The case concerned a business transfer agent and not someone who was an estate agent as commonly understood. However, the agent’s business clearly involved the acquisition and disposal of interests in land and came within the definition of “estate agency work” under the Estate Agents Act 1979. This meant that under Regulation 33 of the Money Laundering Regulations 2007, the agent had to be registered with the Office of Fair Trading in order to carry out “estate agency work”.
In February 2010, the agent entered into a contract to act on behalf of a vendor who wished to sell his restaurant and public house in return for a commission of £40,000 and a registration fee of £9,000. At the time the contract was entered into the agent was not registered with the OFT. The effect of this was that when the agent came to sue for its fees, it was met with a defence that the contract was unenforceable due to illegality as a result of the agent’s non-registration with the OFT at the time the contract was entered into.
The Court accepted this analysis and dismissed the agent’s claim, the Judge adding “It is not for the court to consider whether the sanction of rendering illegal the contracts of unregistered “estate agents” is disproportionate”.
The case is a good example of the policy that a court will not enforce illegal contracts even if the result appears harsh or disproportionate.
If you have any questions or wish to discuss any issues raised in this blog please contact Simon Lockley. Simon is a Director with our Commercial Disputes Litigation Management team and a member of the firm’s Civil Fraud Asset Recovery Unit which provides specialist loss recovery and employment advice to corporate victims of workplace fraud.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.