Foxtons Ltd v Pelkey Bicknell & Anor

An estate agent engaged on terms granting commission upon exchange with “a purchaser introduced by” the agent must introduce the person to the purchase, rather than merely to the property. The introduction must result in that person becoming the eventual purchaser.

This construction reflects commercial common sense, consumer protection considerations and the objective of minimising double commission. It does not require an additional implied term that the agent was an effective cause of the sale. The agent bears the burden of proving the necessary causal introduction.

A homeowner appointed Foxtons Ltd as sole agent to sell her house. Foxtons showed the property to the eventual purchaser and her former husband, but the purchaser rejected it. After Foxtons’ sole agency ended, Hamptons International revived interest in the property, arranged a further viewing and negotiated the sale.

The Kingston upon Thames County Court held that Foxtons was entitled to commission because it had introduced the purchaser and was the effective cause of the sale. The homeowner appealed. The issues were the meaning of “a purchaser introduced by us” in Foxtons’ terms and whether Foxtons had made an introduction satisfying that meaning.

1. Appeal allowed. The words “a purchaser introduced by us” required Foxtons to introduce the person as the eventual purchaser. It was insufficient merely to introduce that person to the property. The necessary introduction was to the purchase or transaction itself: paras [21]–[36].
2. This construction accorded with the usual principle governing commission for a successfully completed transaction. It also reduced the risk that a residential seller would incur two commissions. That consideration was particularly important because the sole-agency wording substantially reproduced the prescribed wording in the Estate Agents (Provision of Information) Regulations 1991, made under the consumer-protection framework of the Estate Agents Act 1979: paras [24]–[25].
3. Foxtons’ proposed construction could produce surprising and commercially unreasonable results. It could entitle an agent to commission long after its appointment ended, even where its activities had no connection with the eventual sale. The contract had to be interpreted according to commercial common sense and the circumstances known to the parties, rather than by reference to an Ombudsman’s practice of imposing a six-month limit: paras [26]–[28].
4. Because the terms themselves required a causative introduction to the purchase, no additional requirement that Foxtons be an or the “effective cause” was to be implied. The preferred construction would usually produce a similar result, but did so through interpretation rather than implication: paras [34], [36]–[37].
5. Foxtons bore the burden of proving that its introduction resulted in the purchaser becoming the eventual buyer. The purchaser had firmly rejected the house after the Foxtons viewing. Her interest was later revived through Hamptons, and the evidence did not establish that the eventual purchase resulted from Foxtons’ earlier activities: paras [39]–[45].
6. The county court’s order was set aside and judgment was entered for the defendant. Rix and Waller LJJ agreed with Lord Neuberger’s judgment: paras [46]–[48].

1. Court of Appeal (Civil Division): The appeal was allowed, the county court’s order was set aside and judgment was entered for the defendant: [2008] EWCA Civ 419.
2. Kingston upon Thames County Court: HHJ Williams held that Foxtons was entitled to commission because the contractual wording excluded an implied effective-cause requirement and, alternatively, Foxtons was the effective cause of the sale.