Mr Edward Martin Robert Wells v Mr Mehul Devani

JurisdictionEngland & Wales
JudgeLord Justice Lewison,Lord Justice McCombe,Lady Justice Arden
Judgment Date15 November 2016
Neutral Citation[2016] EWCA Civ 1106
Docket NumberCase No: B2/2015/0597
CourtCourt of Appeal (Civil Division)
Date15 November 2016

[2016] EWCA Civ 1106

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM CENTRAL LONDON COUNTY COURT

His Honour Judge Moloney QC

3YS52697

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lady Justice Arden

Lord Justice Lewison

and

Lord Justice McCombe

Case No: B2/2015/0597

Between:
Mr Edward Martin Robert Wells
Appellant
and
Mr Mehul Devani
Respondent

Mr Andrew Butler (instructed by Stitt & Co) for the Appellant

Mr David Giles (instructed by Mr Mehul Devani) for the Respondent

Hearing date: 26 July 2016

Approved Judgment

Lord Justice Lewison
1

Mr Edward Wells undertook a development of 14 flats in Hackney as a joint venture with a builder called Andrew White. The completed flats were being marketed by Shaw & Co, a local estate agency, under a contract for a sole agency with a commission of 3% (reduced to 2% on prompt payment). By the beginning of 2008 six of the flats had been sold, one was under offer, and the remaining seven were still on the market.

2

In late January 2008 Mr Wells mentioned his selling problem to Mr Nicholson, a neighbour in Andorra (where they both lived). Mr Nicholson told Mr Wells that he knew of a property investment company in London that might be interested in buying the remaining flats. Mr Wells said that he was happy for Mr Nicholson to make inquiries. On 28 and 29 January 2008 Mr Nicholson sent two e-mails. The first was to Ricky at Greene & Co, an investment company and the second was to Mr Devani. Mr Devani is an estate agent. The e-mail to Mr Devani of 29 January described the development, inquired whether it would be of interest to "Richard" and gave contact details. It concluded:

"Can you pass this on to Richard or to anyone else who may be interested."

3

Mr Devani replied on the same day:

"Thanks for this. It may well be of interest. I'll pass it on.

Please keep me informed of any other opportunities such as this as I always have people looking for all sorts."

4

Later that day Mr Devani telephoned Mr Wells in Andorra. There followed an exchange between them. Mr Devani gave Mr Wells his contact details, and Mr Wells faxed Mr Devani details of the development. The judge described the main issue of fact as whether, in the course of the telephone call, Mr Devani told Mr Wells that he was an estate agent and that his commission for the transaction would be 2% plus VAT, or whether on the contrary he did not say that he was an estate agent, and gave the impression that he was an investor. After a review of the evidence, and having heard the oral evidence of both Mr Wells and Mr Devani, the judge concluded that throughout the conversation Mr Devani considered himself to be proposing himself as an agent rather than a buyer and was looking to a commission from Mr Wells as the source of his profit; that he did not describe himself as a buyer or say anything intended to give the false impression that he was.

5

The critical question was whether in the course of the conversation Mr Wells and Mr Devani reached an agreement that was a legally binding contract. For that purpose it is necessary to examine the judge's findings of fact with some care.

6

The way that the judge described the issue at paragraph [1.3] of his judgment was as I have summarised it [4] above. At paragraph [2.18 c] the judge found that it was more likely than not that "[Mr Wells] asked [Mr Devani] about his fees, and that he did reply that his standard terms were 2% plus VAT". If we pause at that point, there is no finding that Mr Devani identified the sum to which the 2% would be applied, nor the circumstances in which the 2% would be payable, nor even that Mr Wells agreed to the 2%. At paragraph [4.3 b] The judge repeated that "[Mr Devani] did not inform [Mr Wells] (expressly) before the making of that contract of the circumstances under which he would be entitled to remuneration, but did tell him the manner in which it would be calculated". At paragraph [4.7] he referred to the "failure to define the commission-entitling event". The judge supplied the gaps in his findings by implying a term to the effect that payment would be due "on the introduction of a person who actually completed the purchase".

7

Within 30 minutes of the telephone call Mr Devani was in touch with Newlon Housing Association. He spoke to a Ms Ogbonna who said that she would drive by the building and let him know if Newlon were interested. On 1 February (which was a Friday) she called Mr Devani and asked him to arrange a viewing. Mr Devani sent Mr Wells a text message which he got that evening, although he did not reply to it until the following Monday, 4 February. Mr Devani and Mr Wells spoke on the telephone twice on that day. Those conversations led to a meeting at the flats at lunchtime. Those present were Ms Ogbonna and a colleague from Newlon, and Mr Wells and his co-venture partner. Mr Devani was going to attend but in the event did not. The meeting went well, and Newlon were interested. On the morning of the following day, Newlon agreed, subject to contract, to buy the remaining flats. Having told his solicitors, Mr Wells then telephoned Mr Devani. The contents of the call were disputed, but the judge does not appear to have resolved the conflict of evidence.

8

Thus far there was nothing in writing to record the terms of any agreement between Mr Wells and Mr Devani. However on 5 February (at 1406), and thus after Newlon's offer had been both made and accepted, Mr Devani sent Mr Wells an e-mail, the relevant parts of which read:

"Further to our conversation, I am delighted that [Newlon] has agreed to purchase all eight remaining flats…

As per our terms of business our fees are 2% + VAT and I look forward to receiving you [sic] solicitors details so that we can invoice them directly as per your instruction."

9

Very shortly afterwards Mr Wells provided Mr Devani with those details "as promised" by e-mail. Although Mr Wells' e-mail was not sent as a reply to Mr Devani's e-mail (i.e. it was not part of a string of e-mails) the judge found that before he sent it he had seen Mr Devani's e-mail of 1406. Although not expressly referred to in that e-mail (and not appearing in the e-mail as an attachment) it was common ground that Mr Devani's e-mail of 1406 did attach Mr Devani's terms of business.

10

The terms of business stated:

"I am required by section 18 of the Estate Agents Act 1979, as amended, to set out our terms of business, prior to you formerly [sic] instructing our company.

1. A commission of 2% + VAT (Multiple Agency) of the eventual sale price of the property.

2. The commission will be due on exchange of contracts with a purchaser, but payable from the proceeds of sale by your conveyance, with your written authority."

11

The terms of business also explained the meaning of "Multiple Agency", saying that the agents would be in competition with "other agents that you may instruct and the commission fee will be paid to and go wholly to the agent who secures the sale". In dealing with the question when the commission would become payable the terms of business said:

"You will be liable to pay remuneration to us, in addition to any other costs or charges agreed, if at any time:

(a) unconditional contracts for the sale of the property are exchanged with a purchaser first introduced to you by us at any time subsequent to the date of our instruction

(b) unconditional contracts for the sale of the property are exchanged with a purchaser introduced by us during the period of our multiple agency or with whom we had negotiations about that property during that period."

12

They also contained a warning in the following terms:

" Dual Fee Liability

If you have instructed another agent on a sole agency and/or sole selling rights you must check, whether by instructing us as your agent as well, you will be liable to pay both agents' fees once your property has been sold."

13

The sale to Newlon was completed in due course. In consequence Mr Devani claimed a commission of £42,000 plus VAT.

14

The written terms were sent to Mr Wells after the introduction of Newlon was made and hence after the act of introduction of a person who ultimately completed the purchase which, on the basis of the contract found by the judge, amounted to performance of the contract. The judge held that Mr Wells and Mr Devani had made a legally binding contract in the course of the telephone call on 29 January. But he went on to hold (as is common ground) that Mr Devani had failed to comply with his obligations under the Estate Agents Act 1979. In consequence the judge reduced the amount recoverable by Mr Devani by one third. Mr Wells appeals against the finding of liability, and Mr Devani cross-appeals against the reduction in his fee.

15

By an application notice dated 30 November 2015 Mr Wells applied to amend the Appellant's Notice to introduce the contention that the judge had been wrong to find that an oral contract had been made. Although the application notice asked for a 30 minute hearing, in fact Briggs LJ refused permission on the papers on 31 December 2015. Mr Wells renewed the application under CPR Part 52.16 (6). The original application sought to challenge the judge's factual conclusions, and that was the basis on which Briggs LJ refused permission to amend. However, shortly before the hearing of the appeal a legal point was identified which arose on the judge's findings as made. We granted permission to amend at the outset of the appeal limited to the raising of the legal point (which had in fact been argued at trial). Our refusal of permission to amend to attack the judge's factual findings was a reflection of well-established principles on which an appeal court will not interfere with findings of fact made by a trial judge. I collected the authorities together in Fage UK Ltd v Chobani UK Ltd [2015] EWCA Civ 5, [2014] FSR 29 at [114].

16

Thus...

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