Knight Frank LLP v Aston Du Haney

JurisdictionEngland & Wales
JudgeLord Justice Tomlinson,Lord Justice Wilson,Lord Justice Lloyd
Judgment Date12 April 2011
Neutral Citation[2011] EWCA Civ 404
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: B2/2010/2190
Date12 April 2011

[2011] EWCA Civ 404




His Honour Judge Hand QC


Royal Courts of Justice

Strand, London, WC2A 2LL


Lord Justice Lloyd

Lord Justice Wilson


Lord Justice Tomlinson

Case No: B2/2010/2190

Knight Frank LLP
Aston Du Haney

Edward Denehan (instructed by Freeman Box) for the Appellant

Mark Tempest (instructed by Haldanes) for the Respondent

Hearing date: 9 March 2011

Lord Justice Tomlinson



The question in this case is whether an agent, who in the course of making a contract with a third party misrepresents the name of his principal, attracts either liability for breach of warranty of authority or personal liability on the contract in circumstances where the principal is nonetheless identified and his correct name capable of being established. His Honour Judge John Hand QC in the Central London County Court thought not, and dismissed the Appellant/Claimant surveyors' claim to recover from the Respondent/Defendant £70,500, being the agreed cost of preparation of a development appraisal in respect of a site in Salford, commissioned by the Respondent apparently on behalf of either Morecambe Investment Limited or Morecombe Investments Limited, neither of which exists. However it was not disputed before the judge or before this court that Morecambe Investment Company Limited does exist, or at least existed at all material times, and is or was a company registered in the British Virgin Islands. Perhaps for practical reasons the Appellant/Claimant has never sought to bring home liability to Morecambe Investment Company Limited, but on the basis of the judge's findings that company was the Respondent's principal, or at any rate it is not shown that it was not.


The judge seems to have thought that his finding that the Respondent had not acted dishonestly was determinative of liability under both heads of claim advanced, and he gave permission to appeal to this court in part to determine whether that is in fact so. The Appellant says that the judge misunderstood its case at trial, which was not based upon dishonesty, but it suggests that there was in any event ample evidence upon the basis of which the judge could have concluded that the Respondent had acted dishonestly or at least recklessly.


Upon reflection I am not sure that the judge did in fact, at the critical point in his judgment, regard the absence of dishonesty as determinative of at any rate the first issue, breach of warranty of authority, although in his reasons for giving permission to appeal he did say that he had found that if the agent's conduct is not deliberate and dishonest, there can be no breach of warranty of authority. Dishonesty is not usually of any relevance to this question, although it might be relevant to a consideration of whether in all the circumstances a person describing himself as an agent has contracted in such a manner as to attract personal liability on the contract. Liability for breach of warranty of authority is strict, attaching even where the agent has acted in good faith and carefully – see Bowstead and Reynolds on Agency, 19 th Edition, Article 105 at page 581 et seq. Nonetheless, on the basis of his carefully made findings of fact, the judge in my view came to the correct conclusion that the claim could not succeed under either head advanced. Mr Edward Denehan for the Appellant did not place in the forefront of his vigorous submissions to us any suggestion that the judge should have found the Respondent to have acted dishonestly, or that the judge's findings were in any material respect inaccurate.

The facts


On 30 June 2006 Valley and Vale Properties Limited entered into a Call Option Contract with Morecambe Investment Company Limited relating to land and buildings at Middlewood Locks, Salford. It was a development site. By that contract Valley and Vale as seller granted to Morecambe Investment Company Limited as buyer the right to require the seller to sell its interest in the site to the buyer for a price to be calculated in accordance with a contractual formula which would produce a figure in excess of £59M. The option was exercisable up to twenty days after grant of planning permission and the price of the option was £600,000.


The Appellant, Knight Frank LLP, is a well-known firm of chartered surveyors operating in several locations in the UK and elsewhere. In 2006 it had an office in King Street in Manchester. Simon Mackay was at the date of trial, although he is no longer, one of its partners. In 2006 he was an associate, having only just joined the firm the previous year after accumulating over twenty years' experience as a chartered surveyor in other firms. He was head of the Residential Development Consultancy Department in the Manchester office.


The Respondent's business card describes him as a land agent. He said in evidence that he had for some years been involved in property development.


In late October 2006 a Mr Bill McClintock approached an equity partner of Knight Frank in Leeds, Mr D'Arcy, and represented that he had an advisory role in relation to the Salford site. Mr D'Arcy asked Mr Mackay to make contact with Mr McClintock as there was a possibility of Knight Frank obtaining an instruction in relation to the site. Mr Mackay did not know Mr McClintock personally but he knew of him by reputation, Mr McClintock apparently being at the time Chairman of the Ombudsman for Estate Agents. Mr Mackay regarded him as a respected figure who was well-known to Mr D'Arcy. He telephoned him, and was asked to contact the Respondent in connection with the possible provision by Knight Frank of a development appraisal of the proposed Middlewood Locks development. Mr McClintock said that he was advising the Respondent on a potential purchase of the site and that he had recommended Knight Frank to him as being able to provide valuation advice. Mr Mackay duly telephoned the Respondent on 3 November 2006 and they agreed to meet. The Respondent informed Mr Mackay that a valuation of the site was required to assist in obtaining funding for the development of the site, not for the purpose of acquiring it. The Respondent also informed Mr Mackay that the terms of a basic deal had been agreed with the owner of the site, the purchase price being £60M. The judge seems to have accepted that the Respondent told Mr Mackay at this stage and subsequently that he was representing wealthy investors.


Mr Mackay and the Respondent met on 6 November 2006 in Manchester and again on 21 and/or 22 November. By the time of the latter of these meetings Mr Mackay knew that Valley and Vale Properties were the owners of the site. It was agreed that Knight Frank through Mr Mackay would provide a desktop appraisal for a fee of £5,000 plus VAT, which would have to be paid before the work was done.


On 24 November 2006 Mr Mackay sent to the Respondent a letter "to inform [him] of the basis upon which we [Knight Frank] would undertake a desktop valuation and appraisal on the above scheme" viz Middlewood Locks, Salford, Greater Manchester. The letter was addressed to Morecombe Investments Limited c/o 39 Lennox Gardens London SW1X 0DF For the attention of Aston Du Hanney. The Respondent's name and address were obviously derived from his business card which he presented at one of the meetings, no doubt the first. The judge seems to have found that the Respondent asked Mr Mackay to send the letter to him at this address. The misspelling of the Respondent's name (which appeared in at least one other variant in subsequent documents generated by Knight Frank) seems to have been regarded by the judge as symptomatic of Mr Mackay's lack of attention to detail, whilst acknowledging that he could not supervise everything which went out from the office in connection with a project that he was managing. As to the apparent addressee of the letter, Morecombe Investments Limited, the judge found that at some stage Mr Mackay was told, and by inference the judge found was told orally, that the entity he was dealing with was Morecambe Investment Limited and that he must have kept a record of this in a note or daybook, which record reproduced the spelling of Morecambe with an "a". Again, by necessary inference, the judge must have found that Mr Mackay was given this information by the Respondent before the letter of 24 November 2006 was sent. The misspelling of Morecambe which was rendered as Morecombe in the letter was therefore a mistake on the part of Knight Frank, as was the use of the plural Investments. It was Mr Mackay's evidence that the Respondent dictated this name to him but that he could not say whether it was Morecombe or Morecambe. He assumed that this was the commercial vehicle to be used in the development. He was not particularly concerned about the name – he was going to be paid up-front for a desktop evaluation.


Ultimately the provenance of the spelling of Morecambe is I think a somewhat arid debate. The letter asked the addressee to sign and return the duplicate copy. The Respondent, his name misspelled at the end as well as at the beginning of the letter, was invited to sign above the rubric "For and on behalf of Morecombe Investments Limited". The Respondent did sign and return the duplicate, adding in manuscript after his signature the words "As Agent". The Respondent undoubtedly thereby represented that he was acting for an entity called Morecombe Investments Limited. It does not follow that he thereby warranted, in the sense of guaranteed, that he had correctly named his principal, a point to which I shall return.


The judge sets out what thereafter occurred at paragraphs 11–15 of his judgment which I reproduce below in full:-

"11. In due course, the sum of £5,875.00 was paid. In...

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