It’s emerged that a long-running dispute over a chunky £150,000 commission has gone the estate agent’s way, after Savills took it to the Appeal Court at the start of the year.
The appeal ruling was made in February but is only now being publicised after Savills’ lawyer, Glenn Willetts of Birmingham-based No5 Barristers’ Chambers, issued a statement on the case.
Mill Ride Estate in Berkshire sold for £6.8m back in 2012: Savills was instructed on the sale, but did not do the deal directly.
The property, which was formerly an equestrian offering but was laid out as a golf course with clubhouse in the 1990s, was acquired by Sidemanor Ltd – owned by a chap called Peter Blacker – in 2003. It was then put up for sale in 2012, with Savills being brought in to advise.
The firm put together several valuations ranging from £2.5m to £10m, to account for whether planning permission could be secured for a significant detached residence on the grounds, and whether a cottage would be included with vacant possession. Savills recommended “that the estate is offered for sale as soon as planning consent has been granted and we advise that the marketing is initially carried out on a very private basis.”
It sounds like all that was put in writing, with Savills’ Fees & Terms of Business explaining that commission would be due in the event of a sale. But Blacker opted to go for a quicker sale – pre-planning permission – rather than following Savills’ marketing recommendation. Savills’ sales document was, according to the court record, amended and signed – although the first version was never signed.
Mill Ride sold at the end of 2012, but not through Savills. The agent still put in for their £150,000 commission… But Blacker argued that, since the deal was done without planning permission in place, it need not be paid.
Savills disagreed, taking Blacker’s company, Sidemanor Ltd, to court to claim £120,000+VAT in commission. The Judge – an Edward Bailey – found in favour of Blacker, dismissing the estate agency’s claim.
Savills persevered, applying for a hearing at the Court of Appeal at the Royal Courts of Justice – and won.
The judge this time around – Lord Justice Patten – ordered the defendants to pay Savills £144,000, with interest of nearly £27,000, and costs of £80,000.
“On the [original] judge’s construction of the agreement, Savills would have had no entitlement to commission even if they had introduced a purchaser who exchanged contracts at any time prior to planning permission,” said Patten in his appeal judgement. “It is clear that the judge in this case adopted a literal approach.”
“We are delighted with this outcome, which proves that marketing recommendations are simply that; they are proposals and are not binding,” said Glenn Willets, acting for Savills. “The [original] judge was wrong to say they were set in stone.”
Read more on the case here