Cases - Gross Fine & Krieger Chalfen v Clifton

Record details

Name

Gross Fine & Krieger Chalfen v Clifton

Date

[1974]

Citation

EGD 189

Keywords

Estate agency - valuations - agent fees

Summary

The defendant agent was instructed to sell property in London. Needing a valuation of the commercial part, he employed a chartered surveyor of the plaintiff company to provide one and indicated that the usual scale fee would be paid on sale. The surveyor wrote to the defendant saying:

'... it would not be unreasonable to look to you for a valuation fee in the event of our not receiving commission on the usual scale in the event of our selling this property, and your comments would be appreciated'.

This received an evasive reply and comforting words about the certainty of a sale commission.

The surveyor prepared a valuation of £260,000 and recommended a quotation figure of £325,000. Having already received offers in the region of £350,000, the vendor described the valuation as a 'load of rubbish'. He terminated his business with the defendant and, in a strongly rising market, sold the property 18 months later for £600,000. Having received no sale commission, the defendant refused to pay the plaintiffs' demand for £750 scale fees. The plaintiffs sued for payment.

The plaintiffs contended that there was a contract under which the valuation fees were to be paid in any event, but the judge found there was no such contract. However, he found that there was an implied obligation to pay for services rendered so he had to determine the reasonable remuneration. He determined that scale fees could only be charged in appropriate circumstances, and was of the opinion that the valuation did not of itself attract a scale fee nor had it the intrinsic merit to justify the full scale. However, he rejected the claim that the valuation was negligent and found the true value to be half way between the 2 opposing views; that is, half the scale fee.

Mr Justice Kilner Brown said:

'All the experts agree that if a person asked for a figure to be placed upon the property, the agent would not charge for that, but would expect to make his fee upon sale. A valuation which attracts scale fees is a matter of specific and special arrangement.'