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CITE

Unreported Judgment

Salamon Nominees Pty Ltd v Moneywood Pty Ltd[1998] QCA 440de Jersey CJ and McPherson JA and Chesterman J
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Salamon Nominees Pty Ltd v Moneywood Pty Ltd[1998] QCA 440

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 4852 of 1998

Brisbane

[Salamon Nominees P/L v. Moneywood P/L]

BETWEEN:

SALAMON NOMINEES PTY LTD ACN 004 658 146

(Defendant) Appellant

AND:

MONEYWOOD PTY LTD ACN 011 025 755

(Plaintiff) Respondent

de Jersey CJ

McPherson JA

Chesterman J

Judgment delivered 22 December 1998

Separate reasons for judgment of each member of the Court, McPherson JA dissenting.

APPEAL ALLOWED. JUDGMENT BELOW SET ASIDE AND IN LIEU THEREOF JUDGMENT ENTERED FOR THE APPELLANT WITH COSTS OF THE TRIAL AND APPEAL TO BE TAXED.

CATCHWORDS:	PRINCIPAL AND AGENT - real estate agent - commission - *Auctioneers and Agents Act* 1971, s 76 - conditions essential for entitlement of agent to commission - requirement of engagement or appointment to be in writing - appellant vendor and third party purchaser completed second contract for sale of land after terminating previous contract between them - purchaser introduced by agent - appointment of respondent as agent of appellant acknowledged by written term of earlier contract - no such acknowledgment in written terms of second contract - whether relationship of principal and agent as recognised by statutory provision existed at time of completed transaction - whether respondent effective cause of sale and/or introduced purchaser to appellant - estoppel - whether appellant estopped from relying on statutory provision - whether representations made by appellant to respondent as to existence of relationship of principal and agent relevant to second contract - detriment - whether estoppel can nullify statutory provision. Auctioneers and Agents Act 1971, s 76 Anderson v. Densley (1953) 90 CLR 460 Bradley v. Adams [1989] 1 Qd R 256 Burchell v. Gowrie & Blockhouse Collieries Ltd [1910] AC 614 Canniffe v. Howie [1925] St R Qd 121 Day Ford Pty Ltd v. Sciacca [1990] 2 Qd R 209 In re A Bankruptcy Notice [1924] 2 Ch 76 Kok Hoong v. Leong Cheong Kweng Mines Ltd [1964] AC 993 L J Hooker Ltd v. W J Adams Estates Pty Ltd (1977) 138 CLR 52 Lord v. Trippe (1977) 51 ALJR 574 Rasmussen & Russo Pty Ltd v. Gaviglio [1982] Qd R 571 Thompson v. Palmer (1933) 49 CLR 507
Counsel:	Mr P A Keane QC, with him Mr L D Bowden, for the appellant Mr D A Savage for the respondent
Solicitors:	Brown & Fowler for the appellant Russell & Company for the respondent
Hearing Date:	18 November 1998

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 4852 of 1998

Brisbane

Before de Jersey CJ

McPherson JA

Chesterman J

[Salamon Nominees P/L v. Moneywood P/L]

BETWEEN:

SALAMON NOMINEES PTY LTD ACN 004 658 146

(Defendant) Appellant

AND:

MONEYWOOD PTY LTD ACN 011 025 755

(Plaintiff) Respondent

REASONS FOR JUDGMENT - de JERSEY CJ

Judgment delivered 22 December 1998

I have had the advantage of reading the reasons for judgment of Chesterman J. I agree with the orders proposed by his Honour, for the reasons which he gives.

I have also had the advantage of reading the reasons for judgment of McPherson JA. As to what has developed as the major point in the case, while I accept of course the emphasis placed by his Honour on the width of the words “in respect of” where they appear in s. 76(1)(c) of the Auctioneers and Agents Act 1971, I consider that the only arguable written appointment - that contained in clause 30 of the contract exhibit 1, taken with the naming of the agent against note 1 - should not be considered an appointment “in respect of” the transaction for which commission is claimed, that is, the completion of the later contract. There is no doubt that s. 76 requires a written appointment in respect of the specific transaction giving rise to the claim for commission. I consider that the appointment recorded in the earlier contract must be read as an appointment specific to the particular transaction that contract embodied. I then take the view that the only relevant written appointment, being specific to that earlier contract, simply bore no connection to or relationship with the later contract which proceeded to completion giving rise to the claim for commission. As Chesterman J points out, there are two separate transactions, transactions which, despite substantial similarity, nevertheless differ, as to area, price and conditions. They should be regarded as distinct.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 4852 of 1998

Brisbane

Before de Jersey CJ

McPherson JA

Chesterman J

[Salamon Nominees P/L v. Moneywood P/L]

BETWEEN:

SALAMON NOMINEES PTY LTD ACN 004 658 146

(Defendant) Appellant

AND:

MONEYWOOD PTY LTD ACN 011 025 755

(Plaintiff) Respondent

REASONS FOR JUDGMENT - CHESTERMAN J

Judgment delivered 22 December 1998

The appellant defended an action in the District Court in which the respondent claimed an amount representing commission from the sale of the appellant’s land. The purchaser was BMD Constructions Pty Ltd (“BMD”). The respondent was a real estate agent who claimed it effected the sale. It underwent a change in organisation during the period in which it dealt with the appellant but this has no consequence, save for noting that at some time it carried on business under the name of “L J Hooker Land Marketing”.

The appellant had for years been the owner of land located on Ney Road, Capalaba, within the area of the Redland Shire Council (“the Council”). It was interested in developing the land which was, at all relevant times, zoned Rural Non-Urban and abuts a local state school and other land zoned Residential A. It is divided by a creek which runs roughly north to south. Mr Salamon, who controlled the appellant, had engaged surveyors and in October, 1988 had applied to the Council to have the land to the west of the creek rezoned. Approval was granted subject to conditions, a number of which were thought to be onerous. By the beginning of 1994, the conditions had not been fulfilled and the land had not been rezoned. The sticking points were the construction of a round-a-bout and the location of a roadway through the proposed development as well as the construction of a major road along the southern alignment of the land.

The appellant executed two contracts for the sale of land to BMD. The terms of the contracts have a relevance to the points argued on the appeal and it is convenient to say something about them.

The first is dated 31 March, 1994, and was in the standard form approved by the Queensland Law Society and the Real Estate Institute of Queensland. It notes the appellant’s agent to be L J Hooker Land Marketing. The land sold was described as Lot 1 on Registered Plan 189159 in the County of Stanley, Parish of Capalaba, containing an area of 47.5372 hectares. The price was $6,825,000.00 and a deposit of $270,000.00 is acknowledged as having been paid on signing.

Clause 30 of The Standard Conditions of Sale provided that:

“In the absence of any specific appointment the Vendor by executing this Contract hereby confirms the appointment of the Vendor’s Agent ... as the agent of the Vendor to introduce a buyer”.

In addition to the general conditions, the contract included quite elaborate special conditions. Special condition 4 provided that completion was conditional upon the appellant being told by the Council what conditions it would impose on giving its approval for rezoning and the appellant providing that information in writing to BMD by the date for completion, which was seven months from the date of contract. The condition further provided that the appellant might extend the time for satisfaction of the condition by a period no longer than twelve months. Should the appellant exercise its right to extend time, the purchaser was obliged to pay interest for the period of the extension.

The condition further provided that on behalf of BMD the appellant should continue with the rezoning application it had lodged with the Council. The application was identified as being shown on a surveyor’s plan annexed to and forming part of the contract. The appellant agreed to “pursue the application vigorously and without delay”.

The plan of survey did not include all of the land the subject of the contract and special condition 4(b) obliged the appellant to lodge a further application for the rezoning of the balance of the subject land within twenty-one days. This subclause, too, obliged the appellant to “pursue the application vigorously and without delay”.

It is accepted that the appellant endeavoured to satisfy special conditions 4(a) and (b) of the contract. An application for rezoning the eastern portion was lodged on 19 April, 1994. The Council requested a flora and fauna study which caused some delay. By September, 1994, the Council had not issued conditions of rezoning and the contract was still conditional. Rezoning was a sensitive issue because there was on and adjacent to the land vegetation which was a habitat for koalas.

By letter of 27 September, 1994, the Council suggested that it might acquire part of the land to conserve its native bushland. On 17 October, 1994, the appellant urged the Council to decide the rezoning application. The contract was due for completion on 31 October. By letter of 26 October, 1994, the appellant again sought gazettal for the rezoning of the western area and tendered a guarantee for the performance of rezoning conditions in the sum of $250,000.00. By separate letter of the same date the appellant threatened litigation if the Council did not act. The letters went unanswered.

On 27 October, 1994, the appellant exercised its right to extend the date for completion to 31 October, 1995. Thereupon it became entitled to receive the interest provided for by special condition 4.

Negotiations continued much as before. The Council was hoping to obtain State Government funding to allow it to acquire part of the land for conservation purposes. Until it knew what, if any, funds would be made available, it was not prepared to negotiate on rezoning. Mr Salamon also importuned the State Government in an endeavour to obtain a decision. Approaches were made to the Minister for the Environment on 10 and 18 November, 1994, and on 23 November Mr Salamon addressed the councillors to implore them to take action so that he might know where he stood. The only response was an intimation from the Mayor that he could do nothing until the Government showed its hand. The appellant turned to lawyers for assistance. It was advised by Senior Counsel to apply to the Planning and Environment Court for a declaration that rezoning had been approved subject to conditions notified in 1992 in respect of the western portion. As for the eastern area, counsel recommended an appeal against a deemed refusal by the Council to decide the application. The declaration was applied for on 23 December, 1994 and pleadings closed on 20 March, 1995. At about this time, the Council indicated an interest in purchasing about six hectares of the land as a way of resolving the impasse. It is doubtful whether the litigation would have been concluded by 31 October, 1995, the extended date for completion.

The end result was that the appellant and BMD agreed to rescind the first contract. By a separate contract the Council bought part of the land from the appellant. The appellant and BMD made the second agreement for the sale and purchase of the balance of the land remaining after the Council’s acquisition.

The second contract is dated 14 June, 1995. The price to be paid for the reduced area of land was $4,260,000.00. Completion was due on 31 July, 1995 and the contract duly settled. Special condition 4 provided that BMD should be responsible for costs and expenses incidental to the rezoning applications lodged by the appellant since 31 March, 1994. Special condition 5 obliged the appellant to lodge such subdivisional applications “covering the subject land” as BMD might require. By special condition 15, the contract was made conditional upon an order being made by the Planning and Environment Court “giving effect to the conditions of approval of rezoning pertaining to the eastern portion of the subject land ... [and the appellant applying] to the Redland Shire Council for modification of the conditions of approval of rezoning attaching to the ... western portion of the subject land”.

The respondent claimed, and was awarded, commission in respect of the second contract. The appellant complains that it was not entitled to any commission. Its objection to paying commission has three bases. They are that:

the respondent was not the effective cause of the sale and is not therefore entitled to commission;
there is no document signed by the appellant evidencing the respondent’s agency in respect of the second contract; and
the only agreement made between the appellant and the respondent is that evidenced by a letter of 8 April, 1994 by the terms of which no commission was earned.

It is convenient to deal with the second of these because, in my view, the appellant makes out this ground and it is not necessary to consider the others in detail.

Section 76(1) of the Auctioneers and Agents Act 1971 provides:

“No person shall be entitled to sue for or recover or retain any fees, charges, commission, reward, or other remuneration for or in respect of any transaction as ... a real estate agent, ... unless -

...

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 ...”.

Throughout their dealings, the appellant and its representative, Mr Salamon, were reluctant to make any commitment to the payment of commission to the respondent. I have already set out the references in the first contract to the respondent’s agency. This is no doubt a sufficient written appointment to satisfy section 76, but the first contract did not, of course, proceed to conveyance. The only other documentary evidence of agency is found in a letter of 8 April, 1994. It was written by the appellant, signed by Mr Salamon, and was addressed to the respondent. It reads:

“Re: Ney Road, Capalaba

We wish to advise that, although Salamon Nominees Pty. Ltd. never entered into any agreement or instructed you to act as agent to introduce potential purchasers for the above named property, in recognition of the work which you have done at your own instigation, Salamon Nominees Pty. Ltd. hereby confirms that it shall pay you the following:

two per cent commission on the deposit monies received, being $5,400.00, and
a further two per cent on the balance of the monies, if and when received from the said sale.

In the event that the contract is not settled due to either party withdrawing from the sale, no further commission will be payable.”

Although the letter does not in fact identify the “said sale” to which (b) refers, it is clearly enough the first contract. The date points ineluctably to that conclusion as does the reference to the deposit. In the first contract the deposit was $270,000.00, two per cent of which is, of course, $5,400.00. The second contract provided for a deposit of only $5,000.00.

On 4 February, 1994, Mr Murphy sent a facsimile transmission to Mr Salamon advising him that Land-Q Pty Ltd had amalgamated with L J Hooker Brisbane Land Marketing and that “commission at the agreed rate of 2% on the sale of the Ney Road property can be made payable to L.J. Hooker Brisbane Land Marketing”. By a subsequent letter of 1 March, 1994 the respondent sought to impose a qualification on the agreed rate, namely that “[s]hould the sale fail to proceed and the non refundable deposit be retained by the Vendor, then commission will be 8% of the non refundable deposit”. The attempted renegotiation met determined resistance. The letter of 8 April insists upon a flat rate of two per cent. This was subsequently accepted by the respondent.

On 6 and 7 April, 1994, the respondent sent to the appellant completed “Appointment to Act as Real Estate Agent” forms with a request that they be signed to provide the necessary written appointment to satisfy section 76. Two forms were sent because the first appears to have contained an error in the amount of commission to be paid in the event of a sale. The error favoured the respondent. The appellant did not sign either form. The only writing signed by the appellant relevant to the appointment of the respondent as agent is the first contract containing clause 30 and the letter of 8 April. It was, however, the second contract which settled. It is that transaction in respect of which the respondent claims commission. Section 76 requires that, to be entitled to recover commission “in respect of any transaction”, the engagement in respect of such transaction must be in writing signed by the principal.

The trial judge found that the nomination of the respondent as the appellant’s agent in the first contract, together with standard condition 30, was a sufficient written appointment to satisfy the statutory requirement (R1081). Although his Honour did not expressly address the point, it is implicit that he thought the transactions, the subject matter of the two contracts, were the same, or that the appointment of the respondent as agent for the first transaction was a sufficient written appointment for the second. The respondent in this court urged that view and, as an alternative, that the letter of 8 April was in its terms applicable to any sale of the appellant’s land to a purchaser introduced by the respondent.

The appellant submits that section 76 requires, as a matter of plain construction, that the transaction in respect of which commission is claimed be one and the same as that in respect of which the written appointment is made. The submission continues that the only appointment of the respondent as agent appears in and is limited to the first contract. That did not settle and from it the respondent claims no commission.

I think it is right that section 76 requires that there be a written appointment of agency in respect of the specific transaction which gives rise to the claim for commission. One has to see that the appointment covers or refers to, or is in respect of, that transaction.

An appointment may by its terms refer to a number of specified transactions or to transactions described in general terms or by reference to a defined category. If there were a sale of property falling within the category or within the general terms then section 76 would be satisfied. It is in each case a question of construction whether there is an appointment in respect of the transaction from which commission is claimed.

The appointment itself need not be written. In Anderson v. Densley (1953) 90 CLR 460, Williams ACJ, Webb and Taylor JJ noted in their joint judgment:

“A long line of cases in Queensland has decided that the paragraph does not require the contract of engagement or appointment of the agent to be in writing. It is sufficient if some writing or connected writings exist evidencing the creation of the relationship of principal and agent in respect of the transaction pursuant to an oral contract. The leading case is Canniffe v. Howie ...” (at 468).

In Canniffe v. Howie [1925] St R Qd 121, having reasoned to the conclusion summarised by the High Court, Lukin J said (at 127):

“[A]ny 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 appellant stresses the phrase “in respect of the transaction in question” as being the one which gives rise to the claim for commission. It is that transaction, according to Lukin J, for which there must be some writing evidencing the appointment of the agent. Connolly J (with whom Andrews CJ agreed) referred, with approval, to this passage in Bradley v. Adams [1989] 1 Qd R 256 at 261.

The short point is whether, as a matter of construction, the appointment found in condition 30 of the first contract is limited to that transaction, i.e. that particular sale on the specific terms and conditions found in that contract, or whether the appointment is more general in effect evidencing an appointment in respect of other sales of the appellant’s land.

In my opinion it is the former. Its context limits the appointment to that particular sale, the contract for which provides the setting for the entitlement to commission. Although general condition 30 is general in its terms, confirming “the appointment of the Vendor’s Agent ... as the agent of the Vendor to introduce the buyer”, it is found in a contract for the sale of a particular parcel of land on particular terms and conditions. Moreover, the clause operates only to supply a deficiency caused by the absence of specific appointment and it would seem odd that it should operate to constitute written evidence of an agent’s appointment with respect to any sale of any of the vendor’s land on any terms at any time. I think the more reasonable construction is that condition 30 is meant to satisfy the need for writing created by section 76 in those cases where the agent has not separately obtained a written appointment or documentary confirmation of the agency. By identifying the agent in Item C of the schedule and signing a contract containing condition 30, the section is satisfied.

Were it otherwise, every time a vendor of property signs a standard form contract he will appoint an agent for the sale of all his real property whenever and wherever put to market. If the appointment is not limited by its context to the particular contract in which the clause appears there is no basis for imposing any limitation on the appointment.

Serious inconvenience could follow if the execution of a contract containing a clause such as condition 30 constituted a general appointment of an agent for the sale of any land subsequently sold. A vendor, perhaps years after selling pursuant to a contract containing condition 30, may list another property for sale with another agent. He may give that agent an exclusive agency. The agent under the earlier contract may bring the property to the attention of a prospective purchaser who approaches the vendor, or the second agent, and buys the land. The first agent can claim to be the effective cause of the sale and to have an appointment as agent in writing, relying upon the earlier contract.

What is required to satisfy section 76, according to Lukin J and the High Court, is a document signed by the principal which evidences the existence of the relationship of principal and agent in respect of the transaction in question. Condition 30 was inserted by those who drafted the standard form terms to meet that requirement. The appointment is transaction specific. The draftsman of the contract was not concerned with general appointments of agents but only with ensuring that an agent who is accepted by the vendor as having brought about the sale is protected in his claim for commission against offending section 76 and losing his entitlement.

Anderson appears to support this view. The case concerned the construction of section 23 of The Auctioneers and Commission Agents Acts 1922-1951, the terms of which are relevantly identical to those of section 76 of the later Act. The appellant was the vendor of two grazing properties together with plant and livestock. The respondent was the agent who effected their sale. In May, 1951, the appellant orally instructed the respondent to sell his property, land and chattels for a named price. The respondent introduced two purchasers, father and son, who signed two contracts on 12 June, 1951, the first for sale of the land to the son and the second for sale of the livestock and chattels to the father. The second contract was conditional upon the first proceeding to completion. The contracts did not settle but on 23 February, 1952 another contract was made between the respondent and the son for the sale of both properties and all plant and livestock. This contract was completed. The only document that could satisfy the requirement for an engagement or appointment of the appellant as agent for the respondent to sell the grazing properties was the first contract of sale to the son. That contract provided that:

“Mark Densley as Agent for the Vendor William Charles Anderson do hereby acknowledge that I/we have sold this day to Noel Pryce ... the property ... for the sum of £9,542 ... and have received the sum of £2,600 by way of deposit and in part payment of the said purchase money. And I/we as Agent for the Vendor do hereby agree to fulfill on my/our part the Conditions of Sale ...”.

The appellant signed the contract which recited that the respondent as agent for the appellant had sold the two properties. No mention was made in the second contract, for the sale of chattels, or the later contract of 23 February, 1952 of the respondent acting as agent for the appellant on the sale of the assets to which those contracts referred. There were some differences in the schedule of chattels to be sold under the later contract. The High Court, though, noted that the contract for 23 February, 1952 “grew out of the two earlier contracts”.

The High Court then dealt with the point which is of particular relevance to the present appeal. For ease of understanding, it is necessary to refer to the submission of the appellant which appears at 90 CLR 461, that:

“The first contract of sale evidences or is an acknowledgment that the agent was engaged to sell the lands owned by the appellant. It is not an acknowledgment of the engagement or appointment of the agent for the purpose of selling the lands together with plant and stock. The trial judge was wrong in holding that the first contract of sale evidenced an engagement or appointment of the respondent to act as commission agent in respect of the relevant transaction.”

The court said (at 469):

“But the second submission remains for consideration. The provisions of the first contract ... are at most an acknowledgment ... of the engagement or appointment of the [respondent] to act as the agent of the [appellant] to sell the land owned by the [appellant] to Noel Pryce ... It is not an acknowledgment of the engagement or appointment of the [respondent] to sell the whole of the [appellant’s] grazing assets. In the end the [appellant] did sell the whole of these assets to Noel Pryce on a walk-in-walk-out basis. But the [respondent] is unable to point to any writing evidencing his engagement or appointment to act as a commission agent on behalf of the [appellant] other than an acknowledgment of his engagement or appointment to act on the sale of the [appellant’s] land. We are unable to agree with the learned trial judge that ‘the writing contained in [the first contract for the sale of land] evidences an engagement or appointment of the [respondent] to act as commission agent in respect of transactions here in question’. [The earlier contracts] do ... refer to each other, but there is no acknowledgment in either document of the engagement or appointment of the [respondent] to act as ... agent except in respect of the sale of the [appellant’s] land.”

It will be observed that Mr Densley was not entitled to recover commission in respect of the land which was included in the property sold pursuant to the third contract, even though there had been an earlier acknowledgment that he was agent for the purpose of finding a buyer for that land. The transaction which went forward to completion was not that in respect of which there was writing evidencing the agency relationship.

The case seems to support the appellant’s submission that section 76 requires documentary evidence which has specific reference to the very transaction out of which the claim for commission arises. The transactions here are different. It is true that the parties to both are the same and some of the land sold is common to both but the area is substantially reduced as, consequently, was the price. Moreover, the promises and conditions contained in the two contracts are different.

The appellant seeks support from Bradley but that case, by itself, is of little help. Reliance is placed on the remarks of Connolly J (at 261):

“[It] is said, cl. 27 should be read as confirming the appointment of Commercial Property Marketing as the appellant’s agent to introduce a buyer in a general sense and as then going on to acknowledge the obligation to pay commission. In my judgment however cl. 27 cannot be regarded as doing more than confirm the position of the agent in relation to the sale the subject of the contract in which it appears”.

His Honour then went on to refer to what Lukin J said in Canniffe, namely that the writing evidencing the agency must be “in respect to the transaction in question”. However, the clause in question in Bradley, though similar to clause 30 in the present contracts, contained the further phrase that the vendors acknowledged an obligation to pay commission “if the sale is completed ...”. It thus made express the limitation of the appointment to that particular transaction.

Although Bradley for this reason is not directly on point, in my opinion, the result is the same where the acknowledging clause, as does the present, omits the express limitation. It is implicit in the clause that the acknowledgment of agency relates only to the sale which is the subject of the contract in which the clause appears.

Unless the letter of 8 April, 1994 can amount to acknowledgment of the respondent as agent for the second contract, the transaction which settled, there is no writing to satisfy section 76.

The letter, in its terms, expressly denies that there was any relationship of principal and agent between the appellant and the respondent. It does not constitute an acknowledgment of agency but refutes it. Furthermore, the letter is specific in its reference to the first contract. It contemplated that, if that sale did not settle, then no commission other than the $5,400.00 should be paid. The event upon which payment of further commission was made conditional did not occur. The letter does not assist the respondent to overcome the appellant’s objection based upon section 76.

The trial judge held that the absence of writing would not have been a bar to the recovery of commission. His Honour said:

“... Mr. Alfred Salamon, made statements which Mr. Murphy construed, (or any reasonably objective person overhearing them would have construed) as an assertion that he, Mr. Salamon, was an honourable man, and would not go back on his promise to pay commission on the completion of the sale of the land to a purchaser introduced by the plaintiff. I consider that Mr. Murphy acted to his detriment in reliance upon those words, by continuing to seek out possible purchasers of the land, and to persist in his efforts with BMD, notwithstanding the fact that he did not then have a written appointment as agent of BMD. In short, ... I would find that the defendant is estopped from relying upon the provisions of section 76 of the Auctioneers and Agents Act, 1971”.

The evidence relied on by the trial judge for this observation is rehearsed in the reasons for judgment (R1068-9). Mr Murphy, the salesman employed by the respondent who dealt with the appellant, asked Mr Salamon on numerous occasions for a written appointment of agency. Mr Salamon refused but, according to the finding, said to Mr Murphy that he was a man of honour “whose word was his bond”. Mr Salamon had said in evidence:

“... if I say something, I mean it, and what I said was if the purchaser ... is introduced via you, I’m not empowered to ... appoint [you] as an agent, but I don’t think I will have any problem convincing the board ... to compensate you for your efforts”.

The appellant submits that the finding of estoppel cannot stand for a number of reasons. The first is that the representations which are said to found the estoppel relate only to the negotiations for the first contract. That did not proceed and no entitlement to commission arose. There was, in any event, a written appointment in respect of that transaction. No estoppel is needed and there is no scope for one to operate. The appellant’s letter of 8 April, 1994 was, it appears, written in response to Mr Murphy’s importunities to be appointed as agent by writing. No similar assurance was sought or given in respect of the second transaction.

This point appears to have substance. It is only with difficulty that one can understand the representation relied upon as extending to the completed transaction.

A more fundamental difficulty is the absence of evidence that Mr Murphy acted to his detriment in reliance upon the representation. The only evidence on the point appears at R25-26 from which it seems impossible to find that Mr Murphy behaved in any way differently by reason of Mr Salamon’s assurances. Moreover, it is difficult to see what is said to constitute detriment. According to Spencer Bower & Turner, The Law of Actionable Misrepresentation (3rd edition, 1974), paragraphs 138-9, the alteration of position which is said to amount to detriment must be an alteration to material interests, such as entering into a contract, or assuming a liability or making a gift or granting a licence and the like. Dixon J spoke of the need for “material disadvantage” in Thompson v. Palmer (1933) 49 CLR 507 at 547. It is not enough that expectations soar or that social habits change. The evidence does not show any detriment of this kind or, indeed, any other kind.

A point raised on the appeal though not much canvassed was that an estoppel of the kind referred to by the trial judge would contradict the plain meaning of section 76. The principle is referred to in Day Ford Pty Ltd v. Sciacca [1990] 2 Qd R 209 at 216 in the judgment of Macrossan CJ (with whom Kelly SPJ and Ambrose J agreed). The case concerned a contract for the sale of land made invalid by the Land Sales Act 1984. It was said that the defendant was estopped from relying upon the Act by reason of representations to the effect that there was in place a valid contract and the representees had acted to their detriment on the faith of the representations. The court’s answer was (at 216):

“A number of cases consider the place of estoppel in supporting the enforcement of a contract which would otherwise be void for illegality. In Kok Hoong v. Leong Cheong Kweng Mines Ltd [1964] A.C. 993 reference is made to the familiar rule which in its ordinary form is stated in this fashion: a party cannot set up an estoppel in the face of a statute. At 1016 the Privy Council suggested that a test to apply in the type of case before it ... was to ask ‘whether the law that confronts the estoppel can be seen to represent a social policy to which the court must give effect in the interests of the public generally or some section of the public’. A similar approach had been adopted in Maritime Electric Co. v. General Dairies Ltd ... where it was said that in deciding whether an estoppel might be set up against the operation of a statute ‘the Court should first of all determine the nature of the obligation imposed by the statute, and then consider whether the admission of an estoppel would nullify the statutory provision’. At 621 the Court declared that it was ‘unable to see how the Court can admit an estoppel which would have the effect pro tanto and in the particular case of repealing the statute’.”

The Privy Council in the case first mentioned referred with approval to the judgment of Aitken LJ in In re A Bankruptcy Notice [1924] 2 Ch 76. His Lordship said (at 97):

“[I]t is impossible in law for a person to allege any kind of principle which precludes him from alleging the invalidity of that which the statute has, on grounds of general public policy, enacted shall be invalid ... In cases under the Statute of Frauds the general principle has been, not that the Legislature has avoided contracts which are not made in accordance with the forms prescribed ..., but merely that those contracts shall only be proved in that particular way.”

The estoppel alleged here would necessarily operate so as to nullify section 76. For reasons which have seemed sufficient since at least 1922, Parliament has decreed that agents should not be able to sue for their commission unless their appointment was evidenced in writing. The respondent may not circumvent that statutory policy by estoppel. The statute absolutely prohibits the recovery of commission by an agent whose appointment is not evidenced in writing. To say that the commission may be recoverable in a circumstance where there is no written evidence of an appointment is to alter the clear terms of the statute, which is impermissible.

It follows that the respondent could not prove its entitlement to commission or damages in lieu thereof and its action should have been dismissed. The appeal must be allowed. It is not, therefore, necessary to consider the further point argued on the appeal but, because it occupied the forefront of submissions, it is desirable to say something about it.

The trial judge found (at R1070-1) that the appellant appointed the respondent (Mr Murphy in particular) as agent for the purpose of introducing a purchaser to its land. The exact agreement found by his Honour was that the appellant promised to pay the respondent commission at the rate of two per cent of the purchase price upon the respondent introducing a purchaser who actually completed the transaction.

It follows from this formulation of the respondent’s contractual obligation that, before it was entitled to be paid commission, the sale which in fact occurred was brought about as the result of its agency. Some act of the respondent must have been the effective cause of the sale. See L J Hooker Ltd v. W J Adams Estates Pty Ltd (1977) 138 CLR 52 at 58, 61 per Barwick CJ and 67-8 per Gibbs J; Burchell v. Gowrie & Blockhouse Collieries Ltd [1910] AC 614 at 624. As Jacobs J pointed out in Hooker (at 86):

“The inquiry is a factual one and it probably does not matter ... whether the definite or indefinite pronoun is used before the words ‘effective cause’. ... In almost any factual situation a result will have more than one cause ... ‘Effective cause’ means more than simply ‘cause’. The inquiry is whether the actions of the agent really brought about the relation of buyer and seller and it is seldom conclusive that there were other events which [could] each be described as a cause of the ensuing sale. The factual inquiry is whether a sale is really brought about by the act of the agent ...”.

The concept of effective cause was developed to assist agents to recover commission in circumstances where they had located a purchaser who completed the acquisition of property but where there was some alteration in the transaction from that first contemplated when the vendor retained the agent to find a buyer. See Hooker at 76, per Stephen J and Joske, Commission Agency (1974), paragraphs 189-90. The concept should not become a justification for subjecting an agent’s conduct to subtle or sophisticated analysis or a philosophical inquiry into the mechanisms of cause. The inquiry is rather a common sense one to answer the question whether the actions of the agent really brought about the relation of buyer and seller.

The trial judge found that the respondent was the effective cause of the sale of the reduced area of land to BMD. His Honour said (at R1075, 1079, 1080, 1081):

“[T]he [appellant] ... sought to preserve as much as it could of the benefits it perceived itself as having gained in the first contract. Furthermore, ... it was largely successful in so doing.

...

[The correspondence] demonstrates an attitude on the part of the [appellant] that as far as possible the new arrangement was to reflect the old - with only the necessary changes being made.

...

[T]he [appellants] were largely able to achieve this end. Having to negotiate two contracts was clearly not what they would have wished to have happened, and no doubt involved time and worry in seeing the matter through to a successful completion. But at the end of the day, I find, that the [appellant] was able to retain the benefit of most of the advantages conferred by the first agreement.

...

[T]he [respondent], in introducing BMD to the land, and in the initial work he did, pursuant to ... his appointment as agent ..., enabled the [appellant] to enter into a contract on most favourable terms with BMD. ... [S]o 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 [respondent] can be said to be an effective cause of the [appellant’s] entering into the second BMD contract.”

The appellant criticises this approach on the basis that its desire to achieve the best bargain it could from the sale of its land left after the Council’s resumption indicates no more than the operation of self-interest common in, and indeed essential to, the operation of a market economy. It says nothing of the means by which the appellant obtained those benefits. The appellant, in essence, argues that the effective cause of the sale which resulted from the second contract was not the introduction of BMD to the appellant but the resolution of the difficulties encountered with the Council over rezoning. The appellant’s argument is that:

following the rescission of the first contract, there followed a completely new bargain brought about without any involvement by the respondent beyond attempting to be kept informed of the progress of negotiations;
the land was sold not to one purchaser for an aggregate price of $6,825,000.00 but in two subdivided parcels, for a price, though for the same total nominal consideration, which is less by an amount of about $630,000; and
the sale which eventuated occurred only because of protracted and expensive negotiations between the appellant and the Council and then by the purchaser’s thorough re-evaluation of the profitability of its acquisition for residential development.

I accept the force of the appellant’s criticism of the emphasis placed by the trial judge on the “continuity of benefits” which “flowed through” to the appellant from the first to the second contract. The focus of the inquiry must be whether the relationship of buyer and seller which undoubtedly came into existence between the appellant and BMD was brought about by the respondent’s actions. The trial judge was, though, right in having regard to the whole of the circumstances relating to both contracts to see whether the second was effectively the result of the agency. The appellant wishes to limit scrutiny to the negotiation of the second contract. Such an investigation reveals little activity by the respondent. The wider inquiry favoured by the trial judge tends to show that the second contract had its origin not in the Council’s decision to acquire part of the land and the problems and solutions that decision threw up for the completion of the first contract, but in the decision of BMD to buy the whole parcel. The appellant concedes that had the first contract proceeded to completion the respondent (subject to satisfaction of section 76) would have been entitled to commission. It would have found a buyer for the land in accordance with its retainer.

The first contract was rescinded consensually to allow the Council to buy the land it required for its conservation purposes and BMD to acquire the balance with which it could undertake a profitable development. The initial contract could not proceed because of the Council’s desire to preserve bushland. The parties to the contract then made the best bargain they could after accommodating the Council’s concern. What emerges is the persistence of BMD’s interest in acquiring the land and the appellant’s desire to maintain and bring to fruition a relationship of vendor and purchaser with BMD.

The case differs from those relied upon by the appellant, Rasmussen & Russo Pty Ltd v. Gaviglio [1982] Qd R 571 and Bradley v. Adams (supra). Those, and cases like them, were instances where the person found by the agent was willing but not able to buy. When subsequently, by the intervention of another agent, the purchaser’s inability to fund the purchase was overcome, it was held that the first agent was not the effective cause of the sale. In Bradley, Thomas J said (at 264):

“[T]he factors which stand in the way of a successful claim by the agent are the failure of the initial contract, at which point the agent had failed to produce a ready, willing and able purchaser; the total failure of the agent to play any part in the subsequent negotiations and rearrangements; and the substantial difference between the eventual bargain, both in relation to mechanism and benefits of the respective parties when compared with that which the agent was retained to achieve.”

In this case the first contract did not fail because of the inability of the purchaser to complete. It was abandoned as a part of a rearrangement allowing the purchaser to complete the amended bargain. As Lord v. Trippe (1977) 51 ALJR 574 at 579-80 shows, an agent’s work may be regarded as the effective cause of the sale even when significant changes occur between the initial contemplated transaction and that which finally results.

In my opinion, the trial judge was right in concluding that the respondent was the effective cause of the sale and/or that the respondent introduced to the appellant a purchaser who was ready, willing and able to buy its land.

However, because of the lack of writing evidencing the respondent’s appointment its claim for commission must fail. The result might seem harsh but the Court is bound to decide cases according to law on the issues the parties bring forward.

The appeal should be allowed, the judgment below set aside and instead judgment should be entered for the appellant with costs of the trial and of the appeal to be taxed.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 4852 of 1998

Brisbane

Before de Jersey CJ

McPherson JA

Chesterman J

[Salamon Nominees P/L v. Moneywood P/L]

BETWEEN:

SALAMON NOMINEES PTY LTD ACN 004 658 146

(Defendant) Appellant

AND:

MONEYWOOD PTY LTD ACN 011 025 755

(Plaintiff) Respondent

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered 22 December 1998

This is an appeal against a judgment for the amount of commission claimed to have been earned by the respondent plaintiff acting as real estate agent in the sale by the appellant defendant of a parcel of 31.38 ha. of land at Capalaba to BMD Constructions Pty. Ltd. under a contract (ex. 3) dated 14 June 1995. It is admitted in the pleadings that the sale was settled on 31 July 1995, at which time the defendant received the purchase moneys of $4.26 million payable under it. A few weeks before, the Redland Shire Council had on 29 June 1995 completed a sale of a parcel of 16.06 ha. of adjoining land under a contract dated 13 June 1995 (ex. 5) by which the Council agreed to purchase that land from the defendant. The purchase price paid by it was $2.2 million. Together the two parcels had originally constituted a single registered allotment described as Lot 1 on RP 189159 in the County of Stanley, Parish of Capalaba. The whole of that allotment covering an area of 47.5372 ha. was the subject of an earlier contract of sale dated 31 March 1994 (ex. 1) by the defendant as vendor to BMD as purchaser for a price of $6.825 million. That contract was not completed. Although under its terms, the deposit of $270,000 was expressed to be non-refundable, the defendant on the completion of the second contract of sale to BMD (ex. 3) nevertheless allowed the purchaser BMD a credit of $95,000 in respect of it.

The reason why the earlier contract was not completed was that, when BMD originally agreed to buy that land in 1994, it was planning to develop the whole allotment for residential subdivision and sale. This would have interfered with the use of part of it as a koala corridor and it provoked opposition from local residents. In the result, the interests of the koala population were accommodated by the Council’s purchasing the parcel of 16.06 ha. for $2.2 million, and BMD purchasing the remaining 31.318 ha. for the price of $4.26 million previously referred to. The Council could, of course, have acquired its portion of the land by agreement or compulsory acquisition either directly from the defendant or, after completion of the 1994 contract, from BMD. The first alternative was chosen by BMD because it involved a reduction of its liability for stamp duty which, as appears from ex. 14, was a course that the defendant readily agreed to. The original contract ex. 1 was not rescinded until the later two contracts (ex. 3 and 5) had been entered into.

Apart from the koala problem, there is no reason to suppose that the first contract of sale would not have been completed in accordance with its terms. In fact, as the trial judge found, the common intention of the defendant and BMD was that the new arrangement should, as far as possible, reflect the terms of the original contract ex. 1. Despite the intervention of the Council in that arrangement, the sale was completed well within the time limited for completion of the original contract. That contract had expressly permitted, at the option only of the defendant, extension of the date for completion for a period of 12 months, which option was in fact exercised by the defendant. A comparison with the price payable under the original contract shows that the total amount of purchase moneys received by the defendant under the two completed sales was less by $95,000 than it would have been under ex. 1. It, was, however, received some three months earlier than BMD was originally bound to pay it, and to that extent the defendant may be seen to have been compensated by receiving the purchase moneys sooner than might otherwise have been expected.

To sustain its claim for commission in respect of the sale, the plaintiff was required to establish three matters. They were and are: (1) that the defendant had agreed to pay commission to the plaintiff; (2) that the plaintiff had done what was required to earn that commission; and (3) that its appointment to act as real estate agent in respect of the transaction was, within the meaning of s. 76(1)(c) of the Auctioneers and Agents Act 1971, in writing and signed by the defendant. As to the first of these matters, the learned trial judge found that the plaintiff acting through Mr Murphy, and the defendant acting through Mr Salamon, had orally “agreed that commission would be payable to the plaintiff at the rate of 2 per cent of the purchase price on Murphy’s introducing a purchaser who actually completed a purchase; or, as Mr Murphy put it, ‘he would pay me on the receipt of moneys, 2 per cent commission’”. That is a finding of fact based on impressions of credibility formed at trial, which was not challenged on appeal, and which accords with the ordinary expectation that an estate agent’s commission is payable if, but only if, the sale is completed: Anderson v. Densley (1953) 90 C.L.R. 460, 467.

The same passage in Anderson v. Densley goes on to say that if the plaintiff agent is “the effective cause of that sale ... he would at common law have earned his commission”. In Rasmussen & Russo Pty. Ltd. v. Gaviglio [1982] Qd.R. 571, 580-582, some reasons were suggested why, in an action to recover commission, it has been considered necessary for the agent to establish that he or she was the “effective cause” of the sale. I need not repeat here what was said on that occasion, beyond remarking that in that case the plaintiff failed because the agreement there was that commission was payable on finding “a purchaser who enters into a valid and enforceable sale confirmed by me ... for such property and ... completes such sale”. The plaintiff in that instance located purchasers who entered into a valid and enforceable contract of sale; but, through inability to obtain finance, they did not complete “such sale”, but rescinded it. It followed that the conditions entitling the plaintiff to the agreed commission were not fulfilled, and the plaintiff’s action to recover it was unsuccessful. A subsequent completed sale (for which finance was found by someone else) was not considered to be attributable to the plaintiff’s acting as agent.

Whether or not an agent has done what is necessary, or has been agreed, to earn his commission requires ascertaining “with precision what are the express terms of the contract”, and depends upon “the exact terms of the contract in question, and upon the true construction of those terms”: Luxor (Eastbourne) Ltd. v. Cooper [1941] A.C. 108, 124, adopted in L.J. Hooker Ltd. v. W.J. Adams Estates Pty. Ltd. (1977) 138 C.L.R. 52, 66, 73. On the true construction of the agreement found by the judge here, the plaintiff was to be paid commission at the rate of 2% when the purchase moneys were received on completion. That agreement was made on or about 1 March 1994. The original contract of sale (ex. 1) was executed on 31 March 1994. It may be possible to regard that agreement by Mr Salamon to pay commission as an oral acknowledgement or recognition that the plaintiff had already done what was necessary to earn its commission, subject always to receipt of the purchase moneys by the defendant on completion. The defendant’s case is, of course, that it was not by that contract (ex. 1) that the land was sold, but by the other two later contracts (exs. 3 and 5) entered into with BMD and the Council which were completed in June and July 1995. However, if the agreement was, as his Honour found, that the plaintiff would be paid commission when the purchase money was received, then it is arguable that the plaintiff became entitled to payment when those contracts, or in particular ex. 3, were completed, which happened at latest on 31 July 1995.

If, however, it was and is necessary for the plaintiff to go further and establish that it was the “effective cause” of the later sale, then, like Chesterman J., I am persuaded it succeeded in doing so. The expression “sale” in this context means primarily a completed contract for sale which produces the money upon or from payment of which it is ordinarily expected that the agent will be remunerated. The fact that the original contract is, without the intervention of the agent, varied or even rescinded by another contract of sale, is not necessarily fatal to the plaintiff’s claim to have been the effective cause of the later sale if completed. As was said in Burchell v. Gowrie & Blockhouse Collieries Limited [1910] A.C. 614, 625:

“... if an agent ... brings a person into relation with his principal as an intending purchaser, the agent has done the most effective, and, possibly, the most labourious and expensive, part of his work, and ... if the principal takes advantage of that work, and, behind the back of the agent and unknown to him, sells to the purchaser thus brought in touch with him on terms which the agent theretofore advised the principal not to accept, the agent’s act may still well be the effective cause of the sale.”

The decision of the Privy Council in Burchell v. Gowrie was referred to with apparent approval by Gibbs J. and also by Stephen J. in L.J. Hooker Ltd. v. W.J. Adams Estates Pty. Ltd. (1977) 138 C.L.R. 52, 67-68, 76. It may also have contributed something to the statement by Barwick C.J. (138 C.L.R. 52, 55-56) that the agent may earn his commission either by “the introduction of the person to the property of which he becomes the actual purchaser or to the vendor as a purchaser of that property”.

Later in his reasons the learned Chief Justice said (138 C.L.R. 52, 58):

“But the commission is not fully earned unless there is a sale which has resulted wholly or partially from the efforts of the agent. The most common way of performing the agent’s task is to introduce to the principal a person who becomes the purchaser under a binding contract of sale. In terms of causation, the agent has thus been an effective cause of the sale. It is nothing to the point in such a case that that person would have become the purchaser without the intervention of the agent; or that the principal’s own efforts were also an effective cause of the sale.”

Gibbs J. in his reasons for judgment in that case said (138 C.L.R. 52, 68) that, “like all questions of causation”, whether or not an agent was the effective cause of a sale “is ultimately a question of fact”. In the present case the learned trial judge found that the plaintiff had in fact brought about the sale of the land by the defendant. By that, his Honour was referring to the portion containing 31.338 ha. of the whole allotment that was sold to BMD under the second contract ex. 3, and not the area of 16.06 ha. that was, in the events that happened, sold to the Council, whom the plaintiff did not “introduce” to the defendant. The amount of the commission for which judgment was given at the agreed rate of 2%, on which interest was allowed at 10% from the date of settlement of the BMD contract until judgment, was $90,600.00 calculated on the purchase price of $4.26 million paid under that contract ex. 3. This accords with what was said by Barwick C.J. in another passage in his reasons in L.J. Hooker Ltd. v. W.J. Adams Estates Pty. Limited (1977) 138 C.L.R. 52, 59, to the effect that an agent employed to find a purchaser of the whole of the property is entitled to a commission “rateable to the value of the land sold” if the principal sells only a portion of the land to a purchaser whom the agent introduced. In principle, it does not differ from a sale at a price or on terms different from those recommended by the agent who introduced the purchaser, as to which the Privy Council in Burchell v. Gowrie [1910] A.C. 614, accepted that the agent was entitled to his commission.

On appeal, the defendant challenged the finding at trial that the plaintiff was the effective cause of the sale to BMD under the second contract. The submission stressed that the judge had found that there was always a “good possibility” that the original contract would not proceed to completion through no fault of the parties because of public interest in the koala habitat. BMD was aware of the koala problem before it entered into the original contract. It does not detract from the fact that the whole of the land was sold, and that the plaintiff was responsible for interesting BMD in buying from the defendant the portion of the land which it ultimately acquired. Nor is the factual conclusion to that effect undermined by the circumstance that BMD dealt directly with the Council in relation to the second contract, or that it did so on its own re-evaluation of the project. The most that this goes to show is that the person whom the plaintiff introduced as purchaser was someone who was determined to acquire the land, or if necessary, only a part of it once it proved impossible to acquire the whole. To that extent, it served to confirm the wisdom of the plaintiff’s choice of purchase. In the light of that circumstance, the fact that the plaintiff played no part in the negotiations leading to the two later contracts, which were entered into in substitution for the original contract, is not of such decisive significance as to compel a conclusion that the judge’s finding on that issue was wrong and should be set aside. In my opinion, the finding that the plaintiff was the effective cause of the sale to BMD was correct and should not be disturbed on this appeal.

This leaves for consideration the third of the questions specified above, which is whether the plaintiff’s appointment to act as a real estate agent in respect of the transaction was, within the meaning of s. 76(1)(c) of the Auctioneers and Agents Act 1971, in writing and signed by the defendant. However the matter is formulated, it raises two subsidiary inquiries which, although at times they tend to merge, really involve separate inquiries. The first is whether there was any and, if so, what appointment of the plaintiff to act as agent. The second is whether the written appointment, if any, satisfies the terms of s. 76(1)(c) of the Act, which so far as material is in the following terms:

“76.(1) No person shall be entitled to sue for or recover or retain any ... commission, ... for or in respect of any transaction as ... a real estate agent, ... unless -

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 ...”

As to the first of these matters, I am in no doubt that the letter dated 8 April 1994 (ex. 39), on which some reliance was placed by the plaintiff, does not amount to either an appointment, or the recognition of an appointment, of the plaintiff as the agent of the defendant. As I have said, the finding made by the trial judge was that on or about 1 March 1995, the parties orally agreed that commission would be paid to the plaintiff at the rate of 2% of purchase price when the purchase moneys were received. Far from acknowledging or recognising the existence at an earlier date of any such appointment, the letter of 8 April 1994 expressly rejected it. It is possible for a repudiation, if incautiously expressed, to involve an admission of the existence, and even of the terms, of the agreement or appointment repudiated; but ex. 39 expressly denies that the defendant “entered into any agreement or instructed you to act as agent to introduce purchasers” for the property in question. The plaintiff cannot rely on it as amounting to an authority to it to act as agent whether for the purposes of s. 76(1)(c) or otherwise.

Neither of the later two contracts (exs. 3 and 5) made any reference to the plaintiff being the defendant’s agent. The plaintiff, if it is to succeed at all, is forced to rely on the provisions of the original contract of sale itself (ex. 1). Exhibit 1 incorporates the standard printed conditions of sale (first edition) adopted by the Real Estate Institute and approved by the Queensland Law Society. It commences with a series of numbered and lettered notes indicating the nature of the particulars to be filled in in the spaces provided. Opposite Note 1B “Vendor’s Agent/Address” the words “L.J. Hooker Land Marketing” (which was the plaintiff’s trading name) have been inserted. One then travels to cl. 30 of the printed form headed Appointment of Agent, which and provides:

“30. 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.”

The provision in cl. 30 of these standard conditions (first edition) may be contrasted with the form of instrument previously recommended or used by members of the Real Estate Institute for many years, which was frequently the subject of earlier decisions in Queensland, notably Anderson v. Densley (1953) 90 C.L.R. 460, 466. The instrument in that case opened with the words:

“Mark Densley as Agent for the Vendor William Charles Anderson do hereby acknowledge that I/we have sold this day to Noel Pryce ... the property situated in .....”.

There followed a description of the property sold, the price, and so on. As N.W. Macrossan C.J. pointed out in Morris v. Forrester-Jones [1950] St.R.Qd. 252, 261, a document in that form was, strictly speaking not an:

“an instrument of sale .... The document does not in terms purport to sell anything. It records that the plaintiffs have sold to the defendant the subject property for the sum of £1,050 upon the terms set out in the document.”

In other words, the R.E.I.Q. form previously in use was not a contract as such but a memorandum in writing, to be signed by the vendor, of an agreement purporting already to have been made, perhaps orally, to sell the land in question at the agreed price and on the terms recorded in that document. No doubt that form of instrument was adopted or adapted in order to satisfy the provisions of the Statute of Frauds; but, seeing it was an R.E.I.Q. standard form agreement, it almost certainly also had an eye to the provisions of s. 76 of the Act, or its statutory predecessor, by ensuring that there was a written record signed by the vendor of the agent’s authority to act on behalf of the vendor in the matter of the sale. As we shall see, it was, for the purpose of those provisions, sufficient that there was a written acknowledgment, signed either before or after the contract was made or the sale was effected, by the vendor that a named agent had been appointed or engaged by him to act in respect of the transaction.

From the agent’s standpoint, the potential problem created by a contract or memorandum in that form was that, to borrow a phrase from the reasons of Chesterman J. on this appeal, it was “transaction specific”. That this was so clearly emerges from the decision of the High Court in Anderson v. Densley (1953) 90 C.L.R. 460, from which the relevant recital in the instrument has already been set out. It was dated 12 June 1951 (ex. 9) and described the plaintiff agent as acknowledging that he had sold for £9,542 two properties, which were separate Crown leases, of which title descriptions were given. Plant and livestock were not the subject of that contract or instrument, but were included in a separate contemporaneous contract (ex. 10) bearing the same date and recording that they were sold for £4,458 to H.A. Pryce, who was the father of Noel Pryce, the purchaser of the land described in ex. 9. Unlike ex. 9, the contract ex. 10 did not acknowledge the plaintiff Densley as the vendor’s agent in relation to the sale of plant and livestock. No doubt that was because he had not in fact acted in the sale of that property. The problem confronting the plaintiff agent in his action for commission against the vendor Anderson was that, when the parties later entered into a fresh contract dated 23 February 1952 (ex. 13) for the sale for a total price of £113,700 not only of the Crown leases but of the plant and livestock as well, there was no contract or written memorandum for the sale of the lands and chattels in which the plaintiff was acknowledged by the signature of the vendor to have been or to be the agent acting for him in the sale. Exhibit 13 dated 23 February 1952 made no mention of an agent. Neither did ex. 10, which was the earlier contract of 12 June 1951 to sell the chattels to H.A. Pryce. The earlier contract ex. 9 of that date did include a signed acknowledgement that the plaintiff Densley was his agent; but it related only to the lands comprising the Crown leases that were sold, and not to the chattels consisting of the plant and equipment the subject of ex. 10.

The plaintiff was therefore left without any signed acknowledgment by the vendor on which he could rely to satisfy the statute showing that he was in fact the person appointed to act as the vendor’s agent for the sale of both the land and chattels. Hence, as the High Court said in their reasons in that case (90 C.L.R. 460, 469):

“... the second submission remains for consideration. The provisions of the first contract of 12th June 1951, which we have set out, are at most an acknowledgment by the defendant of the engagement or appointment of the plaintiff to act as the agent of the defendant to sell the land owned by the defendant to Noel Pryce for £9,542. It is not an acknowledgement of the engagement or appointment of the plaintiff to sell the whole of the defendant’s grazing assets. In the end the defendant did sell the whole of these assets to Noel Pryce on a ‘walk-in-walk-out’ basis. But the plaintiff is unable to point to any writing evidencing his engagement or appointment to act as a commission agent on behalf of the defendant other than an acknowledgment of his engagement or appointment to act on the sale of the defendant’s land. We are unable to agree with the learned trial judge that ‘the writing contained in Exhibit 9 evidences an engagement or appointment of the plaintiff to act as commission agent in respect of transactions here in question’. Exhibits 9 and 10 do, as he said, refer to each other, but there is no acknowledgment in either document of the engagement or appointment of the plaintiff to act as a commission agent except in respect of the sale of the defendant’s land.”

While it may be accepted that, in this passage, their Honours ultimately approached the question as one of whether or not there was a written acknowledgment of the plaintiff’s appointment as agent, that was so because of the way in which the trial had proceeded in the court below. The jury having answered in favour of the plaintiff the six specific questions put to them by the trial judge, counsel for the defendant then moved non obstante veredicto for judgment in favour of his client on the footing that he was as a matter of law entitled to judgment because of the absence of the written appointment required by the statute (see 90 C.L.R. at 464). The decision is, in my respectful opinion, not authority for saying that the later contract of sale (ex. 13) to Noel Pryce was not part of the same “transaction” as the earlier two contracts. The question was not raised in argument on appeal nor, so far as one can gather, at the trial. Even if it had been, the plaintiff could not have succeeded on submission to that effect, because he was unable to produce more than an acknowledgement that he was the agent for the defendant under a contract that was confined to the sale of the lands to Noel Pryce. Why he did not claim commission on that sale, or the part of it represented by the land component that was sold, we cannot tell. Perhaps he was not advised of the principle stated by Barwick C.J. in the passage referred to earlier from L.J. Hooker Limited v. W.J. Adams Estates Pty. Ltd. (1977) 138 C.L.R. 52, 58 concerning the right to commission “rateable to the value of the land” where only part of the subject-matter is sold.

The real difficulty for the agent in Anderson v. Densley was that the written authority in favour of the agent was too limited in its scope to cover the transaction ultimately entered into and completed. It is not, however, impossible to conceive of cases in which the relevant written appointment of the agent extends to more than the specific contract to which it was in fact initially related. Canniffe v. Howie [1925] St.R.Qd. 121, which was referred to with approval in Anderson v. Densley, is an instance of that kind. The factual sequence there was that on 24 April 1924 the defendant as the prospective vendor of Globe Laundry gave particulars of it to the plaintiff agent. On 19 May 1924, the plaintiff and the ultimate purchaser Fish Steam Laundry met the defendant, who gave to the purchaser a signed option (ex. 4), exercisable within 42 days, to purchase the Globe Laundry for £4,150. The option period expired on 30 June 1924, which was before a contract of sale was entered into on 25 July 1924 at a price of only £4,000. In explaining the submission of the defendant vendor (who was the appellant in the Full Court), McCawley C.J. said ([1925] St.R.Qd. 121, 123-4):

“Had the sale been effected at the price and within the time specified on the document (Exhibit 4), the document would, it is clear, have fully satisfied the requirements of the section. But the appellant Howie contends that the sale on the 25th July was a separate transaction, in respect to which no engagement in writing existed, the document (Exhibit 4) being, he contends, an appointment strictly limited to a particular sale at a specified price and within a specified time - an appointment which had expired before the separate transaction had eventuated.

Assuming that the engagement is limited, what is the nature of the limitation? If the engagement relates only to the offer specified, then, had there resulted before the 30th June, from the negotiations set in motion by or in pursuance of Exhibit 4, a sale at £4,000, would not the document have been a document ‘in respect of’ that transaction ? Here it is established that the negotiations set on foot by the document were continuous and resulted in the sale on the 25th July, and that the time limit mentioned in the document had been verbally extended until the end of July. It seems to me that there was evidence from which the Magistrate could reasonably conclude that the transaction completed on 25th July was a transaction in which the document was a material and substantial step; that the transaction so arose out of and was so intimately connected with the agency appointment conferred or evidenced by Exhibit 4 that that document constituted ‘in respect of such transaction’ an appointment in writing sufficient to satisfy the section. I am therefore of opinion that even if the written appointment is to be construed as limited, the Magistrate’s decision was right, and that the appeal should be dismissed.”

Lukin J. did not refer in detail to the point in his reasons for judgment; but it is clear that he adopted the same view of the matter as McCawley C.J. About that one may be confident because both he and the third member of the Court (who was Macnaughton J.) agreed that the defendant’s appeal should be dismissed. Indeed, Lukin J. considered ([1925] St.R.Qd. 121, 127) that:

“... so long as the relationship of principal and agent in respect of the transaction is evidenced in writing, then the mischief aimed at by the section has been duly met, and the requirement of the section satisfied, and the other terms of the agency contract may be effectively made and varied verbally.”

By “verbally”, it is clear that his Honour meant orally.

Unlike the form of instrument considered in Anderson v. Densley, the acknowledgment in cl. 30 of the contract ex. 1 in this case is in very wide terms. After naming the vendor’s agent in Note 1B as “L.J. Hooker Land Marketing”, cl. 30 incorporates an acknowledgment that “by executing this contract” the defendant vendor “confirms the appointment of the Vendor’s Agent ... as the agent of the Vendor to introduce a buyer”. Unlike the form of acknowledgment in Anderson v. Densley, the language is proleptic. Rather than referring to an event that has already taken place, it is as readily capable of being understood to refer to sales or introductions of buyers that may yet take place as to those that have already done so. There is nothing in cl. 30 to tie it to any particular contract or buyer. The mere fact that it appears in ex. 1 is, in my respectful opinion, not sufficient to justify the implication of any such limitation in or on the words used, although its presence in the contract may go some way to suggesting the kind of transaction that the parties (who for this purpose are the plaintiff and the defendant) had in mind. Read with Note 1B, the terms of cl. 30 amply comprehend the appointment of the plaintiff to act as agent not only in respect of the original sale to BMD, but also in respect of the later sale to BMD. The price payable under the second contract is less than in the first; but so it was in Canniffe v. Howie [1925] St.R.Qd. 121. See also Samson v. Mitchell [1927] G.L.R. 427. The land ultimately sold to BMD was a reduced area, but, on what was said by Barwick C.J. in L.J. Hooker Limited v. W.J. Adams Estates Pty. Ltd., that feature goes only to reduce the amount of commission recoverable by an agent engaged to “find a buyer” and is not fatal to the claim in its entirety.

The second of the two inquiries or questions remains, which is whether an authority expressed as widely as it is in the form of cl. 30 of the standard conditions goes beyond the scope, ambit or contemplation of s. 76(1)(c). The answer to that question depends primarily on the meaning to be given to the word “transaction” in s. 76(1)(c). It is one that is not devoid of authority. In Canniffe v. Howie [1925] St.R.Qd. 121, 124, McCawley C.J. thought it arguable that the option document “evidences a general appointment as agent for the sale of the property”. In addition to what he and Lukin J. said there in relation to the facts of that case, the relevant statutory provision has a lengthy legislative and judicial history. It originated in New Zealand as s. 13 of the Land Agents Act 1913, which provided that a land agent was “not entitled to sue for or recover any commission for or in respect of the sale or other disposition of land unless ... (b) his engagement or appointment to act as agent in respect of such sale or disposition is in writing signed by the person to be charged ...”. The New Zealand provision was plainly narrower than s. 76(1)(c) in that the former referred to a “sale” and to the agent acting in respect of “such sale”, whereas the Queensland provision refers more broadly to a “transaction”. In one of the earliest decisions on s. 13 of the New Zealand Act, Cooper J. in Thornes v. Eyre (1915) 34 N.Z.L.R. 651, 659, said that only two matters were required to be in writing; namely, “the appointment to act as agent, and the specific property which the agent is authorised to sell”. His Honour explained (34 N.Z.L.R. 651, 660) that the “mischief” at which the statutory provisions was directed was the potential for perjury, on the part of either the agent or the vendor, arising from a purely oral authority to sell. Although comparable with the provision in the Statute of Frauds, his Honour observed that s. 13 differed from it in that the Statute required every term of the contract to be in writing, whereas s. 13 required no more than the appointment and the property to be recorded. The same distinction was made by Lukin J. in Canniffe v. Howie [1925] St.R.Qd. 121, 127. The notion that no departure from the terms of the original authority is permitted may have received some approval from Connolly J. in Bradley v. Adams [1989] 1 Qd.R. 256, 261; but Thomas J. deliberately refrained from deciding the point, and Andrews C.J. agreed with his reasons as well as with those of Connolly J..

Cooper J. in effect repeated what he had said in Thornes v. Eyre in his later decision in Looney v. Pratt [1919] G.L.R. 231, 232. It was, he said:

“a sufficient appointment if it is founded on a writing signed by the principal before the transaction is completed, or if it can be gathered from any written document afterwards signed by the principal.”

The written admission by the vendor to the agent in that case was contained in a letter written after the contract was made, which Cooper J. described as “a recognition” by the vendor of the plaintiff as his agent. The decision in Looney v. Pratt has since been followed in New Zealand on occasions too numerous to mention. It was referred to with approval by Lukin J. in Canniffe v. Howie [1925] St.R.Qd. 121, 127, where his Honour and the other members of the Full Court accepted that the document (the option) in that case sufficiently indicated in writing “the existence of the relationship” of principal and agent. It was from that source and the many subsequent decisions in Queensland that have since followed it that the High Court in Anderson v. Densley (1953) 90 C.L.R. 460, 468, derived the proposition that it is sufficient for the purposes of s. 76(1)(c), or its statutory predecessor, which was s. 23(1)(b) of The Auctioneers and Commission Agents Acts, 1922 to 1951, “if some writing or connected writings exist evidencing the creation of the relationship of principal and agent in respect of the transaction pursuant to an oral contract”.

It may be pertinent to notice here that in more recent times the statutory provision in New Zealand has been replaced by s. 62(b) of the Real Estate Agents Act 1976. Despite the fact that s. 62(b) now disentitles a person from suing for commission in respect of any service or work performed by him as real estate agent unless his appointment to act as agent or perform “that service or work” is in writing and signed, a majority of three judges of the Court of Appeal in Houlahan v. Royal Oak Realty (1993) Ltd. [1996] 3 N.Z.L.R. 513 rejected two earlier decisions under s. 62(b) in which it had been held that “that service” was confined to the specific transaction authorised in writing. The agent there was held entitled to recover in respect of a sale between the same parties at a later date, a higher price and a lower deposit, and which also omitted the special condition which had brought about the downfall of the earlier standard form contract under which the agent was acknowledged to be the agent through whom “the sale evidenced by this agreement” had been made.

It is not necessary to determine whether in this State the view of the majority, or of the dissentient minority, in Houlahan v. Royal Oak Realty (1993) Ltd. is to be preferred. In Queensland the word “transaction” adopted in 1922 was deliberately retained in the Act of 1976. Without doubt, it is wider than the word “sale” or the words “that sale” or “that service” used in successive New Zealand statutes. It may in fact fairly be assumed that the original departure in Queensland from the New Zealand model of 1913 was prompted by concern that the trans-Tasman expression might readily provoke disputes of the kind illustrated by these proceedings and by Houlahan. In the present case I have no hesitation in concluding that the second contract ex. 3 for sale to BMD of part of the subject land owned by the vendor is fairly to be considered as part of the same “transaction” in respect of which the relationship of principal and agent was originally constituted by the oral agreement found by the trial judge, and that that relationship is recognised or is “evidenced” by the particulars contained in Note 1B and the terms of cl. 30 of the standard form forming part of ex. 1, which was signed by the defendant.

The words “in respect of”, which are used in relation to “transaction”, both in the protasis of s. 76(1) and in s. 76(1)(c) itself, are very wide. They are said to have “the widest possible meaning of any expression intended to convey some connexion or relation between the two subject matters to which the words refer”. See State Government Insurance Office (Qld). v. Crittenden (1966) 117 C.L.R. 412, 416, per Taylor J., citing with approval the statement of Mann C.J. in Trustees Executors & Agency Co. v. Reilly [1941] V.L.R. 110, 111. Section 76(1)(c) of the Act thus sanctions as sufficient, for the purposes of that provision, a written authority which conveys some connection or relation between the written engagement or appointment to act as real estate agent and the “transaction” out of which the claim for commission arises. Viewed in that context, cl. 30 is, in my respectful opinion, not capable of being considered so broad as to be beyond the proper scope or ambit of s. 76(1)(c). I am not unmindful of the force of some of the concerns expressed by Chesterman J. in his reasons on this appeal concerning the consequences of a potentially “open-ended” interpretation of s. 76(1)(c). In my opinion, however, the requirement that the authority must operate in respect of a “transaction”, and also that the agent must, in the end, establish that it was through his or her agency that the sale was brought about, are adequate to exclude the worst excesses that may be imagined for the future, in the same way as, on my view of the authorities, in particular Canniffe v. Howie [1925] St.R.Qd. 121, they have in relation to s. 76(1)(c) successfully done so in the past.

In the result, I am satisfied that the plaintiff succeeded at trial in establishing all of the necessary elements of his claim to recover the amount of commission and interest thereon for which judgment was given in the action. I would therefore dismiss the appeal with costs.

Editorial Notes

Published Case Name:
Salamon Nominees P/L v Moneywood P/L
Shortened Case Name:
Salamon Nominees Pty Ltd v Moneywood Pty Ltd
MNC:
[1998] QCA 440
Court:
QCA
Judge(s):
de Jersey CJ, McPherson JA, Chesterman J
Date:
22 Dec 1998

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited List of Cases Cited by this judgment

Case Name	Full Citation	Frequency
Anderson v Densely	View on:JADE(1953) 90 C.L.R 460	8 citations Jump To Cite 1 - (1953) 90 C.L.R 460 Cite 2 - (1953) 90 C.L.R 460 Cite 3 - (1953) 90 C.L.R 460 Cite 4 - (1953) 90 C.L.R 460 Cite 5 - (1953) 90 C.L.R 460 Cite 6 - (1953) 90 C.L.R 460 Cite 7 - (1953) 90 C.L.R 460 Cite 8 - (1953) 90 C.L.R 460
Bradley v Adams	[1989] 1 Qd R 256; [1988] QSCFC 80	3 citations Jump To Cite 1 - [1989] 1 Qd R 256 Cite 2 - [1989] 1 Qd R 256 Cite 3 - [1989] 1 Qd R 256
Burchell v Gowrie and Blockhouse Collieries Ltd.	View on:ICLRUK[1910] AC 614	4 citations Jump To Cite 1 - [1910] AC 614 Cite 2 - [1910] AC 614 Cite 3 - [1910] AC 614 Cite 4 - [1910] AC 614
Canniffe v Howie	[1925] St R Qd 121	10 citations Jump To Cite 1 - [1925] St R Qd 121 Cite 2 - [1925] St R Qd 121 Cite 3 - [1925] St R Qd 121 Cite 4 - [1925] St R Qd 121 Cite 5 - [1925] St R Qd 121 Cite 6 - [1925] St R Qd 121 Cite 7 - [1925] St R Qd 121 Cite 8 - [1925] St R Qd 121 Cite 9 - [1925] St R Qd 121 Cite 10 - [1925] St R Qd 121
Day Ford Pty Ltd v Sciacca	[1990] 2 Qd R 209; [1990] QSCFC 1	2 citations Jump To Cite 1 - [1990] 2 Qd R 209 Cite 2 - [1990] 2 Qd R 209
Houlahan v Royal Oak Realty	[1996] 3 NZLR 513	1 citation Jump To Cite 1 - [1996] 3 NZLR 513
Kok Hoong v Leong Cheong Kweng Mines Ltd	View on:ICLRUK(1964) AC 993	2 citations Jump To Cite 1 - (1964) AC 993 Cite 2 - (1964) AC 993
L J Hooker Ltd v W J Adams Estates Pty Ltd	View on:JADE(1977) 138 CLR 52	9 citations Jump To Cite 1 - (1977) 138 CLR 52 Cite 2 - (1977) 138 CLR 52 Cite 3 - (1977) 138 CLR 52 Cite 4 - (1977) 138 CLR 52 Cite 5 - (1977) 138 CLR 52 Cite 6 - (1977) 138 CLR 52 Cite 7 - (1977) 138 CLR 52 Cite 8 - (1977) 138 CLR 52 Cite 9 - (1977) 138 CLR 52
Looney v Pratt	[1919] GLR 231	1 citation Jump To Cite 1 - [1919] GLR 231
Lord v Trippe	(1977) 51 ALJR 574	2 citations Jump To Cite 1 - (1977) 51 ALJR 574 Cite 2 - (1977) 51 ALJR 574
Luxor (Eastbourne) Ltd. v Cooper	View on:ICLRUK(1941) AC 108	1 citation Jump To Cite 1 - (1941) AC 108
Morris v Forrester-Jones	[1950] St R Qd 252	1 citation Jump To Cite 1 - [1950] St R Qd 252
Rasmussen & Russo Pty Ltd v Gaviglio	[1982] Qd R 571	3 citations Jump To Cite 1 - [1982] Qd R 571 Cite 2 - [1982] Qd R 571 Cite 3 - [1982] Qd R 571
Re A Bankruptcy Notice	View on:ICLRUK[1924] 2 Ch 76	2 citations Jump To Cite 1 - [1924] 2 Ch 76 Cite 2 - [1924] 2 Ch 76
Samson v Mitchell	[1927] GLR 427	1 citation Jump To Cite 1 - [1927] GLR 427
State Government Insurance Office (Qld) v Crittenden	View on:JADE(1966) 117 CL.R. 412	1 citation Jump To Cite 1 - (1966) 117 CL.R. 412
Thompson v Palmer	View on:JADE(1933) 49 CLR 507	2 citations Jump To Cite 1 - (1933) 49 CLR 507 Cite 2 - (1933) 49 CLR 507
Thornes v Eyre	(1915) 34 NZLR 651	2 citations Jump To Cite 1 - (1915) 34 NZLR 651 Cite 2 - (1915) 34 NZLR 651
Trustees Executors and Agency Co. Ltd. v Reilly	View on:VR(1941) VLR 110	1 citation Jump To Cite 1 - (1941) VLR 110

Cases Citing List of cases on Queensland Judgments citing this Judgment

Case Name	Full Citation	Frequency
Faamate v Congregational Christian Church in Samoa-Australia (Ipswich Congregation)	[2019] QSC 194	3 citations
Greg Roughsedge Realty Pty. Ltd. v Whitecross	[2000] QDC 360	2 citations
Harmer v PJD Group Pty Ltd	[2016] QCAT 28	2 citations
Ireland v Civilcon (Queensland) Pty Ltd	[2000] QDC 8	1 citation
National Transport Insurance Ltd v Cottell	[1999] QDC 226	1 citation
Neuss v Roche Bros Proprietary Limited	[1999] QDC 249	1 citation

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Salamon Nominees Pty Ltd v Moneywood Pty Ltd[1998] QCA 440