Agency — Whether agent personally liable — Assignment to plaintiff of debt alleged to be due from defendant in respect of commission and fees — Purchase of office block — Appeal from decision of judge rejecting plaintiff’s claim — Conditions governing agent’s acceptance of personal liability — Plaintiff’s claim depended on defendant’s indebtedness and that depended on whether the defendant, while acting as agent for the purchaser of the subject property, had assumed personal liability — Judge’s decision upheld by Court of Appeal
concerned the somewhat involved relationships between a number of middlemen —
The litigation arose out of a sale of an office block to a purchaser called
Monarch Assurance — The assignor of the debt on which the plaintiff sued as
assignee was described as a financial consultant — He claimed various items of
remuneration in respect of the sale of the property for services rendered — The
claims were for an acquisition fee based on a percentage of the purchase price,
a letting fee and a commission on subsequent sale — The acquisition fee was
paid to the assignor and it was the balance claimed to be due to him which was
the subject of the assignment to the plaintiff — The judge found that the
assignor was in fact entitled only to the commission on the subsequent sale —
Whether the plaintiff was entitled to claim the balance, to some extent reduced
by the judge’s finding, as assignee depended on the true liability of the
defendant — Had he, although acting as an agent for Monarch Assurance,
contracted personally so as to make himself personally liable?
claimed to have acted only as the agent for a disclosed principal and never to
have assumed or accepted personal liability for payment of the assignor’s
remuneration or any part of it — The judge held this to be on the evidence the
true position and dismissed the plaintiff’s claim — The Court of Appeal decided
that there was no material which justified the court in disturbing the judge’s
findings and dismissed the plaintiff’s appeal
The following
cases are referred to in this report.
Bridges
& Salmon v Swan, The (Owner) [1968] 1
Lloyd’s Rep 5
McCann
(John) & Co v Pow [1974] 1 WLR 1643;
[1975] 1 All ER 129; [1974] EGD 184; (1974) 232 EG 827, CA
This was an
appeal by the plaintiff, Foalquest Ltd, from a judgment of Judge Inskip QC,
sitting as a judge of the High Court, whereby he dismissed a claim by the
plaintiff as assignee of a debt alleged to be due from the defendant, Robert
Philip Roberts ARICS. The debt was alleged to be due in respect of remuneration
owing to a financial consultant, Nicholas David, in connection with the
purchase and sale of an office block at 15 Grosvenor Gardens, London SW1.
Mark Hoyle
(instructed by Ellis & Fairbairn) appeared on behalf of the plaintiff;
Stephen Jones (instructed by Martin Boston & Co) represented the
respondent.
Giving
judgment, SLADE LJ said: This is an appeal by the plaintiff in an
action, Foalquest Ltd, from a judgment of His Honour Judge Inskip QC, sitting
as a High Court judge, given on April 15 1988, whereby he dismissed a claim by
the plaintiff against the defendant, Mr Robert Philip Roberts [ARICS].
The plaintiff
claims as assignee of a debt said to be owed to a Mr Nicholas David in respect
of commission due on the purchase and sale of an office block in London known
as 15 Grosvenor Gardens, London SW1 (‘the property’). The debt, or alleged
debt, in question was duly assigned in writing by Mr David to the plaintiff in
June 1986, and written notice of the assignment was subsequently given to the
defendant by letter.
There has been
an application by the plaintiff to adduce further evidence, to which I shall
refer hereafter.
There is, with
some significant exceptions, no challenge to most of the judge’s findings of
fact, and I will take the facts largely from his careful judgment. Mr David
describes himself as a financial consultant. Part of his business consists of
acting as a middleman, or deal-maker, between prospective vendors and
prospective purchasers of property. For this work he is remunerated by
commission, the terms of which are negotiated for each contract.
The defendant
is a chartered surveyor, who also earns part of his income as a deal-maker.
From 1982 to 1985 he was carrying on business on his own account. Before the autumn
of 1982 he had, as he put it, a running brief from a company known as Monarch
Assurance Co Ltd to act as project manager on the development and sale or
letting of properties required by Monarch Assurance. He was remunerated on a
commission basis, the terms of which varied from time to time.
In 1982 the
Parker Pen Co wished to dispose of a long lease of the property. Their agents
were Strutt & Parker, of Berkeley Square.
On October 26
1982 Mr Derek Gillmore [FRICS], of the firm of Gillmore Carlin, who are
commercial property consultants, wrote to Mr David referring to a telephone
conversation and enclosing a brochure of the property. After giving certain
information concerning the property, Mr Gillmore said:
My firm is
not retained by the vendors in this instance and if you enter into a
transaction for this property it will be necessary for us to look to you for
our fees for your acquisition and subsequent lettings and sales thereon for
which we would act as your agents.
From this
letter it would appear that Gillmore Carlin, like Mr David, were in the
middleman situation.
Mr David then
got in touch with the defendant because he knew that the defendant had some
connection with Monarch Assurance; this was not the first project which Mr
David had discussed with the defendant, although the earlier ones had not come
to anything.
The defendant
said that he then approached a Mr Wilkinson, who was another middleman; and
although not employed by Monarch, said that he was acting for Monarch. The
defendant said in evidence that he had no reason to doubt that, as previously
the managing director of Monarch, Mr Taylor, had mentioned Mr Wilkinson to him
on a number of occasions. The defendant said that Mr Wilkinson had instructed
him to put forward an offer on behalf of Monarch, and he did so. Mr David said
in his evidence that he made a bid on behalf of Monarch for the property.
There followed
a letter of December 14 1982 in which Mr Gillmore wrote to Mr David, saying in
the first paragraph:
I refer to my
telephone conversation with Bob Roberts yesterday and confirm that I have put
forward a proposal in writing on behalf of Monarch Assurance Company Limited to
purchase the leasehold interest in this property for £500,000.
That offer was
turned down.
In February
the matter was revived. On February 9 1983 Mr Gillmore wrote to Mr David
saying:
I refer to
our telephone conversation yesterday and confirm that a joint selling agent is
about to be appointed by Parker Pen Company. The partners of this agency are
friends of mine and I know that they will be much more realistic in their
valuation of the leasehold interest. I therefore think it appropriate to
restate your interest in this property and perhaps now is the time to tempt
them further with a slightly higher bid.
That was done;
there were further discussions, resulting in a bid of £520,000.
On February 14
1983 Mr Gillmore wrote to Mr David saying:
I refer to
our telephone conversation this morning and confirm that I have submitted a
revised proposal to the selling agents of £520,000.
By February 25
1983 the offer of £520,000 put forward on behalf of Monarch had been accepted
by the surveyors acting for the Parker Pen Co, although nothing binding had
been agreed at that stage. On that day, Mr Gillmore wrote to Mr David again,
telling him that the offer had been accepted.
Against this
background clearly questions of Mr David’s potential remuneration, or
commission, would arise. It is common ground that, as between Mr David and the
defendant the terms of Mr David’s commission, or remuneration, were ultimately
agreed at a meeting between the two of them on March 23 1983 at lunch in a
restaurant known as the Radio Room.
The judge,
however, in his judgment considered the position regarding Mr David’s remuneration
as it was before that lunchtime meeting. Mr David’s evidence was that agreement
had previously been reached between him and the defendant that he was to be
paid an acquisition fee of 2% of the purchase price and that he would also be
paid an equity in the development profit, the amount of such equity still being
the subject of negotiation. The defendant said that nothing had been agreed
prior to March 23, but that as a result of instructions taken from Mr
Wilkinson, he told Mr David that the terms of remuneration, which included an
equity, were unacceptable to Monarch.
The transcript
of the judge’s judgment, at p 12G, records him as saying:
I accept the
defendant’s evidence that he told the plaintiff that the equity proposal was
not acceptable to Monarch.
However, it is
common ground between counsel on this appeal that this reference in the
judgment to the plaintiff was in its context intended by the judge as a
reference to Mr David. Furthermore, this finding of fact has not been
challenged on this appeal.
On March 15
1983 Mr David wrote a letter to the defendant in the following terms:
I know that
the 2 developments which I have put to you and which you hope to secure for
people with whom you are involved may not proceed. However, as we have not been
able to meet I thought it a good idea to put something down on paper confirming
our agreement as to fees.
This is that
I should receive an acquisition fee of 1½ % of the purchase price, a notional
letting fee of 10% of the rental figure projected and also a notional
investment sale fee on the completed development, once again of 1 1/2%. We did
not discuss when this was to be paid but it was your suggestion that most if
not all of it would be payable on completion of the purchase.
Then there was
a postscript, saying:
I have just
heard from Derek Gillmore that you have been given a week in which to exchange
on Grosvenor Gardens so let us hope this one will not ‘get away’.
The defendant
in evidence said that one of the two developments referred to in this letter
was the Grosvenor Gardens project. Mr David disputed that, but the judge found
(at p 6A of his judgment) that one of the two developments referred to was
undoubtedly the Grosvenor Gardens property. He found that this letter was
setting out what Mr David then claimed should be his remuneration for
introducing the property to Monarch. However, Mr Wilkinson, according to the
defendant’s evidence, told him that Mr David’s proposals were unacceptable. The
lunchtime meeting of March 23 1983, to which I have already referred, followed
between Mr David and the defendant.
After that
meeting Mr David set out his version, or his understanding, of the terms agreed
between him and Mr Roberts relating to Mr David’s commission in an important
letter of March 23 1983, which read as follows:
Dear Bob, 15
Grosvenor [Square] SW1.
Thank you very
much for lunch on Monday and I write briefly to confirm our agreement
concerning fees on this deal.
On completion
I am to be paid 2% of the purchase price namely £10,400 + VAT and on the
letting and/or sale of the completed product I shall share fees with one other
agent on the basis that you will pay a scale and a half.
It would be
most helpful to me if you could confirm to John Cloughessy at R Raphael &
Sons, 20 Copthorne Avenue, London EC2 that the first fee will be payable on
completion of the purchase in the usual way.
I hope that
now we have done one deal together it will be the first of many as we
discussed.
There is a
manuscript postscript to this letter, which I need not read. I understand that
R Raphael & Sons were Mr David’s bankers.
The judge
found that the agreement set out in the letter of March 23 was intended to
represent Mr David’s total remuneration for the introduction of the property
and that it was to be paid in two instalments.
In regard to
that letter the judge said (at p 8):
There were
important differences, however, between the terms there set out and those in
the letter of March 15. The acquisition part of the fee which was to be payable
on completion of the purchase by Monarch went up a half per cent to 2 per cent.
In place of the notional fees there was substituted a fee of half of a
scale-and-a-half, which was to be paid on the letting of the property or on the
sale. I find that the meaning of that letter and the words ‘and/or’ inserted on
line 2, was that if the letting was to be subsequently followed by a sale, the
same commission would be payable again on the sale. In other words, going back
to the letter, the commission was to be payable on the letting and a subsequent
sale of the completed product, or if there was no letting on the sale alone.
There is no
evidence that Mr David was to be employed as an agent to find a purchaser or
letter for the property, and I therefore do not find it necessary to imply any
term into the agreement, in order to give it business efficiency, that Mr David
should have been the effective cause, or an effective cause, of the letting or
the sale in order to be entitled to that part of the remuneration. I am unable
to accede to Mr Jones’s submission that the reference to the other agent in the
letter imports the term that no commission was to be payable to Mr David, unless
he was the cause or an effective cause of the sale or the letting of the
property.
To
recapitulate therefore, 2 per cent on acquisition, on letting if letting
occurred, half of a scale-and-a-half to be payable on or after the letting, if
the letting was followed by a sale, a further commission of the same amount to
be payable on sale. If there was no letting preceding the sale then the same
rates of commission, half of a scale-and-a-half, to be payable on sale.
I now revert
to the history of the matter after the property had been acquired by Monarch.
At the defendant’s suggestion, Mr David in June 1983 sent in an account for his
acquisition fee of £10,400 to Monarch’s solicitors and that account was paid by
those solicitors.
The property
was in due course sold by Monarch for £1,075,000. On May 8 1986 Mr David wrote
to the defendant enclosing an
March 1983. The sum claimed was £12,900, made up of £8,062.50, representing
3/4% of the sale price, and £4,837.50, made up of 7 1/2% of £64,500 per annum,
said to be a notional letting figure. The demand was repeated in letters of
June 23 and 24 to neither of which was there a reply.
The plaintiff
company, having taken an assignment of this alleged debt of £12,900, then
issued proceedings against the defendant claiming payment of this sum.
In the light
of his findings as to the actual terms of the agreement relating to
remuneration, the judge found that Mr David was entitled under those terms to
commission only on the sale, amounting to £8,062.50 (but not on a notional
letting). That finding is not challenged by either side on this appeal.
The other main
question which the judge had to determine, which is very much in issue on this
appeal, is whether the defendant contracted as agent for Monarch Assurance and
whether, if so, he was personally liable on the contract. Mr David told the
judge in evidence that during the period between the payment of the first
instalment of the commission — that is to say, the acquisition fee — and the
time of the sale by Monarch, Mr Taylor, the chief executive and managing
director of Monarch, told him that he knew nothing about the agreement entered
into by Mr Roberts. Mr David said that it was for this reason that he did not
look to Monarch for payment of the second instalment, but pursued the claim
against the defendant alone. Monarch has not been joined as a party to the
proceedings either as defendant or as third party.
At a late
stage the defendant applied for leave to amend his defence by adding an
assertion that the defendant
contracted
with the said David expressly as agent for and on behalf of a disclosed
principal, the Monarch Group of companies, in particular Monarch Assurance
Company Limited.
The judge
allowed this application to amend, saying as he did so that any application
arising out of the order could be considered when it was made. The evidence
before him was somewhat limited, since neither Mr Wilkinson nor Mr Taylor gave
any evidence. The plaintiff’s counsel told the judge that Mr Taylor had been
asked to attend on the first day of the trial, but had failed to do so.
However, no application was made to the judge for an adjournment although (as
the judge said in his judgment) it seemed to him that an adjournment would have
had to be ordered in the light of the late amendment to the defence.
At the
beginning of the hearing of this appeal, an application was made to this court
to adduce further evidence, in the form of an affidavit from Mr Taylor, but in
all the circumstances we did not think it right to accede to that application.
At the trial
it was submitted on behalf of the plaintiff that the terms of the letter of
March 23 made it clear that the defendant was contracting personally and not as
agent for a disclosed principal. The judge, however, dealt with this submission
as follows:
He
— the
plaintiff’s counsel —
relies
particularly on the words ‘our agreement’ in the first paragraph and the words
‘you will pay’ on line 4 of the second paragraph. In my judgment whether those
words, ‘you’ in particular, meant the defendant personally or as agent, depends
upon the circumstances surrounding the writing of that letter. Mr David said
that the defendant never actually said he was acting as agent for Monarch. The
defendant said that he could not remember saying that in so many words. Mr
David said: ‘I proceeded and believed that the defendant was contracted
personally’. The defendant said, on the other hand, that the whole basis for
the transaction from the very beginning, when Mr David agreed that he got in
touch with him, because of his relationship with Monarch, was on the basis that
he was acting as agent for Monarch. In my judgment the letters at C 6, 10 and
11
— those are
the letters of December 14 1982, February 25 1983 and March 2 1983 —
in all
confirm the evidence of both Mr David and the defendant that the two offers,
the one which was rejected, and the one which came to fruition, was made on
behalf of Monarch. The wording of Mr David’s letter of March 15 . . . is not in
my judgment consistent with his claim that Monarch were merely acting as
nominee purchasers for the defendant. If that had been the position I do not
consider that Mr David would have used the words: ‘I know that the two developments
that I have put to you and which you hope to secure for people with whom you
are involved may not proceed’. Those words are entirely consistent with Mr
Roberts, the defendant, acting as agent for the people with whom he is
involved.
The judge then
expressed his reasons for accepting the defendant’s evidence that before March
15 1983 the defendant had told Mr David that the equity proposal was not
acceptable to Monarch.
He said:
I find that
the contemporary correspondence, in particular the part of the letter of [March
15]
to which I
have just referred, and the finding that I have made that it refers to the
Grosvenor Gardens property, leads me firmly to the conclusion that I accept the
defendant’s evidence that he told [Mr David]
that the
equity proposal was not acceptable to Monarch. All those matters to which I
have just referred occurred before the letter of March 23 was written following
the lunch party. In my judgment they point to the defendant acting as an agent
for Monarch.
The judge then
proceeded to look at the events after the acquisition of the property, saying:
The fact that
the account was sent to Monarch, albeit on the instructions of the defendant,
and paid by Monarch’s solicitor without question, save as to the argument about
VAT, in my judgment points equally strongly towards the agreement under which
the commission was due having been entered into with the knowledge and
authority of Monarch. Therefore, events before the lunch party and with
circumstances surrounding the payment of the first instalment of commission,
before Mr Taylor, according to Mr David, had disputed further liability, point
to the defendant acting as agent for a disclosed principal, Monarch and so I
find.
We thus have a
specific finding of fact that, in entering into the relevant contract, the
defendant was purporting to act as an agent for a disclosed principal, Monarch.
The judge then
turned to consider whether Monarch had ever in fact appointed the defendant as
its agent, saying:
Mr Hoyle
submits that there is no acceptable evidence that the defendant was ever
appointed an agent by or on behalf of Monarch. However, in the light of the
matters to which I have already referred, I have no difficulty in accepting the
defendant’s evidence that he was instructed by Mr Wilkinson to act as he did on
behalf of Monarch. And, I find as a fact on the evidence tendered by both
sides, that Mr Wilkinson in fact had authority to give those instructions and
to appoint Mr Roberts, the defendant, to act as Monarch’s agent for the purpose
of transmitting the offers and negotiating the scale of remuneration for Mr
David. I am satisfied on the evidence that Mr David believed, contrary to his
current evidence, at all times prior to the discussion that he says he had with
Mr Taylor after the first letting commission had been paid, that the defendant
was acting as agent for Monarch.
Finally, the
judge considered whether, notwithstanding the fact that the defendant was
acting for a disclosed principal with authority, he had nevertheless also bound
himself personally. He answered this question in the negative saying:
The fact that
a person is acting as an agent for a disclosed principal
— I pause here
to say that it is common ground that there is an error in the transcript, which
reads ‘undisclosed’ —
does not
necessarily mean that he does not also bind himself personally. However, there
is no evidence, as I find, to indicate that the defendant was binding himself
and contracting personally as well as agent for Monarch. Mr David himself said
when cross-examined on this aspect — of course, he is not a lawyer, he is only
expressing his view as a middleman deal-maker operating in this field — ‘for a
middleman to become principal it needs a statement to that effect, or to the
effect that he is dealing in the matter as a joint agent developer’ with the
person, as I understand it, for whom he is also acting as agent. That seems to
me to be a good layman’s way of stating the principles of law to be applied.
There has been no evidence put forward by anyone that the defendant purported
to bind himself personally under the agreement that I have found he was
entering into on behalf of the disclosed principal, Monarch.
This claim is
therefore rejected and there will be judgment for the defendant.
The three
conclusions reached by the judge, which are of critical importance for the
purpose of this appeal, were his conclusions that (a) in entering into the
relevant contract concerning commission, the defendant was purporting to act as
agent for a disclosed principal, Monarch Assurance; (b) Monarch had in fact
appointed the defendant as its agent; and (c) the defendant had never made
himself personally responsible for Mr David’s fees.
Each one of
these conclusions is attacked in the notice of appeal, the three grounds of
appeal stated being as follows:
1 The learned judge erred in law in that,
having found as a fact that the letter of March 23 1983 from Nicholas David to
Robert Roberts was the basis of the contract between them, he failed to construe
properly the said letter so as to arrive at a valid conclusion as to the
letter’s legal effect. The learned judge ought to have held that the contract
between Mr David and the defendant was one whereby the defendant himself was to
pay personally Mr David’s fees as set out in the said letter.
The said fees
being found by the learned judge to be £8,062.50.
2 Further the learned judge erred in law in
that, having found that one Mr Wilkinson was the agent for Monarch Assurance,
he then found that the defendant Mr Roberts was also an agent for Monarch
Assurance appointed by Mr Wilkinson. The said finding inter alia goes
against the principle of non-delegation by an agent of his agency and is not
correct. The learned judge ought to have held that Mr Roberts was not an agent
of Monarch Assurance.
3 Further, the learned judge erred in law in
holding that, on the facts as found by him, the defendant has no personal
responsibility for Mr David’s fees. The learned judge if right in holding that
Mr Roberts was an agent of Monarch ought nevertheless and in any event to have
held that he was personally responsible for the fees.
I can deal
with ground 1 very shortly indeed. As has already appeared, the judge made a
finding of fact that Mr David believed, contrary to his current evidence, that
at all times prior to the discussion that he says he had with Mr Taylor after
the first instalment of commission had been paid, the defendant was acting as
agent for Monarch. In other words, the judge’s view of the facts after hearing
the evidence was that the defendant had made it sufficiently clear to Mr David
that he, the defendant, was at least purporting to act on behalf of Monarch. We
have not been supplied with transcripts of the oral evidence which was heard by
the judge, but in my judgment, for the reasons given by him, there was amply
sufficient evidence to entitle him to reach the conclusion which he did on that
point, and on this point it is clear, in my view, that his judgment cannot be
disturbed.
As to ground 2
raised by the notice of appeal, we have been referred by Mr Hoyle on behalf of
the appellant to a statement of principle in Chitty on Contracts (25th
ed), vol 2, para 2229, where it is stated that:
An agent
cannot, except with the express or implied assent of the principal, delegate
his authority, and the principal will not be bound by the act or contract of a
sub-agent whose appointment is not thus sanctioned.
There is no
evidence or suggestion that Monarch itself gave authority to the defendant to
represent it. The defendant’s case was that he derived his authority through Mr
Wilkinson. The point argued by Mr Hoyle is that Mr Wilkinson could not have
effectively invested the defendant with authority to act as Monarch’s agent.
That contention would, I think, have been well founded if Monarch itself had
not delegated to Mr Wilkinson the authority to invest the defendant with the
necessary authority. This appears not only from the passage in Chitty,
to which I have referred, but also from a decision of this court in John
McCann & Co v Pow [1974] 1 WLR 1643. However, the judge found
not only that the defendant was instructed by Mr Wilkinson to act as he did on
behalf of Monarch but also that Mr Wilkinson in fact had authority to give
those instructions and to appoint the defendant to act as Monarch’s agent for
the purpose of transmitting the offers and negotiating the scale of
remuneration for Mr David. Once again, at least in the absence of transcripts
of the oral evidence, I see no possible way in which this court can go behind
that finding.
The third
point raised by the appellant is the only one in this case which has caused me
any doubt at all. Mr Hoyle referred us to the principles relating to an agent’s
liability, which are set out in vol 2 of Chitty at paras 2274 and 2275,
and I shall read the first of those two paragraphs. It is headed ‘Agents’
Personal Contracts in General’ and it reads:
The fact that
a person is an agent and is known to be so does not, however, of itself
necessarily prevent him incurring personal liability. Similarly he may be
entitled to sue. Whether this is so is to be determined by the construction of
the contract, if written, and by its nature and the surrounding circumstances.
When the agent does contract personally the scope of the contract which he
makes requires careful analysis. He may undertake sole liability to the
exclusion of his principal: conversely he may undertake joint liability on the
main contract together with his principal. He may act as surety for his
principal, or enter into a collateral contract with its own terms. The
possibilities shade into one another, and there is no general rule. An agent
may undertake liability without being entitled to sue, but he cannot be
entitled to sue if he is not liable, for there would be no consideration to
support the liability of the other party.
There is a
further helpful statement of principle in Cheshire Fifoot & Furmston’s
Law of Contract (11th ed), p 468:
Further, the
intention to make the agent a party may be inferred as well as expressed, and
it is purely a question of construction in each case, dependent upon the form
and terms of the particular contract and upon the surrounding circumstances,
whether such an intention is disclosed.
There follows
a quotation from a judgment of Brandon J (as he then was) in the case of The
‘Swan’ [1968] 1 Lloyd’s Rep 5 at p 12, in these words:
The intention
for which the court looks is an objective intention of both parties, based on
what two reasonable businessmen making a contract of that nature, in those
terms and in those surrounding circumstances, must be taken to have intended.
The passages
which I have just read relate to a case where an agent has authority and is
known to be an agent. They do show, in accordance with Mr Hoyle’s submission,
that those two facts, even if assumed against him, as I do in the present case,
do not necessarily mean that the agent cannot contract personal liability.
Mr Hoyle, with
some force, has referred us to the detailed terms of the letter of March 23
1983, in which Mr David recorded his understanding of the agreement previously
reached that day with the defendant. He pointed out that in the first paragraph
there is a reference to ‘our agreement concerning fees on this deal’ — ‘this
deal’ clearly referring to the completion by Monarch of the venture consisting
of the purchase and refurbishment and subsequent disposal, either by letting or
by sale, of the property. He has referred us with particular emphasis to the
expression in the second paragraph of the letter, ‘you will pay a scale and a
half’. He has also drawn our attention to the words in the third paragraph ‘You
could confirm’ and to the words in the fourth paragraph ‘now we have done one
deal together’. He points out that there is nothing in the letter expressly to
exclude the defendant from personal liability. He suggests that the phrases
which I have mentioned point rather in the other direction. The letter, as he
says, contains no express mention of any agency on the part of the defendant;
it does not qualify his responsibility in any way, and the letter was sent to
the defendant at his home address. Furthermore, it is pointed out that there
does not appear to have been any express dissent by the defendant from the
terms of the letter.
I see the
force of all these points, but I do not think that, as Mr Hoyle would seek to
persuade us, the letter can properly be read in isolation from everything that
went before it. In particular, I do not think it can be read in isolation from
the known fact that it followed an oral conversation between the defendant and
Mr David, the contents of which conversation it merely purported to confirm.
In my
judgment, the judge, in deciding whether the intention to impute to the parties
was one under which the defendant would incur personal liability for these
fees, was not only entitled, but bound, to take into account the oral evidence
which he heard as to the contents of that conversation. And he plainly did so,
because, on the last page of his judgment, in a passage I have already quoted,
he recounts evidence which Mr David gave as to the position of a middleman
deal-maker operating in this field. In my judgment, the letter, even on its
face, by no means unambiguously suggests that the defendant was intended to
incur personal liability. But when one takes into account, as one must, the
fact that at the time when it was written and at the time of the previous oral
conversation, the defendant was known to be an agent and known to be an agent
acting on behalf of Monarch Assurance, the assertion that the defendant was
clearly intended to incur personal liability becomes even less easy to sustain.
It has to be borne in mind that the letter was not a letter written by the
defendant himself; it was merely a letter written by Mr David setting out his
understanding of the position. The judge had to assess the contents of that
letter against all the background circumstances in which it was written, and
against the oral evidence that he had heard from the two main parties, of which
we have no knowledge save as recounted in the judgment.
There are two
particular pointers referred to in the judgment which could well be said to
point away from personal liability on the part of the defendant. First, Monarch
was known by the defendant to be the ultimate purchaser and on its own behalf
(not on behalf of the defendant) and for that reason was the party to whom Mr
David might, perhaps most naturally, look for payment of his commission.
Second, there is the finding by the judge that at an early stage Mr Wilkinson
had told Mr David that the proposed terms of remuneration including an equity
in the development profit were unacceptable to Monarch. This is yet another
pointer that it had been made sufficiently clear to Mr David that Monarch was
intended to be the source of his ultimate commission.
I think it is
quite possible that there was a genuine misunderstanding between the parties
and that Mr David genuinely believed that he would have the right to look to the
defendant, and to the defendant alone, for his commission. His subsequent
conduct is certainly consistent with that. Nevertheless, we have, once again, a
clear finding of fact by the judge that there was no evidence to indicate that
the defendant purported to bind himself personally
heard all the evidence, which we have not, and in my judgment there is not the
material which would justify us in disturbing that finding of fact.
For all these
reasons, for my part I would dismiss this appeal.
BALCOMBE and BUTLER-SLOSS LJJ agreed and did not add anything.
The appeal
was dismissed with costs, such costs to include those in respect of the
application to adduce further evidence; application for leave to appeal to the
House of Lords was refused.
