Charania v Harbour Estates Ltd

Under a sole-agency agreement, an estate agent earns commission only where it introduced the purchaser to the purchase, rather than merely introducing the purchaser to the property. The agent must establish a causal link between its introduction and the eventual sale. On appeal, the court should respect the trial judge’s evaluation of primary facts and inferences, but may intervene where the reasoning or application of the law requires a different conclusion. Earlier viewings, subsequent conduct, deception and rapid negotiations may together justify an inference that the agent’s introduction was the effective cause of the purchase.

Harbour Estates Ltd claimed contractual commission from Shamas Charania after the sale of his Chelsea Harbour property to Farzin Yazdani. The sole-agency terms required payment where contracts were exchanged with a purchaser introduced by the agent during the agency period. Yazdani had viewed the property four times through Harbour Estates in 2004, but bought it privately in 2006 after approaching Charania’s niece through a porter, following termination of the agency agreement.

The Central London County Court found that Yazdani’s earlier interest had remained inactive until he learned that Harbour Estates was no longer instructed, and entered judgment for the agent. The appeal concerned whether the judge was entitled to draw that inference and whether the introduction was causally connected with the purchase.

1. Appeal dismissed. The contractual test, derived from Foxtons Ltd v Pelkey Bicknell & Anor [2008] EWCA Civ 419, requires the agent to show that it introduced the purchaser as the eventual purchaser, or introduced the purchaser to the purchase, rather than merely to the property.
2. The parties accepted that this required a causal link between Harbour Estates’ introduction and Yazdani’s purchase. The formulation was consistent with the common-law term formerly implied in comparable agency agreements, reflected in Millar, Son & Co v Radford (1903) 19 TLR 575 and Nightingale & ors v Parsons [1914] 2 KB 621, subject to express exclusion.
3. The appeal court was entitled to review the inferences drawn from undisputed facts, but the decision below could be overturned only if it was wrong under CPR r. 52.11(3)(a). The court applied the principle that an appellant must show objective grounds for concluding that a different view is right, rather than merely reasonable or possible.
4. The trial judge was entitled to infer causation from Yazdani’s four viewings, his knowledge of the development, his rapid move to secure the property after confirming that Harbour Estates’ retainer had ended, his negotiations relying on the absence of an agent’s fee, and his lies about having previously viewed the property.
5. Lord Justice Leveson considered the judge entitled, and correct, to reach that conclusion. Lord Justice Wilson and Lord Justice Ward agreed.

• Court of Appeal (Civil Division): Appeal from the Central London County Court dismissed.
• Central London County Court: His Honour Judge Dean QC gave judgment for Harbour Estates Ltd on 20 November 2008 for contractual commission of £34,915.20.