Lisson Pty Ltd v Hallmark Strategies Pty Ltd
[2005] QDC 118
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- Unreported Judgment
- Lisson Pty Ltd v Hallmark Strategies Pty Ltd[2005] QDC 118
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Lisson Pty Ltd v Hallmark Strategies Pty Ltd[2005] QDC 118
Lisson Pty Ltd v Hallmark Strategies Pty Ltd[2005] QDC 118
DISTRICT COURT OF QUEENSLAND
CITATION: | Lisson Pty Ltd v Hallmark Strategies Pty Ltd [2005] QDC 118 |
PARTIES: | LISSON PTY LTD Plaintiff v HALLMARK STRATEGIES PTY LTD Defendant |
FILE NO/S: | BD3932/2004; M5133/2004 |
DIVISION: |
|
PROCEEDING: | Application |
ORIGINATING COURT: | Magistrates Court, Brisbane |
DELIVERED ON: | 23 May 2005 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 18 March 2005 |
JUDGE: | McGill DCJ |
ORDER: | Application dismissed with costs. |
CATCHWORDS: | PRACTICE – Summary Judgment – whether to be allowed for defendant – whether claim necessarily prohibited by statute PRINCIPAL AND AGENT – Statutory provisions relating to agents – prohibition on unlicensed agent recovering remuneration – whether clear that plaintiff’s claim barred by absence of licence. Property Agents and Motor Dealers Act 2000 s 140. Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 – considered. Gray v Morris [2004] 2 Qd R 118 – applied. Jenkins v Kedcorp Pty Ltd [2002] 1 Qd R 49 – considered. |
COUNSEL: | R J Anderson for the plaintiff A P Collins for the defendant |
SOLICITORS: | The plaintiff was not represented by solicitors Crimmins Kerwin Burns solicitors for the defendant. |
- [1]The plaintiff and the defendant entered into a contract in writing dated 8 July 2002 which provided that in certain circumstances the defendant would pay the plaintiff a fee. They entered into a similar contract in writing dated 18 February 2003. The plaintiff claims that under those agreements fees are payable to it by the defendant, as a result of three particular transactions each of which the plaintiff alleges satisfied the requirements under one or other agreement for the payment of a fee.
- [2]The action has been defended, and has fairly recently been transferred to this court. The defendant alleges among other things that the plaintiff is not entitled to recover any amount, because the recovery of any amount payable under either agreement is precluded by s 140 of the Property Agents and Motor Dealers Act 2000 (“the Act”). This is on the ground that by this action the plaintiff is seeking to recover a reward for the performance of one of the activities which a real estate agent’s licence authorises a person to perform under s 128, whereas the plaintiff did not hold such a licence. It is not disputed that the plaintiff did not at the relevant time hold a real estate agent’s licence. The plaintiff disputes that recovery of the amounts claimed in the action infringes s 140 of the Act.
- [3]The defendant has applied under r 171 to have the statement of claim struck out on the ground that it discloses no reasonable cause of action, or in the alternative under r 293 for summary judgment for the defendant. Under the former rule the test is whether it is apparent, with the benefit of argument, that the plaintiff’s case is so clearly untenable that it cannot possibly succeed.[1] Under the latter, the test is whether the defendant has shown that the plaintiff has no real prospect of succeeding on all or part of the plaintiff’s claim, and there is no need for a trial of the claim or the part of the claim. That test will not be satisfied unless it is clear that there is no real question to be tried.[2]
- [4]Section 128(1)(e) of the Act provides that a real estate agent’s licence authorises the holder to perform as an agent for others for award the activity of negotiating for the buying or selling of, among other things, land or an interest in land. The defendant’s argument is that what the plaintiff was required to do under the agreement amounted to negotiating for the buying and selling of the land.
The agreement
- [5]The February 2003 agreement is in evidence. It provided that a builder who builds residential homes and markets them through a marketing entity, the defendant, sought the services of the plaintiff to introduce parties who may be interested in buying a home through the defendant.[3] By clause 3.1 “the builder hereby appoints [the plaintiff] to obtain leads for prospective buyers interested in purchasing a home through [the defendant].” Clause 5 provided that the defendant would pay the plaintiff an introduction fee, set in clause 1 at 6.6% of the total property package price including GST less any commission payable to any licensed real estate agent, upon settlement, but no introduction fee would be payable if any buyer introduced by the plaintiff did not complete a purchase even if a deposit was forfeited.
- [6]The contract is not quite clear as to just what it is that the plaintiff has to do in order to earn the fee payable under clause 5, but it may well be that the plaintiff need do no more than provide the defendant with the name of a prospective buyer, so long as ultimately that prospective buyer completes a contract to purchase a home. On the face of it that is something which could be done without any negotiation between the plaintiff and that prospective buyer, or indeed even any contact between them.
- [7]Indeed, the agreement not only does not contemplate negotiation with the prospective buyer, but provides expressly in clause 4.1 that the plaintiff “shall not negotiate the buying or selling of any property.” Further it provides in clause 8.1 that neither party will have authority to act as agent for any other party. On the face of the contract therefore this is not an agreement for the plaintiff to negotiate for the buying or selling of land as an agent for the defendant, or anyone else.
Authorities
- [8]It was submitted however on behalf of the defendant that the contract was an artificial creation designed to avoid the operation of the Act, and that introducing purchasers fell within the definition of “negotiating.” Reliance was placed on a decision of the Court of Appeal in Jenkins v Kedcorp Pty Ltd [2002] 1 Qd R 49. That decision was an appeal from a prosecution for an offence under the earlier Act, the Auctioneers and Agents Act 1971, for acting as a real estate agent when not the holder of a licence. In that case the activities of the respondent, which had been convicted after a summary trial but had succeeded on appeal to the District Court, were summarised on p. 51; it is unnecessary to set them out in detail, but essentially the respondent was purporting to offer a tax minimisation scheme, which happened to involve the purchase (through a real estate agent) of a particular property which the respondent was in fact trying to market.
- [9]In that case there was a great deal of contact between the respondent and the prospective purchaser, and a good deal of persuasion brought to bear by people from the respondent, and the signature of the purchaser to a contract prepared by the real estate agent was secured by the respondent. The court said at [13] that there was no doubt that the respondent in expectation of a substantial fee was generally carrying on a business of negotiating for buying and selling houses and land. The only question was whether in so acting it acted as an agent for others. One of the factors considered was that the contract with the respondent provided expressly that “nothing in this agreement shall be construed as creating a relationship as principal and agent between the vendors and the respondent”: p.52. The court held at [16] that this could not “govern the ultimate finding of fact if the reality was otherwise. In the present case this would seem to be little more than a self serving statement by the respondent in which it has persuaded someone else to join. … In our view the words ‘as agent for others’ in s 2, which is merely one element in a complex definition, simply connotes a person engaged to act on behalf of another. The context, as the remainder of the definition indicates, is that of participating in some aspect of the buying and selling of real estate and associated activities. It is not amiss to note in this context that the classic function of a real estate agent has been regarded as ‘to find a buyer’ or to introduce a vendor and purchaser. The activities of the respondent adequately satisfy these requirements and those of the definition.”
- [10]The point of that case was that, where it was proved by evidence that the respondent was really acting as an agent for others, the fact that there was an express statement to the contrary in a contract was irrelevant. The same could well apply in the present case, but only once it had been proved as a fact that the plaintiff was acting as agent for someone else. Proof of the terms of contract, however, does not prove that, in doing what was required to be done under it to earn an entitlement to be paid, the plaintiff was acting as an agent for someone else. The contract cannot itself falsify the statement in the contract to the contrary.
Analysis – striking out
- [11]The current pleading on behalf of the plaintiff, a second further amended statement of claim filed in the Magistrates Court on 5 July 2004, alleged that the plaintiff introduced to the defendant purchasers who purchased property marketed by the defendant, and that they were introduced pursuant to the agreements, and that fees pursuant to the agreements are payable but have not been paid. The pleading could have been better drafted, but if the plea of the terms of the contracts is taken to incorporate the actual terms of those contracts, then the pleading is sufficient to allege that circumstances have arisen under which money is payable pursuant to those contracts, it has not been paid, and the plaintiff claims that money. On the face of the pleading, that is a good claim. Even assuming that the effect of Jenkins v Kedcorp (supra) is that the mere introduction of a purchaser to the defendant was sufficient to amount to negotiating for buying or selling of land, and I am not sure that that decision is to the effect that that is always the case, there is nothing in the plaintiff’s pleading or in the agreement relied on in the pleading which means that the plaintiff was introducing those purchasers as agent for someone. The defendant therefore cannot show that the pleading discloses no reasonable cause of action.
Summary judgment - evidence
- [12]For the purposes of the summary judgment application however the defendant relies on evidence to the effect that more occurred than a mere introduction. Some of this evidence is not specific to the particular instances on which the plaintiff is suing, and it is not clear that the deponent is saying, or indeed can say, that those facts necessarily apply to these instances. Accordingly it cannot be clearly concluded in the absence of a trial that they do. There is however an allegation in the affidavit, which is not contradicted by evidence from the plaintiff, that “whenever the plaintiff found a person who was interested in purchasing land they would forward an expression of interest document to the defendant.” That on its face is wide enough to apply necessarily to all three of the instances sued on.
- [13]A copy of an expression of interest document is exhibited, which appears to be on a standard form. Unfortunately it is difficult to read, but appears to be signed by the prospective purchaser and to state among other things: “I would like to proceed with the purchase of the following property.” There is then a description of the property in question, particulars of the buyer, and some other information including an answer to the question: “Is this your first purchase of property through our club?” The price is specified, and the vendor is requested to take the property off the market and prepare a contract.
- [14]Plainly on this evidence the plaintiff was doing far more than simply providing the defendant with names and addresses of prospective purchasers, and sitting back to wait for a fee, which was substantially more than the maximum percentage of the purchase price lawfully payable to a real estate agent, to be forthcoming if a contract with that prospective purchaser happened to settle. In my opinion, if there were enough dealings between the plaintiff and any prospective purchaser to secure the execution of one of those expression of interest documents, there must have been something which would fairly be described as negotiating for the buying and selling of land. The question remains however whether it is sufficiently clear that there is no real prospect of the plaintiff’s avoiding a finding that in doing so it was acting as agent for someone, so that there is no need for a trial.
Authority
- [15]The Court in Jenkins referred to a decision of the Federal Court in Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303. In that case the applicant in the Federal Court was seeking to recover from the respondents an amount alleged to be payable by way of commission arising out of the sale by the respondents of some land. One of the issues raised by the respondents was that the applicant was not entitled to recover such a payment because it did not hold a real estate agent’s licence. In that case the court was considering determining in advance of trial certain separate questions, including whether the agreement on which the applicant was suing was unenforceable because of the application of the relevant statutory prohibition.
- [16]Lindgren J said that the question of whether the applicant was acting as agent was “not concluded by the fact that it was a term of the agreement between him and the vendors that if he introduced a purchaser to them, he would not be acting as agent of either of them or of the purchaser. On the contrary, in my opinion it is possible for a person to act “as an agent for others” for the purposes of the definition, notwithstanding such an express term.” (Page 314). It was this passage which was referred to and relied on by the court in Jenkins (supra).
- [17]His Honour went on at p. 314 to identify the question he had to answer in the following terms: “The question to be answered is whether Colbron’s introduction, with the vendors’ consent, of the potential purchaser to the vendors, his bringing Whitsunday’s representative (Alan Bond) to St Bees Island to meet Berck and Urch, and his subsequent facilitation of and participation in negotiations, signify that he negotiated as an agent for others for the buying or selling of the island. Contrary to Colbron’s submission, the question is not whether the vendors consented to Colbron’s falling within the legal classification called ‘agent’. … According to the assumptions [on which the questions were being answered], Colbron’s affidavit, the pleadings and the particulars, Colbron in Queensland made the telephone calls … securing the vendors’ agreement to pay him for introducing a potential purchaser who purchased the island; took Whitsunday’s representative, Alan Bond, to St Bees Island on 11 October, introduced him there to Berck and Urch and remained present throughout some two hours of negotiation; participated in unidentified ways in negotiations in January and February 1994, when the parties were at a stalemate by the end of February 1994, caused his fax dated 2 March 1994 to be received by the vendors’ Queensland solicitor; and in late February and early March 1994, at St Bees Island and Mackay, conveyed offers and counter offers between the parties. He did all this with the vendors’ authority.”
- [18]His Honour then referred to some definitions, and continued on p.315: “It is the expression ‘as an agent for others’ in the particular context of the definition of ‘real estate agent’ in s 5(1) of the Queensland Act with which I am concerned. … The words ‘as an agent for others’ clearly mean at least ‘not as party principal,’ that is to say in the present context not as vendor or purchaser.”[4] His Honour went on however to note that there was some difficulty about the interpretation of that section, including the identification of the relevant “transaction.” He continued on p.316: “Moreover, in relation to all provisions of the Queensland Act which depend upon the definition of ‘real estate agent’ a careful consideration of the pleadings and the particulars … has convinced me that it is unsatisfactory to determine whether Colbron negotiated for the buying or selling of the island in the context of the artificial ‘half facts’ presented by those documents, the assumptions and Colbron’s affidavit. … In context, they may well do so but in the absence of any context I am not prepared to hold that they necessarily do so. I have formed the view that those defences of ‘statutory illegality’ which depend upon the definition of ‘real estate agent’ in the Queensland Act should be dealt with on a final hearing when all relevant evidence is before the court.”
Analysis – summary judgment
- [19]That was not precisely the question which I have to decide, but the approach is I think instructive. If his Honour thought it necessary in that case to have a trial before determining whether the applicant really had been negotiating, it seems to me difficult to conclude in the present case that I can be satisfied without a trial that the plaintiff was acting as agent for others. It may be of course that evidence of what actually happened will demonstrate that in the present case, as in Jenkins, the plaintiff really was acting as agent for others despite the express terms of the agreement. But I do not think that that is necessarily established against the plaintiff merely by the terms of the written agreement between the parties, and the expression of interest document. I do not think that there is anything else in Mr Lawson’s affidavit which really takes the matter any further. Apart from anything else, none of the other matters referred to are shown to be specifically referable to the three transactions on which the plaintiff is suing.
- [20]Although I have a suspicion that in the long run I will not be doing the plaintiff any favours by not arriving at a final decision on this issue at this time, I am not persuaded that the test for granting summary judgment in favour of a defendant in r 293, as explained by the Court of Appeal in Gray v Morris (supra), has been satisfied. That decision emphasises caution, and Colbron displays caution.
- [21]Accordingly the defendant’s application must be dismissed. This is not a case where the dismissal of the application has been achieved by the respondent’s reliance on affidavit evidence which may at the trial prove to be false, or which contained material which was only made available to the applicant after the application was filed. On the face of it therefore there is no reason to depart from the ordinary rule that costs follow the event. I order the defendant to pay the plaintiff’s costs of the application to be assessed.
Footnotes
[1] General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125.
[2] Gray v Morris [2004] 2 Qd R 118.
[3] Paragraphs A – D of “Introduction” to Exhibit KL1 to the affidavit of Lawson sworn 7 March 2005.
[4] In Jenkins the Court of Appeal took it further, saying that the words “as an agent for others” in the 1971 Act meant simply “a person engaged to act on behalf of another.” (P. 53).