Did auctioneers secure instructions to include in sale a property sold by another agent by private treaty a few days later?–Yes–Claim to commission, etc, on basis of auction sole agency upheld
This was a
claim by Gross Fine & Krieger Chalfen, estate agents and surveyors, of
Princes Street, Hanover Square, London W1, against Mrs Emily Gaynor, of Green
Lanes, St Albans, Hertfordshire, for damages for breach of a contract for sale
of ‘Longwood,’ Holders Hill Road, Hendon, London NW4, by auction.
Mr R F Nelson (instructed
by Slater, Fruitman & Co) appeared for the plaintiffs, and Mr L A Marshall
(instructed by Rose & Birn) represented the defendant.
Giving
judgment, CUSACK J said: This is a claim for commission made by the plaintiffs,
who are a firm of estate agents. They claim that they are entitled to
commission on the sale of a property known as ‘Longwood,’ Holders Hill Road,
London NW4, which was the property of the defendant, Mrs Gaynor. The basis upon
which they claim commission is that they say they were appointed not only as
agents for the sale of that house, but as sole agents for the sale of it, and
that it was in fact sold through the agency of another estate agent, Mr M J
Smith-Carington FRICS. The plaintiffs claim that their instructions were to sell
the house at an auction which was to take place at the London Auction Mart on
June 22 1972. In fact, before that date it was sold privately on the
defendant’s behalf by Mr Smith-Carington. The defence to the claim is a denial
that the plaintiffs were ever appointed agents by the defendant, either sole
agents or at all.
The matter
arose in the early part of 1972 when the defendant, who is a widow, was anxious
to sell the house in which she was then living. It was a matter of some
urgency, because she needed the money that would be gained by a sale in order
to provide an income for herself. She discussed the matter with her daughter,
Miss Gloria Gaynor, and thereafter it is not in dispute that Miss Gaynor took a
prominent part in the matters which followed. It has not been pleaded, nor has
it been submitted, that she was without authority to act on
defendant, and it may be that her intervention in the transactions concerning
the disposal of this house has been somewhat unfortunate in the result. A
decision was taken, after discussion between mother and daughter, that the
house should be sold. Some time early in April 1972 Miss Gaynor spoke to Mrs
Smith-Carington, the wife of the estate agent to whom I referred earlier. The
Smith-Caringtons were friends of the Gaynor family, and as a result of what
Miss Gaynor said to Mrs Smith-Carington, Mr Smith-Carington on Tuesday April 18
came to visit the house–I expect he had visited before, but he came on business
on this occasion–and he saw both mother and daughter. According to Miss Gaynor,
discussion took place as to how the disposal of the house should be dealt with.
Her mother, the defendant, was then adamant that she did not wish it to be disposed
of by auction. Miss Gaynor herself took the same view, as she thought it would
take too long and place too much of a strain upon her mother. I think Mr
Smith-Carington confirms that that was the situation at that stage. A few days
later, on April 24, Mr Smith-Carington visited the house again. He took some
measurements and considered whether it should be sold as a residence for
redevelopment. A little later he made inquiries about the position concerning
planning permission, and ultimately he came to the conclusion that a better
price would be obtained if it were sold for redevelopment.
In the
meantime, Miss Gaynor had read an article in a newspaper about the success that
was being achieved in selling houses, particularly houses with land, at
auction. The newspaper article mentioned the name of the plaintiff firm, Gross
Fine & Krieger Chalfen, and also referred to sales taking place at the
London Auction Mart. As a result of the favourable impression she derived from
that article, Miss Gaynor telephoned the London Auction Mart, found out further
particulars of the address and so forth of the plaintiffs, and on April 25 or
thereabouts telephoned the plaintiff firm and spoke to Mr Cliftord Krieger
FSVA, who is a partner in that firm. Mr Krieger’s account of the matter given
in this court was to this effect. Miss Gaynor wished to explore the possibility
of a sale as quickly as possible, and he told her that there was an auction due
to take place on June 22. He explained to her that normally about eight weeks was
required to make the necessary arrangements to deal with the publicity and
print the various documents that were required, and he told her that it was
inherent in instructions to sell by auction that the auctioneers should be the
sole selling agents. According to him, he explained about the charges for
expenses, which he said he hoped would be limited to £300, and said it was
vital, if the house was to be put in the sale of June 22, that instructions
should be given at once. According to him, Miss Gaynor said she would like him
to proceed with the matter, and asked him to make an appointment with her
mother to view the house. Miss Gaynor, as I understand it, was not herself
living at the house at the time, she was living elsewhere. Mr Krieger said he
also required the name of the solicitors who would be acting, so that that
could be included in the published particulars.
Miss Gaynor’s
account of that telephone conversation is somewhat different, because she said
that she had no intention at that stage, or indeed at any stage, according to
her, of giving firm instructions for the house to be auctioned. She telephoned
Mr Krieger, asked if he could help, and according to her she said that her
mother was thinking of selling the property at Hendon, and asked whether he
could go along to see her mother and view the property. Then there was some
discussion as to what the nature of the property was, and she described it as a
big house divided into flats, with some ground; ‘a smallish garden back and
front’ is what she believes she said. He asked her what her mother’s telephone
number was, and that was given. According to her that is really all that took
place. Mr Krieger certainly did make an appointment to see Mrs Gaynor, the
defendant, and did go to see the property. But Mr Krieger, in the course of his
evidence, told me that he believed that at that stage, on April 25, a contract
had been concluded between him as estate agent and Miss Gaynor on behalf of her
mother, to the effect that his firm should auction the property. I do not think
that is so. It is not so pleaded, because the contract pleaded is a contract
alleged to have been entered into on May 2, a date to which I shall refer
later. Certainly I think that Miss Gaynor was going into far more detail in her
conversation with Mr Krieger than she now remembers, and that she was given the
information which he told me he had given to her over the telephone. The reason
why I have come to the conclusion that a contract was not concluded is that
after Mr Krieger had visited Mrs Gaynor on April 27, a letter was written from
his firm, dated April 28. I say dated April 28; the date was in fact typed as
February 28, but everybody agrees that that was a mistake, and it was April 28.
By the time that letter was written he had made his visit to Mrs Gaynor and he
says that he had had a look at the house, but he did not have any specific
conversation with Mrs Gaynor, or, as I understand it, enter into any specific
arrangement with her. Mrs Gaynor’s account of the matter was that he came,
apparently to her surprise, although according to Miss Gaynor she had been
informed of the pending visit. He came, he talked about figures which Mrs
Gaynor did not fully follow or understand, and in the end, according to her
evidence, the effect of what she said was, ‘Go home and write to me.’
Now, I can
perhaps refer, before I go further, a little more to Mrs Gaynor. Mrs Gaynor
gave evidence. She is an elderly lady. It is I think conceded, without any
reflection upon her, that as with many other elderly people and some younger
people, her memory is not very good. She is obviously not accustomed to legal
proceedings, and certainly not to business transactions. In fact, although she
quite rightly gave evidence as being the defendant in this case, her evidence
was of very little assistance to the court, because of her want of recollection
and her evident confusion about certain matters. Therefore the case must really
be determined upon evidence other than that coming from Mrs Gaynor herself. The
letter to which I have already referred, that of April 28, was written in such
terms that it would be quite inconsistent to find that an agreement had by that
date been concluded, because it is a letter inviting instructions. It deals
with the auction, refers to the auction which was to take place on June 22,
refers to the limitation of expenses to a sum of £300, and refers to the
payment of fees at the rate of 2 per cent on the sale price. All those matters
had in my view, and I so find, been mentioned in the telephone conversation
with Miss Gaynor. Then it goes on to say: ‘Inherent in such instructions would
be the appointment of this firm as sole agents with sole selling rights on your
behalf for a date up to and including eight weeks after the auction.’ A little later on in the letter occurs this
paragraph: ‘I would be most grateful if you would give this matter your
immediate attention, and let me hear from you if possible in writing by return
of post, so that I can then instruct the printers, photographers and
advertisement programmes to be commenced without delay.’ The letter was addressed to Miss Gaynor, and
a copy was sent to her mother. There was no reply to that letter, and the
business on behalf of the plaintiffs passed from the hands of Mr Krieger to
another member of the firm who was assisting him, a Mr J A Salter ARICS. On May
1 Mr Salter himself visited the house and took some measurements, as to which a
mistake occurred, to which I shall refer later. On May 2, no answer having been
received to the letter of April 28, Mr Salter telephoned Miss Gaynor and
inquired as to why there had been no reply to the letter.
In the
background throughout these matters was the sense of urgency felt by the
plaintiffs if the house were to be included in the sale of June 22, for if
there were delay, it would miss
of their own client. Mr Salter told me that when he telephoned on May 2, what
occurred was this. Nobody can be expected to pledge themselves to exact words,
but he probably, he thinks, started by inquiring if Miss Gaynor had received
the letter of April 28, and pointing out that there had been no answer to it.
He then says he went on to request what he calls confirmation that his firm had
been appointed sole agents, and explained exactly what that implied, including
the significance of being sole agent in the sense that the Gaynors would be
responsible to them whoever sold the house. He says that Miss Gaynor agreed. He
could not remember her exact words, but according to him she accepted that the
plaintiffs would be sole agents and confirmed their instructions to proceed
with the auction sale. She did not raise any question about not being sole
agents, and his only other point of inquiry was to ask the name of her
solicitor in order that the necessary particulars of sale could be prepared.
Miss Gaynor gives a differing account of the matter, because she says that
certainly a telephone conversation took place, and there were, according to
her, a number of telephone conversations, one of them initiated by her. She is
not, I find, entirely clear, nor, I think, does she claim to be entirely clear,
as to what was said at any particular conversation. She certainly had this
inquiry about whether the letter of April 28 had been received, and she was
told about the auction, and was asked ‘can we go ahead?’ and according to her, her answer was that she
must ask her mother. She telephoned her mother, her mother still did not want
to auction but wanted to sell privately, and her mother said ‘leave it,’ and so
nothing more was done. That is one account which she gave of the conversation,
but she also gave an account of subsequent conversations, and at some stage,
she agrees, she did give the name of the family solicitors, but she says only
when she was told she would be chargeable for expenses and she answered that
that matter must be referred to the solicitors. I should perhaps amplify that a
little, because she said it was in the last telephone conversation of any that
she had that she told the plaintiffs that she had sent their letter to her
mother’s solicitors. Mr Yaxley was the legal executive there acting, and she
said she told them to contact him, as her mother did not want her to have
anything more to do with the matter.
In deciding
between the conflicting versions of that vital telephone conversation on May 2,
it is necessary to take into consideration what matters may be found for or
against the conflicting versions in the outside evidence. On May 2, Mr Salter
wrote a letter to Mr Yaxley, to whom I have referred, at the solicitors’ firm,
Rose & Birn, of Enfield, and he said: ‘We write to inform you that we have
been instructed by our mutual client Miss Gaynor to submit the above property
for sale by public auction on June 22. Accordingly I would be obliged if you
would kindly forward to me at your earliest convenience the general and special
conditions of sale which are to be included in the auction brochure.’ That letter is wholly inconsistent with Mr
Salter having been told on that very day that he was not to proceed with the
auction and having been referred to the solicitors solely for the point of
dealing with any expenses that might have been incurred. Next, Mr Salter put
the question of the advertisements and the brochure in hand, again inconsistent
with any belief on his part that he had not been instructed at all. Then later
on, as one goes through the correspondence, there came a reply to his letter to
Rose & Birn (the letter of May 2); that reply was dated May 8, by which
time the private sale had been entered upon. Mr Yaxley, who had taken
instructions from the Gaynors, wrote: ‘Thank you for your letter. We are now
instructed that our client has sold by private treaty, and will therefore not
be putting this property to auction.’ It
is to be noted, though this is no criticism of Mr Yaxley, that that letter did
not contain any statement, ‘We have never instructed you at all, you have not
been our agents at any time,’ which is in fact the defence in this case. A
further letter of May 10, again from Rose & Birn, does say that the
plaintiffs had not been appointed sole agents, but it ends up by saying:
‘Doubtless you will let us have a note of the expenses incurred by you to date.
Our clients are not prepared to agree to this property being put to auction,
and you should incur no further expenses accordingly.’ Again, that letter is inconsistent with an
assertion that the plaintiffs were never employed at all. If they were employed
as agents, I am entirely satisfied that they were employed only on the terms
that they were ‘sole agents.’ Not only
was that their practice in relation to auctions, but the other evidence,
including the evidence of Mr Smith-Carington, confirms that that is the practice
of agents selling property at auction, as it is impossible to have more than
one agent acting.
Now on
Thursday May 4, going back a little in date, Mr Smith-Carington, who had at the
beginning of the month, either on the 1st or 2nd, received an offer of £54,000
for the property, received a firm offer of £61,000. He went to see Miss Gaynor
about it (it happened that Mr Yaxley was there at the time); she spoke to her
mother, and it was in those circumstances that the offer of £61,000 was
accepted through the agency of Mr Smith-Carington, who in due course drew his
commission upon the sale. On Friday May 5, Miss Gaynor telephoned Mr Salter, or
he telephoned her–there is a conflict there–I think it more likely that he
telephoned her, but they spoke upon the telephone again, and she disclosed that
there had been this offer from a private source, and he advised her ‘not to
accept it in her own interest.’
According to him, what occurred during the course of that conversation
was that he told her acceptance would be ill-advised, and she should wait for
the advertisement which the plaintiffs proposed to insert on the 13th of the
month, and if possible wait for the auction to take place, as he believed a
better figure than £61,000 would be achieved. He believed that because at that
time he himself had made inquiries about getting planning permission and had
satisfied himself that the property was ripe for development. He also says that
at that time there was a discussion about sharing the commission. Again the
date of that discussion about sharing commission was not entirely clear. It may
not have been on May 8, it may have been on May 5. But in any event, Miss
Gaynor says that at no time was there any discussion about sharing commission.
It was suggested by Mr Smith-Carington in his evidence that the plaintiffs were
exerting considerable pressure. Although he qualified the suggestion and I
think eventually withdrew it, there was in what he said implicit a suggestion
that the plaintiffs were acting improperly in getting into touch with Miss
Gaynor as often as they did and reminding her of the date of the proposed
auction. I detected in Mr Smith-Carington’s evidence a degree of prejudice
which he later did not entirely remove. It is right that I should say I do not
think the plaintiffs were exerting any improper pressure at all.
Now, the
£61,000 was accepted by private treaty as I have indicated. It is against that
background that I have to decide where the truth lies as to the terms of the
telephone conversation on May 2 and to decide what its effect was. The
conclusion I come to is that the evidence of Mr Salter should be accepted, not
only because I regarded him as a truthful and accurate witness, obviously
embarrassed by the situation in which he found himself as a person junior to Mr
Krieger, bearing responsibility in court for this matter; but also by reason of
the fact that the correspondence, although not always in the clearest terms,
because if correspondence were invariably clear there would be very little
litigation, does nevertheless seem to bear out what he says about the
transaction that took place. I think probably the real truth of this matter is
that neither mother nor daughter, certainly not Mrs Gaynor, nor probably Miss
Gaynor, was at all experienced in business
kindly as I can, really made a hopeless muddle of things out of which she has
now endeavoured, unsuccessfully I am afraid, to extricate herself and her
mother. I find that she did give instructions on May 2, that the plaintiffs
should be sole agents, and that she agreed to their terms as set out in the
letter of April 28. It follows from what I have said that the plaintiffs must
succeed in this action, and that raises the question of damages, because what
is sought is commission on the eventual sale of the property, the private sale
for £61,000. The claim amounts to £1,416.65 for commission and expenses. The
commission the plaintiffs are certainly entitled to, but the the items of
expenses which are set out in the further and better particulars require
further consideration, because charges are made for advertising space,
production costs, and then the charges of making corrections when the auction
sale went off. I am not satisfied that the plaintiffs incurred the costs for
advertising space and production costs which they claimed, because five other
houses were at their instance at auction at the same time, and it seems to me
on the evidence which I have, which is rather scanty on this particular matter,
that the costs of advertising and production were in the end distributed among
the other vendors and did not fall upon the plaintiffs themselves. The sum of
money involved is comparatively small. The plaintiffs are however entitled to
recover, in my view, as special damages the costs which they set out of
correcting the block for printing and of the brochure, amounting to £57.48.
When I said
just now that the plaintiffs were entitled to their commission, I had not
overlooked the submission made to me by Mr Marshall that they really should not
have the full commission claimed, but should have some other figure to be
assessed as best the court could. That submission was made to me on the basis
that they made an error in the measurements of ‘Longwood’ which they published
in the preliminary auction particulars. The error arose because the property
was described as being a site of 0.435-acre, whereas in fact it was 0.29-acre.
Furthermore, it was described as having a frontage of 190 ft, whereas the
frontage was in fact 90 ft. The error as to the acreage no doubt crept in as a
result of the erroneous measurement of the frontage by adding 100 ft which were
not in fact there. Mr Marshall submits to me that that error having been made
and circulated, although it could have been corrected at the auction sale,
would have made the sale of the property the more difficult, and that it would
not have fetched £61,000, as it did in the sale by private treaty. I take the
view that although this error is most regrettable, I ought not to assume that
it would not have been corrected in time, because the plaintiffs had written
(as I have indicated earlier) to the solicitors asking for the various general
and special conditions. They would undoubtedly before the sale have inquired
further into the position regarding the house. Indeed I do not think I ought to
assume that in those circumstances this error would have gone uncorrected, or
indeed, that if it had not been discovered until the actual time of the sale it
would have made a difference to the price then obtained. It was a buoyant
market at that time, and later in the same year the property was sold for a
figure of over £70,000. So it is in those circumstances that, as I have already
indicated, I think the plaintiffs are entitled to recover their full commission
as pleaded, and the special damage limited to £57.48. There must be judgment
accordingly, with costs.
