Moneywood Pty Ltd v Salamon Nomineespty Ltd

• Jurisdiction: Australia Federal only
• Court: High Court (Australia)
• Judge: Gleeson CJ,McHugh J,Gummow J,Kirby J,Callinan J
• Judgment Date: 08 February 2001
• Neutral Citation: [2001] HCA 2,2001-0208 HCA C
• Docket Number: B22/2000
• Date: 08 February 2001

[2001] HCA 2

HIGH COURT OF AUSTRALIA

Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ

B22/2000

Moneywood Pty Ltd

Appellant

and

Salamon Nominees Pty Ltd

Respondent

Auctioneers and Agents Act 1971 (Q), s 76(1)(c).

Moneywood Pty Ltd v Salamon Nominees Pty Ltd

Principal and agent — Commission — Action for recovery of commission by agent — Sale of property — Whether agent was effective cause of sale — Whether engagement or appointment of agent complied with s 76(1)(c) of the Auctioneers and Agents Act 1971 (Q).

Contract — Written agreement to engage agent and oral agreement to pay commission — Terms of the contract — Whether commission payable in respect of sale of part only of the property — Whether appointment of agent complied with s 76(1)(c) of the Auctioneers and Agents Act 1971 (Q).

Words and phrases — ‘effective cause’ – ‘implied terms’ – ‘evidenced in writing’.

1 Gleeson CJ. The issues in this appeal concern a real estate agent's disputed claim to commission. The appellant was engaged as agent by the respondent, and found a purchaser, BMD Constructions Pty Ltd (‘BMD’), which entered into a contract to purchase land from the respondent. The contract identified the appellant as the vendor's agent. That contract was never completed, and there was no commission payable in relation to it. By a later contract, which was completed, and which made no reference to the appellant, BMD agreed to purchase, for a lesser sum, part of the land which was the subject of the first contract. The dispute is as to whether the appellant was entitled to commission on the sale price under the second contract.

Gleeson CJ

2 The detailed facts and circumstances surrounding the appointment of the appellant as agent, and the dealings between the respondent and BMD, are set out in the reasons for judgment of Gummow J. At first instance, in the District Court of Queensland, Botting DCJ found in favour of the appellant1. By majority (de Jersey CJ and Chesterman J; McPherson JA dissenting), that decision was reversed in the Court of Appeal2.

3 The issue upon which the Court of Appeal found against the appellant was whether there had been satisfaction of a condition on the right of recovery of commission imposed by s 76(1)(c) of theAuctioneers and Agents Act 1971 (Q) (‘the Act’). That was the principal issue in the appeal to this Court.

4 The appellant established that it was appointed as agent by the respondent, in relation to the sale the subject of the first contract, and that such appointment complied with the requirements of the Act. The appellant also satisfied both the trial judge, and all the members of the Court of Appeal, that the work it performed in its capacity as agent in relation to the first contract was an effective cause of the sale the subject of the second contract.

5 The finding of Botting DCJ on that matter was as follows:

‘In my view the plaintiff, in introducing BMD to the land, and in the initial work he [sic] did, pursuant to (as I have found) his appointment as agent for the defendant, enabled the defendant to enter into a contract on most favourable terms with BMD. In my view, so much of the benefit of this work “flowed through” to the second contract with BMD that it can be fairly said that Mr Murphy's work on behalf of the plaintiff can be said

to be an effective cause of the defendant's entering into the second BMD contract.’

6 This conclusion was challenged in the Court of Appeal. It was confirmed by that Court. In this Court, by Notice of Contention, the respondent seeks to dispute these concurrent findings of fact.

7 InWaltons Stores (Interstate) Ltd v Maher3 Deane J said:

‘In a context where the cost of litigation has gone a long way towards effectively denying access to the courts to the ordinary citizen who lacks access to government or corporate funding, it is in the overall interests of the administration of justice and of the preservation of at least some vestige of practical equality before the law that, in the absence of special circumstances, there should be an end to the litigation of an issue of fact at least when the stage is reached that one party has succeeded upon it both on the hearing before the court of first instance and on a rehearing before the court of first appeal.’

8 Here there are no special circumstances, such as ‘plain injustice or clear error’4, which warrant disturbance of the findings. The case involves a complex set of circumstances, in which there was ample room for a factual judgment of the kind made by the trial judge and the Court of Appeal. That judgment was not based upon any misapprehension of legal principle. It turned upon an assessment of the causal relationship between the work done by the appellant pursuant to its engagement as the respondent's agent and the sale, the subject of the second contract, which was ultimately completed. Such an assessment is commonly required in disputes concerning an agent's commission. The process of reasoning which led to the finding in the present case was orthodox, and amply justified by the evidence.

9 So far as relevant, the Act provides, in s 76(1):

‘No person shall be entitled to sue for or recover … any … commission … or other remuneration for or in respect of any transaction as … a real estate agent … unless — …

(c) the engagement or appointment to act as … real estate agent … in respect of such transaction is in writing signed by the

person to be charged with such … commission … or the person's agent or representative’.

10 As was noted, there was no reference to the appellant in the second contract. However, the first contract, which was in the standard form, identified the appellant as the ‘Vendor's Agent’. It contained standard condition 30, which provided:

‘APPOINTMENT OF AGENT

In the absence of any specific appointment the Vendor by executing this Contract hereby confirms the appointment of the Vendor's Agent (jointly with any other agent in conjunction with whom the Vendor's Agent has sold) as the agent of the Vendor to introduce a buyer.’

11 InCanniffe v Howie5, Lukin J compared an equivalent provision of a predecessor Act with the Statute of Frauds, and referred to the mischief at which the legislation was aimed. He concluded that ‘any document signed by the principal at any time before action brought which evidences the essential fact, the existence of the relationship in respect of the transaction in question, is sufficient to comply with the statute’. The existence of the relationship of agency in respect of the transaction in relation to which the claim for commission is made is, as Lukin J observed, the essential fact which the Act requires to be evidenced in writing.

12 To argue, as the respondent argued, successfully, in the Court of Appeal, that the evidence of the existence of the relationship must be specific to the transaction in respect of which commission is claimed is to re-state, but not to solve, the problem. What is required is evidence of the existence of agency ‘in respect of the transaction in question’. Here, the transaction in question was that which was the subject of the second contract. If there was writing which evidenced the existence of the agency in respect of that transaction the requirements of the Act were satisfied. Adjectives such as ‘specific’ or ‘particular’, qualifying ‘transaction’, may give a useful focus to the inquiry, but they should not alter the language of the statute.

13 The question is approached upon the basis of findings that there was an appointment of the appellant as the respondent's agent, that the appointment was evidenced in writing in the first contract, and that there was a relationship between the agency, the first contract, and the second contract, of such a kind that it was proper to conclude that the work done by the appellant in its capacity as the respondent's agent was an effective cause of the sale the subject of the

second contract. That does not resolve the issue, but it is a significant first step for the appellant.

14 It is true that one ordinarily approaches the question of compliance with s 76(1)(c) only on the assumption that there has been an appointment as agent, and that the work of the agent pursuant to that appointment was an effective cause of the transaction. If it were otherwise, the s 76(1)(c) issue would normally not arise. But the purpose of s 76(1)(c) is to require written evidence of appointment. Where there is such evidence then the purpose of the statute is fulfilled. There is no legislative purpose to be served by requiring a fresh appointment if the original appointment is wide enough to comprehend the transaction in question, and if it has a sufficient connection with the transaction to justify a conclusion that it is in respect of the transaction.

15 The appointment as agent, evidenced in writing, related to the sale of land, which included the land ultimately sold, to BMD. In that respect the case differs fromAnderson v Densley6, where the scope of the written authority of the agent was narrower than the transaction entered into. Standard condition 30 of the first contract referred to the appointment as being ‘to introduce a buyer’. The appellant introduced the buyer, BMD, which entered into the second transaction. There was thus a combination of four circumstances: the terms of the appointment referred to in standard condition 30; the relationship between the parcels of land the subject of the respective contracts; the identity of the buyer; and the fact that the work done as agent was an effective cause of the relevant transaction.

16 In the circumstances there is a sufficient connection between the agency and the transaction in question to treat the appointment as being in respect of the transaction, and to conclude that the requirements of s 76(1)(c) were satisfied.

17 The appeal...