Estate agents’ commission — Claim for commission on introduction on purchasers upheld — Renovated and refurbished property purchased by United Arab Emirates for over £1m — Facts somewhat complicated and some conflict of evidence — The rules of law applicable to the facts as found by the judge were the following — An agreement to pay commission on business introduced does not include an introduction antecedent to the agreement in the absence of an express provision to that effect — An estate agent does not have any implied authority to appoint a subagent — An ‘introduction’ means directing the attention of a person who hitherto has not applied his mind in that direction to the fact that a property is for sale — The judge held, applying the law to the facts as found, that the plaintiffs were entitled to the commission agreed (to be shared on a 50-50 basis with the sub-agents) — There had been an express acceptance that the commission agreement covered the antecedent introduction — It had also been accepted that subagents, although not identified until later, were involved, so that their participation was authorised — A submission by the defendant vendors that an intervention by the agent acting for the purchasers, before a critical meeting, constituted an effective independent prior introduction, thus excluding the plaintiffs’ claim, was rejected by the judge — The plaintiffs had satisfied the conditions required for entitlement to commission under their agreement with the vendors — Judgment for plaintiffs in the sum of £36,225
The following
cases are referred to in this report.
McCann
(John) & Co v Pow [1974] 1 WLR 1643;
[1975] 1 All ER 129; [1974] EGD 184; (1974) 232 EG 827, CA
Samuel
& Co v Sanders Brothers (1886) 3 TLR 145
Wyld v Sparg [1977] 2 SLAR 75
In this action
the plaintiffs, Robert Bruce & Partners, a firm of estate agents, of St
James House, 13 Kensington Square, London W8, sued the defendants, Winyard
Developments, a firm of property developers, for commission claimed to be due
on the sale to the United Arab Emirates of a property which the defendants had
developed at 16 Young Street, Kensington, London W8.
G W Bishop
(instructed by Joynson Hicks & Co) appeared on behalf of the plaintiffs; T
M Wormington (instructed by Bartlett & Son, of Liverpool) represented the
defendants.
Giving
judgment, MR R M STEWART QC said: I start my judgment by expressing my
gratitude to counsel for their assistance in a case which, though simple in the
nature of the claim, has proved to be complex and complicated to hear and to
resolve.
The
background
The plaintiffs
are a firm of estate agents in Kensington. They deal, I accept, in commercial
and residential property. They are a small firm by some standards, but size is
not a measure of probity.
The defendants
are a firm — a partnership — of property developers. I accept what Mr Michael
Squire, one of their partners, said in his evidence that prior to the
development in question they had only had one development, so that in terms of
property development they were comparative newcomers. Having said that, it is
clear that they are men of the world.
In late 1983
the defendants found a property for development, 16 Young Street, Kensington.
The plaintiffs found it for them, the intermediary being one Johnny Robertson
of Mistral. Completion was in about mid-January 1984. The price was £440,000.
In addition, the defendants negotiated the purchase from Barkers, or House of
Fraser, of a plot of land for a lavatory block for £25,000. That was the work
of Mr Michael Squire. It made an enormous impact on the development, changing
the whole potential of its profitability. I accept what Mr Squire and others
have said about that. In the event, the plaintiffs’ commission on the
acquisition was limited to the basic price of £440,000, as the documents show.
Building,
renovation and refurbishment commenced in about February 1984. The builders
were Hatton Builders Ltd. Mr Edward Charles Markes was the relevant contracts
manager and in charge of the works and daily on site while they were being
carried on. Though well advanced at the times of the matters relevant to this
claim in late July/early August 1984, I accept that the works were not
completed: they were not expected to be completed until late September of 1984,
and the defendants had planned that no marketing of the property should
commence until completion, when the pristine refurbished state should make a
strikingly attractive office building to any would-be buyers or lessees.
As it happens,
the building was sold earlier to the Military Section of the United Arab
Emirates. They came on the scene in July 1984 and they exchanged contracts in
early August 1984 and duly completed. The plaintiffs claim that they introduced
that sale and that, pursuant to a contract with the defendants, they are
entitled to commission of 3% on the sale price, plus VAT.
Fortunately, I
am not called upon to try, as on a quantum meruit, what rate of
commission would be reasonable. Quantum is agreed, subject to liability. But
that is hotly disputed.
The evidence
called and the essence of the dispute
I had the
benefit of a number of witnesses. Indeed, the evidence has lasted several days.
For the plaintiffs I have had, first, Mr Robert Doxford, a partner in the
plaintiffs since 1966; second, Miss Dorothy
third, Mr John Ferrand, then working for the plaintiffs on a commission basis
but now a director of a wholesale fish marketing company; fourth, Mr Robin
Langton, a director of Aylesfords, estate agents, mainly residential, in
Kensington, and now a director of a property company.
Essentially,
the plaintiffs’ case is this. They had originally been agents for the disposal
of 16 Young Street. That appointment was terminated when their Charles Barrow
left. So far, common ground. Dee Jerrom had clients, the Military Section of
the UAE, who wanted to acquire a freehold property building in Kensington of
around 4,000 sq ft and were prepared to pay in excess of £1m. She contacted, inter
alia, Robin Langton of Aylesfords in her search. Langton knew of the
plaintiffs, knew that they dealt in commercial property in Kensington, knew
that they had been involved in the acquisition of 16 Young Street, thought they
might still be involved as agents, and contacted, therefore, Robert Doxford of
the plaintiffs.
The plaintiffs
were not then retained by the defendants. Doxford told Langton that the
property might be available for over £1m. At that level he hoped to be able to
negotiate commission at 3%, to be split 50-50. The lay clients should look at
the outside of the building to say if they were interested. They did, and said
they were. The chain therefore on the plaintiffs’ case was Doxford to Langton
to Jerrom to the UAE and vice versa.
On July 31 1984
Doxford met the defendants Bartlett and Squire, disclosed that he had an
applicant, said he had told the applicant that the asking price was £1.25m and
expected a sale in excess of £1m, said other agents were involved (in fact,
Aylesfords) — Mr Doxford claimed that he named them, but I think he is wrong in
that — and said that he required a commission of 3%, and that the defendants
agreed.
Doxford
organised a site visit for August 1, and thereafter channelled a bid of £1m,
which was rejected, and a second bid of £1.1m, which was accepted. In a
subsequent meeting on August 6, the clients face-to-face negotiating — the
plaintiffs and Aylesfords were not there — the price was reduced to £1.05m, at
which price the deal went through. The fact that the offers at £1m rejected and
£1.1m accepted and reduced to £1.05m were made and dealt with in that way is
common ground. How or by whom they were made is not.
So much for
the plaintiffs’ case in outline. The defendants called before me Mr Anthony
Bickford Bartlett, a partner in the defendants, who was called to the Bar many
years ago by the Honourable Society of Gray’s Inn; Mr Edward Charles Markes,
contracts manager for Hatton Builders Ltd and, as it happens, the
brother-in-law of Mr Bartlett; and, third, Mr Michael James Squire, an
architect and partner in the defendants.
The defendants
contend that they are not liable to the plaintiffs. There are a number of
grounds, but they can fairly be brought down to this: first, because the
introduction to the property was by Aylesfords and not by the plaintiffs;
second, the introduction was antecedent to the agreement of July 31 1984 and
was covered neither by the contract nor by the pleadings; third, the plaintiffs
anyway were obliged by the contract as a precondition of their entitlement to
commission to perform some further act of introduction of the buyers to the
defendants after the meeting of July 31. A further act of introduction would be
bringing the parties into contact with each other. The defendants claim that
the plaintiffs did nothing for that. All was done by Miss Jerrom direct and
thus outwith the plaintiffs’ contract entitling them to commission. Mr Bartlett
put it in his evidence that he thought that he was being conned by the
plaintiffs and their claim; in other words, that the claim was phoney. As I
indicated earlier in the course of argument, strong though that allegation is,
the defendants are perfectly entitled to make it and pursue it, and it is
covered by their pleadings.
Quality of
the evidence
It is appropriate
to make some comments generally on the quality of the evidence before I give my
primary findings of fact and, from those, my conclusions. As Mr Squire himself
said, it is very difficult for a witness to think back the best part of three
years and to be precise and completely accurate as to the specific events that
happened or, I add, as to the precise dates and times at which they happened.
Some witnesses were less impressive than others. I start with the lesser actors
before I come to the principal protagonists. Though I say ‘lesser actors’, it
does not mean that they are necessarily less impressive.
Mr Markes I
accept as entirely honest. I do not think he was very accurate when he said, in
relation to the meeting on August 1, that Ferrand of the plaintiffs turned up
three-quarters of an hour after the meeting had started. I think Ferrand did
turn up after the others, but really at the beginning of the meeting. In making
that finding against Mr Markes’ evidence, I should make it clear that I am satisfied
that he was trying to be accurate. I think his recollection of the particular
timing was wrong.
Miss Jerrom —
a witness somewhat flamboyant. I approach her evidence with some caution
because I am satisfied that in some material respects she was wrong, and
materially wrong, and her reasoning justifying her original stance does not
stand up. I take one specific example. She said that she spoke to Mr Bartlett
but not before about 8.30 pm on the night of Friday, August 3. She said that
she was then saying there was a need for a quick deal and the clients wanted to
meet. She gave as her justification for that memory and that timing of it: ‘I
felt it was in order to talk direct to the vendors, once the bid had been put
to and accepted by Aylesfords.’ I am satisfied
that she is wrong, not just in her recollection of the date or time she first
spoke to Mr Bartlett, but wrong in her reasoning. That is important. Is it that
she has forgotten the truth? Or is it
that she does not want to let it be known that she was in contact with Mr
Bartlett earlier than the time when her offer was accepted, and really quite a
lot? Either way, her evidence must be
approached with care, and I do so. Not only was she in contact before the offer
of £1.1m was accepted — and that is the clear inference to be drawn from the
documents — but I am satisfied that she did in fact have a conversation with Mr
Bartlett, much as he described, as having taken place on July 31. Whether he is
right in all its material detail or as to the date will emerge hereafter, but I
am satisfied that she had at least three telephone conversations with Mr
Bartlett before the offer of £1.1m was accepted.
Mr Langton —
essentially honest, but my overall impression is that he was not as impressive
or careful a witness as some. I comment on two specific matters. I accept his
evidence that his diary entries at the disputed pp 29, 30 and 35 were made
contemporaneously. Second, I reject any suggestion that he received or ever
asked for or ever thought himself entitled to commission from Miss Jerrom.
Mr Ferrand —
similar comments apply in a way as they do to Mr Langton. I think he was
essentially honest, but the impression that he gave was of a man who was not
exactly dedicated to the details of his work for the plaintiffs, and therefore
of a person not likely necessarily to recollect the nicest details and minutiae
after nearly three years.
The
principal protagonists
Mr Squire — I
am satisfied that he is a basically honest and decent man who was trying to be
as accurate and frank as possible. He himself accepted the difficulty to
recollect back nearly three years and to be precise and accurate on all details
after that time. If criticism lies against him or his evidence on that, it
arises not by way of any reflection against him but because of a factor of
time; indeed, he is frank that it is difficult to recollect all the details
after time. I am satisfied in particular that he had a conversation with Mr
Bartlett after Miss Jerrom had telephoned Bartlett and that he, Squire,
realised the significance of the plans to which Miss Jerrom had referred to Mr
Bartlett, and that they could only have emanated from the plaintiffs. He
thereby appreciated that Miss Jerrom was, in fact, the agent of the applicants
spoken of by Mr Doxford.
Mr Doxford and
Mr Bartlett — I have carefully considered their manner and demeanour, as I have
indeed of all the witnesses. I have considered all the points raised in
cross-examination and argument, particularly the point made for the defendants
that the whole aura of activity by Mr Doxford smacked of a lack of professional
probity. I do not think it did. True, his agency had been terminated by the
defendants on June 18 1984. He had asked to be reinstated and had not been. No
doubt he was upset. But he knew the figures advised by Gooch & Wagstaff
that:
£950,000 is
perhaps higher than we may anticipate achieving.
He knew that
the defendants were entrusting matters to Gooch & Wagstaff, and it was
reasonable for him therefore to assume that they would abide by Gooch &
Wagstaff’s advice on price. I think he rightly suspected that an offer in
excess of £1m would delight the defendants. He was acting as an entrepreneur,
not unprofessionally, and, indeed, he was acting in the interests of the
defendants in the end, knowing where their sights were set and reckoning he
could
I have
considered carefully the criticisms, and they are valid, that no documents or
memoranda emanate from the plaintiffs to support their case. Equally, it can be
said that no documents were adduced to support Mr Bartlett’s being inaccessibly
en route to or in Ireland throughout Friday, August 3, though I accept that Mr
Bartlett wrote in Mr Squire’s diary Dee Jerrom’s telephone number — a diary
only very belatedly produced. In fact, the entry does not prove the date on
which it was written, only that it appears on the space for Friday, August 3. I
say in parenthesis that I accept that it was written not later than then.
In the end,
where there is a clash between Mr Doxford and Mr Bartlett on the essential
areas of dispute, I prefer the evidence of Mr Doxford. It is not a decision
that I have reached without very careful consideration. I am satisfied that Mr
Doxford was essentially accurate on most issues in dispute, specifically as to
who arranged the meeting of August 1. I am also satisfied that he transmitted
the first offer of £1m and the second offer of £1.1m to the defendants. I
return later to what role Miss Jerrom was playing at the same time. I comment
that I am confirmed in my view of these matters, particularly as to who set up
the meeting of August 1, by the fact that Mr Ferrand attended it. It is common
ground that he attended it. He said he attended it because he was asked to by
Mr Doxford, and Mr Doxford essentially confirmed that. I am satisfied that he
was asked to attend because Mr Doxford had arranged the meeting. If, as was
suggested by the defendants, Miss Jerrom had arranged the meeting, as it were,
as a frolic of her own, there would have been no way that Mr Doxford would have
known that it was on unless he had seen activity on the defendants’ premises.
But he would not have known or had any means of knowing that these were the
applicants that he was getting through Mr Langton of Aylesfords. If he had suspected
that they were, and that something was being done behind his back, I do not
think that he would have sent Mr Ferrand; he would have gone himself. I am
satisfied that the reason why Ferrand went to the meeting was that Doxford had
in fact arranged it.
Primary
findings of fact
I make the
following primary findings of fact:
1. The UAE
delegates were expected to visit the property on July 23 1984. There is no
direct evidence that they did so, but the diary entries of Miss Jerrom and Mr
Langton record the expected visit. If pushed to it, but it is not a necessary
finding for this judgment, I would infer that they probably did visit the
outside then or thereabouts.
2. Miss Jerrom
had been informed of 16 Young Street as a property on the market prior to July
23 1984 by Mr Langton of Aylesfords, probably some time between July 17 and 23.
He, in turn, had got his information from Mr Doxford of the plaintiffs.
3. Mr Doxford
told Langton that he was not instructed, but that he knew the property and
believed that at an offer of £1m plus he could probably get a commission
agreement and would go for 3% and share it 50-50.
4. Miss Jerrom
did not know until Ferrand turned up at the meeting on August 1 that Aylesfords
were not the vendors’ agents. Until August 1 she thought they were, which no
doubt is why she expressed the view, as I find she did, that negotiations must
go through Aylesfords.
5. The UAE
delegates made I think a second visit, but whether it was a second visit
matters not; they certainly made a visit on July 30 1984. Mr Khaldi was
recorded by Mr Markes as taking ‘his clients’ round, and they went inside. They
met Mr Markes inside. He told them that they could not visit inside without an
appointment. He gave them Mr Bartlett’s telephone number as the representative
of the owners. His minute is, I find, accurate, as is his evidence on this
part. He sent the minute to Mr Bartlett and I am satisfied that Mr Markes spoke
to Mr Bartlett about that particular visit prior to either of the afternoon
meetings on July 31 1984.
6. In making
that visit inside the premises, the UAE delegates went outside their brief from
Miss Jerrom and outside the brief that Mr Doxford had given to Langton or
Langton had given to Jerrom in consequence. Certainly, neither the plaintiffs
nor Aylesfords knew of the visit inside on July 31 then or for some time
thereafter. What Miss Jerrom knew as to when it took place is not clear, but
she did know that a visit had taken place. She was given Bartlett’s telephone
number by her clients on July 30 or 31.
7. On the
morning of July 31 1984, Mr Langton contacted Mr Doxford to say that the UAE
were definitely interested and wanted a formal inspection visit. Whether Mr
Langton had been contacted by Miss Jerrom on July 30 or 31 I am not clear, and
I do not think that question has to be answered. As to the line of
communication — Jerrom to Langton to Doxford — I am clear. Doxford then wished
to set up a meeting with the defendants to agree a commission basis and, if
that could be agreed, then to arrange for the inspection. He instructed Ferrand
to contact the defendants. Ferrand did not do so or was unable to do so. Eventually,
in the afternoon, Mr Doxford saw activity of the defendants out of his window,
which looked on to 16 Young Street, so Mr Ferrand was sent to speak to them. He
spoke to Johnny Robertson of Mistral, who was with Messrs Squire and Bartlett,
and so a meeting was arranged.
8. At about
4.30 p.m on July 31 1984 there was a meeting at Mr Doxford’s offices. Present
were Mr Doxford of the plaintiffs, Mr Bartlett and Mr Squire of the defendants.
The question arises as to what was said and agreed. I am satisfied:
(a) Doxford said he had
clients interested in the building. He had told them of the property. They had
seen the outside.
(b) Doxford said he had
another agent involved. I do not think that he mentioned Aylesfords by name. I
do not think the defendants realised it was Aylesfords until a day or so later.
He simply said that another agent was involved with him.
(c) Doxford said that the
deal was on in excess of £1m. He had, he said, quoted a price of £1.25m.
(d) Doxford said if he was to
process the deal and introduce those clients to the defendants, a commission
was required of 3% — at that level because he was having to share it with his
subagents.
(e) The defendants,
principally by Mr Bartlett, were delighted with the prospect of the price, and
agreed to this specific deal and specifically to the 3% commission. It was on
the basis, first, that the introduction was to take place to the defendants,
and I construe that as meaning the bringing of the clients into contact the one
with the other so that each party was in contact with the other; second, the
price was to exceed £1m before any entitlement to commission would arise; third
— and this came from Mr Squire’s evidence rather than Mr Bartlett’s —
solicitors were to be in contact within a week. That is not a pleaded term but
it matters not.
(f) Mr Doxford then, after
the agreement on commission was reached, said he wanted to arrange a formal
site visit for the next day. I am satisfied that this was so because the whole
purpose of the meeting of July 31 was to get an agency agreement and, if
successful, to arrange the site visit. It would have been ludicrous not to
raise the topic of the site visit. I am satisfied that Mr Doxford suggested the
site visit. It was accepted, and it was in this context that Doxford said he
was unable to disclose then the precise identity of his clients, though there
was some mention of Arabs. And Mr Bartlett said no matter, they would learn
that the next day.
9. Those
conditions by the defendants were met in this sense:
(a) The meeting took place
as proposed and agreed on site on August 1. The clients were then brought into
contact with the defendants.
(b) The sale took place at a
price in excess of £1m.
(c) The solicitors were in
contact within the requisite time.
10. At the
meeting on July 31 1984, Mr Bartlett asked whether the clients had visited the
premises. I am satisfied that Mr Doxford had said that they had seen the
outside. Mr Bartlett asked whether they were connected with a Miss Dee. Mr
Doxford said that he had never heard of her. Mr Bartlett asked whether they
were Arabs, because that was the nationality of the people that Miss Dee had
sent, and Mr Doxford said that there might be a connection. It was clear to all
parties that the applicants in respect of whom the agreement for commission was
reached had had their attention drawn to the fact that the building was for
sale, had visited at least the outside of the building, and had therefore
previously been introduced to the property.
11. Following
the meeting on July 31 1984, Doxford got on to Langton, who got on to Jerrom to
set up the meeting for August 1. By the same chain in reverse came back the
confirmation that 10.30 am for August 1 1984 was convenient. I am satisfied
that Mr Doxford telephoned Mr Bartlett to confirm that. I specifically reject
the suggestion that Dee Jerrom set up this meeting herself by some direct
action.
12. I am
satisfied that Dee Jerrom in fact telephoned Mr Bartlett on
the arrangements had been made and confirmed for the meeting of August 1 but
before the meeting took place. She wished to know more details about the
building, its size and what was likely to be an acceptable price. There have
been a lot of submissions as to the date, and I should say briefly why I am
satisfied that it took place on July 31. It is not just the evidence of Mr
Bartlett that it took place then.
First of all,
Dee Jerrom had plans for the property. She referred to them in that telephone
conversation and did not appreciate that the plans were wrong and out of date
and did not include the lavatory block. That would be odd indeed if she had
visited the premises already and spent a long time being taken around by Mr
Markes, as I am satisfied it happened on the morning of Wednesday, August 1.
Second, she told Mr Bartlett in terms that her information as to the property
came from Aylesfords and that negotiations should go through Aylesfords if the
sale proceeded. Mr Bartlett said that he had never heard of Aylesfords, and Dee
Jerrom was unable to help him further. At that stage on July 31, she did not
know that Aylesfords had got their information through Robert Bruce and were
acting as subagents for Robert Bruce. She did learn that when Ferrand turned up
on the morning of August 1 at the site meeting. I find it quite incredible that
this telephone conversation could have taken place after the site meeting of
August 1 and Miss Jerrom not to explain ‘Well, Aylesfords got it from Robert
Bruce, and you know all about them.’ I
am quite sure that the conversation took place on the evening of July 31 at or
about the time that Mr Bartlett said that it did.
I accept,
therefore, Mr Bartlett’s evidence that the telephone conversation took place on
the date and at the approximate time that it took place. I reject only his
evidence that in that conversation Miss Jerrom was asking for a meeting the
next day. The meeting for August 1 had already been asked for by Mr Doxford. I
think there were a number of telephone calls by Miss Jerrom to Mr Bartlett and I
think that what he has done is in no sense dishonest; I think he has got
muddled in which conversation Miss Jerrom asked for a meeting. What does seem
clear is that there was a meeting set up for August 2 — that would be the
Thursday — at which the clients did not turn up. August 2, Mr. Markes thought,
or it could have been the 3rd; but subsequent at any rate to August 1. I think
that Miss Jerrom asked in a subsequent telephone call for a meeting. I am quite
satisfied that she did not try on July 31 to set up a meeting for August 1
because that to her knowledge had already been done.
I further
accept Mr Squire’s evidence that Mr Bartlett telephoned him later that evening
to tell him of the call. Mr Bartlett’s attitude was one of pleasure that there
were now two lots of people potentially interested — the applicants of the
plaintiffs, and Dee Jerrom and her clients. But it was when Squire heard that
Jerrom had old plans without the lavatory block that he realised that they
could only have come from the plaintiffs and that these were the plaintiffs’
applicants. I am satisfied that he gave that reasoning to Mr Bartlett.
Finally, I
accept and find that in the telephone call on July 31 Dee Jerrom gave to Mr
Bartlett not the identity of her clients, save that they were Arabs, but her
name, Dee Jerrom — not just ‘Miss Dee’ — and telephone number, as the agent
acting for her Arab clients in the purchase.
13. On August 1
1984 a meeting took place on site. Dee Jerrom turned up with Mr Khaldi and the
UAE delegates. Mr Markes hosted or acted for the defendants. Mr Ferrand of the
plaintiffs was there for a time. The meeting was a long and thorough meeting
and inspection; I accept the evidence that it lasted probably an hour and a
half or thereabouts. As I have said, I do not think that Mr Ferrand turned up
three-quarters of an hour after the meeting had started. I think Mr Markes is
wrong in that recollection. Equally, I think it likely and I so find, that Mr
Ferrand was the last of all the parties to turn up, but not by long. The
meeting was scheduled for 10.30. He was there at about that time. It may be
that Miss Jerrom and her clients were there a little early.
At the meeting
Ferrand introduced himself to Miss Jerrom. She asked him who he was and what he
was doing, and he said he was from Bruce & Partners. That was when she
realised that Aylesfords were not directly the agents for the owners but came
through Robert Bruce. I think that is the way the introduction went, and it is
a further pointer to the meeting being set up by Mr Doxford, because if Mr
Doxford had even sent Mr Ferrand to find out what other people were doing, Mr
Ferrand would have opened the batting ‘I’m Ferrand from Robert Bruce. What on
earth are you doing here?’ He did not
open that way. I am satisfied that the opening came from Miss Jerrom,
establishing who he was and why he was there.
Ferrand did
not speak to Mr Markes or introduce himself to Mr Markes. He spoke to Miss
Jerrom, nodded to the UAE delegates but did not speak to Mr Markes. That was
not because the plaintiffs should not be represented, but because I think Mr
Ferrand was doing the bare minimum to comply with some rather boring
instructions given to him by Mr Doxford. As a result, Mr Markes did not then
know who Mr Ferrand was.
14. Following
the meeting, probably on Thursday, August 2, Miss Jerrom visited Langton’s
office and put an offer of £1m to Langton. He put it to Doxford, who put it to
the defendants. It matters not at this stage whether Doxford was right that it
was to Squire or whether it was to Bartlett. I am satisfied that it was put to
the defendants and it may indeed have been put by way of a message for one of
them rather than direct. It was rejected on Doxford’s advice that more could be
negotiated. The answer went back down the same chain, quite likely with an
indication that an increase would have to be made but not all that large.
15. On August
3 Miss Jerrom left a message for Langton that her clients would offer £1.1m. He
passed it to Doxford, who passed it to the defendants.
16. Meanwhile,
and before an answer to that offer was given, Jerrom contacted Bartlett direct.
Her evidence — I have already referred to it — was that she did not contact him
until after the offer was accepted. I am satisfied that she is wholly wrong on
that. It is inconsistent with the letter to her from Mr Langton at p 37 on
which she was cross-examined. She did not dissent from the proposition set out
by Mr Langton in that letter. And it is inconsistent with her letter at p 53.
As I have said, I reject her account that she did not contact Bartlett until
the evening of Friday, August 3. I am satisfied that this second offer was in
fact communicated by Doxford to the defendants. Dee Jerrom had left a message
that the increased offer was being made of £1.1m for Langton in his office. It
was transmitted by Aylesfords — and it may well be that Mr Langton was out at
the time — to the plaintiffs, and by Doxford of the plaintiffs to the
defendants. If Bartlett was then in Ireland or en route to Ireland, it must have
been to Squire. I am bound to say that I find the evidence as to when Bartlett
went to Ireland very unsatisfactory. I am far from persuaded that he was
incommunicado and unreachable, at any rate on the morning of August 3. I think
he was still in communication on that morning.
I am satisfied
that before Dee Jerrom had an answer to that increased offer of £1.1m, she had
talked to Bartlett about it. It may be that she also put it directly to
Bartlett as well as setting up the chain via Langton for transmission by
Doxford. It matters not whether the approach or the conversation between Jerrom
and Bartlett was on August 2 or early on August 3. At that stage — and this is
either late on August 2 or first thing on August 3 — Jerrom and Doxford were
both involved in negotiations. Mr Bartlett and Mr Squire decided that the
situation was becoming chaotic and that everything should be transmitted
through Gooch & Wagstaff. The letter from Gooch & Wagstaff, dated
August 3, is significant in this context. I think it was written on August 3
and written because on that day or, at the very earliest, at the end of the
preceding day they had received instructions that they were to channel all
negotiations. I do not think those instructions were given before, at the very
earliest, the end of the working day of August 2.
17. I also
accept, as I have indicated, that there were several telephone calls from Dee
Jerrom to Mr Bartlett between July 31 and August 3, and at least one other than
the two I have already dealt with. Probably on Thursday, August 2, there was a
call in which Mr Bartlett got hot under the collar. He had previously said on
July 31 that an offer of the order of £1.05m would be acceptable. On this
occasion he got hot under the collar because of the complications of the long
telephone calls from Dee Jerrom and he upped his minimum price to £1.1m from
the previously indicated figure of £1.05m. I am satisfied that there was such a
conversation as Mr Bartlett speaks of, but, equally, in so far as Mr Bartlett
says that in this conversation Dee Jerrom said she had never heard of Robert
Bruce & Partners and there was no need to pay Aylesfords, I reject it. I am
satisfied that Dee Jerrom said she had never heard of Robert Bruce &
Partners on July 31. She had heard of them on August 1 and I do not believe for
a minute that she said she had not heard of them afterwards. I am satisfied
that at all times Dee Jerrom said that Aylesfords were not her baby for
commission but that she expected negotiations to go
defendants. This conversation on Thursday, August 2, was the second in time of
the three telephone calls. The conversation referred to in finding 16 took
place subsequent to this one, after a sufficient interval of time for Miss
Jerrom to get her clients’ instructions on the £1.1m.
18. The plans
meanwhile had been conveyed by Doxford to Langton to Jerrom to the UAE. They
were the old plans, not showing the lavatory block. I am satisfied that Mr
Bartlett realised that they were the old plans when he was talking to Miss
Jerrom on July 31. Thus it follows that the plans had been transmitted at the
latest on July 31.
19. It follows
that in so far as Mr Bartlett differs on these facts to which I have referred,
I reject Mr Bartlett and accept Mr Doxford. I add that I find it significant
that Mr Squire considered, after the final deal was struck and the contracts
had been exchanged and, indeed, completion had taken place, that the plaintiffs
should get their commission. I do not think that he then thought that the
plaintiffs had done nothing in setting up the arrangements for the meetings or
transmitting offers and conducting negotiations. On the contrary, I am
satisfied that the plaintiffs had done those things to the knowledge of Mr
Bartlett and Mr Squire.
20. On August
3 two things happened. Gooch & Wagstaff were directly involved as agents
for the defendants, though Miss Jerrom was not particularly happy about it.
Second, Dee Jerrom went to the forefront of negotiations direct, with Squire,
who succeeded Bartlett when the latter was in Ireland (and I am satisfied that
he went to Ireland some time around about then, though not necessarily quite as
early as he says).
21. On August
6 a meeting took place. The UAE delegates conducted negotiations with Mr
Squire. Dee Jerrom was taking a back seat. Neither the plaintiffs nor
Aylesfords were represented. I accept that the price was reduced to £1.05m. Dee
Jerrom said that the meeting was to take place because her clients wanted a
meeting face to face because they were not happy with the price of £1.1m. I
accept Mr Squire’s evidence that the UAE were claiming that they had not agreed
to more than £1m; that he started to walk out; and that he would have done so
if they had not come up with £1.05m. What they had authorised Miss Jerrom to
offer on their behalf I simply cannot decide, But I think the way the UAE were
conducting themselves was probably part of their negotiating or bargaining
habit and no more.
22. The sale
at £1.05m duly went through.
The law
I have been
referred to a number of authorities, in particular a Court of Appeal decision
in the case of Samuel & Co v Sanders Brothers (1886) 3 TLR
145, which is authority for the proposition that an agreement to pay commission
on business introduced does not include an antecedent introduction of business
in the absence of express provision to that effect.
The second
authority is John McCann & Co (a firm) v Pow [1975] 1 All ER
129, again a decision of the Court of Appeal, to the effect that an estate
agent does not have implied authority to appoint a subagent. If therefore he
appoints a subagent without express authority, an introduction by that subagent
is not one within the agent’s contract with his principal and he is not
entitled to commission on it.
Third, a South
African case of Wyld v Sparg [1977] 2 SALR 75, where a helpful
definition is given of introduction:
directing the
attention of a person who hitherto has not applied his mind in that direction
to the fact that a property is for sale
and provides
authority for the proposition that the introduction by the agent must be the
cause of the transaction. That, of course, is within the concept of law that an
event may have several causes. What is relevant is that there is a causal link.
That proposition is confirmed by the passage in Chitty on Contract, vol
2, para 2312, which I summarise as this, that the agent must be the effective
cause of the transaction. I do not think I need refer to any other matters of
law that have been urged before me.
Applying those
principles of law to the present case and to my primary findings of fact, I
find:
1. The original
introduction of the UAE to the property was as a result of Aylesfords
introducing it to Dee Jerrom, the UAE’s agent. Aylesfords in turn got it from
the plaintiffs. At that time Aylesfords acted by agreement with the plaintiffs
as their subagents, but the defendants had not then appointed the plaintiffs as
their agents and, a fortiori, they had not then authorised the
appointment of Aylesfords as subagents.
2. At the
meeting on July 31 1984 in the plaintiffs’ offices, both parties realised that
the plaintiffs’ applicants, albeit the defendants did not know the name, had
been introduced to the property within the definition from the South African
case to which I have referred. The agreement to pay commission to the
plaintiffs was in respect of those specific, unnamed applicants already
introduced. Therefore there was express agreement that the commission and
contract covered the antecedent introduction to the property.
3. At the
meeting on July 31 both parties knew that the plaintiffs had other agents
involved in getting the UAE. I say ‘UAE’; the identity was not then known.
Aylesfords were not then named, only later. In my judgment, it matters not that
they were not named. The commission was assented to on the basis that the
plaintiffs already had other agents involved. Therefore, there was express agreement
to and authorisation of the antecedent appointment by the plaintiffs of
Aylesfords as their subagents in this deal.
4. The
agreement between the plaintiffs and the defendants envisaged a further act of
introduction by the plaintiffs as a precondition of entitlement to commission;
that is to say, in my judgment, introduction by bringing together of the
parties or bringing the parties into contact with each other. That is what the
introduction meant. I have already found that the meeting of August 1 was
arranged by the plaintiffs. It was clear on July 31 that the applicants were
Arabs, whether or not UAE was mentioned (and I do not think any more was
mentioned than that they were Arabs from some Arab government). The meeting of
August 1 was arranged and took place so that thereby (a) the parties were
brought together, causing (b) negotiations and a sale thereafter to take place.
5. The issue is
complicated, and materially complicated, by the action of Dee Jerrom on July
31, before the meeting of August 1 had taken place but after it was arranged,
contacting the defendants and identifying herself as the purchasing agent for
would-be Arab buyers but giving no further clue as to the identity of her
clients. The defendants submit, and submit cogently, that that act constituted
the effective introduction in the sense of bringing the parties into contact
with each other, because from the act of Miss Jerrom contacting Bartlett and
giving her telephone number as the agent for the buyers the parties had the means
of carrying out negotiations between each other and certainly of contacting
each other. The defendants further submit that that act took place because Mr
Markes, on July 30 and before the agreement between the plaintiffs and the
defendants, gave Bartlett’s telephone number.
Therefore they
submit that, the effective introduction or coming together having occurred
before the meeting of August 1, the effective introduction was outside the
contract. For the plaintiffs to succeed, they submit it must be shown that the
plaintiffs were the first to bring the parties together.
6. That
submission has great attraction at first sight, but I have concluded that it is
wrong because
(a) The act of Miss Jerrom
in contacting the defendants was, I am satisfied, not an act independent of the
acts of the plaintiffs and Aylesfords. She contacted the defendants after the
site meeting was arranged and because of the arrangement, and did so to sort
out the particular size of the property, which itself would give a guide to its
market price and the likely acceptable price.
(b) In fact, she did not
identify her clients then. That came only physically at the site meeting
arranged by the plaintiffs on August 1 and in name thereafter, as a result of
the plaintiffs’ meeting and the transmission of the initial offers by the
plaintiffs to the defendants.
(c) She said she had details
from Aylesfords and that all negotiations must go through them. Aylesfords were
in fact the plaintiffs’ subagents, and though the defendants did not know the name,
they had authorised the plaintiffs to proceed with subagents.
I am therefore
satisfied that this was not an introduction of the applicants, the bringing
together of the parties outside the plaintiffs’ contract. I am far from
satisfied that what Miss Jerrom did in fact constituted the bringing together
of the parties, but if I am wrong in that, then, in my judgment, she was not
doing it outside and independent of the chain of the plaintiffs and Aylesfords.
Rather, she was expressly bringing herself within the chain from Aylesfords.
It follows, therefore, that, in my judgment, the bringing into contact of the
UAE buyers was in fact done by the plaintiffs. That was the introduction for
which they were contractually responsible as a precondition of entitlement to
commission. The sale then proceeding to £1.05m (the precondition being that it
should exceed £1m) it follows that, in my judgment, the effective cause of the
ultimate sale was that act of the plaintiffs in setting up the meeting and,
indeed, in carrying out such negotiations as they did thereafter. Therefore
they are entitled to the commission claimed, which I understand to be £36,225.
