Estate agents — Terms of instruction — Effective introduction — Whether claimant estate agent entitled to fee — Whether effective introduction of purchasers by claimant — Whether necessary for claimant also to effect ultimate sale — Claim allowed
The defendant’s company owned a leasehold interest in a fully furnished residential mews property in London SW1. The defendant instructed the claimant to market the property on terms agreed at a meeting and subsequently contained in a letter sent by the claimant to the defendant. The letter, which was signed by the defendant, stated that the claimant was to act as sole agent on the sale, at an asking price of £4.5m, for a commission of 2% of the eventual sale price, plus costs and VAT. An initial three-month period of instruction was specified, but the letter also stated that it was to be read in conjunction with the claimant’s standard terms of business. These provided for the continuation of the agency after the expiry of the initial period until terminated by 14 days’ written notice by either party. Clause 2.2 of the standard terms stated that the defendant would be “liable to pay remuneration to us… if at any time unconditional contracts for the sale of the property are exchanged… with a purchaser introduced by us during the period of our sole agency”. The asking price was later reduced to £3.5m.
In April 2000, the claimant showed the property to a potential purchaser, F, who had responded to the claimant’s advertisement. Subsequently, F met with a former acquaintance, S, who acted as middleman between F and the defendant, bringing about an oral agreement for F and his wife to purchase the property for £3.4m. The sale later went ahead at that price, and the claimant sought payment of its fee. The defendant denied owing the fee, and also denied receiving the leaflet containing the standard terms of business. The claimant commenced proceedings.
Held: The claim was allowed.
On the evidence, the letter had been accompanied by the leaflet containing the standard terms of business. The agency agreement had persisted until, and was still current in, April 2000, having continued beyond the three-month period by virtue of the clause in the standard terms. F and his wife were purchasers who had been introduced by the claimant during the period of its sole agency, and the defendant was therefore liable to remunerate it. The fact that the purchasers then took spontaneous advantage of S’s services for further viewing and negotiation did not undermine the introduction as effected by the claimant. To the contrary, it arguably reflected the efficacy of the initial introduction. There was no reason to imply into clause 2.2 a requirement that the claimant became entitled to remuneration only if it effected not just the introduction but also the ultimate sale. The remuneration fell to be calculated by reference to the full sum paid in consideration, not just of the leasehold interest, but also of the furniture, namely £3.4m.
Michael Pryor (instructed by Russell-Cooke) appeared for the claimant; Charles Bennett (instructed by Shadbolt & Co, of Reigate) appeared for the defendant.
Sally Dobson, barrister
