Estate agency

Citation

(1999), "Estate agency", Property Management, Vol. 17 No. 1. https://doi.org/10.1108/pm.1999.11317aab.002

Estate agency

Estate agency

Antonelli v. Secretary of State for Trade and Industry [1998] 14 EG 133 C.A.

This was an appeal against a banning order made under s3 Estate Agents Act 1979. The appellant had been convicted in Detroit, USA, in 1973, of "burning real estate other than a dwelling house between 1st to 8th December 1971". He left the USA without serving any part of his sentence and eventually set up business as a property agent until 1985. As a result of his activities in this country, he was served with a notice pursuant to s3(2)(a) of the Estate Agents Act 1979, notifying him that the director intended to disqualify him from estate agency work on the grounds of his previous conviction. The appellant appealed to the Secretary of State for Trade and Industry who upheld the ban. In proceeding before the High Court the appellant's appeal was dismissed.

The appellant appealed to the Court of Appeal on the grounds that the offence of which he was convicted occurred before the Act was passed and the Act was not intended to have retrospective effect. Second, that the offence referred to in the Act should be limited to those committed in the UK or if offence abroad were meant to be included they should only be those for which there were comparable offences in English criminal law. Finally, the offence of which he was convicted was not an offence of violence within the meaning ofthe Act because it did not involve violence against the person.

Their Lordships unanimously dismissed all the grounds of appeal. Beldam LJ gave the judgment with which Kennedy and Aldous LJJ agreed. He stated that the provisions giving the Director-General power to disqualify are intended for the protection of the public, and it ". . . would be quixotic to suppose that Parliament intended that the public should be protected from the activities of a practitioner convicted a week after the Act came into force, but not from those of the practitioner convicted a week before". In any case he added that conviction of an offence involving fraud, other dishonesty or violence is only a precondition on which the Director's powers are exercisable. The Director still has to consider whether the person is unfit to carry on the work of estate agency and has a wide discretion in determining whether or not this is so. Therefore the past conviction is not by itself determinant of the imposition of an order of disqualification. Thus it is clear that Parliament intended that an order of disqualification could be made on the basis of past conviction and trusted the Director's discretion as to whether or not he did so. His Lordship also felt that if the purpose of the Act is the protection of the public, it would be anomalous if Parliament had not also intended that convictions of fraud, other dishonesty or violence committed outside the UK would enable the Director to make an order that a person so convicted was unfit to carry on estate agency work generally.

The appellant's argument that the offence must be one for which there is a comparable offence in English criminal law was easily dismissed. The description of the offence contained in the Act indicates that the offence must be of a particular kind and not necessarily specific to the law of the UK. Thus "...the question is not whether the convictions are for specific offence, but whether the convictions are for offence which involve particular attributes".

Their Lordships also found no merit in the argument that references to offence of violence as contained in the Act should be limited to those involving violence against the person. According to the Oxford English Dictionary "violence" means "The exercise of physical force so as to inflict injury on, or cause damage to, persons or property". Thus Beldam LJ had no doubt that Parliament intended that convictions for an offence involving violence towards property should be within Section 3(1)(a).

The final ground of the appeal was technical. The appellant argued that the notice of proposal issued by the Director had stated as the grounds for the proposed order that the appellant had been convicted of an offence involving violence within the meaning of s3(1)(a) but the notice of the decision made reference only to an offence of fraud or dishonesty. This, the appellant claimed, had deprived him of the opportunity to make representations that the offence did not involve fraud or dishonesty. Beldam LJ held that it was open to the appellant if he could honestly do so to submit that the offence referred to in the notice of proposal involved neither fraud, dishonesty nor violence. However, he made no representations to the Director. Further, it appeared that in addition to violence, the offence did in fact involve fraud and dishonesty in that it was committed with a view to making a fraudulent claim under a policy of insurance on the property. As Beldam LJ drily added, "Where a person sets fire to his own property it is not unusual to find that the motive is one of unlawful gain . . .".

The appeal was dismissed.

Michael Harwood t/a RSBS Group v. Smith and another [1998] 11 EG 178 C.A.

This case is a cautionary tale for estate agents who write into contracts the definitions of "a ready willing and able purchaser", "sole agency" or "sole selling rights" directly as laid down in Regulation 5 (1) of the Estate Agents (Provision of Information) Regulations 1991 (SI 1191 No 859).

The paragraph relating to sole selling rights had been included in the contract between the agent and the vendor according to the regulations:

You will be liable to pay remuneration to us, in addition to any other costs or charges agreed, in each of the following circumstances:

1. a.

   If unconditional contracts for the sale of the property are exchanged in the period during which we have sole selling rights, even if the purchaser was not found by us but by another agent or by any other person including yourself.

2. b.

   If unconditional contracts for the sale of the property are exchanged after the expiry of the period during which we have sole selling rights but to a purchaser who was introduced to you during that period or with whom we had negotiations about the property during that period.

The defendants were unhappy with the efforts made by the agent on their behalf and gave four weeks' notice to terminate the sole agency in accordance with the contract. However, during the period of the agency they had seen a newspaper advertisement by the ultimate purchasers of the property and had taken part in negotiation with them. Two days after the termination of the contract with the agents, the vendors entered into a contract for sale with the purchasers. The agents had no contact at any time with the ultimate purchasers. On hearing of the sale, the agents claimed commission on the basis of paragraph (b).

Their Lordships were unanimously agreed that the clause must be interpreted as it would be understood by the reasonable client, since the purpose of the provisions was to ensure that clients knew precisely the circumstances in which they would be liable to pay commission to the agent. Their Lordships agreed that a reasonable client would understand the agreement to mean that the right to commission covers two alternatives: either the purchaser has been introduced by the agent or the purchaser has been introduced to the vendor by somebody else but the estate agent had negotiated with him. The agreement would not be taken to mean that commission was payable where a purchaser was introduced by anyone.

The appeal was dismissed.

Thus any agent who wants to make this clear to clients will need to add additional words to those contained in the regulations.