Savills Land & Property Ltd v Kibble

Respondent negotiating sale of appellant’s property – Agreement on respondent’s standard terms including term for payment of half commission – Appellant withdrawing from sale – Respondent successfully claiming half commission – Appellant seeking to quash order – Whether respondent entitled to receive half commission – Appeal dismissed The appellant was the owner of Halse Copse Farm, Oxfordshire, which consisted of a farmhouse, two cottages, three bungalows, outbuildings and over 500 acres of land. The cottages and bungalows were subject to various tenancies. The farm was divided into two lots. In 1993 the appellant engaged the respondent to negotiate the sale of the farm. The agreement was made on the respondent’s standard terms, which included, at clause 5.1, a term for payment of half its commission “if a ready, able and willing purchaser is introduced to the property and terms are agreed for the sale in accordance with the client’s instructions”. On November 7 1994 an offer for both lots of £845,000 (subject to contract) was received by the respondent from Mr and Mrs Whitehead. Pre-contract correspondence followed between solicitors, which included negotiations in respect of the tenancies of the bungalows and cottages. On January 10 1995 the defendant withdrew the 56-acre field site (lot 2) from the sale, and negotiations with Mr and Mrs Whitehead for a lower price in respect of lot 1 alone broke down at the end of that month. The defendant withdrew the property from the market altogether and the plaintiff submitted a bill for half of its commission in reliance upon clause 5.1. On November 11 1997 Judge Harris QC found that the purchaser had been prepared and able to exchange unconditional contracts and ordered judgment be entered for the respondent in the sum claimed. The appellant sought to set aside the order on the grounds that the judge had misinterpreted the contractual requirements and had drawn incorrect inferences from the evidence. Held The appeal was dismissed. The important factor that caused the transaction to founder and negotiations to reopen was the appellant’s decision to withdraw lot 2. Clause 5.1 of the commission agreement was a protection for the respondent when it was acting as a sole agent and when instructions were withdrawn. If a purchaser had withdrawn, it would have earned no fee, but, if its client withdrew, it was to receive half commission under the terms expressed in clause 5.1. It would have been unrealistic to interpret the clause as meaning entitlement to half commission only if the vendor had withdrawn immediately before the exchange of unconditional contracts. The judge had been entitled upon the evidence before him to conclude that the purchasers were in a financial position to enter the transaction. The question was: was the purchaser ready, willing and able at the time to purchase, by entering a contract it was presupposed by both parties would be drawn up for exchange? The time at which this had to be assessed was when the appellant vendor had withdrawn. The judge was correct to find that at that time, the purchaser was ready, willing and able to proceed. Joel Donovan (instructed by Bowerman & Partners, of Bicester) appeared for the appellant; Simon Williams (instructed by Tolhurst Fisher, of Southend-on-Sea) appeared for the respondent. Sarah Addenbrooke, barrister