Estate agents’ action for commission for introducing leasehold shop property to defendant company–Claim by plaintiffs that, the property not then being on the market and the plaintiffs not being retained by the owners, the defendants agreed to pay plaintiffs RICS scale fees in the event of the property introduced being acquired by the defendants–Property subsequently acquired by defendants–Sharp conflict of evidence as to whether there was a specific agreement to pay scale fees if plaintiffs’ introduction resulted in the acquisition of the interest–Plaintiffs’ account accepted by judge and judgment given in their favour for amount claimed
In this action
Milton Marlowe & Co, a firm of estate agents of New Bond Street, London W1,
sued Southcut Ltd, a company which traded as ‘Star Jeans,’ for a sum of £2,943
which the plaintiffs claimed was due to them as commission for their
introduction to the defendants of a prime leasehold shop property at 20 New
George Street, Plymouth, which the defendants later acquired.
Michael J
Burton (instructed by Laurence Brass & Co) appeared on behalf of the
plaintiffs; Barry Payton (instructed by Austin Ryder & Co) represented the
defendants.
Giving
judgment, MICHAEL DAVIES J said: This is a very unfortunate dispute indeed. It
is a dispute between two young men, one an estate agent, one a businessman, and
both of whom, I have not the slightest doubt, exhibit in their work and
business all the best qualities of energy and integrity which is characteristic
of people like them.
There is not a
great deal of money in dispute–under £3,000, which, of course, is not to anyone
a trifle, but, in relation to the cost of litigation and the time-consuming
nature of it, not a great sum. They have had to be here for the best part, or
parts, of three days and, quite obviously, from having been on christian name
terms at the time of the matters with which this case is concerned, they are
now at daggers drawn. However, although I express regret at that situation, it
is nothing to do with the court. The dispute having arisen, my task is to
resolve it on the facts and with the assistance of counsel, and by applying the
law as I understand it.
Mr Milton
Marlowe is the principal in effect, although in law I suppose the dominant
partner–the other partner being his wife–in the estate agents’ firm of Milton
Marlowe & Co. He is not qualified professionally, but he had a lengthy
experience before he set up his own firm a little time in advance of the
matters involved in this case. His experience had included a good deal of work
with shop properties, and I have no doubt that he had developed by 1974-75 a
considerable expertise in that field.
The defendants
are, in fact, Southcut Ltd, but I do not think that name has been mentioned at
all in the course of the case for this reason, that they trade as ‘Star Jeans,’
and they have been referred to throughout this case, and will be in this
judgment, as ‘Star Jeans.’ Ian Michael
Anthony Lyons (as he is truly named) is and was at all material times the
general manager of Star Jeans. For entirely understandable and creditable
reasons he was and is always known as Michael Star (that being a family name)
and is referred to in the correspondence and evidence, and will be in this
judgment, as ‘Mr Star.’
Star Jeans
dealt in casual clothing and, in particular, in the retailing of that
ubiquitous uniform of the modern day, ‘jeans.’
Star Jeans, as Mr Star explained to me–and of course everybody knows
that this is right–looked in the various places where they traded or wished to
trade, and that was in the south west of England generally, for the best places
consistent with the rent they were prepared to pay, and able to pay, having
regard to the size of their company, that is to say, the best sites in the
trading centres of the towns and cities concerned. I think they are known as
‘prime sites.’ As in every property
deal, I suppose, in relation to retail shops, very often those prime sites if
they come on the market are disposed of before they are advertised, publicised,
circularised, or whatever. Of course there is nothing wrong with that.
Mr Marlowe,
among his other activities, and having built up over the previous years a
connection and, no doubt, a friendship with the property managers of various
large concerns, kept his ear very close to the ground. As well as, no doubt,
acting in the ordinary way as a retained agent for the buying and selling of
properties (in particular, shops), if he heard of shop premises which had not
come on the market but were likely to be available for disposal he would
endeavour to place those by interesting potential purchasers or tenants. It is
for that reason specifically that Mr Marlowe began to develop a relationship
with Star Jeans and, in particular, Mr Star. He was anxious to foster that
relationship because, as he said, he hoped that it might in the end result in
his becoming, in effect, the sole retained agent for Star Jeans in the various
buying and selling of shops and leases in which they might be concerned as they
expanded or entered different towns or cities, or resited their shops more
favourably by disposing of one and acquiring another.
A good deal of
time has been spent in this case exploring the evidence and documents relating
to transactions, or potential transactions, of that nature in which Mr Marlowe
and Mr Star were involved. There are a number of documents relating both to the
opportunity given to Mr Marlowe by Mr Star to sell properties–three or four of
them–belonging to the defendants, and also in relation to the offer by Mr Marlowe
to Star Jeans, through Mr Star, of possible properties. There are also a good
many documents, particularly letters, where Mr Marlowe was suggesting
properties to other companies, and the court spent some time investigating them
because counsel appeared to desire it. I do not propose to dwell on those
matters save in so far as they are material to the point in this case–which I
have thought for a long time during the course of this case, and have said so,
and I think counsel now agree, to be the only point of major importance and
certainly the point on which the decision in this case turns–and that is as
follows.
The
plaintiffs’ claim is for a total sum of £2,943, including VAT, which tax they
have already paid, I am told. The plaintiffs claim, as I say, the sum of £2,943
as commission to which they claim to be entitled from the defendants because
they introduced to the defendants in November 1976 a prime shop property in
Plymouth at 20 New George Street which, in fact, the defendants did buy. The
actual contract was not signed until May 27 1977.
The issue is
this, and it is quite simple and stark, although there is a hot contest as to
the answer at which the court should arrive. Did the plaintiffs on November 22
1976, or thereabouts, introduce the defendants to that property and did the
defendants agree to pay scale fees? The
sum to which I have referred is calculated on the scale fees of the Royal
Institution of Chartered Surveyors, which the pleader of the statement of
claim, Mr Michael Burton, who appeared on behalf of the plaintiffs, like so
many people, wrongly describes as the ‘Royal Institute’ in the statement of
claim. I do not hold that against the plaintiffs.
I put the
issue in that way because Mr Barry Payton, on behalf of the defendants, says
with force that certainly at some stage in the events which followed on
November 22, when the dispute arose, probably both parties–certainly his client
Mr Star, and probably the plaintiffs as well–approached the case on the basis
of (a) whether there was an introduction and (b) whether that introduction led
to the eventual purchase. They overlooked in their minds the necessity of there
being an agreement to pay the scale fees. Mr Burton now acknowledges that there
must be an agreement–either a general agreement in relation to any property
introduced or a specific agreement in relation to this particular
property–before the plaintiffs are entitled to recover their fees.
In addition to
that which is pursued now, which is (a) ‘We, the defendants, already knew of this
property before November 22 and the plaintiffs did not introduce it to us,’ and
(b) ‘We never agreed to pay fees,’ various other defences are pleaded or
foreshadowed, in what I am bound to describe as the very verbose and
unconventional defence which was settled in this case by counsel other than Mr
Barry Payton, and which has, in one or two particulars to which I shall have to
refer very briefly later, somewhat recoiled on the defendants’ head, as Mr
Burton pointed out. In fact, and I say this rather putting the cart before the
horse, those other defences, such as that of causation, now have disappeared
from the case. Without making any formal abandonment, Mr Payton realistically
concedes that if the plaintiffs introduced this property, and if the defendants
agreed to pay fees, then the fact that subsequently the defendants did not use
the plaintiffs to negotiate for the property and went on their own, as it were,
to deal with the vendors is neither here nor there. The issues are those which
I have stated.
I have said
there was a hot contest about this, and there is. It is necessary to summarise
what the two protagonists say. First Mr Marlowe, who says that he knew that Mr
Star was very keen on getting a shop on a prime site in Plymouth. Star Jeans
were already trading in Plymouth–I think in Royal Parade–but, says Mr Marlowe,
they wanted to get, if possible, into New George Street, which is the best
shopping street. He gathered that information from what he says were the
frequent telephone conversations he was having at this time with Mr Star in
connection with the various other matters and properties which I have
mentioned, and of which I do not intend to go into the details.
As a result
(as they say) of information received, Mr Marlowe found out that a shop
belonging to the well-known company of clothes retailers, Dorothy Perkins Ltd,
at 20 New George Street in Plymouth, was likely to, but had not yet, come on
the market. He telephoned, did Mr Marlowe, a Mr Burton, who was the property
manager of Dorothy Perkins Ltd and whom he knew as a result of his work with
other surveyors in earlier years. After the conversation with Mr Burton he was
referred to a Mr Fenton, who was a representative of the firm of estate agents
who were retained by Dorothy Perkins Ltd, possibly generally, but certainly in
connection with this property, 20 New George Street. So Mr Marlowe telephoned
Mr Fenton.
Mr Fenton was
not called as a witness. I think he is, in fact, at the moment in Canada, but
certainly abroad on holiday. But in the agreed bundle of documents there is
what is accepted to be a note made by Mr Fenton on November 22, which is the
day Mr Marlowe telephoned him. There was, according to Mr Marlowe, a second
telephone call to Mr Fenton–which I shall mention in a moment–on that day, and
there was some suggestion that the note on a later page may have been a note
made by Mr Fenton of the second conversation. I think it is more probable that
it was the first, but it does not matter very much. Be that as it may, the note
in so far as it is relevant reads as follows: ‘M Marlowe Star Jeans
Plymouth.’ Then Mr Marlowe’s telephone
number appears on Mr Fenton’s note. ‘November 22, Around £10,000 quoted.’ That £10,000 is in fact the figure–which is
supported by the documents–which Dorothy Perkins and Mr Fenton had discussed as
being the figure which should be asked for the premium on the disposal of the
lease.
The evidence
of what Mr Fenton did is, of course, restricted to some extent by the rules
against hearsay, and in so far as inadmissible evidence from both Mr Marlowe
and Mr Star was given at various times (sometimes, I am bound to say, in effect
at my invitation, because the head of steam in the witness was rising high from
the layman’s understandable refusal to forgive the lawyer’s insistence on the
exclusion of hearsay evidence) I ignore it in so far as it contains matters
which in the case of any interview or telephone conversation might be in
dispute. But I do not think that there is any dispute that Mr Fenton did give
that information and he gave it to Mr Marlowe on the basis that Mr Marlowe was,
in effect, going to pass it on to one client only and that was Star Jeans,
whose name Mr Marlowe gave to Mr Fenton.
I repeat that
the property had not yet come on the market and it is accepted to have been a
very good site for the defendants to move into if they could acquire it. ‘And,’
says Mr Marlowe, ‘having done that I telephoned Mr Star, and I said I had come
across an extremely good property in Plymouth, a prime position in New George
Street. I said, ‘It is not on the market’.’
Then he said, ‘Following my usual practice,’ (whether he used these
words or not does not matter, they are my words but that was the effect of Mr
Marlowe’s evidence) ‘having dangled the bait of a very attractive property in
front of the person to whom I was telephoning,’ (and in using those words I do
not suggest that there was anything improper in this) ‘before giving him any
details I said to him, ‘It is not on the market. I have to look to you for
payment of scale fees if there is a sale.’
He said ‘OK’.’ Now that is the
specific agreement, or the basis of it, which the plaintiffs rely on. ‘And so,’
says Mr Marlowe, ‘I gave him the particulars I got from Mr Fenton. I told him
the rent was £26,000 per annum and that they were looking for a premium of
£10,000. That was correct information and Mr Star was very enthusiastic about
the property. He wanted me to tell Mr Fenton he was very interested. He did not
want them to sell to anyone else and he would come back to me. As a result of
that I telephoned Fenton and he was pleased to hear that Star Jeans were
interested.’ That was the second
conversation I have mentioned between Mr Marlowe and Mr Fenton which took place
on that day.
On the
following day Mr Marlowe undoubtedly wrote a letter dated November 23 1976 to
Mr Star. But before I refer to that letter let me, by comparison, put the
version of Mr Star alongside that conversation according to Mr Marlowe. Mr Star
says this, ‘Yes, we did have a telephone conversation on that day November
22.’ He said at one point in his
evidence, ‘I agree, we did quite often speak on the telephone, although not as
frequently as Mr Marlowe says, about various matters.’ Mr Star says this, ‘He’ (Mr Marlowe) ‘said he
had a property in Plymouth. I said I was already dealing in one which I thought
was coming to fruition.’ Indeed, there
was another property, at 19 New George Street, which, although next door in
number to no 20, in fact was on the opposite and (in a metaphorical sense) less
sunny side of the street from the retailing point of view.
Continuing
with Mr Star’s account of the conversation, he told the court this: ‘Mr
Marlowe, although I told him I was not interested, said, ‘You must listen to
this, it is very good.’ I was on the
other line and very busy, but Mr Marlowe was very insistent on giving me the
information. I was not really taking it in in detail because I was not really
interested and told him so. I just did not want to listen.’ Then he told him that it was no 19 which he
was interested in, of which the rent was about £15,000 a year. ‘But,’ said Mr
Star, ‘nevertheless, Mr Marlowe persisted. He said, ‘It is a tremendous
property, absolutely prime. The rent is £26,000 per annum.’ I said, when he mentioned the rent, ‘I know
about that,’ because this suggested to me the Dorothy Perkins unit, and I knew
that there might be something coming on the market at a rent of £26,000.’ The source was a Mr Webster, who I think was
another estate agent. Mr Webster was not called, but that is just a fact, and I
do not draw any adverse inference from the absence of Mr Webster or Mr Fenton
for or against either side. There are often very good reasons why witnesses
cannot be called. I have not had any assistance from Mr Webster and, again,
anything Mr Star says Mr Webster told him is hearsay, but he says he had some
sort of knowledge about this in an informal way.
Then Mr Star
said to me, ‘I told Mr Marlowe that £26,000 per annum was way out of our
league. It was ridiculous over-rentalisation.’
Those are Mr Star’s exact words. ‘He went on talking. I think he may
have mentioned the premium, but I do not recollect it clearly.’ That was Mr Star’s account in summary. He
added, ‘I didn’t ask him to convey my interest to Fenton. I did not authorise
him to name us to Mr Fenton at any time, and I wasn’t interested in Dorothy
Perkins. I certainly didn’t agree to pay any fee.’ There are the two sides of the case in regard
to that conversation.
I have already
mentioned the defence, and Mr Burton said–and in an ordinary case of this sort,
whatever the subject matter, I agree with his attitude–that he would not
normally take technical pleading points. Provided no party is prejudiced by
some error in a pleading, technicalities are certainly not welcomed in this
division of the High Court in regard to pleadings. ‘But,’ said Mr Burton, ‘in
this case the pleading is more like a solicitor’s letter than the conventional
pleading.’ He points to paragraphs 11
and 12–particularly paragraph 12–which has been amended, as have several
paragraphs in the defence. The circumstances of this were that Mr Star did not
see the original defence before it was served, he told me. When he did see it
he pointed out various errors, and amendments took place.
But there
still appear in paragraph 12 these words relating to the conversation on the
telephone, which is admitted to have taken place:
Accordingly
the Defendants by Star expressed interest in the said property during the
conversation with Marlowe on November 22 1976.
That, of
course, is completely contrary to Mr Star’s sworn evidence which I have just
recited. Then it goes on in its amended form:
On or shortly
after November 24 1976 the Defendants by Star informed the Plaintiffs by
Marlowe orally that the premium of £10,000 and the rent of £26,000 per annum
quoted by the Plaintiffs was too high and at that price the Defendants were not
interested.
So there is
the case being pleaded as though Mr Star had shown interest in the first
telephone conversation, and had then, on or about the 24th–two days
later–indicated that the rent and the premium were too high. Of course, what he
now says is that he was not interested right from the very beginning and
rebuffed or attempted to rebuff Mr Marlowe.
Those are the
two accounts and, of course, notwithstanding the various matters on the
periphery of the case upon which they were cross-examined, to choose between
those two accounts would be very difficult if there were no contemporaneous
documents, or no contemporaneous admitted or proven behaviour which assisted
the court. Fortunately there is such material to bear in mind. There is, first
of all, the letter written by Mr Marlowe to Mr Star on November 23. It says
this:
Dear Michael,
20 New
George Street, Plymouth
I am just
dropping you a line to confirm the details of the Dorothy Perkins unit that we
discussed.
Then he
describes in detail the premises and the nature of the lease and the rent, and
so on. He goes on to say:
Dorothy
Perkins have not yet placed these premises ‘on the market,’ but they would
consider doing a deal at a premium of £10,000.
Finally, I
would just confirm that this is an instance where we are not retained by the
Assignors and in the event of a transaction taking place, we would be looking
to you for payment of our scale fees. The appropriate scales would be . . .
and he sets
them out.
. . . I look
forward to hearing from you after you have been to Plymouth.
In the bottom
right-hand corner appear some words which are of no importance whatever, but Mr
Marlowe seems to put them on pretty well every letter he writes. I am very
doubtful whether in that way they have the slightest legal effect–any more than
putting ‘Merry Christmas’ at the bottom of a business letter would–but he puts
the words ‘Subject to Contract.’ I only
mention them because they have not been mentioned in this case before. In case
anybody should be interested in this judgment for any purpose other than the
present case, they are nothing to do with the case and are not relied on. But
the letter is, of course.
There are
several points about that letter which seem to me to be important. It is true
that even if Mr Marlowe had been rebuffed on November 22, he is sufficiently
zealous–to use one of his own words–and enthusiastic, and sufficiently the
salesman, if he will allow me to say that, that he might still have written a
follow-up letter giving particulars of the property, even if Mr Star had
rebuffed him; so that the mere writing of the letter is not very significant.
But, in my view, the terms of the letter are somewhat significant in some
respects.
First of all,
there are a number of other letters in the bundle –I am not going to read any
of them–in which both to Mr Star of Star Jeans and to other individuals and
other companies, in relation to other properties (and indeed it will be seen
very shortly in relation to this property), Mr Marlowe wrote similar letters
giving particulars of a property, but he usually ended up his letters with some
such words as this: ‘Finally we would mention that this is an instance where we
are not retained by the Assignors and in the event of a transaction taking
place we would be looking to you for payment of our scale fee.’ In other words, I do not think in any other
letter are the words, ‘We’ or ‘I confirm that in this instance. . . .’
It seems to me
that (although, of course, in the correct sense of the word no one can
corroborate himself by writing a letter) the fact that he said that he confirmed
that situation in relation to the fees does in my judgment lend some
consistency and support to his account of the reference to the scale fees in
the interview on November 22, which reference Mr Star denies ever took place.
Then, as Mr Burton puts before me and submits, there are the words at the end,
‘I look forward to hearing from you after you have been to Plymouth.’ It seems to me that that seems reasonably
consistent with Mr Marlowe thinking that Mr Star was interested.
interested.
There was no
reply to that letter. That is not of vast significance because Mr Star (a) was
a very busy man and (b) did have letters not only from Mr Marlowe but from
other agents about properties. Probably he did not reply to many of them. But
it is a fact–a small fact, maybe, but a fact–that there was no letter sent
saying, ‘Deal Milton,’ or ‘Dear Mr Marlowe, Your letter of November 23–what on
earth are you wasting time writing to me about this for? I told you on the telephone that I was not
interested. We have got another property in view, and the rent was too high in
any case.’
Well, what
happened after that? According to Mr
Marlowe, ‘About a week later’ (in Mr Marlowe’s words in the witness box) ‘in
the course of one of my conversations with Mr Star on the telephone, it became
clear that the defendants’ interest had evaporated. They weren’t interested any
more. He did not say why. He certainly didn’t say it was because the terms were
unacceptable.’
Mr Star said,
about that, that it was mentioned again about a week later, or some time in a
conversation and he simply said ‘No’ again. He said ‘I am not interested. No, I
repeat ‘no’.’ So he maintained his
attitude of no interest.
That being so,
said Mr Marlowe–and this part of the case I can deal with quite shortly–he
wrote to other possible purchasers about this property. The first letter,
addressed to a Mr Holt of K Shoe Shops Ltd, is dated December 1 1976. As it
turns out, and as I think should have been obvious to Mr Marlowe all along–as
he now agrees–he ought never to have offered the property to anybody else. It
was not on the market at that time, and the particulars had been given to Mr
Marlowe by Mr Fenton simply for passing on to one specified possible purchaser.
As a result of
those further letters, starting on December 1, Mr Marlowe got a well-deserved
rebuke from Mr Burton of Dorothy Perkins. The letter is in the bundle. He
accepted the rebuke and acknowledged it in a letter to Mr Burton, which again I
think is consistent with his case, but I need not read it, on December 29. That
is by the way; I am not concerned with the propriety or otherwise of his doing
that. But the fact is that it seems to me that the writing of letters to other
people offering the property on December 1 is again consistent with his
evidence that Mr Star withdrew his interest in 20 New George Street about a
week after November 22; because if Mr Marlowe was going to offer it to other
companies, being, as I am satisfied he is, a very go-ahead sort of person in
this way, I think he would have started writing straightaway on November 22, 23
or 24. But he did not, and I think that that is entirely consistent with Mr
Star withdrawing his interest after about a week.
That was that,
until–picking up again the story at what seems to me a relevant matter–in May
1977, according to Mr Marlowe, there was a telephone conversation about
something else and Mr Star mentioned that he was looking at a prime site in New
George Street, Plymouth. ‘I said’–this is Mr Marlowe’s evidence–”It’s not the
Dorothy Perkins shop, is it?’ He said it
was, and I said, ‘This is the shop we introduced to you.’ He said, ‘I can’t remember if that is the
case, but not to worry as we probably wouldn’t go ahead with it anyway,’ and so
I did not pursue it.’
Mr Star says
that evidence is a fabrication. There was no conversation of that sort
whatsoever in May 1977. Of course, if there were such a conversation it would
show that, at the very least, Mr Star was not being entirely frank with Mr
Marlowe, because Mr Star, having expressed horror at a rent of £26,000, had in
fact–as he frankly admitted in the witness box–had a change of heart. He says,
‘I agree; I changed my mind about 20 New George Street. Another ‘Jeans’
retailer had moved into New George Street and I was fearful that we would be
unsuccessful in our business in Plymouth.’
So he negotiated for the purchase of this shop, or for the lease of it,
and, as I have already mentioned, a contract was in fact signed at the end of
May, but of course the decision to buy had been made considerably earlier.
Here I can get
rid of one point which is not of importance as the case has turned out. In the
end the defendants paid the rent, which was not negotiable, being the rent
under the lease which was already in existence, and a premium which in effect
included the fixtures and fittings, or most of them, of £5,000 and not £10,000.
It is not suggested that that is material in this case, because it is plain
from the documents–and I am not going to take up time, as it is not a live
issue, in reading them out–that Dorothy Perkins would always have been happy to
accept £5,000, as they in fact did. I have no doubt that if the matter had
remained in the hands of Mr Marlowe the same agreement would very quickly have
been reached. But, of course, Milton Marlowe & Co had no part in those
negotiations. Nevertheless, it is not suggested that if there was an agreement
between the plaintiffs and the defendants in the first place, any reduction in
the premium or other variation of the terms upon which the lease was sold would
deprive the plaintiffs of the benefit of it.
What happened
next is that (I think at the Jubilee weekend) Mr Marlowe is quietly walking
down the main shopping centre of Plymouth, when suddenly he gets a shock. The
shock is this, that he looks into no 20, and what does he see? Mr Star. He goes in, and, according to Mr
Marlowe, he said–following the May conversation–‘I was pleased he had taken the
shop and that it was one I knew we had introduced to him, and I told him so. Mr
Star said he couldn’t remember if that was right, but he didn’t carry all that
knowledge in his head, and he was too busy with the shopfitters to discuss it,
and he said, ‘Well, write to me when you get back to London.’ He said he would try to find our original
letter of November 1976.’
Mr Star agreed
that Mr Marlowe did come in and see him, but there was, he said, an unpleasant
discussion. ‘I was surprised to see him. He insisted that he had introduced the
property to us. I insisted that he had not done so. I was busy and I told him
to send us a letter later.’ That is what
Mr Marlowe did, and on June 8 by recorded delivery he sent the letter. He says:
I would refer
to our meeting in Plymouth . . .
(that is the
one I have just mentioned)
. . . and as
requested by you . . .
Mr Star
denies that he so requested.
. . . attach
a copy of my original letter dated November 23 1976, when I first offered you
the premises.
As you will
see from my letter, the premises had not been placed ‘on the market’ at the
time and this point has been confirmed by Dorothy Perkins’ agents, and so there
can be no question in my mind of your having been offered the premises
previously.
Then he goes
on to deal with the history of the matter in some detail, reciting information
that he had obtained from Mr Fenton. Then he says this, in the second
paragraph:
Since January
we have spoken about the above premises and it is only a few weeks ago that I
brought to your attention once again the fact that the property had been
introduced by us, although at that time you informed me that you were not
interested in taking this property. At no time during that conversation or any
other time did you indicate that you had made an offer and were actively
negotiating for the premises.
So there is Mr
Marlowe setting out, in that letter of June 8, the May conversation–or the
effect of it–which I have recited and which Mr Star says is a complete
invention. Then he goes on to set out his complaint and sets out his claim.
On June 22, Mr
Star wrote a succinct reply, and, of course, there is nothing wrong in keeping
a letter short if appropriate. He said:
In reply to
your letter of the 8th instant and notwithstanding your letter of November 23
1976, at no time was there an agreement for you to negotiate on our behalf.
You were not
instructed as an acquiring agent for Southcut Ltd, in this or any other case,
and your sole connection with us at that time was as a selling agent.
What is said
on behalf of the plaintiffs, by Mr Burton, is: ‘Well, it is rather strange,
although this was a succinct letter, and although, of course, it was a denial
of any liability, there was no comment on the allegation about the May
conversation–nothing to the effect of ‘You even fabricate alleged
conversations,’ or anything like that. This is really the letter of a man who
knew that the plaintiffs had introduced the property to him and his company but
thought that he was not liable for a fee because his company had not used Mr
Marlowe to negotiate.’ I think that
particularly in the second of those two points there is substance. I think that
it does read as the letter more of a man who is taking that attitude.
This judgment
has already taken a long time, and if I went into every peripheral issue then
it would take a great deal longer, but I do not think it is necessary to do so.
The
plaintiffs’ case is first put on the basis that there was a general agreement
for the payment of fees for introductions. I think the evidence is insufficient
to establish that. I think that the position was that there was an
understanding of a general nature between the plaintiffs (through Mr Marlowe)
and the defendants (through Mr Star) that he would expect to get paid for any
introductions which resulted in a purchase. But I should be very reluctant to
base any judgment in favour of the plaintiffs on a general agreement legally
enforceable.
The much more
powerful submission, on much stronger grounds, which depends, as I have said
more than once in this judgment, on my assessment of who is accurate about the
interview on the telephone on November 22, is that it is said that there was a
specific agreement in this case to pay scale fees of the Royal Institution if
the introduction resulted in a purchase. That is how the case is pleaded and
clearly pleaded in paragraph 3 of the statement of claim.
Having, I
hope, fairly summarised the evidence of each party and pointed out the main
documents, and of course reminding myself constantly that the burden of proof
of the case is on the plaintiffs, it seems to me that the history of the matter
and the documents which I have taken time to recite and the contemporaneous
behaviour of the parties strongly points to the conclusion that the court
should prefer, as I prefer, the account given by the plaintiffs. That being so,
in my judgment, an agreement is proved as pleaded in the paragraph to which I
have just referred.
Very
interesting points might have arisen on, for example, causation, on whether the
plaintiffs were entitled to scale fees or only a quantum meruit, and Mr
Burton, in spite of gentle protests from me, insisted on opening them to me.
When I chided him with that again in his final submission he said, ‘Oh well, it
was a good thing I did in the end because, even if it did not impress your
Lordship, it must have impressed my learned friend because he in the end did
not pursue those defences.’ That is by
the way. There is no dispute, as I have said, about that matter. Once the
agreement is proved, that is it. I was a little troubled, particularly after I
had been referred overnight to the judgment of O’Connor J in Sinclair
Goldsmith v Minero Peru Comercial (1978) 248 EG 1015, [1978] 2 EGLR
28, given on July 17 1978 as to whether this was a case in which it would be
appropriate, in view of the fact that what the plaintiffs did was ‘introduce’
and no more, that they should receive their full fees, or whether they should
receive less on a quantum meruit basis. But Mr Burton has pointed out to
me the various regulations. Mr Payton realistically does not argue to the
contrary, and I am satisfied that in this case, once the agreement is found, as
I find it, that the introduction should result in payment at the scale fees
which are applicable, then the plaintiffs are entitled to the fees as claimed.
Various
frightful possibilities were dangled in front of me by Mr Payton as to the
effect on the offer of properties if I found for the plaintiffs. I do not think
those fears are justified; it depends entirely on the facts of a particular
case whether an agent can prove that in the circumstances he is entitled to
commission.
I should add
one further point, that it is not suggested that any other agents were involved
or that the defendants, in fact, were put in the position of having to pay, or
of being liable to pay, commission to more than one agent in respect of the
introduction.
In those
circumstances, as I have said, the plaintiffs are entitled to judgment. They
have paid, as I have said, the VAT, and so, subject to anything counsel may
want to say, I think the plaintiffs are entitled to judgment in the sum of
£2,943.
