Savills (UK) Ltd v Blacker & Anor (Rev 1)

In construing an estate agency agreement, a marketing report and standard terms may perform different functions. Recommendations about when to market a property do not, without clear words, qualify provisions defining when commission is payable. A sole-selling-rights clause may therefore require payment on exchange of unconditional contracts during the agency, even where the purchaser was not introduced by the agent and planning permission has not been obtained.

Whether an agent who signs a written agreement is personally liable is a matter of construction. An unqualified signature points towards personal liability, but the whole agreement and admissible circumstances must be considered. The agreement may make both the individual and a company jointly and severally liable.

Savills appealed against an order made by HH Judge Bailey in the County Court at Central London on 6 October 2015, dismissing its claim for £120,400 plus VAT as estate agency commission.

The agency agreement comprised a signed marketing report and standard terms. The report recommended marketing the estate after planning permission, while the standard terms provided for commission on an unconditional exchange during sole selling rights, even if the purchaser was introduced by someone else. The sale occurred before planning permission and without Savills’ involvement. The issues were whether commission was payable and whether Mr Blacker, Sidemanor, or both were contracting parties.

The appeal was allowed. Patten LJ gave the judgment, and Beatson LJ agreed.

1. Construction. The marketing Report and the standard Terms of Business formed one contract but performed different functions. The Report set out an agreed marketing strategy, whereas the standard terms specified when commission became payable. The Report’s references to offering the estate for sale after planning permission were recommendations, not an immutable contractual condition. Clause 18.1 was engaged only if there was a genuine conflict between the documents. Reading the recommendations as restricting commission would improperly qualify clause 2.2.1(i) and leave the contract without effective payment provisions.
2. Interpretative approach. The court considered the principles in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 892 at 912, Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 at [21]–[26], and Arnold v Britton [2015] UKSC 36. The language of the agreement remained central. Commercial common sense was to be assessed at the time of contracting, and the court was not entitled to rewrite an imprudent bargain. The ordinary and natural meaning of the contract resolved the issue.
3. Commission. The Estate Agents Act 1979 provided the statutory context for the particulars of services, charges and liability contained in the Terms of Business. Clause 2.2.1(i) made commission payable when unconditional contracts were exchanged during the period of sole selling rights, even if the purchaser had not been introduced by Savills. The absence of planning permission did not remove that entitlement.
4. Contracting parties. Under Universal Steam Navigation Company Ltd v James McKelvie and Company [1923] AC 492, whether an agent contracting in writing assumes personal liability is a question of construction. An unqualified signature is a starting point, but the whole agreement and admissible circumstances must be examined. The contractual provisions contemplated liability by the vendors. Because the instructions covered the Cottage, for which Mr Blacker was the contractual purchaser and vendor, and the remainder of the estate, owned by Sidemanor, the only consistent construction treated both as clients jointly and severally liable under clause 2.1.1.

1. Court of Appeal (Civil Division): Appeal allowed against the order dismissing Savills’ commission claim. [2017] EWCA Civ 68.
2. County Court at Central London: HH Judge Bailey dismissed Savills’ claim on 6 October 2015.