Cases - Savills Land & Property Ltd v Kibble
Record details
- Name
- Savills Land & Property Ltd v Kibble
- Date
- [1998]
- Citation
- EGCS 170
- Legislation
- Keywords
- Estate agency - commission - Estate Agents (Provision of Information) Regulations 1991
- Summary
-
Sole agents were engaged by the defendant to sell property in 2 lots. Lot 1 comprised farms, and lot 2 comprised 56 acres of agricultural land. The commission agreement provided for full commission on the event of exchange of contracts, but for half commission:
'... if a ready, willing and able purchaser is introduced to the property and terms are agreed for the sale in accordance with the client's instructions ... and this must be paid if the Client subsequently withdraws and unconditional contracts for sale are not exchanged'.
This wording follows the required statutory explanation of the effect of introducing a ready, willing and able purchaser in the Estate Agents (Provision of Information) Regulations 1991 (below). The phrase 'ready, willing and able purchaser' was also defined in accordance with the 1991 Regulations as:
'... prepared and able to exchange unconditional contracts for the purchase of the property.'
The agents introduced a prospective purchaser whose offer of £845,000 was accepted by the defendant, subject to contract. On the evidence it was found that there was no doubt that the purchaser was anxious to purchase the property. However, the vendor appeared to have second thoughts and began to alter the terms of the original offer. In particular he attached a condition that his brother, who farmed lot 2, be given an agricultural tenancy and a protected tenancy of a cottage. The prospective purchasers agreed to allow the brother a short-term farm tenancy but sought vacant possession of the cottage as originally agreed. At this point, the vendor decided to withdraw lot 2 altogether from the sale. So the purchaser offered a reduced price for lot 1 which was not accepted and the whole transaction fell through.
The Court of Appeal held that the judge had been entitled to find that the agents had introduced a ready, willing and able purchaser and so had earned the half commission. Lord Woolf MR said:
'The clause in question is designed to provide protection to the plaintiff when they are sole agents whose instructions are withdrawn ... It would be unrealistic to interpret clause 5.1 in a way which means that the entitlement to that fee only arises immediately before contracts are exchanged, so that both parties have agreed the terms of the contract and are ready to exchange by applying their signature. The position has to be judged at an earlier stage when ... a vendor withdraws. At that time was the purchaser ready, willing and able to purchase the property by entering into the contract which it was presupposed by both parties would be drawn up for exchange?'
The evidence showed that the purchaser met this criterion.
It is interesting to consider whether the court would have awarded Savills commission if the purchaser, tiring of the vendor's attempts to extricate himself from the terms of the original agreement, had withdrawn instead of the vendor. This point illustrates the conceptual difficulty of establishing exactly when somebody is ready, willing and able to purchase when the vendor is free to alter the terms right up until contracts are exchanged.