Estate agents — Commission — Action by agents against vendor — Terms of instructions were ‘the property to be advertised without cost to the vendor and entered on the agents’ list of properties for sale at the asking price of £34,500′ — Agents mentioned the property to one potential purchaser only and told him (without authority) that the vendor would accept £33,000 — Vendor subsequently discovered that the figure being offered was in fact £33,500 and he refused to accept it — The agents and the purchaser then put their heads together and agreed upon a figure of £34,000 and the sale went through — When the agents claimed commission the vendor refused to pay and this action was brought — The judge held that the agents were not entitled to commission — The agents’ appeal was rejected by the Court of Appeal, although their reasons were not expressed in precisely the same terms as those of the judge — They held that it had been an essential condition of the instructions that the property should have been put on the market at the asking price and that this condition had not been fulfilled — The property had not been put on the market for £34,500 — The fact that it was for sale was communicated to one person only and that person had been led to believe, without foundation, that the vendor would take £33,000 — Agents’ appeal dismissed.
This was an
appeal by Ronald Edward Spiers, trading as ‘Garmans’, estate agents, from a
decision of Judge McMullen at Edmonton County Court, dismissing an action for
commission brought by the appellant as plaintiff against Trevor John Taylor and
Sandra Taylor, defendants and respondents to this appeal.
Robert Sherman
(instructed by Willson & Bentley) appeared on behalf of the appellant;
Frank Moat (instructed by Russell Jones & Walker) represented the respondents.
Giving
judgment, EVELEIGH LJ said: The plaintiff is an estate agent. He agreed to act
on behalf of the defendant in the sale of the defendant’s house. He was,
incidentally, also acting for a vendor from whom the defendant wished to
purchase. He was also acting for a Mr Tucker. Tucker wished to sell his house
and to purchase another. Having said that, I would say at once that there has
been no suggestion of impropriety in this case.
The agreement
between the plaintiff, the estate agent, and the defendant, in so far as it is
contained in writing, is to be found in a form obviously designed for use by
the plaintiff in his business. In consequence, a great deal is printed and the
particular matters are entered in handwriting. We read ‘Details of the property
to be offered for sale’ and then follow the words: ‘Dear Vendor, We are pleased
to accept your instructions to act as your estate agents on the undermentioned
terms.’ That is signed by or on behalf
of the plaintiff. Then there follow the words:
Terms of
instructions. The property to be advertised without cost to the vendor and
entered on the agents list of properties for sale at the asking price of
£34,500. The vendor agrees that should the estate agent introduce a ready,
willing and able purchaser at the above asking price, or any other price that
may be subsequently agreed the vendor will pay the scale commission as shown
below.
Then there is
set out a scale of commission and there is written at that point in handwriting
‘2% sole agency’.
The learned
judge found that the defendant had been told by the plaintiff that he would do
the negotiations and that he was not to do so in the event of a prospective
purchaser being introduced; and the defendant agreed. Mr Tucker was interested
in buying the defendant’s house and Mr Tucker was given particulars of the
property. He was told that the vendor would accept £33,000. A letter was
written on June 3 1980, some four days later, after the agent had been
instructed in the matter of the sale, to the defendant stating:
We have
pleasure in informing you that we have introduced Mr and Mrs Tucker who have
agreed to purchase your property as above and have paid a preliminary deposit.
We confirm the agreed purchase price of £34,500 subject to contract and vacant
possession at completion. We are today writing to your solicitors giving them
full details of the transaction and trust the matter will proceed to a
satisfactory conclusion.
On about July
18 the defendant discovered that the figure that Mr Tucker was offering was
£33,500, and he was not prepared to accept that. Indeed, he was indignant. Some
considerable time had passed since the property was first put on the market and
steps had been taken towards tidying up the other transactions which were
connected with the sale of the defendant’s house — for the obvious purpose, of
course, of seeing that all the contracts were signed simultaneously. The fact
that the property was for sale had not been communicated to anyone else, and
that is not surprising, for the defendant was under the impression that his
asking price was going to be paid, and it would seem that as a result of a
mistake in the plaintiff’s office he treated the matter as virtually complete.
Mr Tucker and
Mr Taylor then put their heads together and agreed upon a figure of £34,000,
and the sale went through. The plaintiff claimed his commission. The defendant
refused to pay, and counterclaimed for breach of contract. The learned judge
found that there had been inefficiency by the plaintiff in performing his side
of the contract, although he did not spell out in terms precisely what that
was, and held that he was not entitled to his commission. He found that, as a
result of his inefficiency or negligence, the defendant had been deprived of
the opportunity of obtaining a greater price, and awarded £50 on the
counterclaim for breach of contract, £50 being his assessment of the value of
the loss of a chance.
Now, the
counterclaim has not been argued in this court, although it is the
subject-matter of an appeal, but counsel has recognised that it is really, in
the circumstances of this case, de minimis and, while not accepting it,
did not advance arguments in support of his contention that the sum of £50
ought not to have been awarded. Indeed, the argument of the plaintiff (now the
appellant) in this court was that, while there was a breach of contract of some
kind by the plaintiff in not dealing with the matter efficiently, it was not a
breach of a main term of the contract and therefore did not disentitle the plaintiff
from claiming his commission. It is said that the breach, whatever its precise
nature might be, was a breach of some minor term, that the main term of the
contract was that the plaintiff would introduce a ready, willing and able
purchaser and, upon his doing so and a sale resulting, the commission was
earned.
Now, we have
had this case argued from many directions and the law has been canvassed
approaching the matter first in one way and then in another way. But it seems
to me at the end of the day that this is a very simple matter, although I
confess it has taken me rather longer than it ought to have done to see that.
In Cheshire and Fifoot’s Law of Contract, edited by M P Furmston, 10th
ed, at p 451, we read:
Thus the
guiding rule in every case is ‘that before you find the commission payable you
must be satisfied that the condition on which it is payable has been
satisfied’, and reference is made to the case of A L Wilkinson Ltd v Brown
[1966] 1 WLR 194, at p 197, those being the words of Harman LJ.
Now, when we
look at the words contained in the printed form of the plaintiff, we see:
Terms of
instructions. The property to be advertised without cost to the vendor and
entered on the agents’ list of properties for sale at the asking price of
£34,500.
That is a
condition which has to be fulfilled as the obligation undertaken by the estate
agent before he is entitled to claim his commission. Commission is not payable
until something further has happened, of course, and that is that a buyer or
purchaser shall have been introduced, and so on. But the putting of the
property on the market for the asking price of £34,500 is clearly, to my mind,
an essential term to be fulfilled by the plaintiff before he is entitled to
commission. You do not put property on the market for £34,500 by making it
known to the only person to whom you communicate the fact that the property is
for sale that the vendor will take £33,000. It seems to me, therefore, that the
condition upon which this commission was to be earned was not fulfilled. The
property was not put on the market at £34,500, and that is the straight answer,
as I see it, to this case. As I said, we have not been concerned with the
counterclaim. So I shall say nothing about that. I would dismiss this appeal.
STEPHEN BROWN
LJ agreed and did not add anything.
The appeal
was dismissed with costs. Leave to appeal was refused.
