Letgain Ltd v Super Cement Ltd

Commercial property –Instructions to market property “quietly” — Property sold at alleged undervalue — Dispute over instructions — Vendors refusing to pay commission on grounds of breach of duty — First instance finding in favour of the estate agents — Vendors’ appeal dismissedThe plaintiffs were property consultants who claimed £4,312.50 for the value of their charges for services in connection with the sale of commercial premises at Spelthorne Lane, Ashford, Middlesex, a freehold property owned by the defendants. The defendants at the material time manufactured and sold flooring material at the premises, which comprised a funnel-shaped site with the factory placed at a relatively narrow entrance. To the rear there was some unused land. It was accepted that as a term of the contract made in 1988 that the defendants agreed that they would pay the plaintiffs 1.25% of the sale price but, they claimed that they were not liable because the plaintiffs were in breach of express and/or implied terms of the contract as a result of which they lost the chance of selling the property for a larger sum. The premises were subsequently sold by the purchaser, P, to another firm for £550,000. At the trial the plaintiffs were alleged to have been in breach because, inter alia, they failed to: cause a “For sale” board to be erected at the premises; advertise the property; circularise “all the London and local agents”; and properly market the property. They also advised the defendants to sell at an undervalue. The plaintiffs said their instructions were expressly not to do anything other than market the property quietly because of pending litigation against a former member of the firm and that the vendors did not want him to know that the premises were for sale. At the trial the judge found in favour of the plaintiffs after hearing all the witnesses and a careful consideration of the evidence. He decided that the instructions were that no board was to be used and that the property was not to be advertised nationally. There was thus no breach of contract. With regard to the circularising “all known local agents”, the term conferred a discretion on the plaintiff estate agents. With regard to the question of the implied duty to use reasonable care in carrying out their contractual obligations, the agents could only market the property with in the limits of their instructions. Moreover, they were not professionally incompetent in not having advised the vendors to refuse the sale at £300,000. While other surveyors who inspected the property might have valued it at a higher figure, the judge was satisfied that the figure agreed was within the acceptable range of values. The vendors appealed. Held The appeal was dismissed. 1. The grounds of the appeal were on finding of facts and appellate judges were at a permanent disadvantage in forming their own view. If the trial judge reached an estimate of a witness that was a conclusion of fact which should be let alone. 2. If there had been an alteration to the instructions that the property was to be quietly marketed, it was surprising that those important changes had not been recorded in writing. 3. Further, there would have been a charge to the client for a board and national advertising if those had been the estate agents’ instructions. 4. With regard to possible advice not to accept the offer, the judge found that the pro and cons had been put to the vendors and they were then left to decide for themselves. 5. It was not for the court to disturb the judge’s careful findings of fact. Augustus Ullstein QC (instructed by Crellins, of Weybridge) appeared for the appellant vendors; Simon Brown (instructed by Kennedys) for the respondent estate agents.