Pelkey Bicknell v Foxtons Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Neuberger of Abbotsbury,Lord Justice Rix,Lord Justice Waller
Judgment Date23 April 2008
Neutral Citation[2008] EWCA Civ 419
Docket NumberCase No: A3/2007/1692
Date23 April 2008

[2008] EWCA Civ 419

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM

KINGSTON UPON THAMES COUNTY COURT

(HER HONOUR JUDGE WILLIAMS)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Waller

Vice-president Of The Court Of Appeal, Civil Division

Lord Justice Rix and

Lord Neuberger Of Abbotsbury

Case No: A3/2007/1692

Case No 6KT01606

Between
Foxtons Limited
Respondent
and
Pelkey Bicknell & Anr
Appellants

Mr Patrick Blakesley (instructed by Foxtons Legal Department) for the Respondent

Mr Clive H Jones (instructed by Blake Lapthorn Tarlo Lyons) for the Appellant

Lord Neuberger of Abbotsbury
1

This is an appeal brought by Mrs Treld Bicknell against a decision of HHJ Williams given on 12 June 2007, in the Kingston upon Thames County Court. The Judge held that Mrs Bicknell was liable to pay Foxtons Ltd, the well known residential estate agents, commission on the sale of her house, 29 Lancaster Park, Twickenham, because the person who purchased the house, Mrs Kim Low, had been first introduced to the house as a potential purchaser at a time Foxtons were appointed sole agents.

The background to the dispute

2

Following discussions about the proposed sale of her house, on 15 October 2004, Mrs Bicknell appointed Foxtons on a sole agency basis to sell her house, on their standard conditions of appointment. In their letter of appointment, Foxtons referred to their recommended “asking price of £1,400,000”, and explained that their fees would be “calculated at the sole agency rate of 2.25% of the achieved sale price plus VAT…”. The letter, which was countersigned by Mrs Bicknell, contained “a copy of [Foxtons'] terms of business which should be read in conjunction with this letter”.

3

Those terms (“the Terms”) stated that Foxtons' standard rate of commission was 2.25% of “the sale price achieved” if they were appointed on a sole agency basis, and 3% if they were appointed on a multiple agency basis (i.e. if the vendor appointed other agents to act for her as well). The Terms also provided that such fees “become due and payable on exchange of contracts”, although there was also a provision that Foxtons could agree to wait for payment until completion.

4

Most importantly, the Terms included the following:

TYPE OF AGENCY

Sole Agency

Where Foxtons acts on your behalf as your sole agents, you will be liable to pay remuneration to us, in addition to any other costs or charges agreed, if at any time unconditional contracts are exchanged:-

with a purchaser introduced by us during the period of our sole agency or with whom we have had negotiations about the property during that period; or with a purchaser introduced by or offering via another agent during that period.

A sole agency can be terminated by either party giving four weeks notice in writing.

Multiple Agency

Where Foxtons is instructed along with other agents, you will be liable to pay remuneration to us, in addition to any costs or charges agreed, if at any time unconditional contracts are exchanged:-

with a purchaser introduced by us; or with a purchaser to whose attention we brought the availability of the property.

A multiple agency can be terminated by either party giving four weeks notice in writing.

Sub Instruction

Foxtons reserves the right to sub-instruct other agencies at any time during our agency if we consider that this would be in your best interests. This will not involve any extra costs….

5

The wording of the Terms' sole agency provisions is not without some general significance, as it is almost entirely based on a prescribed provision contained in the Estate Agents (Provision of Information) Regulations 1991, S.I. 1991/859. These Regulations were made pursuant to section 18 of the Estate Agents Act 1979, which, by subsection (4), enables the Secretary of State to prescribe information which must be provided by estate agents to their clients as to “particulars of the circumstances in which the client will become liable to pay remuneration to the agent”—subsection (2).

6

By article 5(1)(b) of the 1991 Regulations, if, “in the course of carrying out estate agency work”, an estate agent uses the term “sole agency”, he is required to “explain the intention and effect of [that] term…. to his client…. by means of a written explanation having the form and content set out in paragraph (b) to the Schedule to these regulations”, although the wording should be altered to the extent it is misleading “by reason of the provisions of the contract in which those terms appear”. Paragraph (b) is precisely the same as the parts of Foxtons' standard sole agency terms italicized in the above quotation. Thus, subject to the addition of the words “or offering via”, Foxtons took the prescribed words from the 1991 Regulations verbatim when setting out the sole agency terms.

7

Immediately following their appointment as sole agents, Foxtons put the house on the market at an asking price of £1.4m. On about 8 April 2005, the asking price was reduced to £1.25m. On 23 June 2005, Miss Kate Jolley of Foxtons showed the house to a Mr Alisdair Low, who was looking for a house on behalf of his former wife. According to Miss Jolley, he “loved” the house, and viewed it again a week later, when his interest in the house “remained clear”. He then visited the house with Mrs Low (who said in her evidence that she did not recall the visit) on 26 July. On that visit, Miss Jolley said, Mrs Low did not like the house even enough to proceed beyond the first floor, as, “the property required too much work”.

8

Miss Jolley did not seek an offer from the Lows, not least because, she said, “there was a lot of interest in the property”; indeed, according to the Judge, she gave “the impression that the price was not negotiable”. Miss Jolley also stated that Mr Low's “interest in the property went from very high, when he said he loved it, to being entirely lost when his wife viewed it”. After 26 July 2005, Foxtons had no further contact with Mr or Mrs Low until after Mrs Low had bought the house.

9

By the time of Mr Low's third visit to the house, Foxtons' sole agency had been determined. This occurred on 15 July, when they agreed with Mrs Bicknell that they would act under a multiple agency agreement, at their standard commission rate of 3%. Around the same time, Mrs Bicknell appointed another well known firm of estate agents, Hamptons International (who had valued the house on 1 July no doubt in anticipation of being appointed) to market the house, also on a multiple agency basis, but at a commission rate of 2.25%.

10

On 5 July 2005 (prior to the determination of Foxtons' sole agency, but no point is taken in that connection), Mr Daniel Hutchins of Hamptons sent particulars of the house to Mr Low, who told him that he had already inspected it. On 9 August Mr Hutchins sent Mr Low a mailshot, which included details of the house, and it does not appear that Mr Low followed this up. In early October, Mr Low and Mr Hutchins had a telephone discussion, in which the house was mentioned, although, according to the Judge, “it is not clear who raised the matter of this particular property”. Apparently as a result of that discussion, Mr Hutchins arranged for Mr and Mrs Low to visit the house again, which they did on 15 October.

11

Following that visit, Mrs Low made an offer to purchase the house for £1.1m. Mr Hutchins took instructions from Mrs Bicknell, and refused the offer. Mrs Low then increased her offer to £1.15m, which was accepted by Mrs Bicknell. Matters proceeded without any significant problem to exchange of contracts and then to completion on 4 January 2006.

12

Mrs Bicknell then paid Hamptons commission at the agreed rate of 2.25% (plus VAT) out of the proceeds of sale in the normal way. She then instructed Foxtons to help her find a property to rent. It was as result of that instruction that Foxtons learnt that the house had been sold by Mrs Bicknell to Mrs Low. Foxtons made further investigations, and, after discussions with Mrs Bicknell and with Hamptons, they began these proceedings for recovery of their commission.

The issues and the decision at first instance

13

Foxtons' case before the Judge, as before this court, is simple. Under their sole agency contract, they were entitled to commission if contracts were exchanged with “a purchaser introduced by” them, Mrs Low was introduced to the house by Foxtons in June (through her former husband) or July 2005, and Mrs Low became a “purchaser” by January 2006 at the latest, having exchanged contracts prior to that. Foxtons advanced two arguments. The first was that, on the true construction of their agreement with Mrs Bicknell, these bare facts were enough to entitle them to commission on the sale to Mrs Low. In the alternative, if, contrary to that simple argument, Foxtons had to show that they were the “effective cause” of the sale to Mrs Low, they could satisfy that requirement on the facts of this case.

14

After having heard oral evidence from all the individuals that I have mentioned, Judge Williams, in a clearly expressed reserved judgment, decided in favour of Foxtons on both arguments. First, she accepted the argument that the Terms “expressly negate the introduction of an implied term that the agent has to be the effective cause of the sale”, especially relying on the words “at any time”. Secondly she held that, in any event, Foxtons were the effective cause of the sale to Mrs Low, on the basis that “there was no evaporation of [Mr Low's] interest [in the house], merely a lull during the summer”. She added that Mr Low had not “given up” on the house, and that his...

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