Christie Owen & Davies Plc v Raobgle Trust Corporation

Under a sole selling rights agreement, an introduction remains effective where the introduced person participates in a later purchase made for a partnership, even if legal title is taken by another partner or a corporate vehicle. A partnership formed for a joint venture need not await the start of trading. The court must identify the venture agreed upon and ask whether the parties have embarked on it. Acquiring premises for development may itself be the first step in that venture. Future plans to convert or operate the premises do not prevent the partnership from arising at the acquisition stage.

The appellant estate agent had sole selling rights to market the respondent’s property. During the agency period it introduced Mr Kimitri, who initially negotiated unsuccessfully to buy the property. After the agreement ended, the property was offered at auction. It failed to meet the reserve and was subsequently sold nominally to Mr Pavlou.

The agent claimed that Mr Pavlou had purchased on behalf of a partnership comprising himself, Mr Kimitri and Mr Tsaroullas. The Bristol County Court, before HHJ Denyer QC, found the partnership insufficiently proved. On appeal, the respondent conceded that commission was payable if the partnership already existed when the purchase was agreed. The central issue was whether the parties had embarked on their joint venture by acquiring the property, or whether they had to begin trading first.

1. Disposition. Lord Justice Rix gave the leading judgment. Lord Justice Moore Bick and Sir Nicholas Wall agreed. The appeal was allowed, further documentary evidence from Mr Kimitri was admitted, and the agent was held entitled to its commission.
2. Contractual meaning of purchaser. The agreement gave purchaser a broad meaning, including a person acting on behalf of the eventual purchaser. Consistently with Christie Owen & Davies plc v Ryelance [2005] 18 EG 148 (CA), a purchase through another partner or a corporate vehicle did not defeat the commission claim where the introduced person was involved in the purchasing venture.
3. Evidence. The trial judge’s conclusion that there was no evidence of a partnership overlooked substantial oral and contemporaneous documentary evidence. The later documents confirmed that the three individuals contributed to the venture and supported the witnesses’ account. The court considered admission of that material realistic because the factual challenge to the witnesses had been abandoned and the absence of documents had materially influenced the trial decision.
4. Partnership and joint venture. The court applied Khan v Miah [2000] 1 WLR 2123. There is no requirement that a contemplated restaurant or other business must have begun trading. The correct inquiry is to identify the joint venture agreed upon and determine whether the parties had actually embarked upon it. Acquisition, conversion and fitting out of premises may form part of the business activity before trading begins.
5. Application. The venture here was to acquire and develop the property. Its possible future uses could be implemented later, but acquisition was the first step in the agreed venture. The parties therefore had embarked on the joint venture when the purchase was agreed, and the introduced person was a purchaser within the contract.

• Court of Appeal (Civil Division): In [2011] EWCA Civ 1151, the appeal was allowed and the agent was held entitled to its commission.
• Bristol County Court: HHJ Denyer QC found that the partnership and the connection between the introduction and the later purchase had not been sufficiently proved. The appeal was brought from that decision in claim 9WM00669.