not the Claimant because, on submission, the purchasers had approached Baker Pearce having “felt strung along by Alexander Watson” in respect of an unsubstantiated grievance in respect of the adjoining flat. In the alternative the defence argued that no actual ‘negotiations’ took place until Baker Pearce became involved. The Claimant’s Counsel counterargued that there was no
breakdown in communications since the purchasers never lost interest in the property. The purchaser viewed the property on 15 August and 18 September through Alexander Watson, with Baker Pearce not becoming involved until 21 October and hence the Claimants were the ‘effective cause of the transaction’. Counsel on behalf of the Claimant also asserted that ‘introductions’ in this situation also mean negotiations, talks, viewings and correspondence. Claimant’s Counsel sought to rely upon the case of Lordsgate Properties Limited v Balcombe (1985) EGLR 20 wherein it was decided that it is possible to have a situation where two agents are entitled to be paid commission arising from one transaction where both agents were instrumental in the sale or where two agents were appointed but on different terms both of which were subsequently fulfilled, although the Court prefers to find one agent to be the ‘effective cause’ of the sale.
THE JUDGEMENT District Judge Wicks held that although the Claimant did make the purchasers aware of both flats, the Claimant did not in fact ‘introduce’ them to the purchase and that they were not instrumental in ‘clinching the deal’. Despite the fact that the Claimant had undertaken viewings with the purchaser, had entered into correspondence with them and the purchasers had shown an interest in the property via the Claimants, this was held not amount to ‘actual negotiations’. The fact of the Defendant moving to another estate agents was found to be sufficient to evidence a breakdown in communication between the parties. The Claimant was held to not be entitled to any commission and order to pay the Defendant’s costs in the matter, consequently resulting in a total loss of approximately £27,000. So where does this leave estate agents? What is the future for
multiple agency arrangements? The fact that the judgement will be unsatisfactory from an estate agent’s perspective is undoubtable because it does little to lend clarity to the meaning of ‘introducer’ or ‘negotiations’ in these scenarios. This decision can only deter estate agents from entering into multiple agency arrangement, although it is unlikely that any have the luxury of turning such business away until subsequent case law clarifies the position.
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