Stephen Burney v The London Mews Company Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE WALLER,LORD JUSTICE KAY,MR JUSTICE LINDSAY |
| Judgment Date | 07 May 2003 |
| Neutral Citation | [2003] EWCA Civ 766 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B1/2002/2705 |
| Date | 07 May 2003 |
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ILFORD COUNTY COURT
(HIS HONOUR JUDGE RICHARDSON)
Lord Justice Waller
Lord Justice Kay
Mr Justice Lindsay
B1/2002/2705
MR R BARTLETT (instructed by Meyrick Mills Solicitors) appeared on behalf of the Claimant
MR J KITSON (instructed by Shah & Burke Solicitors) appeared on behalf of the Defendant
Wednesday, 7th May 2003
This is an appeal from a decision of His Honour Judge Richardson, given on 4th December 2002, whereby he dismissed an appeal from a decision of District Judge Sherratte, dated 5th September 2002. By the District Judge's decision, he had refused to set aside a default judgment obtained by the claimants, whom I will call "London Mews", for a commission which they alleged they had earned as estate agents in relation to the sale of the defendant Mr Burney's property at 17 Bryanston Mews West, London W1.
Mr Burney had appointed London Mews as sole agents to sell 17 Bryanston Mews by an agreement, which is dated 12th March 2001. The terms of that agreement are of course of the highest relevance, it being on the basis of those terms that any commission could be claimed. By a term headed "Our Agency", it was provided that, so far as material:
"You will be liable to pay remuneration to us in addition to any other costs or charges agreed, if at any time unconditional contracts for the sale of the property are exchanged (and subsequently completed) with a purchaser introduced by us during the period of our sole agency or with whom we had negotiations about the property during that period; or with a purchaser introduced by another agent during that period".
Then there are provisions in relation to the fees, there being a 2 per cent fee, save in circumstances in which another agent had been instructed by Mr Burney, when the fees of London Mews would have been 2.5 per cent plus VAT. There is also a provision which provides for London Mews earning a 1 per cent plus VAT commission if Mr Burney concluded what is termed a "private sale".
The facts are not really in dispute. Indeed, we raised with Mr Bartlett at the commencement of this hearing whether there were any facts which were in dispute. What we had in mind was that this is an appeal from an appeal —that is to say two rounds had been fought out at considerable cost to the parties —and on one view of Mr Bartlett's submissions, that could have led to this court simply taking the view that certain of the facts needed to be found at a trial before any decision could finally be taken. But that prospect —that is to say a trial and further rounds of appeal —ought to be avoided if at all possible, and Mr Bartlett, on instructions, supported that approach to this case.
He accepted that the facts as stated by the judge could be taken as the facts on the basis of which a decision in this case should be taken. He went so far as to submit that if his submissions were accepted, the effect ought to be that a judgment should be entered in favour of his client, rather than the other way round.
London Mews prepared particulars in relation to the property. Presumably they had inspected the property, taken such measurements as were necessary, arranged such photographs as were necessary and produced particulars. They also advertised the property in newspapers. Indeed, it appears that it was as a result of the advertisement in the newspapers that they were approached by another estate agent, Kaye & Co. In the event, London Mews sent the particulars that they had prepared to Kaye & Co on the basis that they were for circulation to retained clients.
Retained clients strictly are persons who have retained an estate agent to look for property; i.e., they are clients who are going to pay a commission to an estate agent for looking for property, as opposed to clients who retain estate agendas as vendors and pay a commission on the sale.
What appears to have happened is that Kaye & Co utilised the particulars that they had been sent by putting them onto their own headed paper. They circulated those particulars to a large number of people, including a Mr Cullinane. That circulation seems to have gone beyond circulation to retained clients, and indeed Mr Cullinane was not apparently a retained client.
It is accepted that Kaye & Co were not appointed subagents by London Mews. Thus, they had no authority to contact Mr Burney. They had no authority to visit the property in order to produce their own particulars. They had no authority to arrange visits to the property.
It seems that Mr Cullinane thought that Kaye & Co were agents appointed by the vendor, Mr Burney. Mr Cullinane's version of events is set out in a letter exhibited to Mr Burney's statement, and I am quoting from a letter dated 8th August 2001, where Mr Cullinane says:
"After receipt of the details, I spoke to Mr Bikhit of Messrs Kaye & Co and expressed interest in viewing the Property. It was explained to myself and my girlfriend, Ms Suzanna Wong, that the vendors were out of the country for the weekend and were thus uncontactable but that Messrs Kaye & Co would seek to arrange an appointment for us to view the property on Monday 26th March 2001. During the course of the morning of 26th March, there were various calls between ourselves and representatives of Kaye & Co and eventually Mr Bikhit admitted to us there seemed to have been some misunderstanding between themselves and the vendor and that they were not retained to sell the property on the vendor's behalf, but "could get us into the property" if we agreed to pay them a commission equivalent to 1 per cent of the purchase price. At this point I expressed my extreme dissatisfaction with the way in which Messrs Kaye & Co conduct their business. I explained that to my mind they had misrepresented themselves as being appointed as agents to sell the property on behalf of the vendor and I did not, at this nor at any prior or subsequent stage, agree to pay the 1 per cent commission they requested on the purchase of the property nor any other property. In reply to this Mr Bikhit said that they thought that Messrs Kaye & Co had been appointed by the vendor and if I was not prepared to pay the 1 per cent commission then I could, of course, seek to gain access to the Property through contacting the estate agents instructed by the vendor to sell the Property or making my own private enquiries".
It seems that Kaye & Co would not in fact tell Mr Cullinane who Mr Burney's agents were and in the result, Mr Cullinane approached Mr Burney at 17 Bryanston Mews West directly. The letter appears at page 77 of the bundle. He apologises for the unusual nature of his approach. He says that he hopes that the property is still for sale. He also says that Kaye & Co were not prepared to tell him who Mr Burney's agents were and he also indicates that he can be contacted at his personal number, or if Mr Burney would prefer it, through Mr Burney's agent, and he says in the final paragraph:
"It may not be relevant to you, but I would suspect that if you were to contact us directly there may well be an estate agent commission saving for you".
What happened as a result of that approach by Mr Cullinane was that a sale of 17 Bryanston Mews West took place and it appears that, rather unattractively —and Mr Bartlett did not seek to defend this —while that negotiation for a sale was taking place, Mr Burney wrote to London Mews saying that he was taking the property off the market while his wife was having a baby and that he intended to instruct London Mews thereafter.
London Mews, perhaps unsurprisingly, when they learned of the sale, were not pleased about Mr Burney's attitude, and they wrote to him on 20th August, claiming the 2 per cent plus VAT commission which they asserted was due to them.
The judge decided that London Mews were entitled to their commission. He first distinguished a case called McCann v Pow [1975] 1 All ER 129. That was a case in which the estate agents, McCann, claimed a commission, earned as they alleged in their particulars of claim through the activities of persons they described as their "subagents", a firm called Douglas & Co. The Court of Appeal held (the main judgment being given by Lord Denning) that the principal agents, McCann, had no authority to appoint subagents, and the Court of Appeal disallowed the claim for commission.
In the instant case, the judge held that Kaye & Co were not subagents and he therefore distinguished that case.
The judge then dealt with the concept of introduction and he did so in these words:
"16. It is said that there are two breaks in the chain of causation between the acts of the claimants and the ultimate transaction. Firstly, it is said that Kaye & Co, without authority from anyone, prepared and sent to Mr Cullinane their own particulars of the property. Secondly, it is said when Mr Cullinane expressed interest in the property they did not put him into contact with the claimants or arrange for him to view it. Either of those events alone, it is said, would be sufficient to prevent the claimants from the being the effective cause of the sale".
The judge continued:
"I have listened with care to that argument, but I reject it.
17. So far as the particulars of the property are concerned, I have already said that it is, in my judgment, clear in this case that there can only be two explanations for the particulars. One is that Kaye & Co copied the...
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