Christie Owen & Davies Ltd v Rapacioli
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CAIRNS,LORD JUSTICE ORR,LORD JUSTICE JAMES |
| Judgment Date | 12 February 1974 |
| Judgment citation (vLex) | [1974] EWCA Civ J0212-1 |
| Date | 12 February 1974 |
| Court | Court of Appeal (Civil Division) |
[1974] EWCA Civ J0212-1
In The Supreme Court of Judicature
Court of Appeal
Lord Justice Cairns,
Lord Justice Orr and
Lord Justice James.
MR A. HAMILTON, Q.C., (instructed by Messrs. Lake, Parry & Treadwell) appeared on behalf of the Appellants (Plaintiffs).
MR R. WATT, (instructed by Messrs. G.H. Moss & Co.) appeared on behalf of the Respondent (Defendant).
This is an appeal from the Judgment of Deputy Judge Ellison given at the Westminster County Court on the 6th July last year. The action was by estate agents for commission. Their claim was dismissed, and they appeal. The defendant is a restaurateur. In June, 1972, he instructed the plaintiffs to assist him in the sale of the lease and goodwill of his restaurant at 113, High Holborn, to quote a price of £20,000 and stock at valuation. The terms as to commission set out in a letter dated 1st June, 1972, from the plaintiffs to the defendant were that in the event of the plaintiffs "effecting an introduction either directly or indirectly of a person ready able and willing to purchase at the above price" — that is the £20,000 -"or for any other price the defendant might agree to accept", the plaintiffs could look to the defendant and his company jointly and severally for commission in accordance with an attached scale. It was admitted that the defendant agreed to these terms.
The plaintiffs did introduce a prospective purchaser, a Mr. Abbas. On the 15th June he telephoned to Mr. Bristow, a director of the plaintiffs, and offered £17,700 for the lease and goodwill, plus the stock at valuation. Mr. Bristow spoke to the defendant about his offer, and he agreed to accept this lower price. Solicitors were instructed on both sides. The defendant's solicitors prepared the draft contract and sent it to Messrs. Pollard Thomas & Co., solicitors for Mr. Abbas, the partner of that firm who dealt with the matter being Mr. Goldberg. The draft contract was approved by Mr. Goldberg on behalf of Mr. Abbas and returned to the defendant's solicitors with a letter of the 16th July. The contract was then engrossed,and Mr. Abbas signed it. On the 20th July Mr. Goldberg sent it to Messrs. Moss & Co., the defendant's solicitors, for signature by the defendant. The contract provided for a deposit of £1,850. A £500 deposit had already been paid, and with the letter of the 20th July Mr. Goldberg sent a cheque for the balance of £1,350. Then the defendant, having apparently got a better offer, declined to go on with the transaction. The whole question in the action was whether Mr. Abbas was a person "ready, able and willing to purchase."' The learned Judge held that he was not, because no binding contract had been entered into between him and the defendant. If he was a person ready, able and willing to purchase, then the plaintiffs had earned their commission, which, according to the scale, would be £835.
This appeal, therefore, raises once again the question of how the words "ready, able and willing to purchase" are to be construed, and we have had interesting and helpful arguments from counsel on both sides with regard to that matter. It is conceded on behalf of the defendant that Mr. Abbas was able to purchase at the price mentioned, £17,700. So it is on the words "ready and willing" that we have to concentrate.
I start, as one inevitably does in a case about estate agents' commission, with the decision of the House of Lords in Luxor (Eastbourne) Ltd. -v- Cooper (1941 A.C. p. 108), but bearing in mind that in that case the contract was for commission to be paid on completion of sale. I quote from Viscount Simon, Lord Chancellor, at page 119. He said: "There is, I think, considerable difficulty, and no little danger, in trying to formulate general propositions on such a subject, for contracts with commission agents do not follow a single pattern and the primary necessity in each instance is to as certain with precision what arethe express terms of the particular contract under discussion, and then to consider whether these express terms necessitate the addition, by implication, of other terms." In that case, the agents could only succeed if a term could be implied. In the present case, no implied term is relied on.
At page 120 Viscount Simon said: "It may be useful to point out that contracts under which an agent may be occupied in endeavouring to dispose of the property of a principal fall into several obvious classes. There is the class in which the agent is promised a commission by his principal If he succeeds in introducing to his principal a person who makes an adequate; offer, usually an offer of not less than the stipulated amount. If that is all that is needed in order to earn his reward, it is obious that he is entitled to be paid when this has been done, whether his principal accepts the offer and carries through the bargain or not."'
Then Lord Russell of Killowen, at page 124, said: "A few preliminary observations occur to me. (1) Commission contracts are subject to no peculiar rules or principles of their own; the law which governs them is the law which governs all contracts and all questions of agency. (2) No general rule can be laid down by which the rights of the agent or the liability of the principal under commission contracts are to be determined. In each case these must depend upon the exact terms of the contract in question, and upon the true construction of those terms." That particular proposition is one that is not relevant here. At page 129 Lord Russell of Killowen said this: "I have already expressed my view as to the true meaning of a contract to pay a commission for the introduction of a purchaser at a specified or minimumprice. It is possible that an owner may be willing to bind himself to pay a commission for the more introduction of one who offers to purchase at the specified or minimum price; but such a construction of the contract would in my opinion require clear and unequivocal language."
Then in 1950 there was a clutch of cases in the Court of Appeal dealing with this topic. The first of them was Nelson & Co. -v- Rolfe (1950 1 K.B. p. 139). There the terms were for payment of commission on the introduction of a person able, ready and willing to purchase on the principal's terms. A. person was introduced who offered to buy on those terms, but by then an option had been given to another prospective purchaser and the principal refused to sell to the person introduced by the agent. The agent was held to be entitled to commission. The value of the decision for us is, however, reduced by the fact that the defendant admitted that the person introduced was able, ready end willing to purchase.
Then there were three cases in the second volume of King's Bench Reports for that year, the first of them being Graham and Scott (Southgate) Ltd. -v- Oxlade (1950 2 K.B. p. 257). The words to be construed there were "willing and able to purchase", and Mr. Justice Roxburgh's decision in favour of the defendant was affirmed by the Court of Appeal because the person introduced had merely made an offer "subject to survey". It is useful to quote a sentence or two from the judgment of Lord Justice Cohen at page 266, where he said: "I think that the agent may prove; that a person whom he has introduced is willing to purchase the property by showing that that person has made an unqualified offer or expressed an unqualified intention to mate an offernotwithstanding that such an offer until accepted could be withdrawn. On the other hand, if the evidence shows that the offer is qualified by a condition inserted to prevent the other party's turning the offer into a contract by acceptance, I think it impossible to say that the agent has discharged the onus which rests on him of proving that the person whom he has introduced was willing to purchase the property." The first sentence of that passage is strongly in favour of the plaintiff's contontion here.
The next case is McCallum -v- Hicks, on page 271 of the same volume. There the defendant instructed the plaintiffs to "find someone to buy my house". A person was introduced, and he and the defendant signed a provisional agreement "subject to contract". Later the defendant resiled from the transaction. The Court of Appeal, Lords Justice Bucknill and Donning, and Mr. Justice Hodson, unanimously held that "find someone to buy" meant "find a purchaser", and that commission was only payable when at least a binding contract for sale had been entered into. Lord Justice Denning made some observations of wide significance at pages 275-76. He said: "Some agents recently have been endeavouring to get house-owners to sign forms much more favourable to the agent. They have been trying to alter the ordinary understanding by getting house-owners to sign a document which makes them liable for commission if the agent Introduced 'a person able, ready and willing to purchase.' Once such a form is signed, they say, they are entitled to commission if they introduce a man who makes an offer but does not sign a binding contract. If this is correct, it means, that where a number of House agents induce a house-owner to let them put his house ontheir books — as they often do — the house-owner may find himself liable to pay commission not only on the sale which is completed through one agent, but also on offers which have been made through other agents and have never reached a binding contract: see, for instance, Giddy and Giddy v. Horsfall, Bennett & Partners v. Millett, and Nelson v. Rolfe. This is so contrary to the common understanding of men — and also, I may add, to common fairness — that the courts will endeavour to...
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