No show !

Posted: 4th November 2016

Show cancelledIt is more than three years since we first reported on what had become fairly regular encounters with a firm of commercial property agents who operate nationally and appear to sue many of their clients.

In No sale in April 2013 we reported on the nightmare case of Joe Canney, of Ilminster, who instructed us in the defence of a claim by RTA (Business Consultants) Limited, based in Stockport.

We have been instructed by a number of RTA’s clients since then.  One particularly happy ending – and darkly amusing story – comes from a client in the London area.

We will call him Malcolm.  We have changed the name because whilst he is very happy with the result, he has had enough of RTA and doesn’t want to hear any more!

Malcolm’s story was similar to many others that we have heard and read.  It started with regular telephone calls – on average twice weekly – asking if he was interested in selling his business and eventually he agreed to make an appointment for RTA’s representative to visit him.

After some discussion, Malcolm told the representative that he couldn’t commit to a decision there and then.  Notable amongst his reasons was the fact that his property was leased and he wanted to talk to the landlord of the premises first.

But, Malcolm said, the RTA rep was insistent that Malcolm should “fill in the paperwork anyway” and give him a cheque for a four figure sum to save the inconvenience of another trip if Malcolm decided to proceed. He assured Malcolm that the agreement would not be processed and the cheque presented unless and until Malcolm contacted him again and said he was ready to go ahead.

You can probably guess the rest.  Malcolm decided not to proceed and cancelled the cheque which RTA presented anyway.  They then wrote and complained that he was in breach of contract and owed them two and a half times the value of the cheque as liquidated damages by reference to the commission that they say they would have earned but for his breach of contract.

Subsequently, RTA issued proceedings.  These again were in familiar form.

The RTA standard terms and conditions routinely provide for a “registration fee” to be paid up front. Very often it is non-payment of this fee which sparks the problem.

The terms and conditions provide amongst other things that if the registration fee is not paid then the client is in breach of the agreement. That triggers what is known as a liquidated damages clause which makes the client liable for payment of one half of the commission that the agents would have earned if they had introduced a buyer and the sale had proceeded.

These are always commercial contracts because they relate to the sale of a business and so the clients do not generally have the sort of protection enjoyed by consumers.  See for example the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

So it can be difficult – which is why people instruct lawyers to apply technical knowledge and experience.  We took up the fight on Malcolm’s behalf.

This was one of many small claims which went through the process of mediation but failed to reach a settlement.  It was listed for hearing at one of the outer London courts a few weeks ago.

With the case all prepared in the usual way, just two days before the hearing we received a letter from RTA informing us that they were withdrawing the claim.  Remarkably, the letter was sent by post only, despite the short time remaining before the hearing.

Malcolm went along to the hearing anyway on our advice.  He was amused and bemused to find a solicitor, instructed by RTA, waiting for him at the court.

Contrary to initial suspicions, the solicitor was there because he had not been informed of the withdrawal!  Fortunately Malcolm was armed with a copy of the letter that we had received two days beforehand and the case was disposed of. 

Most important, for Malcolm, was that he has not been forced to pay what he regarded as the price of a service he never received and in fact didn’t want.  It cost him money to defend the case, of course, but significantly less than if he had simply waved a white flag and paid up!