Long (Peter) & Partners v Burns
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SINGLETON,LORD JUSTICE MORRIS,LORD JUSTICE ROMER |
| Judgment Date | 16 July 1956 |
| Judgment citation (vLex) | [1956] EWCA Civ J0716-1 |
| Date | 16 July 1956 |
| Court | Court of Appeal |
[1956] EWCA Civ J0716-1
Lord Justice Singleton
Lord Justice Morris and
Lord Justice Romer
In The Supreme Court of Judicature
Court of Appeal
Mr. Peter Dow and Mr. Quentin Dunnett (instructed by Mr J.J. Dunnett) appeared on behalf of the Appellants (Plaintiffs).
Mr. Conolly Gage (instructed by Messrs Torr & Co.) appeared on behalf of the Respondent (Defendant).
The Plaintiff are estate and business transfer agents at Richmond. They claim commission or damages from the Defendant, Mrs. Burns, who has a garage some three miles out of Reading. A representative of the Plaintiffs, Mr. Wade, heard that Mrs Burns was anxious to dispose of her garage. He called upon her and obtained her signature to a document part of which I read. It is headed "Peter Long & Partners, Lion House, Richmond, Surrey", and at the head of it there are spaces for the type of business and the address and position. The place is "Hawthorne Garage, Three Mile Cross, Near Reading, Berkshire", on the Main Road from Reading to Basingstoke. The type of business is set out, and there is a description of the premises. They are stated to be freehold, and the turnover is given as approximately £10,000 a year. The accounts are audited; it is run by the partners, and the price asked is £9,750.
At the foot there appears in print: "To Messrs Peter Long & Partners, Estate & Business Agents, Lion House, Richmond, Surrey, I hereby appoint you my Sole Agent for the sale of my business and property the details of which are truly stated above and overleaf, at the price £9,750 and trade stocks at valuation. In consideration of your services I undertake not to revoke this agreement and agree to pay your commission in accordance with the terms stated herein on the total purchase price (including stock) upon your introducing a person ready, willing and able to enter into a binding contract to purchase my business referred to above. In further consideration of your services I agree to leave the disposal of my business and property with you as my Sole Agent for a period of three months from the date hereof, nor will I consent to my business being sold except to a person introduced by you. Commission Rates: Business premises, Lease, Goodwill, Trade fixtures and Fittings and Trade stocks 9% Freehold Property, 5%. The document was signed by Mrs Burns on the 8th August, 1954.
He doubt the Plaintiffs made some effort to find a buyer for the garage. It happened that a Mr and Mrs Pritchard were anxious to acquire the property and the business. They know something of it, and they got into communication with Mrs Burns. When the Plaintiff's representative, Mr Wade, called to see Mrs Burns again, she told him that the Pritchards were anxious to buy, Mr Wade said it would be a good thing to get then over, and that was arranged by telephone.
This is Mr Wade's account of what took place. I read from a document agreed between the parties and supplied to the Court: "Re Hawthorne Garage, Three Mile Cross, Near Reading, I called at Hawthorne Garage on the 12th September last at approximately 12.30 p.m. to meet a prospective purchaser and was informed at about 1.0 p.m. by Mrs Burns that Mr & Mrs Pritchard, who had known the aforementioned Garage for some time past, were very keen to buy. I suggested that this might wall be an opportune moment for them to meet me and proceed with the purchase. Mrs Burns telephoned Mr Pritchard, who arrived with Mrs Pritchard within 45 minutes. They informed me that they had known the Garage for some considerable time, and were keen to purchase, also that they would not require any Petroleum Company Finance. They were apparently quite satisfied with regard to the annual gallonage. I understood Mr Pritchard to be a member of the Regent Petroleum Company, and in consequence he had checked the figures. I was then given Mrs Pritchard's full name and address which was entered into the Contract, the purchase price was agreed at £7,750 freehold, stock at valuation. Mr Pritchard asked me if I know of any Town Planning Schemes. I informed him that, to the best of my knowledge, and upon information from Mrs Burns, 2 or 3 ft. would be taken from the forecourt of the Garage; he did not regard this with any concern. Mrs Pritchard then handed me a cheque payable to the favour of Messrs Peter Long & Partners to the amount of £390 part of the normal 10%, agreeing toforward us the remaining £475 as soon as she had made arrangements with her Bank, and duly signed the Contract witnessed by myself". Some work was being done further down the road, and Mrs Burns, probably in reply to a question, had at some time told Mr Wade that some 2 or 3 feet might be taken from the front of the garage. Whether she know anything about Town and Country planning, I do not know; nor do I know whether Mr Wade did.
The contract which was signed was for the sale of the freehold, goodwill, fixtures, etc., for a total sum of £7,750, and by its terms the National Conditions of Sale were introduced. There is a copy of the contract on pages 95 and 95A of this bundle of correspondence. Apparently the agents' representative had a copy with him; maybe he carries copies of this form with him when he goes about. I do not think I need read it. The total purchase price is divided up. Clause 8 provides: "The Vender will upon completion for the further consideration of £3,250 convey (or procure the conveyance of the said freehold property known as Hawthorne Garage Three Mile Cross to the purchaser and shall offer a statutory root of title".
Than, Clause 9: "The National Conditions of Sale (16th Edition) shall be deemed to be incorporated herein so for as the same are applicable to a sale by private treaty and are not varied by or inconsistent with the express terms of this Agreement". Condition 15 (3) of the National Conditions of Sale reads: "Save as mentioned in the Special Conditions, the property is not to the knowledge of the vendor subject to any charge, notice, order, restriction, agreement or other matter arising under the Town and Country Planning Act, 1947, but (without prejudice to any right of the purchaser to rescind the contract under paragraph (2) of this condition) the property is sold subject to any such charges, notices, orders, restrictions agreements and matters affecting the same".
It seems to me to be highly undesirable that parties should be asked to enter into a contract of this kind without any advice. The impression given is that the sole desire of the agents' representative was to obtain a signature to the document in order to found a claim for commission. When the matter came into the hands of the Solicitors, it was ascertained that the true position was that the Berkshire County Council, in their Development Plan, had "a road-widening scheme which, when work commences on it, will necessitate the compulsory purchase of the bulk of the said property and will render it impossible to continue the said business on what remains thereof. The said work is scheduled for completion by 1972". That is taken from a portion of the Particulars under paragraph 6 of the Defence in this case. I asked learned Counsel during the argument if that was the correct position, and it was agreed that it was.
There was considerable correspondence. The Pritchards refused to complete, and the proposed purchase fell through on Mrs Pritchard, who alone had signed the contract as purchaser, making a small payment to Mrs Burns. It is conceded for the purposes of this appeal that an action by Mrs Burns for specific performance of the contract would not have succeeded. The agents commenced this action against Mrs Burns claiming £387. 10. 0d, being 5 per cent on the purchase price. The Statement of Claim is framed as though it is a claim for commission, but it ends as a claim for damages. The action was heard by the Lord Chief Justice, and on the 21st March of this year he gave Judgment for the Defendant, holding that the agents had not produced someone who was "ready, willing and able to enter into a binding contract" to purchase the business. The Plaintiffs appeal against the judgment.
On their behalf it was submitted by Mr Dow that the contract was a binding contract until it was repudiated, and that the right to commission was established when the contract was signed. I agree with the Lord Chief Justice that the wordsbinding contract" in the document on which the Plaintiffs rely mean a contract which is enforceable in law. The contract could not be enforced by reason of the misrepresentation by the agents' representative as to the position under the Town and Country Planning Act. That is admitted. Hence the claim must fail. If the contract could not be enforced as against the purchaser, it was not a binding contract within the meaning of those words in the document on which the Plaintiffs rely. I do not think it necessary to go into the authorities. They were considered by the Lord Chief Justice, who said in the course of his Judgment: "The purchaser is saying 'This is not a binding contract'. I have to consider whether it was a binding contract. As the parties have agreed (I should have said that I am trying this case on the correspondence and certain admitted facts) that Mrs Pritchard, that is the purchaser, was induced to sign the contract, among other things, by the statement made by Mr Wade, I am bound to hold that it was a contract induced by an innocent misrepresentation, and I cannot say that it was not with reference to a substantial matter. Mrs Pritchard had been told that the town and country planning scheme which was in existence (which might, of course, have been seen by either party if they had wanted to) would only effect this garage to the extent of two or three feet; but in fact it would almost have wiped it out of...
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