Lady Manor Ltd v Fat Cat Café Bars
Defendant seeking premises – Claimant estate agent sending letter with details of property – Claimant not engaged by vendor – Claimant’s letter “confirming” fee payable upon “introduction” – Claimant referring defendant to vendor’s agent for purpose of view – Claimant demanding fee following successful transaction – Whether claimant’s letter could be read as an offer to provide further information in return for a fee upon acquisition
Prior to the events in dispute, the defendant retained a firm of estate agents (LSH) to find suitable premises in Shoreditch, London. In October 1998 the defendant received an unsolicited letter from the claimant estate agent, giving details of premises on offer in Hoxton Square (the property). The letter stated: “As discussed, I would also like to take this opportunity to confirm my company’s fees which would become payable in the event that the above introduction leads to a successful transaction. Our fees would be [as set out]”.
Acting at the defendant’s request, LSH contacted the claimant to arrange a view of the property. The claimant explained that the vendor’s retained agent was not the claimant, but another firm (S). After viewing the property by arrangement with S, the defendant proceeded with the transaction. Following completion, the claimant sent a demand for commission allegedly due under the terms of its letter. The defendant disputed the existence of any such liability. In the instant proceedings, the claimant, while accepting that nothing had occurred to warrant the use of “as discussed” and “confirm” in the claimant’s letter, contended that: (i) the same letter constituted an offer to provide further information, in return for a specified fee, in the event of success; (ii) the defendant had accepted that offer by obtaining, and using, the information relating to the role of S.
Defendant seeking premises – Claimant estate agent sending letter with details of property – Claimant not engaged by vendor – Claimant’s letter “confirming” fee payable upon “introduction” – Claimant referring defendant to vendor’s agent for purpose of view – Claimant demanding fee following successful transaction – Whether claimant’s letter could be read as an offer to provide further information in return for a fee upon acquisition Prior to the events in dispute, the defendant retained a firm of estate agents (LSH) to find suitable premises in Shoreditch, London. In October 1998 the defendant received an unsolicited letter from the claimant estate agent, giving details of premises on offer in Hoxton Square (the property). The letter stated: “As discussed, I would also like to take this opportunity to confirm my company’s fees which would become payable in the event that the above introduction leads to a successful transaction. Our fees would be [as set out]”.
Acting at the defendant’s request, LSH contacted the claimant to arrange a view of the property. The claimant explained that the vendor’s retained agent was not the claimant, but another firm (S). After viewing the property by arrangement with S, the defendant proceeded with the transaction. Following completion, the claimant sent a demand for commission allegedly due under the terms of its letter. The defendant disputed the existence of any such liability. In the instant proceedings, the claimant, while accepting that nothing had occurred to warrant the use of “as discussed” and “confirm” in the claimant’s letter, contended that: (i) the same letter constituted an offer to provide further information, in return for a specified fee, in the event of success; (ii) the defendant had accepted that offer by obtaining, and using, the information relating to the role of S.
Held: Leave to appeal refused.
Since the claimant had not acted as an agent for any person, the question was what liability, if any, could arise from a response to a cold call. Subject to certain immaterial exceptions, it was a basic principle that no payment could be required for conferring an unrequested benefit, whether by providing information or otherwise: see Falcke v Scottish Imperial Insurance Co (1887) LR 34 ChD 234. That principle did not apply where, after receipt of such information, the parties agreed that the sender would do something more that would amount to good consideration. In such a case, while information already given could amount only to “past consideration”, the further information was sufficient consideration, even though it was of little value or of minor causative significance in the transaction: see Chitty on Contracts (28th ed) para 3-13.
By putting the defendant in touch with S, the claimant had provided further information that was of sufficient value in the eyes of the law. However, the terms of the claimant’s letter could not be construed as an offer to provide that information for a fee. The wrongly used expressions were not only confusing, but, when corrected, left the suggestion that “the above introduction” would attract a fee upon acquisition, which, in view of the basic principle, it could not do. The alleged offer had failed to make it clear that the defendant had a choice between accepting the offer or making alternative inquiries based upon the information already received.
Stuart Hornett (instructed by Dechert) appeared for the claimant; Anwar Nashashibi (instructed by Fraser Brown, of Nottingham) appeared for the defendant.
Alan Cooklin, barrister
