Agency – Damages – Breach of contract – Commission

Nicholas Prestige Homes v Sally Neal: CA (Civ Div) (Lords Justices Ward, Patten, Black): 1 December 2010

The appellant firm of estate agents (N) appealed against the dismissal of its claim for damages for breach of contract from the respondent vendor (X).

X had instructed a number of estate agents to sell her property. In November 2006 she instructed N. By email, N thanked X for her instructions and confirmed that it would act as agent under a multiple agency agreement until 31 December 2006, during which time X would dis-instruct all other agents apart from one (P), and that from 1 January 2007, it would act as sole agent, at which time X was to terminate any existing agreement with P. X replied to that email stating that that was ‘fine’. In January 2007, during the sole agency period, the eventual purchaser of X’s property telephoned N to enquire about it, but found the line engaged. She therefore telephoned P, who was still representing X. Despite N calling the purchaser back shortly afterwards, she was by then engaged with P. X’s property was ultimately sold via P’s agency in May 2007. N issued proceedings against X seeking commission due as a debt, and damages for breach of contract in respect of the sole agency agreement. The district judge, having found as a fact that P, rather than N, was the party who had introduced the purchaser to X’s property, dismissed the claim for commission. The claim for damages was not, however, referred to at all in his judgment. N contended that it ought to have succeeded on its alternative claim for damages for breach of contract in respect of the sole agency agreement on the proper application of the jurisprudence exercised by the Court of Appeal in its decision in Foxtons Ltd v Bicknell [2008] EWCA Civ 419, [2008] 2 EGLR 23.

Held: (1) The decision in Foxtons Ltd, in particular the judgment of Neuberger LJ as he then was, foresaw a claim of the sort made in the instant case being raised, Foxtons Ltd followed. The terms of the sole agency agreement made it plain that, during the sole agency period, X, as vendor, was not to market the property through any agent other than N. Having regard to the fact that P remained instructed in January 2007, there had been a breach of the term that no other agent should be instructed, and thereby a breach of contract.

(2) It was plain that, but for that breach of contract, on the balance of probabilities, N would have had a chance of selling X’s property to the eventual purchaser. That chance was not purely speculative but, on the evidence, a real and substantial one. In those circumstances, it followed that X’s breach of contract had caused N to lose the chance of earning the whole of its commission. N was entitled to damages, based on the commission it would have earned, of £10,883.

Appeal allowed.

By its representative for the appellant; in person for the respondent.