Standard Life Assurance Company v Egan Lawson Ltd

Whether an introduction is the effective cause of a transaction is determined by examining the facts as a whole. In rival-agent cases, priority in time is relevant but neither determinative nor paramount. The court must assess the causal link between each introduction and the eventual transaction, including what would have happened had the later introduction not occurred and whether it broke the chain of causation. A purchaser’s continued possession of an earlier agent’s file does not itself establish causation. In the absence of contractual authority to apportion commission, the result is all or nothing.

Egan Lawson introduced a commercial property to Standard Life in August 1997, proposing a pre-emptive purchase. Standard Life initially investigated the property but rejected it as too expensive. After the property was marketed publicly, Richard Ellis later reintroduced it to Standard Life when the vendor appeared willing to accept a lower price. Standard Life then purchased the property and paid Richard Ellis commission.

Hallett J held that Egan Lawson’s introduction was an effective cause and awarded it the same commission. Standard Life appealed, contending that Egan Lawson’s introduction had ceased to operate and that the later introduction caused the purchase.

1. Appeal allowed. The order for Egan Lawson was set aside. Egan Lawson was ordered to repay £147,445.43 with interest, and to pay Standard Life’s costs.
2. The applicable question was whether Egan Lawson’s introduction was the effective cause of the purchase. That question required an objective examination of the whole course of events. The authorities, including John D Wood v Dantata [1987] 2 EGLR 23, Peter Yates & Co v Bullock [1990] 2 EGLR 24, Nahum v Royal Holloway and Bedford New College [1999] EMLR 252 and Chasen Ryder & Co v Hedges [1993] 1 EGLR 47, provided general guidance but did not determine the result.
3. Where rival agents claim commission, the first introduction is not automatically effective merely because it occurred first. The court must examine the causal connection with the eventual transaction and consider whether the later introduction was independent and broke the chain of causation.
4. Egan Lawson’s introduction concerned a pre-emptive bid before public marketing. By 10 September 1997 Standard Life had rejected the opportunity, and Egan Lawson thereafter took no further part. The later transaction arose from Richard Ellis’s November introduction, which brought the property back to Standard Life’s attention when a lower offer might be accepted.
5. The existence of Egan Lawson’s file, and Mr Barrett’s review of material within it, did not establish that Egan Lawson’s introduction was the effective cause. The later introduction was the starting point for the decision to purchase, and the purchase would probably not have occurred without it.
6. The court also recognised that, absent an express or implied contractual basis, commission could not be apportioned between competing agents. The issue was therefore one of entitlement to the whole commission or none.
7. Simon Brown LJ agreed in the result and additionally considered that prospective-purchaser cases may differ from vendor-instruction cases. In his view, absent clear terms, a prospective purchaser would ordinarily promise commission only if it used the agent’s information to secure a transaction it would otherwise not have secured.

• Court of Appeal (Civil Division): Appeal from the order of Hallett J dated 23 April 1999. The appeal was allowed and judgment for Egan Lawson was set aside.
• Queen’s Bench Division: Hallett J awarded Egan Lawson £135,125 plus interest for unpaid commission.