Nicholas Prestige Homes v Neal

This is an estate agent’s claim for their commission on the sale of property, but it is a claim with a difference. Sitting in the Luton County Court, Deputy District Judge Simmons dismissed the claim for commission on 16 December last year. He also dismissed a counterclaim by the defendant, who was the vendor of the property, for damages for distress caused to her by the claimant partnership, Nicholas Prestige Homes.

The claimant appealed, with permission granted by Buxton LJ, limited, however, to an alternative claim made in the particulars of claim for damages for breach of contract, the breach being the continued appointment of other agents who were eventually the effective cause of the sale of this property.

Buxton LJ refused permission to appeal any argument that the claimants were entitled to their commission on a proper application of the jurisprudence, as explained by this court in the well-known case of Foxtons Ltd v Pelkey Bicknell & Another [2008] EWCA Civ 419, [2008] All ER (D) 328 (Apr).

The facts of this case are as follows. This is a property in Bedfordshire which the defendants wished to sell. They had instructed a number of estate agents during 2006 but no buyer had been found. After some discussion they decided they would end the instruction of some of those estate agents and instruct a new agent: the claimants, Nicholas Prestige Homes, a firm of estate agents.

It seems that Mrs Neal, the defendant, contacted Nicholas Prestige Homes to discuss matters relating to the sale, and on 23 November 2006 two employees, Mr Marc Taylor and Miss Sonia Halsall, called at the property and there was a discussion between them about the appointment of Nicholas Prestige Homes.

The next important event is that on 28 November 2006 Nicholas Prestige Homes emailed Mrs Neal at her place of employment, and that email is important. It is sent from Marc Taylor to Mrs Neal -- I think under her maiden name -- at her place of employment, the subject matter being “Melford House”, the property with which we are concerned.

At the top of the email it records that there are attachments, and they are identified as an Agency Agreement Melford Sole Document and an Agency Agreement Melford Multi Document. In fact, those two standard documents are Nicholas Prestige Homes Multiple Agency Agreement which, according to its terms, would have entitled them to pay commission if, at any time, contracts for the sale of the property are exchanged with a buyer introduced to the property by Nicholas Prestige Homes in any way during the period of their agency.

The Sole Agency Agreement gives sole selling rights to Nicholas Prestige Homes and is in these terms:

“You will be liable to pay remuneration to Nicholas Prestige Homes, if, at any time, contracts for the sale of the property are exchanged with a Buyer introduced to the property in any way during the period of our agency (“Agency Period”). Nicholas Prestige Homes will have sole selling rights for a period of sixteen weeks. The sole selling rights will automatically continue after the Agency Period until terminated by giving twenty one days written notice. During the Agency Period the Vendor will not market the property for sale privately or instruct any other agent to market or sell the property. In the event that you part exchange your property with an applicant introduced by Nicholas Prestige Homes, our commission terms will be calculated at the prevailing market value of the property.”

That document stipulated a commission to be calculated at 1.95% plus VAT of the eventual sale contract price of the property.

The email of 24 November then had this text:

“Further to our meeting yesterday 23 November 2006, we write to thank you for your instructions and confirm the agreed arrangements to be as follows:

NPH are appointed on a multi agency basis until 31st December 2006. We are not to advertise your property in the press or through Rightmove or Primelocation. You are disinstructing all other agents with immediate effect save for Messrs Plumm Property who will cease marketing the property from January 1^st 2007.

With effect from 1^st January 2007, NPH will have sole selling rights and are to commence marketing through newspapers/RM and PL and any other appropriate media.

Accordingly, we are pleased to attach agency agreements that cover both periods and the terms agreed.

Please would you acknowledge safe receipt.

Shall I arrange for Nicholas [being the partner or owner of the firm, Nicholas Walley] to contact you with regard to discussing the letting option?

All the best,

Marc Taylor.”

It seems that at the trial below Mrs Neal explained to the deputy district judge that she had not fully read that email or the attachments. Her case there was, and still is, as she has explained it to us, that she at all times wished to market this property through several agents on a multi-agency basis and that she never intended and would never have intended to bind herself to a sole agency agreement. That was a crucial issue for the court to resolve.

The explanation of Mrs Neal included her saying, as I understand it, that sometime later Mr Taylor telephoned to ask about the selling of the property, and she responded to that phone call on 28 November in these terms:

“Hi Mark,

That’s fine, look forward to some viewings.

Sally.”

It is, however, to be noted -- and it is not without significance -- that that email from Mrs Neal is a reply to Marc Taylor’s email of 24 November, as is apparent from the actual document produced to us by Mrs Neal. There we see in the way emails are recorded that her reply is immediately above the record of the email of 24 November sent by Marc Taylor to her. It is not – and this is also important – a new email created freshly and without reference to the first document of 24 November.

In those circumstances, the conclusion of the deputy district judge was, as recorded in paragraph 52 of his judgment:

“I find that Mrs Neal did enter into a contract with NPH on 28 November 2006 on the terms set out in the email of 24 November 2006 and accepted by her in her email of 28 November 2006.”

Mrs Neal appeared in the court below as a litigant in person and appears here in person with her husband. Today even Nicholas Prestige Homes are in person, though they did have the benefit of solicitors and counsel to argue their case over the two days it took before the deputy district judge.

It is always a concern for this court when litigants in person appear. We all understand the insuperable difficulties of obtaining legal aid or obtaining legal advice under conditional fee agreements or whatever. It is a constant worry, I am sure, for all of us and, certainly speaking for myself, a constant worry to ensure that the litigant’s case is properly put and understood and considered by the court and that no unfair advantage is being taken of the fact that one party is represented and the other is not. Keeping the level playing field is an endeavour which is paramount.

I confess to having been concerned, when first reading the judgment of the deputy district judge, that his finding of the contract, being in the terms of the email of 24 November, was possibly open to dispute. I was of that mind because all that I had read in the judgment preceding it was his account of the fact that the email of 24November:

“...set out what he [Marc Taylor] believed had been agreed together with copies of two agency agreements between his employers and Mrs Neal. One of the agency agreements was a sole selling rights agreement and the other a multiple agency agreement.”

I was therefore concerned that it was possible that alternative contracts were being placed before Mrs Neal and that her acceptance in her response of 28 November did not make it clear which of the alternative arrangements she was accepting and an agreement would not have been possible on those vague terms.

Thus we allowed Mrs Neal to explore the possibility of appealing out of time against that finding of fact by the deputy district judge and we gave her the opportunity to place before us the actual correspondence. Having seen the actual correspondence, it is perfectly clear that these two agreements were not being put forward as alternatives but as consecutive arrangements, as the text of Marc Taylor’s email made perfectly plain.

Given that Mrs Neal responded to that email in her reply in the terms she did – “That’s fine, look forward to some viewings.” -- it is not a surprise that the deputy district judge came to the conclusion he did that the contract was made in the terms of those two emails.

In fairness to Mrs Neal we have explored the possibility of her seeking permission to appeal out of time, indicating that it had insuperable difficulties. Even if she did formally seek permission to appeal I would have been bound to refuse it, not because it was made out of time but because it would have had no real prospect of success. The finding of the deputy district judge was one which was well within his power to make; indeed it was one which, on the documents I have read, was almost inevitable.

Thus I proceed upon a basis that the contract was made in terms of the sole agency and I turn therefore to the appeal that is launched by Nicholas Prestige Homes.

They lost below because the deputy district judge concluded that they were not the party who had introduced the purchaser to the purchase following the Foxtons case. They had not been given permission to appeal that, and so that claim has been lost.

When I began the judgment I indicated that this was an unusual case and its unusual feature is that the claim pleaded in the first place was a claim for commission for debt, but by paragraph 8 of the particulars of claim an alternative claim was made: that the claimant claimed damages for breach of contract in the amount of £10,883.44 commission, which it would have received on the sale of the property to Ms Wooller and Mr Durham, being the eventual purchasers, had the defendant not instructed Plumm Properties either in the sole agency period at all or specifically on the sale.

That alternative claim was clearly made in the particulars of claim, and the curious feature of the case is that it was not referred to at all by the deputy district judge. Why not? I simply do not know.

Mr Walley, who represents his firm today, tells us that the claim was duly presented by counsel to the deputy district judge. Mrs Neal is not so sure about it, but the fact is that it was there and that it ought to have been dealt with by the court below once the claim for commission was dismissed. Buxton LJ gave permission for it, and, one should add, that in the Foxtons case Lord Neuberger of Abbotsbury foresaw the possibility of this sort of claim being made, because in paragraph 24 of his judgment dealing with the construction of the contract in that case he said this:

“Further, on my preferred interpretation of the Terms, it is unlikely that a client who has instructed more than one agent will be liable for more than one commission (save if, effectively in breach of the sole agency contract, he instructs other agents before determining that contract).”

That is precisely the case presented to us today by the appellant. The terms of this sole agency made it plain that, to repeat the quotation:

“During the agency period the vendor will not market the property for sale privately [and then follow the important words] or instruct any other agent to market or sell the property”

It is plain therefore that during the period for which they had sole selling rights they were to be the only person marketing the property.

On 20 January – which, on the finding of the deputy district judge, is during the sole agency period which began on 1 January and was to last for 16 weeks -- the eventual purchaser telephoned Nicholas Prestige Homes; the line was engaged and the purchaser left a message indicating that she had seen the property being marketed on Rightmove, or one of those internet information sites, and she expressed her interest in it. The lady at Nicholas Prestige Homes was engaged on another call but immediately answered the voicemail message left by the purchaser. She tried to telephone back but the line was engaged because - as the deputy district judge thought was likely – the purchaser was on the telephone to the other agents, Plumm, whose name appeared alongside that of Nicholas Prestige Homes on the website as agents marketing the property.

Having begun her dealings with the property through Messrs Plumm, the purchaser continued to deal with them and eventually on 28 March the purchasers exchanged contracts with Mrs Neal and her husband for the sale of this property, with completion taking place on 1 May.

Having regard to the fact that the other agents, Plumm, remained instructed on 20 January, there was in my judgment a breach of the term that no other agent should be instructed. In the words of the email of Mr Taylor, Mrs Neal was to disinstruct:

“...all other agents with immediate effect save for Messrs Plumm Property who will cease marketing the property from 1 January 2007.”

So there was a breach of contract, and the question then is what damages flow from that breach? But for the breach it seems to me plain on a balance of probabilities that Nicholas Prestige Homes would have had a chance of selling the property themselves because it is plain that they tried to respond to the eventual purchaser’s call by phoning back immediately. Indeed there is some suggestion, not accepted by the deputy district judge, that they rather aggressively pursued the eventual purchaser to the point where at one stage she may have lost interest. Be that as it may, the eventual purchaser did go through with the purchase, and therefore it seems to me on a balance of probabilities that the breach caused the loss of the chance for Nicholas Prestige Homes to sell the home.

The next question therefore is: what damages flow from the loss of that chance? We have to evaluate whether that chance is purely speculative or whether it is real and substantial. In the events as they happened, given the purchasers’ attraction to the property, which was unwavering from the point of their being introduced to it to their concluding the sale, it must be that this was a real chance, a substantial chance, which was lost by reason of the breach.

I have hesitated whether to give any discount for the possibility that the purchasers might, for inexplicable reasons, have felt their affection for the property was being diminished simply by virtue of Nicholas Prestige Homes’ involvement, but there is no sufficient information before me to justify that conclusion. In the result, it seems to me that this was a certain chance and that no discount should be afforded for the imponderables involved in any case involving the assessment of chances.

In those circumstances, it seems to me to follow that the claimants lost the chance of earning the whole of their commission, they are entitled to damages accordingly, and I therefore would allow the appeal and enter judgment for the claimants in the sum of £10,883.44.

I agree.

I also agree.