December 2010

Court of Appeal allows estate agents' appeal and awards £1 million commission in case involving 3rd most expensive UK house sale

Glentree Estates Limited, Beauchamp Estates Ltd, Savills (L&P) Ltd (Formerly FPD Savills Ltd) V Favermead Limited

In this case Savills were the lead agent in a claim for £1,000,000 estate agents' commission on the sale of the 3rd most expensive house ever sold in the UK.

The house in Kensington Palace Gardens was bought in 1995 by a company owned and controlled by Professor Khalili.  The house was sold in September 2001 to Corfiducia, a Liechtenstein trust, for the family of Mr Bernie Ecclestone of Formula 1 fame for £50 million together with a share of profit on any re-sale. In March 2004 the trust sold the property to a company owned by the renowned Indian entrepreneurs Mr and Mrs Lakshmi Mittal for US$105 million, an event which was well documented in the press. The claimant estate agents acted pursuant to instructions contained in agreements made with Favermead Ltd ("Favermead"), one of Professor Khalili's companies.

In awarding the estate agents commission of £1 million against Favermead in respect of the sale from Corfiducia to the Mittals' company the Court of Appeal ruled that the claimants did not have to prove that they were the effective cause of the purchase and having introduced the Mittals they must, therefore, be entitled on the face of it, to the £1 million commission. The Court of Appeal said that, had it been necessary, they would have held that the estate agents were the effective cause of the sale to the Mittals' company.

Jonathan Gaunt QC and Robert Deacon (from 11 SB) were instructed by CKFT Solicitors for the Appellant.

The full judgment can be accessed via  this link.