Action against firm of estate agents by vendors of cafe premises for alleged breach of contract and negligence in recommending certain persons as prospective purchasers on whom complete reliance could be placed and in parting with the keys of the premises to them — Evidence that prospective purchasers had used the keys, given to them by the estate agents for the limited purpose of checking the condition of stock in the cafe, to enable them to take up occupation in the premises for some weeks — Held by the judge that the alleged breach of contract or negligence had not been established under either head — Even if the plaintiffs had succeeded on the issue of the keys, the judge expressed the view that there was no evidence of damage suffered — Claim against estate agents dismissed
This was an
action by the plaintiffs, Mr and Mrs Edmonds, against the defendants, Andrew
& Ashwell, a firm of estate agents, of Leicester and elsewhere, claiming
damages for alleged breach of contract and negligence. The claim arose from the
introduction by the defendants of two persons, referred to in the judgment as
Jatania and Rahja, as prospective purchasers of the plaintiffs’ cafe premises
at 167 Belgrave Gate, Leicester.
K Garnett (instructed
by John Parry Williams, of Saffron Walden) appeared on behalf of the
plaintiffs; P H Ripman (instructed by Rutherfords, of Tamworth) represented the
defendants.
Giving
judgment, MR BARRY CHEDLOW QC said: This is a claim by the plaintiffs against
the defendants, who are chartered surveyors, auctioneers and estate agents,
arising out of the attempted sale of the plaintiffs’ cafe premises at 167
Belgrave Gate, Leicester, in the latter part of 1973 and the early part of
1974.
Briefly, the
plaintiffs’ claim arises firstly because they say that the joint purchasers
introduced by the defendants, namely, the persons whom I shall call for short
Jatania and Rahja, were represented to them by the defendants as persons of
substance and able to purchase the plaintiffs’ premises, whereas in fact, say
the plaintiffs, the defendants in breach of their duty to the plaintiffs, and
negligently, had no grounds for so believing, and pressed the plaintiffs to
accept these two persons as purchasers, even though they had no sufficient
grounds for believing them able to purchase the premises.
Secondly, the
plaintiffs say that, despite express instructions which they had given to the
defendants by letter to retain the keys of the premises in their possession,
the defendants in breach of this term, or carelessly, parted with the keys to
the proposed purchasers, who then got into the premises and carried on business
at them, when it was entirely improper of them so to do. The plaintiffs say
that the proposed purchasers were persons of no substance, and that they
subsequently, despite a notice to complete the purchase, failed to do so, and
ultimately left the premises and did not go ahead with the purchase. The
plaintiffs thereby say that they have been put to the loss and damage which is
set out in the statement of claim.
By their
defence the defendants deny that they were in breach of contract or negligent
in putting Jatania and Rahja before the plaintiffs as prospective purchasers
upon whom they could rely. It is admitted that they did propose these two as
purchasers, but they deny that they were in any way lacking in their duty or
obligation of care to the plaintiffs in so doing. The defendants admit that
they handed over the keys to Jatania in order that he might check the condition
of the stock and the premises which had been vacated by the plaintiffs; that it
was for this purpose only and not for habitation, and they deny they were in
breach of any express term in any letter, whose existence is denied. The
defendants also deny in any case that the plaintiffs have suffered the loss and
damage set out, and also say that in any event if there were any damage the
plaintiffs have failed to mitigate their damage in the manner set out in the
defence.
Thus it seems
to me that there are three issues in this case. The first is: were the
defendants negligent or in breach of contract in recommending or sponsoring
Jatania and Rahja as potential purchasers of these premises? Secondly, were the defendants negligent or in
breach of contract by parting with the keys?
There is an issue here as to whether there was or was not a letter
delivered to the defendants as deposed to by the plaintiffs, and furthermore,
the question may arise whether, express instruction or no, the defendants were
negligent or in breach of duty in parting with the keys in any event in all the
circumstances. The final issue is, if either of these two issues is answered in
favour of the plaintiffs, what damages flow, how the damage is to be
quantified, and have the plaintiffs mitigated such damage as they have
suffered?
Apart from the
oral evidence which was called before me, I have been shown a large number of
documents, including a bundle of about 177, to which I have been referred, and
I shall in the course of my judgment refer to some of these documents. I
propose to deal with the first issue, namely, whether the defendants were
careless or in breach of their duty to the plaintiffs in putting forward Messrs
Jatania and Rahja as potential purchasers of the plaintiffs’ cafe premises.
The
plaintiffs’ case is that the defendants were urging the plaintiffs to accept
them, and the defendants’ support for these two was quite excessive; that they
were leading the plaintiffs to believe without any proper or sufficient ground
that the sale would most certainly go through and the plaintiffs contend that
the defendants were making these pressing statements without any, or any
sufficient or proper, grounds for making them.
Mrs Edmonds
gave evidence before me, and she said, among other things, that Mr Wheelright
(who is the defendants’ representative, and at that time their commercial
manager, now I think a partner of the defendant firm) said that Jatania was a
man whom he had dealt with on previous occasions. He was a man of substance and
there would be no problem in selling to him. She said he stated that there
would be no trouble getting an assignment for Jatania because he was already a
restaurateur. Once again he said it would be easy to sell to them and it was
foolish to continue with a sale that might prove abortive. This latter
statement was made by Mr Wheelright at a time when Mr and Mrs Edmonds were
proceeding with the sale to another prospective purchaser called Mr Vermah. Mrs
Edmonds further said that Mr Wheelright said he dealt with Jatania on many
previous occasions, and he said all had gone through well and he (that is Mr
Wheelright) could vouch that all was fine, ‘and
says: ‘I do not say Mr Wheelright was improper in preferring Jatania or Rahja.
He told me he had acted for Jatania and he was satisfactory, and Mr Wheelright
was not concealing the fact that he was friendly with Jatania. He did try to
persuade me to change from Vermah to Jatania and Rahja.’
Well now, what
is the position so far as Mr Wheelright is concerned in relation to Jatania and
Rahja? Mr Wheelright in his evidence
said that ‘George’ — that is to say, Jatania — ‘was known to me. He was a man
of diversified interests in property. I had sold him property and other
properties to people he represented. He came into our offices fairly
regularly.’ Mr Wheelright went on, ‘I
have been concerned with a number of properties, including a drapery business,
which I have sold to Jatania, or to those whom he represented, and I have known
him for about two years. Both I (Wheelright) and Messrs Coles & Whitmore
(who were the solicitors acting for Jatania and Rahja) had had no trouble with
them.’ Mr Wheelright said that he had no
misgivings about Jatania at all at that time. That is to say, towards the
latter part of 1973. He said, moreover, that whereas Jatania had operated a
restaurant, the other potential purchaser on the scene at the time, Mr Vermah,
had not. What is more, Mr Wheelright said, whereas Mr Vermah’s offer was
conditional in a number of respects, the offer that Jatania and Rahja had made
to purchase the property was the usual one of merely being subject to contract.
Mr Wheelright said that he had obtained references in relation to Messrs
Jatania and Rahja, which he regarded as satisfactory, and I have seen them.
Not content
apparently with these references, Mr Wheelright, on behalf of his clients, the
plaintiffs, had made inquiries of the British Debts Services, who apparently
keep a register of debtors and judgment debtors, and neither Mr Jatania nor Mr
Rahja was held on any records that British Debts Services had. Mr Wheelright,
in his evidence, was quite frank about it. He said that it is quite possible he
did say there would be no trouble with Jatania and Rahja, and he said frankly
he felt that that was the case. He told me, ‘I told Mrs Edmonds that almost
certainly the sale would go through based on the facts I then had’. But he went
on to say, ‘I did not give her a warranty, and I was not being
over-enthusiastic about Jatania and Rahja’.
Mr Sunderland,
who was the managing clerk employed by the plaintiffs’ solicitors, gave
evidence before me and said as to Jatania and Rahja ‘We had had good references
given to us. They satisfied me and, what is more, they satisfied the landlord’s
solicitors. I was under the impression that Jatania was a respectable man. I
had no reason to think otherwise. He had a beautiful car and was well dressed,
and I had no reason to think the sale would not go through.’ Mr Sunderland went on, ‘Jatania and Rahja
were the only other people in the running when Mr Vermah dropped out, and it
had been arranged that if one did not go through the other would’. I ought to
add here that in fact the purchaser who had originally been preferred by Mr and
Mrs Edmonds, namely, Mr Vermah, had indeed dropped out because he was not
prepared to sign a contract until the new year, whereas Mr and Mrs Edmonds
wanted, if they could, to have a contract signed in December, and Jatania and Rahja
were in fact prepared so to do.
That is not
all the evidence which was given as to the first issue. But these are the
considerations, or some of them, which seem to me to be substantial in relation
to it. I say at once that there seems to me to be just no evidence at all that
Mr Wheelright in any way behaved in breach of his contract to Mr and Mrs
Edmonds, or carelessly in acting as he did in relation to these prospective
purchasers, Messrs Jatania and Rahja. He knew them. Certainly he had done business
with Jatania before, and he and solicitors found him perfectly trustworthy. The
references which he had taken up were satisfactory. Neither had debts to all
outward appearances. Jatania was a respectable man and a member of the Ugandan
Asian community, who represented others of that community, and was a frequent
attender at Mr Wheelright’s offices. On the totality of all the evidence which
has been presented to me, no case at all has been made out in my view, which
begins to support the contention which I have called the first issue, namely,
some breach of contract or negligence in Mr Wheelright in forwarding and
suggesting Mr Jatania and Mr Rahja as potential purchasers of the plaintiffs’
premises, and in my judgment this issue in the plaintiffs’ case wholly fails.
I now turn my
attention to the second issue, namely, the keys. It is the plaintiffs’ case
that on the Saturday night and Sunday morning before Christmas 1973 they were
collecting their belongings from their cafe premises preparatory to moving to
Norfolk for Christmas. What the plaintiff and her husband told me was that on
the Saturday night Mrs Edmonds wrote the letter on p 66 of the bundle of
correspondence, which her husband Mr Edmonds took round to the defendants’
business premises and put through the letter box, with the stock list enclosed
with it. Mr and Mrs Edmonds say that they then carried on packing their
belongings and when they had finally finished and had a further load in their
van, and were about to go away to Norfolk, Mrs Edmonds wrote upon one of her
husband’s vehicle log sheets in the cab of the lorry or van in the early hours
of the Sunday morning before Christmas a further letter to Mr Wheelright, which
her husband again delivered through Mr Wheelright’s business door. That letter
contained words to the effect, for Mrs Edmonds tells me quite frankly she
cannot remember the exact words, but something like, ‘Herewith are the keys to
The Topic Bar. Hold them until you hear from Mr Sunderland that completion has
taken place.’ As I say, this letter
together with the bunch of keys was in a separate envelope put into Mr
Wheelright’s letter box. A second set of keys was given to Mr Perks, the
plaintiffs’ next-door neighbour, to retain for them.
There is a
stark issue about this matter. Mr Wheelright denies ever having received any
such second letter at all. He says that when he came to his premises for a
business appointment unrelated to this matter about, I think, December 27 1973,
there was lying on his mat one letter from the plaintiffs only, and that is the
letter on p 66 of the bundle, including the stock list. He says it also
contained the bunch of keys, and that he is quite satisfied that there
certainly were not two separate envelopes from the plaintiffs upon his mat on
that particular day when he went to his business.
In the
statement of claim the plaintiffs in para 4 allege that the defendants had been
given express instructions to hold the keys until the plaintiffs’ solicitors
notified them that completion had taken place. A request for further and better
particulars by the defendants brought forth the answer on November 11 1977 that
the instructions were contained in a letter addressed to the defendants and
posted through the defendants’ letter box on or about December 24 together with
the keys of the premises.
There was
called before me Mr Matthews, of the defendants’ solicitors. He told me that
the defendants disclosed in their bundle of documents, among others the letter
on p 66, and this was disclosed to the plaintiffs’ solicitors, and indeed the
latter asked for a copy of the documents, including that contained on p 66 of
the bundle. At no time, Mr Matthews told me, did the plaintiffs’ solicitors
ever suggest that there ought to be disclosed a second or further letter of the
same time as the document on p 66, and that the first day of the trial was the
first time the defendants or Mr Matthews had heard it suggested that there was
a second letter written on that day, delivered to the defendants in the early
hours of the Sunday morning before Christmas.
The plaintiffs
say that it is strange that if the letter on p 66 was the only letter no
reference to keys was made in it. The defendants say that it would be surprising
if two letters were delivered through the defendants’ letter box within six
hours or thereabouts of each other. The defendants place reliance upon the
discovery point as deposed to by Mr Matthews. For my part I think it unlikely
in all the circumstances of this case that Mrs Edmonds would have used the
words which she said she used to the defendants, namely, that they were to hold
them until they received instructions. Moreover, the whole tenor of the letter
on p 66 seems to me to be in the nature of a document written after all the
packing had been completed, and there was nothing else remaining to be done.
Indeed, the letter indicates that even writing paper has been packed up. I have
listened carefully to the evidence and the submissions of counsel. I think Mr
and Mrs Edmonds are mistaken. I think the events of that night when they were
busy and tired, and had finished packing in the early hours of Sunday morning,
are confused in their minds. I do
come to the conclusion that on the totality of the evidence, and in particular
the terms of the letter itself, the fact that no request was ever made for a
second letter to the defendants’ solicitors after the existence of the document
on p 66 was disclosed, the unlikely writing of two letters within six hours of
each other, and the terms that Mrs Edmonds says she used, lead me to believe
that no such second letter was ever delivered to the defendants. Moreover, I
prefer the evidence of Mr Wheelright that no such second letter was ever
received by him.
The matter of
course does not end there. It is quite clear that Mr Wheelright was instructed
by Mr Sunderland, if nobody else, to keep the keys in his possession until
completion. This he did not do, but parted with them for the ostensible purpose
of allowing Jatania to go into the premises to inspect them. Was this a breach
of his duty to the plaintiffs? Each case
must turn upon its own facts, and Mr Wheelright makes the distinction between
occupied and unoccupied dwelling premises on the one hand and occupied and
unoccupied commercial premises on the other. For my part, I think the
distinction is a valid one. I have no doubt at all that Mr Wheelright
throughout felt himself to be acting in the best interests of the plaintiffs,
his clients, in doing what he did. So far as he was concerned the person who
was requesting the key was a person who was going to complete the bargain
within a few days, which everyone at that time thought. He was, so far as Mr
Wheelright was concerned, a reputable man. The premises were to be sold as a
going concern. Yet Mr Wheelright knew that the Edmonds had left to go to
Norfolk and were not coming back. He knew that there were perishables upon the
premises and that the prospective purchasers might have some complaint if the
premises were not run during the period certainly into the early new year.
These were cafe premises and the chances of a prospective purchaser of such
premises improperly taking possession and seeking to run them in the teeth of
objections from the vendor would seem to Mr Wheelright in his experience to be
so remote as to be a non-existent risk.
Finally, as Mr
Ripman for the defendants points out, no expert evidence was called before me
as to the practice among estate agents in circumstances such as these. I have
only got the evidence of Mr Wheelright. Can I say on the totality of the
evidence that what Mr Wheelright did in parting with possession of these keys
for a limited purpose, as he thought, that Jatania wanted them was a breach of
any term in the contract or was negligent in all the circumstances of this
case? I have given this matter anxious
thought and consideration, and have come to the conclusion on all the evidence
here that no such breach of contract or carelessness has been shown by the
defendants in Mr Wheelright acting as he did in all the circumstances on this
occasion.
I think it is
very necessary to avoid the wisdom of hindsight. I take the view that in doing
what he did Mr Wheelright genuinely thought that he was acting in the best
interests of his clients, and that indeed by allowing Jatania to have the keys
he was avoiding rather than forwarding a breach of contract.
On this issue
also in the result on the evidence before me, the plaintiffs have failed to
satisfy me that in parting with the keys as Mr Wheelright undoubtedly did on
this occasion, in all the circumstances of this case there was either a breach
of his duty or carelessness, and on this issue also in my view the plaintiffs’
claim fails.
That is enough
to dispose of this action, but I ought to say that even if I were wrong upon
this issue I would have the very greatest difficulty in finding that the
plaintiffs have suffered any damage as a result of it. The evidence which I
have heard, and the reading of the correspondence, makes it quite clear that
the prospective purchasers, certainly Jatania, went into possession as I think
sometime in early January, but certainly by the end of February he had vacated
them. Meanwhile, a notice to complete had been served which expired about March
4. So that the plaintiffs would have been quite unable to do anything with the
premises until that time. Many of the items which are claimed by way of damages
were running whether the prospective purchasers were in improper occupation or
not, with the possible exception of the rates, and certainly the £46 worth of
produce which disappeared. That was something which would not have been lost to
them had Jatania not been in the premises. But so far as the other items are
concerned, the evidence I have heard leads me to the conclusion that the
plaintiffs were not disabled from finding other purchasers in this case, by any
occupation by Jatania. Indeed, Mrs Edmonds’ reaction in February when she heard
the sale had gone off was that she and her husband would return to the premises
and run them. Then the possibility of purchase by some jeweller arose, and even
during the months of April and May the possibility still existed of Jatania
being able to raise some part of the purchase price and continuing with the
purchase. There were, I am quite satisfied, no other purchasers in the field,
and it was not until the middle of the year that Mr Chung, the ultimate
purchaser, appeared on the scene. Even then it took about four months before
his purchase was completed. I would have found it impossible to have held that
the extra expenses to which the plaintiffs were put between March and October
1974 could be laid at the defendants’ door. It has to be remembered that the
plaintiffs had forfeited the abortive purchaser’s deposit of £520.
I have said
enough to indicate that in my view, even had the plaintiffs succeeded on the
second issue in this case, they have suffered no damage thereby. But, as I say,
it is not necessary for me to come to any concluded view about this matter in
the light of the view I have come to on this issue. In the circumstances this
claim fails in toto, and there must be judgment for the defendants.
Judgment was
given for the defendants with costs, the costs after the date of the
plaintiffs’ legal aid certificate not to be enforced without leave.
