Knobel & Davis Property Services Pty v Jones
[2007] QDC 241
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- Knobel & Davis Property Services Pty v Jones[2007] QDC 241
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Knobel & Davis Property Services Pty v Jones[2007] QDC 241
Knobel & Davis Property Services Pty v Jones[2007] QDC 241
DISTRICT COURT OF QUEENSLAND
CITATION: | Knobel & Davis Property Services Pty v Jones [2007] QDC 241 |
PARTIES: | Knobel & Davis Property Services Pty Ltd ACN (057 143 192) (Plaintiff) v Kathleen Jones (Defendant) |
FILE NO: | 430 of 2005 |
PROCEEDING: | Civil trial |
DELIVERED ON: | 8 October 2007 |
DELIVERED AT: | Southport |
HEARING DATES: | 1 and 2 October 2007 |
JUDGE: | C.F. Wall Q.C. |
ORDER: | Judgment for the Plaintiff with costs |
CATCHWORDS: | PRINCIPAL AND AGENT – right to commission - real estate agent – validity of appointment – whether appointed before sale of property. Legislation referred to: Property Agents and Motor Dealers Act 2000 ss 128 (1), 133 (1) and (8), 135 (1), 140, schedule 2 definitions “sell”, “reward” Acts Interpretation Act 1954 s 38 (4) Text: Duncan, Real Estate Agency Law in Queensland (4th Edition), page 208 dist. |
COUNSEL: | Plaintiff – Ms K. T. Magee Defendant – Mr M. Campbell |
SOLICITORS: | Plaintiff – Phillip Shakespeare Defendant – Bennett and Devery |
HIS HONOUR: The plaintiff sues the defendant for $76,120 for real estate agent's commission plus interest. The claim is based on the sale by the defendant of her land and buildings at 3028-3030 Gold Coast Highway, Surfers Paradise.
The defendant agreed that the plaintiff, through its agent, Allan McKay, introduced her to Robert Badolotti, whose company purchased the land. See page 70 of the transcript.
Mr Campbell, of counsel for the defendant, submitted that both Mr McKay and the defendant gave their evidence in an honest and forthright manner, but that I should prefer the evidence of the defendant. In fact, I prefer the evidence of Mr McKay for reasons which I will refer to shortly.
Three issues arise according to the defendant. They are (1) whether a copy of the document appointing the plaintiff the defendant's real estate agent (PAMD form 22(a)), exhibit 2, was provided as the defendant submitted it should have been, to the defendant at the time it was signed by the defendant. See section 133(8) of the Property Agents and Motor Dealers Act 2000 (the Act). (2) Whether Mr McKay discussed with the defendant whether the appointment as agent was to be for a sole agency or an exclusive agency. See section 135(1) of the Act. And (3) whether Exhibit 2 is a valid appointment, given that it was signed by the defendant some time after the plaintiff was concerned in the sale of the land in the sense of acting for the defendant in finding a purchaser who would buy the property. See sections 140, 128(1) and 133(1) of the Act. This issue does not really depend on any question of credit.
Generally, I accept Mr McKay's account of events and relevant dates. I thought he had a better recollection than the defendant. His evidence was consistent with diary entries made at the time, Exhibit 5. I thought the defendant's recollection of events and dates was relatively poor and her evidence was quite disingenuous in a number of respects.
I am satisfied that their first meeting was at the defendant's property on the 24th of May 2004 and not the 19th of May 2004. In this respect, I am satisfied that the defendant's sister, Mrs Patricia Macglalis, was also mistaken. She had no particular reason to recollect the meeting having occurred on one rather than another date. See also Exhibit 5, entry for 24th of May 2004. I accept that Mr McKay's diary entries generally reflect what occurred on the days referred to.
I also find that their next meeting was on the 27th of May 2004 at Rish Restaurant with Mr Badolotti and not Saturday the 22nd of May 2004. See also Exhibit 5, entry for the 27th of May 2004.
Initially in her evidence, the defendant said, page 63, that Mr McKay rang her on, she thought, the 22nd of May 2004 and arranged for a meeting with a developer, (Badolotti), the next Saturday morning. The 22nd was, in fact, a Saturday and the next Saturday was the 29th. When McKay was recalled, so this could be put to him, it was suggested to him that the meeting with Badolotti took place on the 22nd of May. When I raised with Mr Campbell that this was not what the defendant had said, he said that he was, in fact, suggesting to Mr McKay that the meeting took place on the 22nd of May and he clearly gave the impression he was doing so on instructions. See page 66 of the transcript. When the plaintiff, who was present when this evidence was given, was recalled, she said, page 68, that the meeting was on the 22nd of May.
The defendant also conceded the possibility that Exhibit 1 was written by Mr McKay on a serviette at the restaurant. See the defendant's affidavit, sworn on the 10th of January 2005, paragraph 48. The affidavit records it being sworn in 2004, but that is clearly a mistake. Exhibit 1 clearly was not written on a serviette, as is apparent from the document itself.
The defendant said their second meeting at Rish Restaurant was on Saturday the 28th of May. She was adamant that the two meetings at Rish Restaurant were on a Saturday. The 28th of May was a Friday. See also Exhibit 5. She later gave evidence that the meeting was on Saturday the 29th of May. She said that Exhibit 1 was not the document written by McKay at Rish Restaurant on the 28th of May. I find that it was and that the deletions were made to the knowledge of both the defendant and Badolotti, before the document was signed by the three of them.
The terms of Exhibit 1 are, in themselves, inconsistent with the Wings unit being a deposit. Exhibit 1 records that the agreement was that the defendant would enter into a contract to purchase the unit. That is also stated in the copy of Exhibit 1 that the defendant says McKay later provided her with, namely Exhibit 7. I do not accept her evidence that she did not receive a copy of Exhibit 1 until one to three weeks later.
The contracts which were, in fact, signed by both parties and which, in fact, proceeded to completion, involved the sale and purchase of the defendant's land and a Wings unit and the latter was never a deposit for the purchase of the defendant's land.
I do not accept that the defendant did not read the contract, Exhibit 3, before she signed it or at least relevant important parts. I do not believe her when she said that the special condition on the last page was inserted later, after the contract had been signed by the parties. It was not put to Mr McKay in cross-examination that the special condition was inserted later and was not part of the contract when the contract was signed by the defendant. At any rate, the defendant said that, absent her glasses, she was not able to read the contract. This evidence by her was, I find, made up as she went along.
In relation to her evidence that she and McKay inspected the Wings development on the 28th of May, I am satisfied that there was, in fact, an inspection by both the defendant and McKay, but that it was on the 25th of May and not the 28th of May. The 25th of May is more consistent with the dates recorded on Exhibit 6 and their order. I find that McKay's recollection about this inspection is wrong. I think it more likely that such an inspection, in fact, took place by both of them together, having regard to the importance of the purchase of the unit by the defendant to the sale of her land. In her evidence, she said her second meeting at Rish Restaurant was on the 29th of May, the day following their inspection of the Wings development.
The defendant said that handwriting on Exhibit 2 was not done at the meeting on the 2nd of June. I am satisfied that it was. Also, the start date in section 5.1 is consistent with that date recorded on Exhibit 1 in lieu of the 29th of May. I am satisfied that the reason the 29th of May, not the 28th of May, was originally written on Exhibit 1, was that given by McKay at page 11 of the transcript.
I am also satisfied that the defendant believed her exclusive agency with Knight Frank ended on the 1st of June and not on the 26th of June 2004, which, apparently, was the date it, in fact, ended. A belief that it ended on the 1st of June is consistent with the 2nd of June being the new date written on Exhibit 1 and also the date of the contract, Exhibit 3. I am satisfied that the defendant would not have signed Exhibit 3 if she, in fact, knew or believed that she still had a current exclusive agency agreement with Knight Frank, which would leave her liable to pay commission to that agency. I am unable to accept her evidence that she knew she was going to be paying commission to Knight Frank, (who do not appear to have been involved at all in the sale) and that the plaintiff's commission would be from the sale to her of the Wings unit. On her case, that was never to be a sale as such, but a deposit on the Exhibit 3 contract. I find that she knew what she was signing when she signed Exhibit 2 and knew that she would, in all probability, be liable to pay commission on the sale arranged pursuant to it.
After entering into the contract, Exhibit 3, the defendant received an offer from a third party to purchase the land for $3 million and an invoice from Knight Frank for commission on the present sale. She sought to terminate Exhibit 3 and was sued for specific performance. She has paid Knight Frank and ended up completing Exhibit 3.
I am satisfied that McKay complied with section 135(1) of the Act before the defendant signed the document and that she signed it before she signed the contract, Exhibit 3. I believe McKay about these matters. The defendant, in effect, said she did not read what she signed because she did not have her glasses, but I am satisfied that the documents were explained to her, as McKay said, and I am also satisfied that the defendant checked that Exhibit 3 reflected what had been agreed in Exhibit 1 and that she had Exhibit 1 in front of her before she signed Exhibit 3.
I accept the evidence of McKay, page 22, that he took the defendant through the terms of the contract, Exhibit 3. He said she looked through it with the heads of agreement alongside and she was happy with that and signed it (the contract).
She also executed the contract for the purchase of the Wings unit at the same time. That was a separate contract. Exhibit 3 recorded the payment of the deposit $1, not a deposit of a unit valued at $640,000. The order of events described by McKay is also consistent with the entries in Exhibit 5 for the 2nd of June.
I am satisfied that McKay photocopied and provided the defendant with a copy of Exhibit 2 within an hour after it had been signed by the defendant and that this was sufficient compliance with section 133(8). McKay described at page 23 what he did at the conclusion of the meeting on the 2nd of June and before providing copies of documents, including Exhibit 2, to the defendant and I am satisfied, in the circumstances, that a copy of Exhibit 2 was provided by him to the defendant "as soon as possible", bearing in mind where the meeting occurred and what he had to do immediately after the meeting. See section 38(4) Acts Interpretation Act.
The final issue raised by the defence relates to the validity of Exhibit 2, bearing in mind work performed by McKay for the defendant in relation to the transaction before Exhibit 2 was signed. The following are the relevant provisions of the Act:
"140.Restriction on recovery of reward or expense - no proper authorisation etc.
A person is not entitled to sue for, or recover or retain, a reward or expense for the performance of an activity as a real estate agent unless, at the time the activity was performed the person -
- (a)held a real estate agent's licence; and
- (b)was authorised under the person's licence to perform the activity; and
- (c)had been properly appointed under division 2 by the person to be charged with the reward or expense."
(S.133 is in division 2)
"128.What a real estate agent's licence authorises
(1)A real estate agent's licence authorises the holder of the licence ("real estate agent") to perform the following activities as an agent for others for reward -
- (a)to buy, sell, exchange, or let places of residence or land or interests in places of residence or land;...
- (e)to negotiate for the buying, selling or exchanging of something mentioned in paragraph (a) ..."
"133.Appointment of real estate agent - general
(1)A real estate agent who is asked by a person ("client") to perform an activity ("service") for the client must not act for the client unless the client first appoints the agent in writing under this section.
Maximum penalty - 200 penalty units."
The sale of the defendant's land occurred after Exhibit 2 was executed.
It is clear that the activities of McKay, from the 24th of May 2004 up to obtaining the signature of the purchaser on Exhibit 3 before Exhibit 2 was executed, including preparation of the contract, Exhibit 3, were activities as an agent connected or concerned with the selling of the land and that the plaintiff or McKay may have infringed section 133(1) in carrying them out without first obtaining a signed form 22A from the defendant.
For commission purposes, under Exhibit 2, the sale would take place once a valid contract for the sale of the land was entered into. That was the activity which would generate the right or entitlement to commission. That happened once the defendant signed Exhibit 3 and that fact was communicated to the purchaser. At the time that occurred, the plaintiff had already been properly appointed under section 133. In these circumstances, the statement in Duncan, Real Estate Agency Law in Queensland, (4th edition), page 208 that: "If an appointment is signed half way through the transaction, then the agent has not been properly appointed and is not entitled to commission", is distinguishable.
Much depends on what the transaction is. For present purposes, the relevant transaction was the sale of the land and that occurred after Exhibit 2 had been executed, notwithstanding that McKay had performed selling type work in respect of the land before Exhibit 2 was executed. The plaintiff was appointed to sell the land and that sale occurred after appointment.
"Sell" is defined in schedule 2 as follows:
"'Sell' includes agree to sell, advertise or display for sale, attempt to sell, have for sale, negotiate for a sale, and in any way be concerned in selling."
"Reward" is defined as follows:
"'Reward' includes remuneration of any kind, including, for example, any fee, commission or gain."
Exhibit 2 is expressed to enable the defendant to appoint a real estate agent "for the sale of property, land..." The property is described in section 3. In section 4, the agent (the plaintiff), was appointed to perform the following service: "Sale of Land and Buildings." In section 5, the plaintiff was appointed as a sole agency with the "start date 2nd June '04" and the "end date 2nd July '04". The document was signed by both parties on the 2nd June '04. The contract, Exhibit 3, was not signed by the defendant as vendor until after Exhibit 2 was executed.
Section 140 speaks of "reward for the performance of an activity" and the time "the activity was performed". Here, the activity or service (see section 133(1)) was the sale of the land and when that occurred, the plaintiff had already been appointed under Exhibit 2. The fact that, according to Exhibit 2, section 4.1, the service included negotiations with qualified buyers and those negotiations took place before Exhibit 2 was signed, is not, in my view, a sufficient reason to deprive the plaintiff of commission for a sale which occurred after Exhibit 2 was executed. The relevant activity occurred after the execution of the authority. In this respect, I agree with paragraph 23 of the plaintiff's written submissions. The heads of agreement, Exhibit 1, did not amount to a sale of the land, as that was, by its terms, expressed to be "subject to and conditional upon the seller (the defendant), entering into a contract and purchasing lot 54 in Wings Residential Resort...for $640,000, as part settlement of this transaction."
For these reasons, the plaintiff is entitled to judgment for the amount claimed, $76,120 plus interest at 10 per cent. The sale was completed on the 20th of June 2005 and interest accrues from that date at $7,612 per annum, or $20.85 per day. Two years' interest amounts to $15,224. Interest for the period from and including the 21st of June to and including today, the 8th of October 2007, namely, 110 days at $20.85 per day, amounts to $2,293.50. Total interest amounts to $17,517.50.
The total amount for judgment and interest is $93,637.50. I give judgment for the plaintiff against the defendant for $93,637.50. I order that the defendant pay the plaintiff's costs of and incidental to the proceeding to be assessed on the standard basis unless agreed. I give the parties liberty to apply on two days' notice to the other in respect of the interest calculations.