Ian Green Residential Ltd v Asfari and another

Purchase of property — Estate agent — Claimant estate agent arranging viewings of property for defendants — Defendants purchasing the property — Whether introduction agreement concluded under which fee payable to claimant — Whether such a term to be implied — Whether section 18 of Estate Agents Act 1979 precluding such implication — Claim dismissed The claimant was a firm of estate agents whose managing director, G, had previously dealt with the defendants. G arranged for the defendants to view a property in St John’s Wood, London NW8, which they eventually purchased for £14.5m in October 2006. The claimant brought proceedings against the defendant claiming payment of commission of £170,375, consisting of 1% of the purchase price plus VAT. It alleged the existence of an agreement, concluded in January 2006, under which the defendants had agreed to retain the claimant to introduce them to the property. It admitted that no fee had been mentioned at the time, but submitted that: (i) it had been understood, on the basis of previous dealings between the parties relating to the introduction of other properties, that a fee of 1% plus VAT would be payable; (ii) a term should be implied into the agreement that a reasonable fee would be paid for the introduction; or (iii) a quantum meruit was payable in restitution for the work that G had done.The defendants denied that an agreement had been concluded, or, if it had, that there was any basis for implying a term as to the payment of commission. They further contended that to imply such a term would be contrary to section 18 of the Estate Agents Act 1979, since the claimant had not communicated in writing the required section 18 information, including the amount of any retainer and the circumstances in which it would be payable, before the defendants committed themselves to liability to the claimant, as required by regulation 3(1) of the Estate Agents (Provision of Information) Regulations 1991.Held: The claim was dismissed. On the evidence, the defendants had found the property themselves and had not agreed to engage the claimant to introduce them to it. They had not agreed to pay any fee to the claimant in respect of the property.As to the quantum meruit claim, even though restitution in general no longer rested upon a foundation of an implied contract to pay, it was still of great significance, in the particular circumstances of the case, whether the expectation of the parties had been that payment would be made for the services in question. On the evidence, the defendants had made it clear at all times that they were not accepting any liability to pay any sum to the claimant. In those circumstances, it would be wrong in principle to find that any quantum meruit was due.Per curiam: If an agreement had been concluded, as contended for by the claimant, that agreement would have fallen within the scope of the 1979 Act because it would have concerned “estate agency work” within the meaning of that Act. There was no reason why that Act could not apply to an agreement for an introduction to a single property, as opposed to an agreement to search for properties generally. In respect of an agreement within the 1979 Act, failure to comply with the requirements of section 18 and of the 1991 Regulations would not have prevented the implication of a term as to the payment of a reasonable fee, but would have had the effect that the contract was enforceable only by an order of the court, as contemplated by section 18(5) and (6).Martin Hutchings (instructed by Ingram Winter Green) appeared for the claimant; Katharine Holland (instructed by Denton Wilde Sapte LLP) appeared for the defendants.Sally Dobson, barrister