LEGAL
When is an introduction not an introduction?
“The Best Agent in the United Kingdom” Alexander Watson recently lost a case on commission fees. Claire Shearmur, a Solicitor at Barlow Robbins LLP reviews the case.
Philip Alexander Smith T/A Alexander Watson v Jeffrey Marks
Judgement was awarded in favour of the Defendant in the case of Philip Alexander Smith T/A Alexander Watson v Jeffrey Marks by District Judge Wicks in the Uxbridge County Court on 8 October 2009. To summarise the facts, Philip Alexander Smith the Claimant
(trading as Alexander Watson estate agents) sought payment of commission in connection with the sale of a flat in Pinner (“Flat 15”). Mr Marks, together with his wife entered into an agreement with Alexander Watson to market the property with an expectation of achieving a sale price in the region of £250,000. Prospective purchasers viewed the flat on 14 August 2008 together with an adjoining flat also marketed by Alexander Watson. The prospective purchasers viewed Flat 15 again on 18 September and withdrew an offer that they had made on the adjoining flat. Unbeknown to the Claimant, the purchasers then approached
another firm of estate agents, Baker Pearce, to make their formal offer and negotiate further terms. The matter then proceeded to an exchange of contracts and completed in the usual way. All parties appear to have been in agreement that the retainer was on a multiple agency basis. Alexander Watson rendered an invoice for their commission
as initial introducer following an admission by the Defendant that he was liable for the same. However on taking subsequent advice, this admission was retracted. The Defendant gave evidence that at no time did he have any
The defendant moving to another agent is sufficient to evidence a breakdown in communication between the parties.’
contact with Alexander Watson in relation to agreeing the terms of a sale to the purchasers. The signed retainer between the Claimant and Defendant provided that, “if you decide to appoint another agent you will be liable to pay commission to us in addition to any other costs or charges agreed if at any time unconditional contracts are exchanged with a buyer, introduced by us, or with whom we had negotiations about the property during the period of this agreement”. The defence relied upon the
case of Foxtons Limited v Pelkey Bicknel & Another (2008) EWCA Civ 419 on the basis that the wording of the above referenced clause was very similar to the one utilised in this case regarding the
construction of the words ‘a purchaser introduced by us’. The conclusion of District Judge Wicks was that for the Claimant to be entitled to a commission under the terms of ‘having introduced a purchaser’, the Claimant had to show that they had introduced the person as the eventual purchaser (ie they had introduced the purchaser to the purchase and not just the property). The case turned on this point. The Defence asserted that Baker Pearce had in fact introduced the purchaser to the purchase and
PhiliP AlexAnder Smith, Director at Alexander Watson told PROPERTYdrum: THE AGENT’S VIEW
“We introduced the buyers to the development, they wrote to us stating how they loved both flats and were trying to make a decision between them. They then chose one of them, but after becoming fed up waiting for grant of probate they came back to us – not the other agent – to arrange a further visit with builders to re-investigate the possibilities of the other flat. Clearly, there was no break down of communi-
36 JUNE 2010 PROPERTYdrum
cation as they were able to organise this visit. They withdrew from the sale of the first flat the next day – and shortly after went to Baker Pearce to make their offer. If I was not both the introducer and
cause of this sale, then I do not know what my job is, This has been an extremely expensive case for us; the total cost, including our ‘lost’ fee, was £27,000. It was also very disappointing to find that the courts side with the consumer.”
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