Estate agents’ commission — Claim for commission against a person who had held himself out as agent for one company as vendors but who was in fact acting as agent for another company not named — Defendant gave the plaintiff estate agents instructions to put on the market a property known as Neardown Stables and purported to be acting as agent for Neardown Stables Ltd — The asking price for the property was £225,000, but the plaintiffs were successful in obtaining an offer of £235,000 and were authorised to accept it — The plaintiffs then submitted an account for £8,941.75 in respect of their commission — Defendant at that stage asked for a reduction of £500 and subsequently suggested a settlement by instalments — As payment was not made either of the reduced total or by instalments, the plaintiffs’ solicitors wrote a letter before action — In reply the defendant’s solicitors claimed that the defendant was the wrong party to sue; the action should have been directed against Neardown Stables Ltd — Subsequently, however, the defence was that the defendant was not personally liable as he was acting as agent for another company, based in Jersey, Monolith Holdings Ltd, which was the freehold owner of Neardown Stables — The judge found as a fact that the defendant was holding himself out as agent, not for Monolith Holdings nor for an undisclosed principal, but for Neardown Stables Ltd — Monolith Holdings had been referred to only once, in the subject heading of a letter, and its status had not been explained — Held that the defendant was personally liable to the plaintiffs for the agreed commission — ‘It does not seem to me to need authority for the proposition that where a person holds himself out as an agent for a named person but is in fact acting as agent for an unnamed person then the agent is personally liable’
No cases are
referred to in this report.
In this action
Savills, estate agents, sued the defendant, R A Scott, for commission in
respect of the sale of Neardown Stables, a property in Upper Lambourn, Berkshire.
R Mawhinney
(instructed by Ellis Peirs & Young Jackson) appeared on behalf of the
plaintiffs; S Redmayne (instructed by Malkin Cullis & Sumption) represented
the defendant.
Giving
judgment, SIR DOUGLAS FRANK QC said: This is an action by a well-known firm of
estate agents (now a limited company) for commission in respect of the sale of
the property known as Neardown Stables, Upper Lambourn, Berkshire. The
undisputed facts are:
1 Mr A R Adams-Cairns, a chartered surveyor
then employed by the plaintiffs as an associate and now a director, received a
telephone call from one David Williams asking if the plaintiffs would be
interested in acting as selling agents for the property.
2 On August 30 1983 Mr Adams-Cairns visited
the stables where he met the defendant and Mr Williams. He was shown round the
property. A question arose as to planning permission about which he was told to
get in touch with a firm of solicitors, namely, Reid Minty & Co.
3 On September 7 Reid Minty wrote to Mr
Adams-Cairns about the planning permission and, although they referred to ‘the
present owner’, they did not say who that owner was.
4 Within a day or two the plaintiffs wrote
to the defendant at his London address confirming that they had been given
instructions to place the property on the market at an asking price in the
region of £225,000. The plaintiffs sent another letter on the same date to the
defendant in which they set out the terms of the agency. They repeatedly
referred to ‘you’ and ‘your’, thereby implying that
However, in one part of the letter they said ‘if your clients are not happy
with this approach . . .’.
5 On October 5 1983 Mr Scott, on notepaper
at the head of which was printed ‘Neardown Stables Limited’, wrote to the
plaintiffs saying:
I confirm that I am requested on behalf
of the owners of the property to instruct you to sell the property, Neardown
Stables at Upper Lambourn as Sole Agents. I enclose our cheque on account as
requested for £495 and look forward to hearing from you as soon as possible on
intended progress.
In fact
the cheque was drawn on the account of Vision Diffusion Ltd, a company of which
the defendant was a director although that was unknown to the plaintiffs.
6 On November 15 1983 the plaintiffs wrote
to Mr Scott confirming that they had been given instructions to accept an offer
of £235,000.
7 On November 22 1983 Reid Minty & Co
wrote to the plaintiffs a letter which was headed:
Dear Sirs,
Re: Monolith
Holdings Limited
Neardown
Stables, Upper Lambourn, Berks
This was the
first occasion on which the name of Monolith Holdings Ltd had appeared in any
document. Their status in the transaction was not stated.
8 On December 13 1983 the plaintiffs sent to
Mr Scott a letter saying that they had learned that contracts had been finally
exchanged and enclosed a copy of their account for £8,941.75, the amount
claimed in this action.
9 In January 1984 the defendant telephoned
Mr Adams-Cairns asking for the amount to be reduced, and on January 20 Mr
Adams-Cairns replied that provided the account was paid by January 25 they
would reduce their account by £500. The account was not paid.
10 On February 9 the defendant visited the
plaintiffs’ offices and suggested settling the account in three instalments,
namely, £5,000 on February 10, £1,500 by February 29 and £1,650 by the end of
March. None of the agreed payments were made and on February 16 the plaintiffs’
solicitors sent a letter before action.
11 On March 23 1984 the defendant’s solicitors
wrote to the plaintiffs’ solicitors a letter acknowledging service of the writ
and in which they said that the plaintiffs had chosen the wrong defendant. They
continued as follows:
Your client’s letter of September 9 1983
is in our view clearly an invitation to treat and it finishes by asking for
written instructions to proceed. Those were supplied by letter dated October 5
1983 which although signed by Mr R A Scott were on notepaper of Neardown
Stables Limited the actual owners of the property. Your client’s own
particulars prepared later on clearly set out that the Vendors were Neardown
Stables Limited, and there was no question of Mr Scott becoming personally
liable nor indeed is this indicated in the correspondence. In those
circumstances your client’s action is clearly against Neardown Stables Limited
not Mr Scott.
12 Monolith Holdings Ltd is a company
registered in Jersey and was in fact the freehold owner of Neardown Stables.
There is one
important question of fact which is in dispute and that is whether at the
meeting on August 30 1983 either Mr Scott or Mr Williams, or both, mentioned
that the owners of the property were Monolith Holdings Ltd as they allege, that
is to say, that they told Mr Adams-Cairns that Monolith Holdings were the
owners. Mr Adams-Cairns denied that Monolith Holdings Ltd were mentioned. The
defendant said that he believed he mentioned their name and that Mr Williams
certainly did. If that is so, I do not understand why Mr Williams was not
called to corroborate that assertion. That is a significant and unexplained
omission in the evidence for the defendant. Moreover, on or about the day that
the plaintiffs were first instructed, Mr Adams-Cairns opened a diary for this
transaction in which he appeared to have entered the names of everyone
concerned, including the names of the solicitors and the partners, and no
mention is made of Monolith Holdings Ltd. The defendant’s solicitors could not
have asserted so forcibly that the owners were Neardown Stables Ltd unless that
is what they had understood from their client. Why, I ask rhetorically, did the
defendant not tell his solicitors that he had told Mr Adams-Cairns that the
owners were Monolith? As I have said,
the first time that company was mentioned in any document was in Reid Minty’s
letter of November 22 1983. I am satisfied that that was the first mention in
any form of that company to the plaintiffs or Mr Adams-Cairns.
The defence is
that the defendant was not contracting personally but was acting as agent for
Monolith, which was known to the plaintiffs. My finding of fact on that
question in itself defeats that defence. I would go on to say that on a true
construction of the documents, and particularly the letter of October 5 1983,
the defendant was holding himself out as acting as agent not for Monolith nor
for an undisclosed principal but for Neardown Stables Ltd. It does not seem to
me to need authority for the proposition that where a person holds himself out as
an agent for a named person but is in fact acting as agent for an unnamed
person then the agent is personally liable. It is obvious, for example, that
although a person may be willing to trade with an English registered company
without further inquiry they might take a different view with a company
registered in the Channel Islands. Accordingly, the arguments canvassed and the
authorities cited on the question of an agent’s liability for an undisclosed
principal are in my judgment irrelevant.
It follows from
the foregoing that there will be judgment for the plaintiffs for the amount
claimed.
