Cases - Lordsgate Properties v Balcombe

Record details

Name

Lordsgate Properties v Balcombe

Date

[1985]

Citation

1 EGLR 20

Keywords

Estate agency - commission

Summary

It is rare for 2 agents to be regarded as the effective cause, but in the peculiar circumstances of this case, the judge found that both were entitled to commission.

Here the defendant instructed sole agents to sell his property. Notwithstanding this, he also instructed other agents, including the plaintiffs. The purchaser was first shown around the property by the plaintiffs, he visited again through the sole agents, and put in a bid through the sole agents, which was rejected. He then put a bid of £160,000 through each agent. Owing to a misunderstanding, the agents believed that these bids were from different bidders. So, at the behest of the defendant, a third party was gazumped, a contract race was entered and the purchaser bid £165,000 (against himself!) through the sole agent.

The plaintiffs' task was to 'introduce an applicant who purchases'. The judge found that as the plaintiffs introduced the purchaser and the chain of events was added to, not broken, by the work of the sole agents, they remained an effective cause. The sole agents were also entitled to their commission as they had fulfilled the terms of their commission agreement, which was to be 'instrumental in negotiating a sale'.

This may be regarded as a somewhat unusual approach, but the conduct of the defendant seems to have been a material fact too, for the judge also remarked that it was the defendant's actions, in gazumping and using 2 agents to help him bid up the price, that brought about the unusual situation of liability for 2 commissions. So the consequential loss of part of the increased price was, he said, 'fair and just'.