Daily Mirror (Northern Ireland)
Payment for failure firm demands £10k
Agency flops in B&B sale but still sues for commission
A year ago this week the Independent Press Standards Organisation, IPSO, threw out a complaint against me by a regular in this column, Paul O’reilly.
He’s the boss of RTA (Business Consultancy) Limited, which claims to find buyers for businesses that the owners want to sell.
He’d complained that my latest article amounted to harassment because I’d previously written critical pieces about RTA’S habit of demanding huge fees from clients even when it fails to find a buyer.
That story revealed how RTA successfully sued a secondhand car dealer for £7,000 even though the poor chap had cancelled his contract to sell the business just one day after signing it.
IPSO ruled: “The newspaper was entitled to report on the court case, IPSO’S function is not to prevent this.”
Now O’reilly has been in court again, suing Lincolnshire B&B owner Ann Cizek despite failing to find a buyer for her.
Ann signed a six-month contract for RTA to sell the business after its sales rep said it should be marketed for £425,000.
The figure was a ludicrous overvaluation – the small B&B had an annual turnover of just £8,000 – yet the rep insisted that RTA had interested buyers.
Of course Ann didn’t get a single viewing, yet alone an offer, and cancelled the contract by recorded delivery letter and later sold the property for £275,700. RTA claimed not to have received Ann’s cancellation and said that it was still owed commission because it had sole selling rights.
First it demanded £25,800, then reduced the figure to £10,000 so that the claim qualified as a small claims court case, meaning RTA was unlikely to have to pay Ann’s legal costs if it lost.
O’reilly said in his witness statements: “The defendant bizarrely suggests that the contract is not one that provides sole selling rights.
“Clause Two specifically states that the defendant is providing to us sole selling rights, and under a sole selling rights contract the agent does not have to be the effective cause of the sale.”
This is the essence of the RTA business model: it wants paying even if it’s not responsible for a sale.
Ann’s lawyer argued in court that the contract was not a sole selling agreement and Deputy District Judge Nix agreed, describing the contract as ambiguous and saying: “There is no express clause stating that no other agent can be instructed.”
Ann and her lawyer Anthony Reeves, of Summerfield Browne Solicitors, were delighted.
“It had been a long period of stress waiting for this case to be heard and she is glad it is over,” Mr Reeves said.
“She hopes that the decision will give encouragement to others to take on RTA.
“The important point of law is that it was not a ‘sole selling rights agreement’ and so RTA had to have been the introducer of the buyer to be able to claim commission.”
O’reilly has claimed so many times that his firm is doing nothing wrong that I sometimes wonder if he’s convinced himself that it’s really true.
In his eyes, all he wants is for clients to honour the contracts they’ve signed.
He seems blind to the morality of demanding payment when his company has proved as useless as a chocolate fireguard.
As for his complaint that my stories about his business amount to harassment, here’s a promise: I’ll stop writing about RTA when I stop receiving complaints about it.