Court awards estate agent reasonable commission when introduction was effective cause of sale despite absence from final transaction.

[*416] 1982 February 26

(PR. NICOLAIDES, D.J.)

IN THE DISTRICT COURT OF NICOSIA

Nicolas Minikouris,

Plaintiff,

v.

Charalambos Demiotis,

Defendant.

(Action No. 4273/79).

Contract - Estate agent - Commission - When is agent entitled to remuneration - Principles applicable - Purchaser introduced by agent after seller had accepted agent's services to find a purchaser Sale effected in the absence of agent - But said

introduction the effective cause of the sale - Agent entitled to remuneration — In the absence of agreement as to the commission to be paid reasonable remuneration payable.

C. HadjiIoannou, for the Plaintiff.

A. Georghiades, for the Defendant.

JUDGMENT

The following judgment was delivered by:

FR. NICOLAIDES, D.J.:- By this action[*417]

the plaintiff claims against the defendant £120.- as reasonable remuneration or commission for the sale of a house, situate at 5, Kimonos str. at Kaimakli or alternatively as damages for breach of contract.

In the statement of claim, the plaintiff alleges that he is a retired building constructor who now works as an estate agent. It is also alleged that in June 1979 the plaintiff agreed with the defendant to find a purchaser for the said plot at the price of £6,000.-.

Acting on the said agreement the plaintiff found a purchaser who eventually bought the house at £6,000.-. The defendant refused to pay any commission to the plaintiff who instituted the present action. By his defence, the defendant denies all the above and alleges that the plaintiff showed some interest in buying the property which belonged to the defendant’s wife. He also alleges that the property was sold to a purchaser introduced to him by a certain Kyriacos Tsiartas and not by the plaintiff. Finally the defendant denies that he entered into any agreement with the plaintiff and rejects the claim of the plaintiff that he is entitled to any remuneration at all.

In giving evidence the plaintiff stated that since 1979, when he retired from the building industry, is working as an estate agent When he heard that the defendant was selling his house he first visited the property and later he contected the defendant and agreed with him to find him a purchaser. The plaintiff asked for the title deed but as the defendant did not have it he gave him a survey plan of[*418]the area The defendant promised the plaintiff that if he would find him a purchaser he would give him commission.

The plaintiff found a purchaser with whom he visited the property for inspection. They visited the property three times in all.

According always to the version of the plaintiff the purchaser then visited alone the defendant and agreed with him to buy the property at a price of £6,000.-. when the deal was concluded the plaintiff visited the defendant in order to collect his commission "but the defendant asked him to come some other day as he was busy at that time. Finally the defendant did not pay anything to the plaintiff.

In cross-examination the plaintiff insisted that he informed the defendant that he is an estate agent "but he admitted that they did not discuss the matter of his commission. He explained that the usual practice is that it is not necessary to mention the commission because the clients know that they have to pay commission.

P.W.2, Costas Clerides, the person who purchased the house, in testifying actually repeated the version of the plaintiff, He said that after visiting the property with the plaintiff, the plaintiff told him where to find the defendant. The witness chose to see the defendant personally as he was related to him and he was hoping to a discount. He stressed, however, the fact that he was brought into contact with the defendant, by the plaintiff.

He admitted that before visiting the defendant he saw Tsiartas a common relative, hoping again that Tsiartas[*419]will intervene and secure a better price for him

P.W.3., Haris Menikou, ascertained that the plaintiff is an estate agent and stated that once the witness acted himself as anestate agent he was paid 2% of the price as commission.

The. defendant in giving evidence alleged that, although the plaintiff visited him in connection with the house in question he was not aware and the plaintiff did not inform him that he was an estate agent. The defendant gave him a survey plan and told him that the purchase price was £6,000.- but nothing was said about the payment of a commission. The defendant further said that he put up sale signs outside the . house and advertised the sale in two newspapers. When derides, the purchaser, visited him after a telephone conversation with Tsiartas, nothing was said about the plaintiff. To the contrary, as the defendant alleged, Clerides told him that he saw the sale signs and he visited him in order to conclude the sale.

The defendant denied that he entered into any agreement with the plaintiff and he alleged that when he gave him the plan he did so under the impression that he wanted to buy the house for himself.

I have considered the evidence before me as a whole with the utmost care. Having seen the witnesses when giving evidence and after watching their demeanour I am convinced that the plaintiff's version is true. I accept his evidence which is corroborated by the evidence [*420]of Clerides who impressed me as a witness of truth. Clerides who is as independent witness, and actually a relative of the defendant and a person who did business with him, had every reason not to hack the story of the plaintiff if that story was not true. His evidence, which I accept in toto, is convincing, clear and without contradictions.

I can say the same for the evidence of the plaintiff. He gave me the impression of a very honest man who spoke the truth. He gave his version straight and he did not try to cover any empty spaces or make his version more convincing. He even admitted that nothing was said about the payment of a commission. On the other hand the evidence of the defendant is unconvincing and vague. Tsiartas who, according to the allegations of the defendant, was the person who introduced the purchaser to the defendant was not called as a witness, in order to strengthen this allegation.

I reject the allegation that the defendant did not know that the plaintiff was an estate agent as well as the allegation that he got the impression that the plaintiff was personally interested to buy the property.

I find as a fact that the defendant was informed by the plaintiff that he is an estate agent. I also find that they reached an agreement and that the defendant accepted the plaintiff's services to find a purchaser for the property of the defendant at Kaimakli.

In the defence there is an allegation that the house belonged to the defendant's wife and that the plaintiff[*421]showed interest in buying that house. Nothing in the evidence before me indicates to that direction. To the contrary, the defendant was all along referring to "his house". But even if the house was belonging to the defendant's wife, from the whole of the evidence, it can be inferred that the defendant was authorised by his wife to sell the house.

I further find that the plaintiff found a purchaser and due to his efforts and his

introduction the house was eventually sold at the requested price of £6,000.-. It is also a fact that the plaintiff and the defendant did not discuss the question of commission, but the whole conduct of the defendant, both before and after the sale indicates that there was an implied term about the payment of commission.

I feel that two questions pose for determination:-

The first is whether there was a valid and binding agreement between the plaintiff and the defendant and whether the plaintiff was entitled to any remuneration under the terms of that agreement; and the second question is, assuming the first question is answered in the affirmative, what is the remuneration which the plaintiff is entitled to.

It is well settled that it is the ordinary law of contract which applies in cases like the present one.

In J.F. Aho Et Fils, Trading Under The Style Societe B.E.P.I.N. Another v. Photos Photiades (1968) 1 C.L.R. 477 Josephides J. after adopting certain statements from the speeches of the learned judges in the case of Luxor (Eastbourne) Ltd. v. Cooper (1941) A.C.108, said at p.494:-[*422]"To sum up, the position is this, that we have to look to this case

as being governed by the ordinary law of contract and to interpret and apply the contract as alleged to have been made by the parties, if made at all, and not to make the

contract for the parties or reconstruct an agreement on equitable principles".

As regards to the payment of commission, the learned judge refers to Pollock and Mulla's Indian Contract and Specific Relief Acts, 8th Edition p.679:-

"But in order to establish a claim for. commission the agent must show that the transaction in respect of which the claim is made was a direct result of his agency. It is not sufficient to show that the transaction would not have been entered into but for his introduction. He must go further, and show that his introduction was the direct cause of the transaction".

In Stelios Orphanides v. Vyron Michaelides (1967) 1 C.L.R. 309 the reasoning of Lord Atkinson in the case of James T. Burchell v. Gowrie and Blockhouse Collieries Ltd., (1910) A. C. 614 was adopted and applied:-

"It was admitted that, in the words of. Erle C.J.in Green v. Bartlett, 'if the relation of buyer and seller is really brought about by the act of the agent, he is entitled to commission although the actual sale has not been effected by him’. Or in the words of the later [*423] authorities, the plaintiff must show that some act of his was the causa causans of the sale (Tribe v. Taylor) or was an efficient cause of the sale (Millar v. Radford)".

In Costas Kalisperas v. Victor Papadopoullos (1969) 1 C.L.R. 480 Vassiliades P. defines at p.486 the term "commission":-

"The very meaning of the word 'commission' (see Oxford Universal Dictionary 3rd ed. vol.1 p.351 col.3) denotes the remuneration of the agent for services in connection with sale or purchase of property (or goods) on a commission basis. The corresponding word in Greek 'προμήθεια’ (προμηθεύω) likewise denotes the agent’s remuneration for supplying or providing something. No question of commission arises where the agent has not brought about the sale or has not found and introduced the buyer to his client in performance of a contract (express or implied) in the ordinary course "of the agent’s business".

In the very recent case of Leila Schiza v. Charalambous Pamboulos (1979) 1 C.L.R, 373, it was held that remuneration by an agent can be claimed only on transactions which are the direct conseouence of the agency. It is not necessary that the agent should actually complete the transaction but he must show that it was brought about as the direct result of his intervention. Once the agent [*424]had introduced the parties together the principal will not do anything which might prevent his agent from earning his commission once his services were instrumental in bringing about this revolt.

In view of the above authorities I. find that the first question is answered in the affirmative. I find that there was a valid and binding agreement between the parties and the plaintiff is entitled to some remuneration under the terms of the contract.

The plaintiff was constituted an agent of the defendant with a view to finding a ready and willing purchaser who would enter into a binding contract with the defendant.

The plaintiff has actually done the most effective part of his work by finding a suitable purchaser and bringing him into conduct with the defendant. The plaintiff’s acts were the causa causans of the sale which was the direct consequence of the agency. Though the purchaser visited the defendant alone and concluded the sale agreement by himself the effect of the introduction remained and definitely the said introduction was the effective cause of the sale.

The answer to the second question, i.e. what is the remuneration which the plaintiff is entitled to, is given by Hadjianastassiou J. in the case of Stelios Orphanides v. Vyron Michael ides (supra) at p.318:-

"With regard to the rate of commission, in the absence of any express agreement, a reasonable remuneration is payable".

From the

whole of the. evidence on record I find that the amount of 2 is reasonable and just, under the circumstances. The agent

runs the risk of disappointment because he is promised a reward in return for an uncertain event. The agent takes the risk in the hope of a substantial remuneration for comparatively small exertion.

It is a fact that the - purchase price was £6,000.- ana therefore the plaintiff is entitled to the sum of £120.- as reasonable remuneration.

In the result there will be judgment in favour of plaintiff and against the defendant in the sum of £120.- plus costs on that scale to be assessed by the Registrar.

Judgment for plaintiff

for £120.- with costs.