Knight Frank has failed in a Court of Appeal fight to secure payment of its claimed £70,500 fee for a full development appraisal of a site in Manchester.
Knight Frank LLP had appealed against a judge’s ruling rejecting its claim against a man who, it said, acted as an agent for a company that did not exist.
However, Lord Justice Tomlinson, sitting with Lord Justice Lloyd and Lord Justice Wilson, today rejected the agent’s appeal, ruling that there was “no basis” upon which Aston Du Haney could be held under a personal liability to Knight Frank.
Knight Frank had sought to force Mr Du Haney to pay the sum, plus interest, claiming he was in breach of his warranty of authority after he instructed the agent in February 2007 to prepare a full development appraisal suitable for lending security purposes in respect of Middlewood Locks, Salford, Manchester.
The agent claimed that, on the signed letter of instruction, Mr Du Haney held himself out to be an agent for Morecombe Investments.
However, the company which actually had an option to buy the locks was called Morecambe Investment Co, a company registered in the British Virgin Islands.
Knight Frank produced the full appraisal and gave it to Mr Du Haney on 30 May 2007, but it claimed it had never been paid.
The agent argued that, by signing “for and on behalf of Morecombe Investments Ltd”, Mr Du Haney represented to them that he was authorised to contract with it. However, it argued he was never so authorised, as there was never a company of that name.
However, Lord Justice Tomlinson today ruled that Judge Hand at Central London County Court came to the “correct conclusion” by dismissing the agent’s claim.
He said that Knight Frank had not tried to show that Morecambe Investment Company did not exist, and, “perhaps for practical reasons” had never sought to sue the company.
However, he said that Knight Frank had not demonstrated that, but for the representation made by Mr Du Haney that his principal was Morecombe Investments, it would not have proceeded to undertake the work.
Quoting an academic text book on this area of law, he continued: “The mere fact that the agent’s act does not bind his purported principal does not mean that he is to be regarded as acting for himself; there must be evidence that he is actually doing so, or other circumstances preventing him from denying this.”
He said that, notwithstanding “unsatisfactory aspects” of Mr Du Haney’s evidence, it was his pleaded defence to the claim that he had acted for and on behalf of Morecombe Investments.
He added: “The misspelling and the redundant ‘s’ are irrelevant misnomer. The appellant has made no attempt to show that he was not in fact acting as agent. There is no basis upon which the respondent can be held under a personal liability to the appellant.”
Knight Frank LLP v Du Haney Court of Appeal (Lloyd, Wilson, Tomlinson LJJ) 12 April 2011
Edward Denehan (instructed by Freeman Box) for the appellant
Mark Tempest (instructed by Haldanes) for the respondent
jess.harrold@estatesgazette.com
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