Glentree Estates Ltd v Holbeton Ltd

An estate agent claiming commission must establish that it was either “the” or “an” effective cause of the eventual sale. If it establishes neither, the claim fails. Causal continuity may be broken where a purchaser loses interest after the agent’s introduction and the eventual sale results from a later chain of events. On appeal, a permissible inference from primary facts will stand even if it is not inevitable; interference requires perversity. In multiple-agency cases, there is no legal presumption either way on liability for more than one commission. Agents may agree to share a single commission. Whether “an” effective cause is sufficient without an express term remains unresolved where the claimant fails on both formulations.

Holbeton appointed Glentree initially as sole agent to market Silverwood, later appointing Hanover on a multiple-agency basis. Mr Ibrahim viewed Silverwood through Glentree, made an unsuccessful offer, and bought another nearby property. His interest later revived after false information about the possible sale price, but the eventual transaction followed direct negotiations with Holbeton and involved part-exchange.

Glentree’s commission claim was dismissed by HHJ Seymour QC, whose judgment is reported at [2010] EWHC 2901 (QB). The judge found that Glentree was neither the nor an effective cause of the sale. The appeal was confined to whether the inferences drawn from undisputed primary facts were perverse.

1. Appeal dismissed. The court dismissed Glentree’s appeal and ordered it to pay Holbeton’s summarily assessed costs.
2. The trial judge’s primary factual findings were not challenged. The appeal therefore concerned only the inferences drawn from those findings about Mr Ibrahim’s state of mind. Glentree accepted that it had to show perversity before the Court of Appeal could interfere.
3. The inference that Mr Ibrahim had lost interest in Silverwood after his £10 million offer was rejected was permissible. His purchase of The Villa, the absence of any later discussion with Glentree about Silverwood, and the revival of interest only after false information about a lower price supported the conclusion that the causal chain had been broken. His continuing interest in other properties and the short period before the eventual purchase did not make that inference perverse.
4. The relevant causation question was whether continuity between the original relation brought about by the agent and the ultimate transaction had been broken, rather than merely dislocated or postponed, adopting the formulation in Bow’s Emporium v A R Brett & Co Ltd (1927) 44 TLR 194 at 199. Glentree failed to establish either “the” or “an” effective cause.
5. The court noted, without deciding, that the authorities remained equivocal on whether an effective cause is sufficient absent an express term, referring to Foxtons Ltd v Pelkey Bicknell [2008] EWCA Civ 419 at paragraphs 18–20. There was also no legal presumption governing whether a vendor with multiple agents must pay more than one commission.

• Court of Appeal (Civil Division): [2011] EWCA Civ 755 — appeal dismissed; Glentree was ordered to pay Holbeton’s summarily assessed costs.
• Queen’s Bench Division: HHJ Seymour QC dismissed Glentree’s commission claim, in a judgment reported at [2010] EWHC 2901 (QB) .