling
the property at a higher sum, that being the £250,000 difference which was
claimed. That came about in this way, that Mr Payne subsequently sold the
property for the price of £550,000 to a company called Ideal Vehicle Rentals.
It was alleged
by the defendants in their defence that the plaintiffs were in breach of the
contract between themselves and the plaintiffs in a number of respects: first,
that they failed to cause a ‘for sale’ board to be erected at the premises;
second, that they failed to advertise the property properly; third, that they
failed to circularise all London and local agents; fourth, that they failed
properly to market the property to potential owner-occupiers; fifth, that they
failed to attempt to market the property to persons and organisations desirous
of purchasing the property; and, finally, that they advised the defendants to
accept an offer which was below the true market value. It was the plaintiffs’
case that they were expressly instructed not to put up a board and not to
advertise the property. They denied that they were in breach of the contract in
other respects and the judge found in their favour.
The
introduction between the parties came about in this way. In June and August
1988 the plaintiffs wrote two letters to the defendants inquiring whether they
were interested in selling the property, because at that stage they had a
client who might be interested. That came to nothing but Mr Goddard, the
managing director of the defendant company, subsequently telephoned the
plaintiffs and expressed an interest in instructing the plaintiff company to
market the property for them. A meeting was arranged which took place on
September 21 between Mr Goddard, on behalf of the defendants, and Mr John
Kingston [MA(Cantab) ARICS], a director of the plaintiffs. At that meeting Mr
Goddard told Mr Kingston that the company might want to sell either the
property or the business. One of the reasons was that there was litigation
between Mr Little, a former managing director of the company, and the company for
breach of fiduciary duty on the
was soliciting their customers. Mr Goddard on that occasion told Mr Kingston
that the discussion was highly confidential and that they were involved in that
litigation. As a result of that meeting, it was left that Mr Kingston would
write, setting out his opinion as to how the property could be marketed. Mr
Goddard told Mr Kingston that there was to be a board meeting of the defendant
company on October 25 and that he would thereafter contact him.
Mr Kingston
then caused inquiries to be made at the planning office. The planning officer
was against residential development and reasonably positive that a B1 use could
be developed. B1 use comprises office development, hi-tech development and
light industrial use. On September 26 Mr Kingston wrote a letter to Mr Goddard.
The letter indicated these points and that Mr Kingston thought that a price of
£750,000 could be obtained on a development basis. He said that his optimism
was based on a buoyant market and the fact that considerable sums were being
offered for commercial developments. He suggested that the planners would not
be too strongly opposed to the offer of small two-storey business units for owner-occupiers
at the site. He said that vacant possession would have to be given within a
reasonable time, and he thought that that would fit in with the litigation
which he understood was expected to be resolved within a few weeks. He then set
out in some detail how it was proposed that the plaintiffs would market the
property, and I read from the letter:
(a) Board
I feel it
would be beneficial to place a board on the premises (perhaps 5′ x 4′) so that
the property could be easily identifiable to interested parties.
(b) Mailing
I would also
offer our in-house service, whereby we would write to all investors/developers
who we believe would be interested in such a proposition. This method of
marketing is found to be particularly successful and economical.
(c) Preparation of Particulars
Details of the
site would be prepared on our usual A4 details paper and sent to all the London
and local agents for their perusal.
(d) Advertising
It is also
recommended that a limited amount of advertising be undertaken and I would
advise that perhaps a half page (black and white) advertisement be placed in
the Estates Gazette, which is a much read document within the property
world.
Then he said
that they would expect to dispose of the site within a three-month period. In summarising,
he put the position as follows:
. . . it is my
considered opinion that to ensure the highest possible value for your property,
there is only one suitable course of action. I believe that the site should be
marketed at the earliest opportunity as a redevelopment situation.
No doubt
there will be aspects of this report which you will wish to take up with me and
discuss at greater length and I would be delighted to hear from you at your
convenience.
Mr Goddard
telephoned Mr Kingston after the board meeting on October 25. According to Mr
Kingston, Mr Goddard told him that the company wanted to sell the property and
asked him to attend a meeting between himself and Mr Broomfield, who was the
company chairman, to discuss the sale. He was not instructed in that telephone
conversation to go ahead and market it on the basis of the letter of September
26, and he was not given authority to act at that time. According to Mr
Goddard, however, on receipt of the letter they had the board meeting. He
telephoned Mr Kingston on October 26 and instructed him to sell the property.
He said it was arranged for Mr Kingston to come to a meeting on November 1 to
measure up the premises.
A meeting took
place on November 1 attended by Mr Goddard, Mr Broomfield and Mr Kingston. As
the judge described it, there was a head-on conflict between Mr Kingston and Mr
Goddard as to what took place at that meeting. Mr Kingston’s evidence was that
there was discussion about the proposals contained in the letter of September
26, and that he said the proposals with regard to the use of the sale board
were not acceptable. Both the defendants’ representatives were concerned that
the other person involved in the litigation would become aware of the sale and
there was a discussion about the use of the sale board, but eventually he was
instructed not to use it. As to the advertising in the Estates Gazette,
again it was Mr Kingston’s evidence that that was not acceptable because Mr
Goddard and Mr Broomfield felt that national advertising would jeopardise their
desire to keep the matter secret and, accordingly, Mr Kingston was instructed
not to advertise at all. Again there is a conflict of evidence about that. Mr
Goddard said that Mr Kingston was instructed to place an advertisement in the Estates
Gazette, but not to undertake any other advertisement in relation to the
property. Various other matters were discussed. The closing date for the offers
was to be December 9, but that was subsequently changed to December 16.
On the next
day, November 2, Mr Kingston went to see the planning officer. Mr Kingston said
he was told that he could not proceed with residential development and that he
could not proceed with office development, but that, although the planners were
pessimistic, they were not closing the door to B1(b) and B1(c) development —
that is the other type of development to which I have referred. Mr Kingston
said that shortly after that meeting he telephoned Mr Goddard, told him what
had happened, said that redevelopment would not be easy, but it was agreed
between them that they would go ahead and attempt to market on the basis agreed
at the meeting, ie that it was suitable for redevelopment.
Thereafter
particulars of the property were prepared on November 8. They consisted of five
pages, but the last three pages were plans and directions, which were not sent
out unless requested. The particulars were described as ‘excellent
redevelopment potential’, and the potential purchasers were invited to consult
the attitude of Mr Sterney, the planning officer, with regard to potential
development. There was no price indicated in the particulars. According to Mr
Kingston, the particulars were sent out, first, to developers who were kept on
an in-house list by the plaintiffs (there were about 300 developers on that
list); second, to central London estate agents, using an estate agency service
which, according to Mr Kingston, mailed about 400 to 500 agents practising in
central London, and also to 65 to 70 local agents, using the Estates Gazette
agents’ directory, which contains a list of agents which is updated every
month. Mr Kingston said that the particulars were sent only to the commercial
agents in locations which he thought were suitable.
According to
Mr Goddard, he said that about a week after November 1 he had taken up the fact
that there was no sale board up on the premises, but that Mr Kingston had told
him that, on reflection, he thought it best not to have a board. The judge did
not accept that evidence.
By the closing
date of the offers, December 16, there had in fact been no offers at all, and
on December 19 Mr Kingston wrote to Mr Goddard in these terms:
Unfortunately,
I have to advise you that we did not receive one offer in relation to
the above property. Clearly this is most disturbing and, in part, may be
explained by the closeness to Christmas.
I have
subsequently spoken to the planners again, however, and feel that it is
something more fundamental. When I met Spelthorne Council, they indicated that
they would be somewhat reluctant to see any form of redevelopment close to the
residential area. Many of the interested parties have contacted me advising
that the planners have totally ‘stone walled’ any redevelopment plans put to
them. I strongly believe that this is the main reason for such a response.
With regard
to where to go from here, I believe you have two alternatives:
1. Re-market
the site in the New Year and within this programme, include wholesale
advertising showing that it could be of interest to both developers and
owner/occupiers. You still have sufficient time for this plan to take place
satisfactorily.
2. Consider
your idea of simply selling your business, as discussed in our early meetings.
Shortly after
receiving that letter Mr Kingston received a letter from Mr Jeff Tapping [ARICS],
who was a partner in a local firm of estate agents [Bryant & Partners],
making an offer for the premises of
informing him of the offer. He said in the letter:
The reduced
level obviously illustrates that it is being bought by an owner/occupier but I
am not sure that it should be dismissed, as the developers may find the
planning difficulties insurmountable.
Perhaps you
might call me to discuss the situation further, but I strongly suggest that a
letter be sent back to this interested party indicating that we would like to
interview them. It may be possible to then ‘wind’ up the offer level from them
slightly.
A meeting was
fixed to take place on January 4 1989 and it was arranged that on that day Mr
Kingston would first meet Mr Goddard and Mr Broomfield to discuss the offer,
and then they would see Mr Tapping and Mr Payne. According to Mr Kingston, at
any rate in his evidence in chief, there was a fourth person present at the preliminary
meeting. He said he was told by Mr Goddard that this was a local agent who had
been asked to express his views. The agent said that he envisaged a value in
excess of £300,000 for an occupier. Mr Kingston said that he thought there
would be a joint marketing between himself and the other agent. He also thought
that Mr Goddard told him that the other agent was from a firm called Shepherd
Dear & Co. Mr William Shepherd [FRICS], of Shepherd Dear & Co, had in
fact advised Mr Goddard about the premises. He had written in 1987 and shortly
before this meeting. It was put to Mr Kingston in cross-examination that there
was no other person present, but when Mr Goddard gave evidence he said that his
nephew had been present, a man called Mr Denham, and that he had remembered
that shortly before the trial.
The offer of
£265,000 made by Mr Tapping was discussed. Mr Kingston said that he felt that
an offer of £350,000 would be attractive and that the present offer of £265,000
did not reflect the true value. On the other hand, the defendants could by this
time wait until June 1990 because vacant possession was not to be given to a
purchaser before that date. On the other hand, the existence of the litigation
hindered the advertising and the use of a board. Therefore, he said that unless
there was a change of attitude towards advertising and the use of a board, it
would be very difficult to find an owner/occupier to buy at a higher price. It
was decided at the preliminary meeting that the strategy to be adopted was to tell
Mr Tapping and Mr Payne that they were one of several agents interested in the
property and to hint strongly that the only way to get it would be to increase
the offer.
There then
followed the meeting with Mr Tapping and Mr Payne. They were told that if the
offer was increased the defendants might be tempted, and it was suggested that
an increase of £100,000 might be acceptable. Mr Tapping said that they were not
interested in that. After that meeting there was a further discussion, briefly,
about remarketing the property and again Mr Kingston said £265,000 was not
acceptable.
Mr Goddard’s
account of the meeting was different. He said that after he had received the
offer of £265,000 he was advised that it might go to £365,000. He contacted Mr
Shepherd, of Shepherd Dear & Co, because he thought that it was desirable
to obtain another opinion, and the opinion of Mr Shepherd was that £365,000 was
acceptable. Mr Shepherd was not retained, but at the meeting Mr Goddard told Mr
Kingston the substance of the advice given by Mr Shepherd, namely that it could
be marketed over the next six months, a further offer might be forthcoming, and
that a price of £300,000 to £350,000 might be forthcoming, and then it was for
Mr Goddard to make up his mind what to do. He said that, in effect, he was
being advised at the meeting that, if an offer of £300,000 were made, it was
acceptable and should be accepted.
On January 6
Mr Tapping did increase the offer to £300,000, with the proviso that there
should be a contract within seven days. The offer was discussed on the
telephone between Mr Goddard and Mr Kingston. Mr Kingston said that he had put
the pros and cons of the offer, leaving it to his client to decide whether to
accept it, saying that it was on the light side and that Mr Goddard might get
more.
According to
the judge, Mr Goddard’s recollection of that telephone conversation was not
clear. He could not remember discussing it with Mr Kingston, but accepted that
he must have done. Eventually, after discussing it with Mr Broomfield, they
decided to accept the offer, because Mr Kingston advised that there was no
guarantee that £350,000 would be forthcoming and that the offer of £300,000 was
available only for a short time. Shortly after that, the offer was accepted.
After those
negotiations were complete and a binding contract was entered into, Ideal (the
firm I have already mentioned) became interested and made an offer of £555,000
to Mr Payne. That was in the form of an option which was to be exercised by
them if they wished to do so, and in fact they exercised the option in June
1990.
There was
evidence from a Mr Robert Meacock [FRICS FSVA], who was an estate agent, who
was called on behalf of the defendants, that in April 1989, when he was looking
for premises for another client of his, Houlihan & Co, the planning officer
at Spelthorne suggested that he might be interested in the defendants’
premises. He got in touch with Mr Goddard, but by that time they were committed
to Mr Payne. Mr Meacock in fact proposed that his client should buy out Mr
Payne, as I understand it, at a premium, paying £500,000 for the site, but,
although negotiations took place with Mr Payne, they fell through, not
surprisingly perhaps because Mr Payne was going to get £555,000 from Ideal.
That is a
brief summary of the facts of the case. The judge accepted the evidence of Mr
Kingston where it differed from that of Mr Goddard. At p20 of the judgment he
said:
It is also
convenient at this stage to state my impression of Mr Kingston and Mr Goddard
as witnesses. Mr Kingston often found it very difficult to answer, even a
simple question, in short, simple and unconvoluted language. But I am
satisfied, having seen and heard him for a substantial period of time, that he
was not fencing with any of the questions, that he was trying to answer them
accurately even though he used circumlocation. I find him to have been a
truthful and reliable witness. I very much regret to say that that was not my
impression of Mr Goddard. He frequently fenced with and was evasive in
answering questions put to him. As I have already found, he attempted to shift
to Mr Broomfield alone the desire to avoid Messrs Little and Dean learning
about the sale.
I should point
out that Mr Broomfield, although he was an important witness in relation to the
meeting of November 1 and indeed of January 4, was not called to give evidence.
The judge then went on to deal with the evidence of Mr Denham, and again he
said that he preferred Mr Kingston’s account of the meeting of January 4.
With regard to
the breaches of contract pleaded in para 14 of the defence and counterclaim, he
held, first, in relation to the alleged failure to erect a ‘for sale’ board,
that the plaintiffs had received specific instructions on November 1 not to use
a for sale board. In relation to the allegation that the plaintiffs failed to
circularise other estate agents with particulars of the sale, he accepted Mr
Kingston’s evidence that he circulated 65 to 70 local agents, and that was a
sufficient discharge of the duty. With regard to para (c) that they failed to
market the property properly, he held that the marketing strategy carried out
was perfectly proper, having regard to the constraints put upon the plaintiffs
by the requirement that there was to be no local publicity so that Mr Little
should not get wind of the matter. With regard to the allegation in para (d)
that the plaintiffs failed to market, or attempt to market, the property to
persons or organisations desirous of purchasing the premises for business use
(ie as owner/occupiers), he held that there was no breach of that. It was
agreed that developers would be targeted in the first place, but, when there
was no offer, the question of targeting the owner/occupiers was raised in the
letter of December 19. Then they received the offer of £265,000, which
eventually became one of £300,000, which, as it were, superseded the
alternative of further marketing the property. With regard to the final
allegation that the plaintiffs advised the defendants to accept offers which
were substantially below the true market value of the property, the judge held
that Mr Kingston did not advise acceptance. He put the pros and cons of
accepting the offer of £300,000 and left it to the clients to accept or not as the
case may be. In fact, as the case was developed, the real allegation was that
the plaintiffs should have
rejected that contention.
The criticisms
which are made in the grounds of appeal and developed by Mr Augustus Ullstein
QC [counsel for the appellants] are entirely upon the judge’s findings of fact.
That presents the plaintiffs with a very difficult task in this court. The
principles to be applied are set out in the White Book at p940 and they are
well known. It is necessary only for me to refer briefly to two well-known
passages in the speech of Lord Wright in Powell v Streatham Manor
Nursing Home [1935] AC 243, first at p265 where Lord Wright is dealing with
the speech of Lord Sumner in The Hontestroom v The Sagaporack
[1927] AC 37 at p40. Lord Wright in citing the speech of Lord Sumner, after
referring to the fact that the Court of Appeal can interfere with a judge’s
findings of fact because it is a rehearing, said:
None the less,
not to have seen the witnesses puts appellate judges in a permanent position of
disadvantage as against the trial judge, and, unless it can be shown that he
has failed to use or has palpably misused his advantage, the higher Court ought
not to take the responsibility of reversing conclusions so arrived at, merely
on the result of their own comparisons and criticisms of the witnesses and of
their own view of the Probabilities of the case.
Then he said:
If his [the
trial judge’s] estimate of the man [the witness] forms any substantial part of
his reasons for his judgment the trial judge’s conclusion of fact should, as I
understand the decisions, be let alone.
Then at p267
Lord Wright said:
In truth, it
is not desirable, in my opinion, to do more than state, as I think Lord Sumner
was stating, principles which will guide the appellate Court in the majority of
such cases. The problem in truth only arises in cases where the judge has found
crucial facts on his impression of the witnesses: many, perhaps most cases,
turn on inferences from facts which are not in doubt, or on documents: in all
such cases the appellate Court is in as good a position to decide as the trial
judge. But where the evidence is conflicting and the issue is one of fact
depending on evidence, any judge who has had experience of trying cases with
witnesses cannot fail to realize the truth of what Lord Sumner says: as the
evidence proceeds through examination, cross-examination and re-examination the
judge is gradually imbibing almost instinctively, but in fact as a result of
close attention and of long experience, an impression of the personality of the
witness and of his trustworthiness and of the accuracy of his observation and
memory or the reverse. He will not necessarily distrust a witness simply
because he finds him inaccurate in some details: he can give such inaccuracy
its proper place, particularly if he sees that the witness is tired, or
antagonised, or confused, or perhaps impatient, and especially if the matter of
the inaccuracy is of minor or collateral importance. But such inaccuracies may
appear in a very different light when pointed to as isolated passages in the
shorthand notes and abstracted from the human atmosphere of the trial and from
the totality of the evidence. The judge will form his impression from the whole
personality of the witness; he can allow for the nervous witness, standing up
in a crowded Court or worried by the strain of cross-examination. The judge may
be deceived by an adroit and plausible knave or by apparent innocence: for no
man is infallible; but in the main a careful and conscientious judge with his
experience of Courts is as likely to be correct in his impressions as any
tribunal, unless perhaps, as some would say, a jury of twelve members is
preferable.
I do not think
I need recite any more from that passage. It shows that the defendants in
appealing these findings of the very experienced judge have an uphill task.
Mr Ullstein
criticises, first, the judge’s finding as to the date and time the contract was
completed, namely November 1, and the judge’s decision that there was no breach
of contract in failing to display a board. Mr Ullstein, in effect, takes three
points. First, he submits that the judge’s conclusion is inconsistent with the
board minute of October 25. That, so far as is relevant, simply reads:
It was agreed
that the [managing director, ie Mr Goddard] should instruct Russell Cash &
Co to dispose of the company’s freehold property.
Mr Ullstein
submitted to this court, as he did to the judge, that that meant that he was
instructed to complete the agreement on the terms of the letter of September
26. In my judgment, that is not so. First, it is common ground that it was
arranged that Mr Broomfield would be present at the meeting, and it is clear
there was a need to see Mr Broomfield. Moreover there is no reference in the
minute to the letter of September 26, still less the fact that it could be
accepted only on those terms. Second, Mr Ullstein points to the fact that Mr
Kingston’s notes of the meeting of November 1, although, according to him,
there were two important changes in the strategy as set out in the letter of
September 26, contain no express reference to those changes, namely that there
was to be no board and no advertising in the Estates Gazette. What Mr
Kingston did record in his very sketchy notes of that meeting was that the
property was to be quietly marketed. It is common ground that Mr Kingston was
anxious about this and, in my judgment, there was nothing improbable about
those instructions being altered in view of the reservations that both
directors of the defendant company had about the secrecy of the operation and
the fact that Mr Little was not to know about it.
Then it is
said that it is surprising that these two important changes were not recorded
in writing. It is correct to say that there was no further letter from either
side confirming the terms of the agreement. It is common ground that the
acceptance of the instructions was oral. In my judgment, this is merely a
factor to be taken into account by the judge, as he did in fact take it into
account, in reaching a conclusion. It seems to me that the probability is that,
if Mr Kingston had suggested both these two things, ie the board and the
advertising in the Estates Gazette, especially since the client would be
charged separately for it and in his opinion it would be an aid to the
marketing, it is likely, it seems to me, that would have been done unless the
clients changed their instructions. In my opinion, the probability supports the
plaintiffs’ account of the matter.
In addition Mr
Broomfield was not called (as I have already indicated) to give a different
account of that meeting, and I agree with the point made by Mr Simon Brown
[counsel for the respondents] in his skeleton argument that there does not
appear to be any really convincing explanation why Mr Broomfield should have
been brought into the matter at all if in fact it had already been finalised by
the telephone conversation accepting the contract in the terms of the letter.
The second
point which Mr Ullstein criticises really goes to the nub of the case and that
is to the judge’s finding that Mr Kingston circulated 65 to 70 of the local
agents. Mr Kingston said that that is what he did. He said that he took the agents
from the Estates Gazette list. He took them from the list for those in
the locality. He gave the names to the secretary, and she typed out the
addresses to be put on the envelopes. The judge accepted that there was a
paucity of documentary evidence supporting the plaintiffs’ account of this
matter. He dealt with it at p24A-E in relation to such documentary evidence as
there was. The first was a fax, which appears in the bundle, which appears to
be a response to an inquiry by Messrs Stimpsons, and the judge says:
According to
Mr Kingston, he received a telephone call from Messrs Stimpsons to whom he had
sent the particulars and as a result of the enquiry, he faxed the site and
location plans to them. I accept that evidence. That is in fact not the only documentary
evidence showing that local agents were circulated. At page 84 section II is a
letter from the Cardiff Property plc of Egham dated 23rd November 1988 and
written to a Mr Richards of Bryant & Partners under the heading ‘Spelthorne
Lane Ashford . . .’ in which the writer states:
‘I refer to
your faxed letter of 22nd November and would confirm that we have already
received particulars of the same direct from Russell Cash.’
The
Plaintiffs also called Mr Tapping of Bryant & Partners, the agents who were
acting for Mr Payne. In evidence-in-chief, Mr Tapping said, although he was not
sure, that he thought he had received the particulars from the Plaintiffs.
However, in
cross-examination he plainly became less certain of that and the judge did not
rely on Mr Tapping’s evidence in support of the plaintiffs’ case in that
matter. Mr Ullstein submits that the judge’s finding about this matter cannot
stand. First, he submits that Mr Kingston’s evidence about it was
contradictory. He refers to a passage at day one p59 in his evidence-in-chief
where he said:
There is a
system, my Lord, for mailing London agents utilising the estate agent’s
services. This is a service which we’re registered with and mails something in
the region of 400 to 500 other practices in the London and the surrounding
area. In addition to that, clearly in this instance I felt the local agents
should receive the information also, and I subsequently sent information on to
them. This was done by use of an Estates Gazette agents’ directory,
which I might explain, my Lord, is something which comes out once a month which
is like a bible of agents across the country.
Mr Ullstein
says that that has to be compared with what he said at p70F where he is again
being asked in chief:
Q. So those
are the particulars you prepared, and those particulars you sent out, did you,
to London agents?
A. To all the
developers on our list and investors, to all the Central London agents and to
the local agents.
MR JUSTICE
TODOR EVANS: Just say that again, would you?
A. I do
apologise.
Q. It is my
fault. You sent it to?
A. The
developers, 300 plus, as I discussed earlier; the Central London agents which,
if you recall, was by way of the estate agent’s services, and the appropriate
local agents.
Mr Ullstein’s
point appears to be that in that passage Mr Kingston is saying that he got the
estate agent’s service to circularise the local agents. I do not read it in
that way at all, and I think there is nothing in the point that Mr Kingston’s
evidence was contradictory.
Second, Mr
Ullstein submits that there was no clear documentary evidence that the
circulation was done. He submits that Mr Tapping and Stimpsons may have been
contacted by developers who were circulated directly by the plaintiffs and that
they in turn contacted their own property agents who took the matter up with
the plaintiffs. That is a possible explanation, but, in my judgment, it seems
no more likely than that they were circulated direct by the plaintiffs.
Third, Mr
Ullstein says that it is very surprising that there were no responses direct
from those agents whereas there were from the developers. On the other hand, as
I understand it these particulars were sent out on a speculative basis to the
agents concerned. They were then probably filed away for future reference or
thrown in the waste paper basket, as the case may be, and looked at as the
occasion demanded. So although I think perhaps it is a little surprising that
there was no reaction other than the three possible ones to which I have
referred, in my judgment, it is not wholly inconsistent with the plaintiffs’
case.
Fourth, the
defendants called a Mr Robert Meacock [FRICS FSVA], who was a local agent who
had three offices in the area. Mr Kingston said each of those offices would
have received the particulars. Mr Meacock said that at the material time he had
some 40 clients on his books who were interested in this kind of property, and
in particular that he had two firms (Ideal and one called Houlihan), both of
whom later showed very considerable interest in the property, who at all
material times were interested. So it is said that, if Mr Meacock’s offices
received these particulars, it is most improbable that Mr Meacock, who had
these clients available, would not instantly have got on to the plaintiffs to
say, ‘We have some clients who are interested’. The judge’s assessment of Mr
Meacock’s evidence is to be found at p25F-G. He said:
. . . There
are reasons why I do not find it possible to accept Mr Meacock as a reliable
witness. In my view of him, he was a very partisan witness, always anxious to
make every point he could in favour of the defendants. Quite apart from this
impression derived from seeing him in the witness box, I note that in a letter
of the 24th June 1989, he was offering himself to Mr Goddard to assist any
claim which he might have against the plaintiffs.
It seems to me
that it is impossible for this court to overcome that assessment by the learned
judge. It is true that it is perhaps surprising, if Mr Meacock was a reliable
witness, that the particulars did not come to his attention in one of the three
offices, but that is the way the judge dealt with it. He was by no means
satisfied that they would have come to Mr Meacock’s attention personally, and
that is the way it was left. The judge’s conclusion on this point can be
summarised at p27 A-D.
He said:
Quite apart
from from my impression of him
— ie Mr
Kingston —
I can find no
reason in the evidence or in common sense why he should not circulate the
particulars to an appropriate number of local agents.
That is a
clear finding that on the probabilities Mr Kingston would have done exactly
what he said. Mr Ullstein submits that the judge was wrong in that because he
failed to appreciate that Mr Kingston’s strategy was to target the developers
and not local owner/occupiers, and therefore there was no real need to
circulate local agents, and that Mr Kingston might be reluctant to share his
commission with some other local agent. But it seems to me that the answer to
this point was provided by my lord, Kennedy LJ, in argument, namely that it was
part of the original strategy by Mr Kingston, even if only as a fall-back
position, that the local agents should be circulated and there was no
reasonable explanation as to why he should have changed that strategy. It seems
to me that it is improbable that he would have changed the strategy,
particularly since he was as anxious as anybody to get the best price for the
property. In my judgment, even if we thought on the balance of probabilities
that Mr Meacock’s evidence was right, it would not, in my view, entitle us to
reverse the judge’s acceptance of the truth of Mr Kingston’s evidence to the
contrary. In fact, I can see nothing improbable about the fact that Mr Kingston
did circulate those local agents. It seems to me that it is likely that he
would have done so for the reasons I have given.
The next
criticism is that the plaintiffs advised the defendants to accept an offer
below the market value. As I have already pointed out, the real case here is
not that which was pleaded, but that the plaintiffs (Mr Kingston) ought to have
advised the defendants not to accept the offer, whereas in fact Mr Kingston
says that he did not give any positive advice; he put the pros and cons of
accepting it and left it to the clients to make up their minds.
The judge had
a great deal of evidence about the value of the property. His conclusion was
expressed at p36C in these terms:
I am
satisfied on the evidence that, in the circumstances which governed the
marketing of this property in the autumn of 1988, the acceptable range of
values was £300 to £350,000.
That is a
clear reference to the inhibiting circumstances of the marketing, namely that
it had to be done quietly without Mr Little getting wind of it.
Mr Ullstein
relies particularly on the evidence of Mr Guy Egerton-Smith [FRICS], who was
the expert witness called on behalf of the plaintiff. At day three p49, there
are some answers which culminate in a passage in cross-examination of that
witness. The judge says to Mr Egerton-Smith:
Just pause, I
would like to get this down. You agree that at £300 [that is, £300,000] the
advice should be: ‘You can’t do worse; unless you’ve got special reasons, go
on’?
A. Exactly.
Q. That’s it?
A. Yes, my
lord.
Mr Ullstein
fastens on that passage and says: ‘There is the plaintiffs’ own expert witness
saying that that is what ought to have happened’. But the judge had a good deal
of evidence about the value of this property, including evidence from Mr
Tapping, who was the agent for Mr Payne who bought the property, and the judge
records his evidence at p34F as follows:
Mr Tapping
said in evidence that at the time of the meeting on the 4th January, in his
view the value of £300,000 was about right. In giving this evidence, Mr Tapping
may, of course, have been justifying his deal for Mr Payne at that figure, but
having seen him, I do not think that that is so. I find him to have been a
reliable witness.
I am bound to
say that, for my part, I would have thought that Mr Tapping might have taken
the opposite view that, if he thought it was
substantially less than the market value. However, the judge accepted Mr
Tapping as a reliable witness and that is what his estimate was at that time.
There was
evidence from a Mr John Gay [FRICS], who inspected the property in July 1989
for the purposes of a building society. The judge said at p35:
His valuation
was £350,000. He accepted that the prime purpose of his valuation was to be
satisfied that the property provided good security and that therefore a
mortgage valuation would be on the conservative side. But in his view, and his
opinion is quite independent of the parties in this case, the mortgage value
was not far below the full market value.
That, of
course, was six months later on a rising market.
The evidence
about Mr Shepherd is also of particular importance. The judge refers to it at
p36E:
. . . Mr
Goddard’s evidence about his conversation with Mr Shepherd after the offer had
been made is, in my judgment, good evidence that the advice given by Mr
Kingston was competent advice. It shows that another surveyor practising in
Ashford, who knew the local market and who knew the property having inspected
it in November 1987 gave similar advice. I do not consider that Mr Kingston
ought to have told Mr Goddard that his advice would be not to accept the offer.
In my
judgment, that evidence in relation to Mr Shepherd is of very great importance
for the reason that the judge gives. It seems to me that with valuations at and
around that figure, particularly having regard to the instructions given by the
client which circumscribed the way in which the property should be marketed, it
was not possible to say that Mr Kingston was in breach of his duty in leaving
the matter for the client to make up his mind one way or another at a figure of
£300,000.
The final
point which is raised by Mr Ullstein in his notice of appeal and argument
relates to the judge’s finding about who was present at the meeting on January
4. Was it, as Mr Kingston said, a representative from Shepherd Dear & Co or
was it Mr Goddard’s nephew, Mr Denham?
In their reply the plaintiffs’ at p71 of the bundle had pleaded this in
relation to that meeting:
Mr Goddard
advised Mr Kingston that a firm of Local Estate Agents, namely Shepherd &
Dear, had independently advised the Defendants that:
(A) £300,000 would be a reasonable price for the
freehold of the Site in view of the planning difficulties; and
(B) the Defendants should not ‘Re-Market’ the
Site if an offer of £300,000 was forthcoming.
There is no
reference in the reply to the presence, at the meeting, of Mr Shepherd.
On July 10 —
ie a few days before the trial started — Mr Kingston’s proof of evidence was
submitted, in which it was said for the first time that Mr Shepherd or a
representative of the firm was present at the meeting. It was put in
cross-examination to him that he was wrong about that, that in fact there was
no one present at the meeting, but it appears that Mr Goddard thought that the
possible explanation may have been that it was his nephew Mr Denham, who was a
student at the time and who was working at the firm with his uncle, who may
have been present. Mr Denham was called. He said that he recognised Mr Kingston
in court, but he had no recollection of the meeting, still less of what was
discussed at it. Finally, when Mr Kingston was asked about this matter again,
he accepted, as I understand it, that he might have been mistaken and that the
person present might have been somebody like Mr Denham, but at any rate he was
told about the information that Mr Shepherd had given.
The judge on
this point preferred the evidence in chief of Mr Kingston. It may be that the
judge was mistaken on that point. It may be that in fact it was Mr Denham who
was present and Mr Goddard related to Mr Kingston at the meeting what he had
been told by Mr Shepherd, but, in my judgment, it really makes no difference.
Mr Kingston may have been mistaken about that matter. The real point is that Mr
Shepherd’s advice was substantially the same as that of Mr Kingston, and to my
mind it does not matter whether that advice was given before the meeting or at
the meeting. It does not, in my judgment, seriously affect the credibility of
Mr Kingston. As I have said, in the original reply it does not appear to have
been the case for the plaintiffs that Mr Shepherd was present at the meeting.
It may be that Mr Kingston thought that that was so because he had a very clear
and detailed recollection of what the advice was, which of course could have
come only either from Mr Shepherd, or from a representative of that firm or
from Mr Goddard having related it to him, and, in my opinion, that matter,
which really was conceded by Mr Ullstein, cannot affect the judge’s conclusion.
I have come to
the clear conclusion that we cannot disturb the judge’s careful findings of
fact here, which were based on ample evidence, that, although Mr Ullstein has
pointed to certain matters which affect questions of probability, they do not
in any way, in my judgment, undermine the judge’s findings of fact, and I would
dismiss the appeal.
KENNEDY and BUTLER-SLOSS LJJ agreed and did not add anything.
Appeal
dismissed with costs.