Estate agents’ commission — Rival claims to entitlement for introduction of purchasers — Several firms instructed, of which two, one of them the plaintiffs, were claimants — Defendants, a property company, faced with the competing claims, and with no direct knowledge of the facts, paid the commission to the plaintiffs’ competitors, but subject to an undertaking to indemnify the defendants if it should turn out that the plaintiffs were entitled to the commission — Plaintiffs sued the defendants for the commission, but the real contest was between the agents
of the trouble and confusion in the case was due to the fact that the
purchasers had been more impressed by the reception and attention received from
the plaintiffs’ competitors than the service given by the plaintiffs — The
purchasers considered that this more helpful attitude deserved the commission;
unfortunately this feeling led to actions which were mistaken
eventually purchased, a ground-floor garden maisonette in the Hampstead area,
was on the books of both agents — It had been first brought to the purchasers’
notice by the rival firm, but it had not then excited much interest — The judge
found as a fact that the decisive introduction had been made by the plaintiffs,
but the way in which this came about was, to say the least, curious — The
appointment for the purchasers to see over the house on the critical morning
was made by the plaintiffs as a result of persuasion by their representative on
the previous evening — On that same evening the purchasers had a look at the
outside of the maisonette and found it attractive — They agreed between
themselves that it would be unfair if the plaintiffs obtained the commission
for the sale as the other firm had been more helpful in trying to find them
something to buy — They therefore decided to cancel the appointment with the
plaintiffs and arrange an appointment with their rivals — This plan (with
which, of course, the rival firm should not have complied) partially miscarried
— The purchasers failed to make contact with the plaintiffs but succeeded in
notifying their rivals — The result was that representatives of both firms
turned up at the property the next morning
decided that it was the action of the plaintiffs in persuading the purchasers
to go to see the property which resulted in their offer that morning to pay the
asking price — This was the effective cause of the sale — Even after that
decisive event the purchasers were still expressing the view that the other
firm should have the commission as they had been ‘so helpful’ — However, as the
judge said, estate agents ‘get paid for results and not for effort’ — The
defendants, although they had acted throughout with complete propriety, had
paid the wrong agents — Judgment accordingly against them in favour of the
plaintiffs for the amount claimed
No cases are
referred to in this report.
In this action
Bentleys Estate Agents Ltd, estate agents in the Hampstead area, sued Granix
Ltd, a property company, for commission gained by the introduction of Mr and Mrs
Dunn, who purchased the ground-floor maisonette at 47 Platts Lane, London NW3,
part of a property developed and owned by the defendants. The other estate
agents mentioned in the action were Benham & Reeves, with offices in
Hampstead and elsewhere in north London.
G
Treverton-Jones (instructed by Ronald Nathan & Co) appeared on behalf of
the plaintiffs; R Willer (instructed by N Usiskin & Co) represented the
defendants.
Giving
judgment, PHILLIPS J said: The plaintiffs in this case are estate agents who carry
on business in the Hampstead area. The defendants are a property company. The
plaintiffs claim commission for introducing to the defendants Mr and Mrs Dunn,
who purchased the ground-floor maisonette at 47 Platts Lane, London NW3,
premises entrusted to their agency, among others, by the defendants.
The defence is
that this valuable introduction was effected not by the plaintiffs but by a
rival firm of estate agents, Benham & Reeves. The defendants have no direct
knowledge of the material facts in what must on any footing have seemed to them
a confusing factual situation. Faced with rival claims for commission by two
estate agents, they took the sensible course of paying one, Benham &
Reeves, against an undertaking by Benham & Reeves to indemnify them against
the consequences of any claim by the plaintiffs. It follows that, in reality,
this is a dispute between the two rival firms of estate agents.
There has
been, in this case, a degree of conflict of fact, though not as severe a
conflict as the pleadings suggested there might be. Before I review the facts
accordingly, I propose to say a word about the impression made upon me by the
witnesses. The first was Mr McNelis, who was called for the plaintiffs. He is
an employee of the plaintiffs and he is the employee who was principally
concerned with this transaction. He was a patently honest witness. He gave his
evidence with care and I find his evidence reliable. The impression he made
upon me was confirmed by a written statement in the form of a letter from a Mrs
Jamali, which was produced in evidence under the Civil Evidence Act, which
corroborated Mr McNelis’ evidence in one respect in relation to which there was
a conflict.
The defendants
first of all called Mr Cramer, a negotiator at Benham & Reeves. He was not
a good witness. He showed a marked inclination to replace recollection by
reconstruction and that reconstruction was not soundly based, as he suggested,
on the contemporary documentary evidence but was, in large measure, wishful
thinking. He was not, in my judgment, a frank witness. I have concluded that he
was well aware that in this case Benham & Reeves had not acted with
complete propriety.
The defendants
also called Mr Weldon, the office manager of Benham & Reeves, really to
give evidence on only one aspect of the case. He also I found to be an
unsatisfactory witness. The evidence he gave was at odds with a more
contemporary note that he made and I formed the view that he was not being
frank for the same reason as Mr Cramer.
Also from
Benham & Reeves, the defendants called Miss Tracy Arnold, who described her
occupation at the time as a ‘show-over girl’. She was an honest witness who had
a good recollection of that part of the story in which she featured.
The defendants
then called Mrs Dunn. She did not give her evidence well. She had, I have no
doubt, acted with the best of intentions, but it seemed to me that she was
unhappily aware that her actions had, in part, been the cause of this
litigation. She gave her evidence in a manner which was somewhat flustered and
confused. Having said that, I accept as accurate most of what she said, though
on one aspect of the case she was, in my judgment, guilty of wishful thinking.
Mr Dunn, who
next gave evidence for the defendants, was an admirable witness. He was
patently honest and he gave a clear account of events which I have been able to
accept in the main as being not merely honest but accurate.
The Dunns’
daughter, Miss Natasha Dunn, was also called to give evidence on an area of the
case which was not of great importance. She was plainly, again, an honest
witness who gave her evidence clearly but, having regard to the passage of
time, there was one aspect of her evidence where I formed the view that her
recollection was probably open to question.
Finally, Mr
Mahdavi of the defendants was called to give evidence which the defendants’
counsel accurately described as being largely formal. He is a man who is,
again, patently honest and reliable, and his conduct and that of his company in
this case has at all times been beyond reproach.
I turn, with
that introduction, to the facts. In 1986 the defendants developed 47 Platts
Lane, converting it into a garden maisonette and first- and second-floor flats.
On September 2 1986 they gave an agency to Benham & Reeves in relation to
these premises, under which Benham & Reeves would be entitled to a
commission of 2% on any sale effected through their services. That percentage
suggests that they had the exclusive agency. On the evidence, there was one
other agent, I think, involved at this stage. Be that as it may, on October 8
1986 the terms of their agency were altered to a joint agency, which had the
result that the commission to which they would be entitled in the event of
getting a sale increased to 3%. By February 19 1987 the top second-floor flat
had been sold but the first floor and the garden maisonette had not.
Accordingly, the defendants gave additional instructions to Bentleys, the
plaintiffs. At least one other firm of estate agents had also been instructed
in relation to these premises. Bentleys were not given a key but they were
informed that the key was held by Benham & Reeves and could be obtained
from them.
Mr Dunn is a
dentist. He and his wife lived, before the events with which I am concerned, in
Radlett in Hertfordshire. In the summer of 1986 they decided to sell their
house and move into Hampstead. They put their house on the market and went
round all the Hampstead estate agents looking for a home in Hampstead: I say
‘they’, but it was Mrs Dunn who did most of the house hunting. Among the agents
to which she went was Bentleys and from them she received a disappointing
service. There was then a lady there who appeared to take no interest in the
Dunns’ requirements. This contrasted with the diligence that was shown by
Benham & Reeves and particularly by their Mr Cramer, with whom Mrs Dunn
visited many properties. In late October the pressure eased somewhat because a
sale which the Dunns thought they were about to conclude fell through; but in
January they had a new purchaser, completion was expected fairly soon and the
pressure was on again.
On January 16
Mrs Dunn telephoned Mr Cramer at Benham & Reeves and Mr Cramer gave her
particulars of four properties, one of which was the garden maisonette at 47
Platts Lane. Mrs Dunn explained to Mr Cramer that her husband was not enamoured
with Platts Lane and for that reason they were not interested in the garden
maisonette. She looked at Netherhall Gardens, one of the other premises, but
this did not appeal. Mrs Dunn also went back to Bentleys and there she found
that Mr NcNelis was now employed. He had been recruited from the City and she found
him much more attentive than the lady with whom she had previously dealt at
Bentleys. At about this time, on one or two other occasions, according to Mr
Cramer, he urged the merits of the garden maisonette at Platts Lane, but on
each occasion Mrs Dunn showed no enthusiasm for it.
We come then
to February 27 1987, where entries in Mr Cramer’s diary assist to reconstruct
events. At 5 o’clock the diary records a meeting with Mrs Dunn to look at
premises at Bracknell Gardens and at 5.30 the diary records that Mrs Dunn was
due to go to look at premises at Hampstead Hill Gardens, where the owners would
be on hand to show her around. Mr Cramer said in evidence that in the course of
showing Mrs Dunn around Bracknell Gardens, they arranged an appointment for the
following morning to enable Mrs Dunn to look at the maisonette at 47 Platts
Lane. This piece of evidence was in somewhat startling conflict with the
further and better particulars that had been pleaded on behalf of the
defendants, which were as follows:
On Friday February 27 1987 Mr Dunn
telephoned Benham & Reeves and spoke to Mr Robert Cramer. Mr Robert Cramer
told him about the relevant maisonette and it was arranged between them that Mr
Dunn and his wife would view the flat at 10.15 am the following morning namely
February 28 1987. Subsequently, Mr Dunn learnt that his wife had made an
identical appointment with the plaintiff.
Mr Treverton-Jones, in cross-examination,
asked Mr Cramer about that passage and he agreed that it was almost wholly
inaccurate. When I questioned Mr Cramer at the end of his evidence, he said for
the first time that the evidence he had given in relation to making this
appointment was based not upon recollection but upon a reconstruction of
entries in his diary for February 28, to which I shall come in due course. It
is that reconstruction which I had particularly in mind when I said that his
evidence consisted more of wishful thinking than a valid reconstruction. Mrs
Dunn, when she gave evidence, said that she had no recollection of making such
an appointment; indeed, she agreed that she could have made no such
appointment, having regard to what subsequently transpired.
What
subsequently transpired was that, after Mrs Dunn had looked at Bracknell
Gardens, she went down to look at Hampstead Hill Gardens, which she remembered
clearly, as its decor she found somewhat unusual and unattractive. From those
premises she went to Bentleys shortly before they closed their doors at 6
o’clock on the Friday. She was, by now, getting quite desperate. There she saw
Mr McNelis, who extolled the attractions of the maisonette at 47 Platts Lane
and gave her written particulars of those premises and told her the address.
Mrs Dunn had, as I have indicated, already been told about those premises by Mr
Cramer and, indeed, supplied with particulars in relation to them by Benham
& Reeves. But at this stage of the story she did not recognise the address
as being one of which she had heard from Benham & Reeves and she agreed
that she would meet Mr McNelis there the next morning before an important
family engagement that she had. Her evidence as to the precise details of this
rendezvous conflicted with that of Mr McNelis.
Mr McNelis’
evidence was that he told Mrs Dunn that he would be showing a Mrs Jamali over
the premises at around 10 o’clock and said that he would wait at the premises
until 10.30 to show them to Mrs Dunn. Mrs Dunn, I think, said that there was a
firm rendezvous for 10.30. In so far as it matters — and I do not believe it
does — I accept the evidence given by Mr McNelis on this point. Mr McNelis,
when he had arranged to show Mrs Jamali the premises, had telephoned Benham
& Reeves to seek the keys and said that he would call round to collect them
that evening. He went round at about 6 o’clock to Benham & Reeves, but they
were unable to find the keys, so he arranged to call to pick them up the
following morning, Saturday the 28th.
Mrs Dunn
meanwhile had met her husband and they had gone together to a service at a
synagogue in the course of which (or, perhaps more likely, before it began) Mrs
Dunn showed her husband the written particulars of Platts Lane and told him
that she had arranged a meeting there the following morning with Bentleys. Mr
Dunn thought that the premises looked attractive and, after the service, he and
his wife decided that they would deviate on their way home to have a look at
the premises from the outside. This they did. They stopped outside 47 Platts
Lane and there was more than one estate agent’s board, as is often the case in
Hampstead, and the boards there included those of Benham & Reeves and
Bentleys. At this point, Mrs Dunn suddenly realised that this was one of the
properties that she had first heard about from Benham & Reeves. In giving
her evidence — which, as I have said, was somewhat confused — she told me that
she also appreciated at this point that her husband had arranged to see these
premises through his secretary earlier that day. That part of her evidence I
reject and it is that part that I referred to as ‘wishful thinking’ on her
part.
Mr Dunn, when
he came to give evidence, was quite clear that no such appointment had been
made; and no evidence was called from Benham & Reeves to suggest that Mr
Dunn or his secretary had made such an appointment. Thus, the basis of the case
pleaded by the defendants in their further and better particulars fell away.
The Dunns
decided that it was really unfair that Bentleys should
attractive, when Benham & Reeves had really done much more work in trying
to find them somewhere to buy. Accordingly, they decided that what they would
do the following morning would be to cancel the appointment with Bentleys and
make an appointment instead with Benham & Reeves to view the property. That
is precisely what they did. Early the following morning Mrs Dunn telephoned
Bentleys, only to have the disconcerting answer of an answerphone, of which she
declined to take advantage. She telephoned Benham & Reeves and spoke to a
Mr Weldon. Mr Weldon told me that what she said was that she had arranged an
appointment with ‘Robert’ — that is Mr Cramer — to see him that morning; some
confusion had developed and she wanted to confirm that she would be meeting him
at 47 Platts Lane. Mr Weldon said: ‘He is not in yet but I will ensure that
someone will be there as arranged.’ He
was somewhat confused in relation to precisely how it was he knew that the
premises concerned were Platts Lane but, in the end, he said it was Mrs Dunn
who mentioned it to him. This account differed from a note (which had been
disclosed but initially mislaid when Mr Weldon was giving his evidence) in his
hand which reads as follows:
Mrs Dunn phoned me at 8.30 am on Saturday
morning asking for Robert who was not in. She said that her husband had made an
appointment through another agent but because Robert had been so helpful she
wanted to meet Robert outside the flat at 10.15 rather than see it through the
other agent.
As I said,
this note had initially been mislaid, but it was then found and put to Mr
Weldon, who agreed that he had made that note, not contemporaneously but some
time after the events. But he said that his recollection now did not accord
with the note but was in accordance with the evidence he had given.
In my
judgment, that note plainly represented the telephone call in question. It
accorded with the evidence as to what occurred, given to me so clearly by Mr
Dunn, and, indeed, it accorded largely with Mrs Dunn’s evidence. I was left in
no doubt that Mr Weldon and Mr Cramer must have been aware of the true
position, namely that an appointment had been made with another agent and that
the Dunns were cancelling this and inviting Benham & Reeves to show them
around the premises instead. I asked Mr Weldon whether it was appropriate for
an estate agent who received such a request to comply with it. He said that it
was not; that if a firm appointment had been made with one estate agent, a
subsequent agent approached ought to tell the potential client to stick to the
appointment with the original agent.
Mr Cramer then
arrived at Benham & Reeves and was told what had transpired. He made an
entry in his diary for that day, the 28th, recording the appointment to view
Platts Lane at 10.15 on the part of the Dunns. He also made a note on the top
of his diary which indicated that he himself would be attending that
appointment. What then happened, in all probability, as Miss Arnold told me,
was that an alternative engagement that she had, to show some people round some
premises, was cancelled and she was asked to step in and show the Dunns round
Platts Lane instead of Mr Cramer.
At some stage
Mr McNelis came in for the keys. Miss Arnold had already gone off with them,
and so he was told that they were not available but that a representative of
Benham & Reeves would meet him at the premises to give him the keys. Miss
Arnold was told that Mr McNelis would ask for the keys as he had two clients to
show around the premises.
Mr McNelis and
Mrs Jamali arrived at 47 Platts Lane at about 10 o’clock, to find Miss Arnold
with the keys. They got the keys and he started showing Mrs Jamali round.
Meanwhile, the Dunns had driven in from Radlett rather faster than they
expected and had gone straight to Benham & Reeves to see if they could look
round the premises earlier than the 10.15 that they had arranged; and Benham
& Reeves had sent them straight on down to Platts Lane. They arrived at
Platts Lane to see, through the window, Mr McNelis showing Mrs Jamali round. Mr
McNelis saw them and motioned to them to come in. Miss Arnold, who was sitting
in her car, was unaware of the appearance of the clients she had to show round;
and, seeing what had happened, she assumed, quite naturally, that the Dunns
were clients of Mr McNelis, so she remained in her car while they went into the
premises. There is an issue as to whether or not it was necessary for Mr
McNelis to open the front door of the building and the front door of the
maisonette to give them access, or whether he had left those doors open so they
could simply walk in. In my judgment, this issue is one that is wholly
immaterial. So, in my judgment, is the issue of the extent to which Mr McNelis
actually escorted the Dunns around the house, because their evidence is that
Mrs Jamali was a demanding client and really occupied all Mr McNelis’
attention, so that he simply told them to look round for themselves until he
had finished with Mrs Jamali.
At all events,
a stage was reached where Mr McNelis took Mrs Jamali to look at the other flat
— the upstairs flat — for sale, and while he was doing this Mr and Mrs Dunn had
a brief word. They had been very impressed with the maisonette and decided to
‘strike while the iron was hot’ and to buy it.
Mr McNelis
then came down with Mrs Jamali and the evidence of the witnesses — which on
this part of the case was in conflict — agreed about one thing, namely that Mrs
Jamali left before Miss Arnold came in. Miss Arnold came into the premises
because Mrs Dunn, according to Miss Arnold, had noticed her through the window
and, appreciating that she was with Benham & Reeves, beckoned her to come
and join the party.
While Mrs
Jamali was still present, Mr and Mrs Dunn said to Mr McNelis that they liked
the property and were prepared to pay the asking price. I make this finding
with confidence because, in the Civil Evidence Act evidence from Mrs Jamali,
she states with convincing detail that the offer was indeed made in her
presence. When Miss Arnold came into the house, the Dunns repeated their offer
to Miss Arnold and Mr McNelis jointly. There was at this stage, understandably,
on the part of the Dunns a considerable degree of embarrassment. It is not
necessary to go into further detail as to what thereafter occurred, save to
record that the Dunns addressed their remarks to the representatives of both
estate agents. Thereafter, both the estate agents, rather like Tweedledum and
Tweedledee, were quick to perform those formalities which are usually performed
when the happy stage is reached of a purchaser agreeing to pay the asking
price: writing to the parties involved, their solicitors, and so on. The only
respect in which Mr McNelis did something that Benham & Reeves did not was
that he arranged a direct meeting between the Dunns and the defendants — but
that particular matter again is, in my judgment, of no significance.
On these
facts, the question arises: who was entitled to the sale commission? Mr Willer submitted that the test was simply:
‘Who was the effective cause of the sale?’, and I accept that that is indeed
the correct test. Mr Willer strove valiantly to keep his clients’ boat afloat
although it had shed planks almost throughout its voyage; but there can be no
doubt, in my judgment, on the facts of this case, that Bentleys were the
effective cause of the sale. It was bad luck for Benham & Reeves that this
was so.
On March 4 Mr
Dunn, with his wife’s encouragement, wrote to Mr Narinians of the defendants
saying:
Having given the matter our careful
consideration, my wife and I feel that the agent who did most work in helping
us find a property was Robert Cramer of Benham & Reeves. In the
circumstances we feel that they should receive the agents fee for selling the
above property.
Well, the fact
is, first of all, of course, that estate agents usually (as in this case) act
for the vendors and not for the purchasers. Second, they get paid for results
and not for effort. It is Benham & Reeves’ misfortune that when they
pressed 47 Platts Lane on the Dunns, the Dunns were not at that stage
interested in property in that road. It is Mr McNelis and his firm’s good
fortune that he pressed those premises on Mrs Dunn at the opportune moment. It
is quite plain that but for that pressure at about six o’clock on the evening
of the 27th, when Mrs Dunn went to see Mr McNelis, the Dunns would not have
gone to see 47 Platts Lane on the following morning. They might or they might
not have done so on some later occasion as a result of a suggestion from Benham
& Reeves or, indeed, some other estate agent; but, on the facts, it was
plainly Bentleys who procured this sale.
As I have
indicated, what happened when the Dunns arrived at no 47 is not of the essence
of the causative picture. The factor which caused the sale was getting them to
look at the property, and, once they were there, as is usually the case, the
property sold itself. In fact, as it happened, on my findings, Bentleys,
through Mr McNelis, were also responsible for showing the maisonette to the
Dunns even if all that he did was to beckon them to come through open doors and
invite them to look around. It is clear that the Dunns had decided they wanted
to buy the property before Miss Arnold took any part in the proceedings.
It follows
that the defendants — who have, as I have indicated, acted with entire
propriety throughout the story — have paid the wrong agents and judgment must
be entered for the plaintiffs against the defendants for the amount claimed.
