Foxtons Ltd v Puri

This is a renewed application for permission to appeal from a judgment and order of HHJ Cowell dated 18 March 2010. Moore-Bick LJ refused permission on the papers. The judge held that Foxtons, the claimant estate agents, were entitled to commission in the sum of £188,000 plus interest and costs as a result of certain transactions. The defendant, Mr Puri, says the judge was wrong for at least one of two reasons.

It is necessary to say something about the background. The commission is claimed pursuant to a written contract been Foxtons and Mr Puri of January 2008. It was on a Foxtons standard form, and set out the terms on which they agreed to be estate agents for the sale of the property concerned. The property is identified on the form as 74-76 Courtfield Gardens and the client was named as Mr Puri, the defendant. The stated rate of commission was 2.5%. That got varied later in a manner which is no longer relevant.

In fact, the property was owned by an offshore company. It was the only asset of that company. It was a special purpose vehicle. Both sides to the estate agent contract knew that at the time of the contract; so it was said by Foxtons, and held by the judge, that when the contract talked about “sale of the property” the parties must have contemplated including simply transferring the property by transferring the shares in the company.

That seems to me to be an entirely rational view. No other view makes any sense whatever, and I cannot see any realistic prospect of the court being persuaded, simply because the Foxtons standard form was used, that the language of the contract only contemplated an actual transfer of legal title of the property itself. Any businessman would say that the property was being bought if the company whose only asset was the property was being bought. That was the first point.

The second point which is sought to be raised is that it is said that Foxtons did not introduce the purchaser. The way that is argued is to say that the ultimate purchaser was not in fact introduced by Foxtons because the ultimate purchaser was not really in existence at the time. But the difficulty with all that is that the people behind the ultimate purchaser were introduced via Foxtons. A Mr Lee had been concerned with a possible venture on behalf of Boston University for student accommodation. That fell through; and Mr Lee was working with a Mr Schwarzman, and it was Mr Schwarzman who organised the ultimate purchase. That all came from Foxtons.

Ms Fitzgerald argued, attractively, that the chain of causation was broken. In one sort of intellectual sense it was, but in no commercial sense was the chain broken; Foxtons were instrumental in this purchase happening, and they are entitled to their commission.