Case No: A2/1999/0796
 
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL  DIVISION)
ON APPEAL FROM MRS JUSTICE HALLETT
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL

Tuesday, 21st November, 2000

B e f o r e :

LORD JUSTICE SIMON BROWN
LORD JUSTICE MUMMERY
and 
LORD JUSTICE LATHAM
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	THE STANDARD LIFE ASSURANCE COMPANY (INCORPORATED UNDER THE LAWS OF SCOTLAND BY ACT OF PARLIAMENT)		Appellant	
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	EGAN LAWSON LIMITED	Respondent	

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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
Official Shorthand Writers to the Court)
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David Unwin QC & Alastair Walton (instructed by  Herbert Smith for the Appellant)
Michael Driscoll QC & Francis Bacon (instructed by  Portner & Jaskel for the Respondent)

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Judgment
As Approved by the Court

Crown Copyright ©

Lord Justice Mummery:

The Appeal

	This is an appeal against an order made by Hallett J on 23 April 1999 awarding judgment  for £135, 125 (plus interest) in favour of Egan Lawson Limited (Egan Lawson), a London firm of chartered surveyors specialising in commercial property investment, on its claim for unpaid commission against the Standard Life Assurance Company (Standard Life). Standard Life appeals with the permission of this court. 

Introduction

	It is common ground that the question for the decision of the judge was whether Egan Lawson’s introduction of Standard Life to  a commercial property investment at the end of August 1997 was the “effective cause” of the  purchase of that property by Standard Life in December 1997. The dispute arose in the context of the payment of a substantial commission by Standard Life to another firm of estate agents, Richard Ellis, on the basis that that firm’s introduction of the same property in November 1997 was the “effective cause” of the purchase by Standard Life.

	Although the witness statements and the oral evidence at the trial revealed some differences of recollection, on which the judge made findings broadly favourable to Egan Lawson, the relevant events between the end of August and the end of December 1997 are well documented in contemporaneous communications and records and are not seriously in dispute.  It is necessary to examine this material, as well as Hallett J’s careful judgment, in detail , as the critical controversy is about the interpretation to be put upon the facts in the context of the causation issue. In that exercise Mr David Unwin QC, for Standard Life, and Mr Michael Driscoll QC, for Egan Lawson, gave valuable assistance to the court.    

The Facts

 	On 26 August 1997 Egan Lawson learned of the proposed sale by Pillar Caisse of Phase II of The Meadows Shopping Centre in Chelmsford (the Property). The Property consisted of major store units, some smaller letting units and car parking spaces. At that time the  proposed sale had not yet become public knowledge.

	On 28 August Mr Douglas Lawson (of Egan Lawson) phoned Mr Francis Salway, who was the Assistant Property Investment Manager at Standard Life’s Unit Linked Property Fund at the  George Street office in Edinburgh. That fund normally dealt with acquisitions below £10m. Mr Salway had had previous contact with Mr Douglas Lawson about the investment requirements of Standard Life. Mr Lawson informed him of the proposed sale of the Property. Mr Salway asked for more information, including plans, details of tenancies and an initial financial appraisal. Mr Lawson sent a letter to Mr Salway on the same day enclosing his initial appraisal (with back up details) for Standard Life at £13.28m, background material in the form of extracts from an acquisition report prepared by Richard Ellis in 1996 on the previous sale of the Property to Pillar Caisse Management Limited, and a copy of a publication  “Focus on Retail Demand.” He concluded

“ I look forward to discussing the matter further and confirm that we would wish to act for you for a fee based on 1% of the purchase price plus VAT.”	

	Later that day Mr Lawson visited the site and took  photos.

	On 29 August Mr Lawson wrote again  to Mr Salway enclosing the photos taken by him on his inspection of the site. He informed him that Savills were instructed by Pillar Caisse to sell  and would be quoting offers in excess of £13m. He pointed out that

“ There is a lot of goodwill between us and Pillar and for a short period we have the opportunity to make a pre-emptive offer.”

	On 1 and 2 September Mr Lawson phoned Mr Salway. They discussed  the rental income likely to be received from the Property. On 3 September Mr Salway travelled from Edinburgh to Chelmsford to visit the Property. He took  photos and made rough notes and calculations. He thought that the Property was worth about £11m. On the same day he had another telephone  conversation with Mr Lawson. He told him that the Property was not worth more than £11m. There was conflicting evidence about the conversation. The judge accepted Mr Lawson’s evidence that he was left by Mr Salway with the impression that he was not interested in the Property and that Mr Lawson should look elsewhere for a buyer.    

 	On 10 September Mr Salway wrote to Mr Lawson informing him that the Property was not of interest to Standard Life as it considered  “ the yield pricing to be far too keen.” He added

“We do nevertheless much appreciate receiving such early introductions from you.”

 	In mid-October the Property was officially put on the market by Pillar Caisse at £12.87m. A number of other agents unsuccessfully attempted to interest Standard Life in the Property.

	(a)	 On 9 October Jones Lang Wootton faxed brief details to Mr  Ken Barrett. He assisted Mr Niall Lindsay in running Standard Life’s Main Fund in the George Street office. The Main Fund normally dealt with acquisitions over £15m. The faxed response was that Standard Life was not interested due to the “relatively small lot size for the main fund.”

	(b)	On 10 October Savills, who were instructed to act for the vendors, wrote to Mr Lindsay (and to Egan Lawson) about the proposed sale at £12.87m and enclosed details in the form of a 26 page report. The faxed response of Standard Life  on 13 0ctober was that the Property was not of interest to Standard Life  “due to its specification and layout.”

	(c)	On 14 October  Karen Queen , a Divisional Director with Richard Ellis, phoned Standard Life’s George Street office  about the Property. The  faxed response of the same date sent by Mr Gregor Martin, who worked with Mr Salway, was that 

“...I regret to inform you that we have received a prior introduction.” 

The Property did not in fact attract any offers at the asking price.
   
	On 5 November Karen Queen phoned the Main Fund at Standard Life and spoke to Mr Lindsay, who was her ex-husband.  He referred the matter  to Mr Barrett for him to deal with. From her Standard Life learned that the vendor might entertain a bid lower than the asking price for the Property. She faxed details of the Property to  Mr Barrett on 6 November. This was followed by further faxes providing  information relating to growth rates, valuations and bids. Mr Barrett retrieved the  file of papers (No. 1134, marked “Pending”) opened by Standard Life on the introduction of the Property by Egan Lawson and read the file. He did not refer the matter back to Egan Lawson. Instead, on 11 November Mr Barrett made a valuation of the Property at just over £11.5m. It was compiled on the basis of information taken from material supplied by Savills. On 12 November Mr Barrett sent an internal memo setting out the details of a proposal to purchase the Property for £11.5m. This was agreed internally. Karen Queen, who was in touch with Savills, drafted an offer document. An initial offer of £11m ( the same figure at which Mr Salway had arrived on his visit to the Property in September) was rejected. On 18 November, on the instructions of Standard Life, Karen Queen sent a letter to Savills submitting an offer of £11.5m, subject to contract and to other conditions. Savills replied on the same day enclosing Heads of Agreement for approval.

	On 19 November Standard Life wrote to Karen Queen asking for a list of matters to be covered by her purchase report for the Property. The letter confirmed that her firm’s fee would be 1% of the purchase price payable in the event of it completing a purchase of the Property.

 	Completion in fact took place on 19 December. On 22 December Richard Ellis submitted an invoice for commission of £135,125 which was paid.

 	In a conversation between Mr Lawson and Mr Salway on 20 November about another property Mr Lawson had been informed that Standard Life’s Main Fund had agreed to purchase the Property through Richard Ellis for £11.5m and that no fee would be paid to Egan Lawson. On 25 November Mr Lawson wrote to Mr Salway claiming that Egan Lawson were due a fee in the event of Standard Life acquiring the Property. Mr Salway’s response on 27 November was that, assuming that Standard Life did complete the purchase, Egan Lawson’s earlier introduction was not the “effective cause of purchase.” The same contention was made by Mr Lindsay in his letter of 10 December. On 12 December Mr Lawson asserted that he had made a valid introduction and that his firm would be submitting a fee account based on 1% of the purchase price should Standard Life acquire the Property. The fee note for £135,125 commission was submitted on 2 March 1998. It was not paid. 

The Judgment

	The judge put the critical question thus: 

“....was Mr Lawson’s introduction the  [effective cause] of the sale by Pillar Caisse to Standard Life of Phase II, The Meadows, for the sum of £11.5m in the autumn of 1997?”

	She answered the question affirmatively, having concluded that there was 

“... a chain of causation from the introduction of the Property to the defendant company by the plaintiff firm to the agreement to buy just ten weeks or so later.” 

	The judge identified five relevant factors pointing to that result:-

	1. 	Egan Lawson were the first agents to introduce Standard Life to the transaction upon which commission is claimed.

	2.	Egan Lawson provided to Standard Life all the good quality information it required of them for the purposes of the introduction.

	3.	Egan Lawson played their part fully in effecting an introduction to the Property and the transaction. The introduction led Mr Salway to visit the site and to make his own valuation at £11m.

	4.	The Lawson /Salway material remained on the file of Standard Life accessible to any member of that company considering the possibility of making a bid for the Property. A bid was  in fact made within weeks of the provision of the material.

	5.	Mr Barrett did consult the file just a few weeks after it had been provided before deciding to make a bid for the Property. The judge said-

“ In my judgment he must have paid far greater attention to it than he is now willing to admit.” 

	The judge added that the fact that Standard Life were able to agree terms to buy at a reduced price did not turn it into a completely different transaction. 

Submissions of Egan Lawson

	In seeking to uphold the decision of the judge Mr Driscoll QC highlighted 10 crucial factual points, which were either admitted or found by the judge. He submitted that having heard two days of evidence (in particular from Mr Barrett)  the judge was entitled to find that there was a real and substantial causal link, and an unbroken chain of causation, between Egan Lawson’s  original introduction and information and Standard Life’s ultimately successful bid. Although the 10 points inevitably replicate the factors relied on by the judge in finding for Egan Lawson it is, I think, helpful to list them.

	1. 	Timing. Egan Lawson was the first agent to introduce Standard Life to the Property.

	2.	Information. 	In the course of that introduction Egan Lawson provided Standard Life with all the information needed to enable Standard Life to put its own price on the Property after making a visit to the Property. It was good quality information.

	3.	Visit.	Using that information and persuaded by it to go and look at the Property, Mr Salway visited the Property, took photos and put a price of £11m on it.

	4.	Interest.  Standard Life decided that at an asking price of £13m the Property was not worth bidding for, but, if the asking price came down, it would be interested at about £11m.

	5.	Lack of Interest. However, Standard Life told Egan Lawson that it was not interested at any price and gave the false impression that it was not interested at all.

	6.	Marketing.	Savills marketed the Property at £12.87m and sent marketing material to Standard Life.

	7.	Lower Offer.	Some weeks later Standard Life discovered that the Property was not sold at the asking price and that the vendor would take a lower offer.
 
	8. 	No Further Information.  Standard Life did not have any further information  than that  originally supplied by Egan Lawson, as updated by that supplied by Savills, in order to determine a price for the Property. Standard Life did not make another visit to the Property.

	9.	Use of Information.	Standard Life used the information supplied to them by Savills, the information supplied by Egan Lawson and their own information generated by the Egan Lawson introduction (in the form of the valuation made by Mr Salway and the photos) to make another more detailed financial appraisal and to make an initial bid of £11m, rather than the £12m suggested by Karen Queen.

	10.	Increased Bid.  When that bid was rejected by the vendor Standard Life increased its bid to £11.5m which was accepted. That bid could be justified on the basis of a second more detailed financial appraisal which used the same information as before, as updated by the information from Savills.

The Law
	
	There is no dispute about the applicable legal principles. Both sides cited  cases on claims for commission  by two rival estate agents. The claims in those cases were all  against vendors for commission  on the sale of a property to a purchaser introduced  by the agent. The issue was whether the estate agent (or, more accurately, which of two rival firms of estate agents) made an introduction which was the “effective cause” of the sale. Those authorities provide general guidance which, though not determinative of this appeal, focuses attention on legal considerations material to this case. 

	The issue  whether an  introduction of a purchaser by an estate agent to the vendor was the “effective cause” of the transaction which ultimately takes place  must be resolved by an examination of  the facts as a whole: John D Wood v. Dantata [1987] 2 EGLR 23; Peter Yates & Co v. Bullock [1990] 2 EGLR 24.

	In the case where only one  estate agent is appointed by the vendor the solution is simple: his introduction of the purchaser usually  is treated as carrying with it the (or “an”) effective cause of the sale. It is unnecessary to consider further  whether there were other events, such as the vendor’s own efforts, which could be described as a cause of the transaction between the vendor and the purchaser introduced by the agent. Nahum v. Royal Holloway and Bedford New College [1999] EMLR 252.

	In the case of two estate agents appointed by the vendor, each with competing claims to commission from the vendor for an introduction of the eventual purchaser, the issue is more difficult. It is not resolved by simply adopting a chronological approach and asking which introduction took place first. The first in time factor (and the interest which the initial introduction generates) is relevant, but it is neither determinative nor paramount in resolving the rival claims to commission: John D Wood v. Dantata (supra).  It is necessary  to consider the causal link between the introductions and the ultimate transaction between the vendor and the purchaser introduced to him by each agent at different times. The first introduction by an agent may be the effective cause of nothing. It may not lead to any interest or offer on the part of the eventual purchaser. And it may be that the second later  introduction, which is in no way dependant on the first and may even  relate to and lead to a different bargain, is the effective cause of the transaction: Chasen Ryder &Co v. Hedges [1993] 1 EGLR 47.  In deciding which introduction was the effective cause of the sale it is relevant to ask what would have happened if the second agent had never come into it.  Would the  introduction by the first agent then be regarded as the effective cause of the sale?  Did the appearance of the second agent break the chain of causation?  See Peter Yates &Co v. Bullock (supra). 

	None of the cases indicate that it is legally possible, in the absence of an express or implied contract to that effect, for the court to apportion the agreed commission between the two agents on an  equitable basis that each introduction was a contributory cause of the purchase by the person introduced. Neither side proposed that solution as a legally permissible (or  even desirable) result in this case. It is a case of winners and losers, all or nothing.    

	The question provoked by a comparison of  the vendor commission cases with this case  is  this: why did Standard Life, as a prospective purchaser, appoint two  agents  and  respectively agree to pay them commission for an introduction? 

	The job of  the agents was to introduce Standard Life to a commercial property which it might be interested in buying as an investment. The key factors of value to Standard Life were the opportunity to acquire the Property, the suitability of the Property as an investment by Standard Life and the price at which Standard Life could acquire it. It is not disputed by Standard Life that, as it purchased the Property to which it had received separate introductions from each agent, it is liable to pay the agreed  commission to one of them. It denies that it is liable to pay both, though it is recognised that double payment of commission will in fact occur if, as the judge held, it was wrong in the view, on which it acted at the time, that the introduction by Richard Ellis was the effective cause of the eventual purchase.

Conclusion

	I would allow this appeal. In my judgment, the introduction of Standard Life to the Property by Egan Lawson was not, on a proper analysis of the facts as a whole, the effective cause of the purchase of the Property by Standard Life.

 	On an  objective examination of  the whole course of events leading up to the purchase by Standard Life  in December  1997 I am struck by the three distinct  stages through which the matter progressed.

	1.	 August/September 1997.
	At this stage Egan Lawson introduced the Property to Standard Life as a possible commercial investment to be acquired  by a pre-emptive bid before it was put on the market by Pillar Caisse and its agents. Although Standard Life  initially expressed interest and asked Egan Lawson for more information, the position by 10 September was that Egan Lawson’s introduction had not resulted in a purchase. That introduction  was not subsequently followed up or revived by either Egan Lawson or Standard Life. After Mr Salway’s  letter of 10 September there was no further contact at all about the acquisition of the Property between, on the one hand, Mr Douglas Lawson and, on the other hand, Mr Salway or anyone else in Standard Life. Egan Lawson simply dropped out of the picture. There was no life left in that introduction. 

	2.	October 1997.
	At this stage the Property was put on the market at the price of £12.87m. No fewer than three new firms of estate agents attempted, without any success, to interest Standard Life in its acquisition. Egan Lawson did not reappear on the scene. No further steps were taken at this stage  by any of the agents to interest Standard Life in the Property. No steps were taken by Standard Life to follow up the introduction of the Property.

	3. 	November/December 1997. 
	The interest  of  Standard Life in the possible acquisition of the Property was activated  at this stage on the initiative taken by Karen Queen on 5 November and again on 6 November. She contacted Standard Life’s Main Fund personnel, first Mr Lindsay and then Mr Barrett, introduced them to the Property and supplied them with information about it. It was  now known that Pillar Caisse had not sold at the asking price and  would accept a lower offer. That led to the submission by Karen Queen on 18 November of an offer by Standard Life to purchase for £11.5m, which was accepted.

	In my judgment, it was the introduction of the Property  by Karen Queen at this stage which was the “effective cause” of the purchase of the Property  by Standard Life in December for £11.5m. The probabilities are that, if she had not made the introduction at this stage, Standard Life would never have acquired the Property. Her introduction was the starting point for, and led to, the decision of Standard Life to purchase the Property for its Main Fund .

 	Egan Lawson had been off the scene since 10 September. They never re-appeared on the scene. They played no direct part in the events at this stage. The argument that they played a part at this stage rests on the fact that Mr Barrett read the file on the Property at Standard Life which contained the material generated by Egan Lawson’s involvement at the first stage. i.e. Egan Lawson’s initial financial appraisal, the note of the rough calculation of value (£11.04m) made by Mr Salway in September, the 1996 report from Richard Ellis and the photos taken by Mr Lawson and Mr Salway on inspection of the site.

	In my judgment, the judge’s findings of fact and the evidential material do not establish that the consideration of the file material by Mr Barrett and the attention which he paid to it, after the introduction made by Karen Queen early in November and after the material (also on file) made available by Savills, were such as to make the introduction of the Property by  Egan Lawson at the first stage  the effective cause of the purchase at the third  stage.
 	Mr Driscoll also made detailed submissions  (a)  on the unsatisfactory nature of Mr Barrett’s evidence and the judge’s unfavourable  assessment of his reliability as a witness and (b)  about  incomplete and unsatisfactory entries in the  computer records of Standard Life relating to the introduction of the  Property by Egan Lawson and the reasons for rejecting it. In my judgment those points  do not significantly assist Egan Lawson’s case on the effective cause point.
Lord Justice Latham: 
	I agree.   The analysis of the facts by Mummery LJ, which I gratefully adopt, makes it clear in my judgment that the intended transaction in respect of which Egan Lawson made its introduction was not the same transaction as that which was ultimately effected between Standard Life and the vendors.  The introduction by Egan Lawson was for the purposes of a pre-emptive strike, the purpose of which ended once Savills put the property on the market, or, more particularly, sent detailed information about the property to Standard Life themselves.  The transaction ultimately effected arose out of the information provided by Richard Ellis that the vendors might be interested in a sale at a lesser price.  Whilst, in one sense, that was something which Standard Life could have discovered for themselves, once they realised that the property had not been sold at the asking price, nonetheless, bearing in mind the volume of business which Standard Life is likely to have been considering at any one time, it seems to me clear that it was the action of Karen Queen which brought the property back to the attention of Standard Life as a possible purchase.  The transaction which resulted had, in my judgment, nothing to do, in those circumstances, with what had been done by Egan Lawson.  The mere fact that, as a result of Egan Lawson’s original introduction, a file on the property existed does not seem to me to justify the conclusion that there was any causal link between its introduction and the ultimate transaction.  The only proper conclusion from the facts is that the transaction would have occurred even if Egan Lawson had played no part in the story at all.  I do not therefore consider that what Egan Lawson did had any causative effect on the transaction, and was certainly not the effective cause, which was the test both parties agreed had to be met in order for it to be entitled to the commission which it claimed.

Lord Justice Simon Brown :

	I, too, agree that Egan Lawson did not earn their commission on this transaction and that Standard Life’s appeal should accordingly be allowed.
	My only real doubts in the case are as to whether Richard Ellis were for their part strictly entitled to commission and, a related question, whether, assuming they were not (supposing, say, they had never come into the picture because Standard Life had discovered for themselves - surely not very difficult - that the vendor would probably take less than the asking price for the property), that would have improved Egan Lawson’s legal claim to be paid a fee.
	Mummery LJ’s valuable survey of the law includes this:   “In the case where only one estate agent is appointed by the vendor the solution [to discovering the ‘effective cause’ of the transaction] is simple:   his introduction of the purchaser usually is treated as carrying with it the (or ‘an’) effective cause of the sale.”   I respectfully agree.    But I respectfully question whether that principle carries over into what seems to me to be the very different situation arising in a “prospective purchaser” case like the present.
	All the authorities in this field relate to the appointment of agents by vendors (generally of property but in Nahum v Royal Holloway and Bedford New College [1999] EMLR 252 of pictures).    It is the vendor who takes the initiative:   the agent is instructed to find a purchaser for the property;  the agent’s terms are agreed.   That, no doubt, is precisely what occurred between Pillar Caisse and their estate agents, Savills, in the present case.   But the position between Standard Life and, respectively, Egan Lawson and Richard Ellis was very different.   In neither case did Standard Life take the initiative and instruct the agent to find them a suitable investment (i.e. a suitable property at a suitable price).   Had they done so, then I accept that the situation would have been closely analogous to that of a seller instructing one or more agents to find a buyer.
	Here, however, each agent made their respective approaches to Standard Life and, in effect, said:   I have inside information about a possible investment which may be of interest to you.   And this is it.   In Egan Lawson’s case the information was:  this property is about to be marketed at something over £13 million.  We are giving you a short opportunity to make a pre-emptive offer for it.  We wish to act for you for 1%.   In Richard Ellis’ case the information was (some 3½  weeks after the vendors’ agents, Savills, had circularised Standard Life amongst other prospective purchasers with the proposed sale at £12.87 million):   the vendor will probably take less than the asking price.    No fee was mentioned at that time;   later, after Heads of Terms had been agreed with Pillar Caisse at £11.5 million, Standard Life told Richard Ellis that they would be paid a 1% fee in the event of completion.

	Let me assume, although it is not altogether clear, that the agents in these cases are not actually imposing their information and their terms upon prospective purchasers, i.e. cold-calling them with their information.  Nevertheless it is the agents who are asking to be instructed, and it is entirely a matter for the prospective purchasers whether to contract with them and if so on what terms.   
	In this situation I would expect the prospective purchaser, assuming he is prepared to contract with the agent at all, to agree no more than that, if he makes use of the inside information provided to enter into a transaction which he would not otherwise have secured, then he will pay the stipulated fees; otherwise not.  In the absence of clear terms, I would certainly not regard the prospective purchaser as agreeing to pay a fee providing only that he eventually purchases the property in question - the standard basis upon which a vendor instructs his agent to find a purchaser.  That would be to overlook the real differences between the two situations.
	Applying that approach to the present case, it seems to me plain that Egan Lawson’s inside information was never made use of.   No pre-emptive bid was made.   (And that perhaps was just as well:  Egan Lawson were inviting Standard Life to bid some £13 million, certainly a great deal more than the £11½ for which they eventually secured the property.) True, Standard Life were given “a head-start” (as Mr Driscoll QC put it) over rival prospective investors, but this head-start in the event proved worthless.  Once the property came to be marketed by Savills, Standard Life were in no better position than any other purchaser.
	Even, therefore, had Richard Ellis not subsequently entered the picture, I for my part would have held that Egan Lawson never became entitled to a commission in this case.  In these circumstances it is strictly unnecessary to decide whether Richard Ellis’s contribution was itself the effective cause of this transaction.   Perhaps it was.  Perhaps, surprising though it seems, it really needed Karen Queen’s phone call to her ex-husband at Standard Life on 5 November to alert Standard Life to the fact that by then the vendor would probably take less than £12.87 million for the property.   Perhaps, but for that “inside information”, Standard Life would never have bought this property.   In the end, of course, Standard Life actually instructed Richard Ellis to act as their agents in the transaction and expressly agreed to pay them a 1% fee on completion.  But obviously such an agreement could not operate to deprive Egan Lawson of their commission had it otherwise been earned.    As stated, however, in my judgment it was not earned, and that, irrespective of Richard Ellis’ entitlement, is conclusive on this appeal.
ORDER: Appeal allowed, and the order below to be set aside.  Costs of the action, including the appeal, to be paid by Egan Lawson to Standard Life, to be assessed if not agreed.  Egan Lawson to repay Standard Life £147,445.43, with interest at 7 per cent.
(Order not part of approved judgment)