Harbour Estates Ltd v Charania

Sale of property – Sole agency agreement – Commission – Appellant agreeing to pay commission if purchaser introduced by respondent during sole agency period – Respondent arranging four viewings to eventual purchaser but property unsold when agency agreement terminated – Purchaser completing sale directly from appellant after 16-month delay – County court finding respondent entitled to commission following first introduction – Whether judge giving insufficient weight to period between first introduction and final purchase – Appeal dismissedThe respondent company operated as an estate agent. In 2002, it entered into a sole agency agreement with the appellant to sell his property the termination of which could be exercised by either side on giving 14 days’ written notice. In accordance with article 5(1)(b) of the Estate Agents (Provision of Information) Regulations 1991, made pursuant to section 8 of the Estate Agents Act 1979, the contract provided that the appellant would be liable to pay remuneration if unconditional contracts for the sale were exchanged with a purchaser that the respondent had introduced during the period of the sole agency or with whom it had had negotiations concerning the property during that period.The respondent marketed the property at the agreed price of £1.1m and arranged more than 100 viewings, including four to the eventual purchaser (Y). However, the property remained unsold during the period of the sole agency and the appellant terminated the agreement. The appellant spent most of his time abroad but his niece lived in the same block as the property in question. She was approached by one of the porters on behalf of Y, who lived on the same estate, to the effect that Y was interested in purchasing a property in her block. Y did not mention that he had previously viewed the appellant’s property but indicated that he wished to deal directly with the vendor and not through an estate agent. Y’s eventual offer was accepted, contracts were exchanged and the sale completed.The respondent became aware of the sale and it brought proceedings to recover commission from the appellant in the county court. The judge found that, on the balance of probabilities and as a matter of inference from the circumstantial evidence, Y had been introduced by the respondent during the period of sole agency so that the respondent was entitled to commission in accordance with the agreement. The appellant appealed. He contended that, when he found a causal link between Y’s original viewings through the respondent and his eventual purchase, the judge had erred in law by giving insufficient weight to the fact that there had been an interval of around 16 months between Y’s last viewing of the property through the respondent and his approach to the porter.Held: The appeal was dismissed.The respondent, in order to be entitled to commission under the terms of the sole agency agreement for having introduced a purchaser, had to show that it had introduced that party as the eventual purchaser; it must have introduced the purchaser to the purchase and not merely to the property. The test was whether the purchaser had purchased as a result of the introduction by the estate agent: John D Wood & Co v Dantata [1987] 2 EGLR 23; (1987) 283 EG 314 and Foxtons Ltd v Bicknell [2008] EWCA Civ 419; [2008] 2 EGLR 23; [2008] 24 EG 142 applied. In the present case, the judge had been entitled and was correct to conclude that Y had purchased the property as a result of the respondent’s introduction to the appellant and that there was a causal link between that introduction and the ultimate purchase.Dan Stacey (instructed by Candey LLP) appeared for the appellant; Daniel Bromilow (instructed by Herrington & Carmichael LLP, of Camberley) appeared for the respondent.Eileen O’Grady, barrister