Estate agent Benhams has won a High Court claim against Kythira Investments for commission owed on the £1.65m sale of two Hampstead homes.
In the High Court, Gray J held that, although the parties had never had a written agreement of retainer, Benhams had been “instrumental” in Kythira’s purchase of the properties in 1998.
He ordered Kythira – a North London development company owned and run by the Tsentas brothers, Christos, Costas and Andros – to pay a standard commission rate of 2% on the transaction.
In May 1998, Kythira purchased Leavesden Cottages, in Branch Hill, London NW3, from Dreamgate Investments for £450,000. The following September, Kythira’s nominee, Bickmar Developments, acquired the adjoining property, known as Spedan Cottages, for £1.2m.
The properties were later sold for £1.175m and £3.35m respectively.
Benhams claimed that one of its directors, Jeremy Gee, had been approached by Kythira in early 1998 to assist in the transactions, specifically in negotiations for a reduction in the vendors’ asking price. The agent dismissed Gee for dishonesty shortly after the transaction had been completed.
In the High Court, Augustus Ullstein QC, counsel for Kythira, argued that the firm had at no stage retained Benhams to act as its agent.
He said that no written retainer existed, in contrast to previous transactions in which Benhams had been instructed to act, including the acquisitions of 50-54 Maresfield Gardens and 2 Nutley Terrace in 1993 and 66 Maresfield Gardens in 1995.
Moreover, he said, Benhams had not invoiced Kythira for the commission either before or after Gee’s dismissal.
However, Gray J held that, notwithstanding the absence of documentary evidence of a retainer, the evidence of previous acquisitions in which Benhams had acted as agent and Gee’s continued involvement with Kythira during the negotiations led the court to “infer” the existence of a retainer.
He said: “I am entirely satisfied that, although there may have been no express agreement, it was implicit that Benhams would be paid for its services in connection with the purchasers.
“Where a client retains an estate agent to act for it in connection with a particular transaction, it appears to me that the presumption must be that the agent will be paid for its services.”
Benhams Ltd v Kythira Investments Ltd and another Queen’s Bench Division (Gray J) 20 December 2004.
Murray Rosen QC (instructed by CKFT) appeared for the claimant; Augustus Ullstein QC (instructed by Philip Ross & Co) appeared for the defendant.
References: EGi Legal 21/12/04