Hudson v Standfield[2013] QDC 289

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The plaintiff, Mr Hudson, was at the relevant time, a real estate agent. He carried on business under the trading name Pot of Gold Real Estate. The defendant, Mr Standfield, is a solicitor. At the relevant time he was acting as an executor of the estate of the late Ms Berg. Ms Berg’s sons were beneficiaries of the will. The plaintiff claims $59,400 as unpaid commission to which he says he is entitled. By counterclaim the defendant claims the sum of $6,600 due and payable to the defendant upon the contract of sale being terminated.

2. [2]
   The plaintiff and the defendant entered into an agreement whereby the defendant appointed the plaintiff as agent to sell a property which was part of Ms Berg’s estate. The appointment was under Form 22a of the Property Agents and Motor Dealers Act 2000 (PAMDA).

3. [3]
   The plaintiff claims he ought to be paid his commission because, although the contract entered into between the defendant and a buyer did not reach settlement, the contract was terminated by mutual agreement between the buyer and the defendant, therefore under Clause 2.1(4) of the Form 22a appointment the plaintiff is entitled to his commission. Clause 2.1(4) of the relevant Form 22a appointment entitles an agent to commission “if the Contract of Sale is terminated by mutual agreement of the Client and the buyer”^[1].

4. [4]
   The defendant submits that the plaintiff is not entitled to his commission on three bases:

• The buyer breached the contract by failing to settle by the due date and the seller exercised his right to terminate the contract, therefore the manner in which the contract was terminated did not fall within any of the agreed terms of the PAMDA 22a appointment, which would result in the plaintiff being entitled to his commission.
• The plaintiff is excluded from recovering commission by reason of s 140 PAMDA because he failed to comply with his obligations under ss. 134A and 135 PAMDA to bring to the defendant’s attention certain information about the appointment.
• The plaintiff was acting as the undisclosed agent of the buyer, which disentitled him from recovering any commission.

First issue in dispute: Whether the Contract of Sale was terminated by mutual agreement between the defendant and the buyer.

5. [5]
   At the relevant time, the plaintiff employed his then de facto partner, Ms Pomytkina as an assistant. They both gave evidence for the plaintiff’s case. The defendant also gave evidence. During the defendant’s evidence, the defendant produced file notes and copies of relevant correspondence that passed between the plaintiff, the defendant, and the buyer’s solicitors^[2]. The other documentary evidence relevant to this issue includes the PAMDA 22a Agreement signed by the parties on 26 June 2008^[3]and the REIQ contract executed on 17 July 2008 (the first contract)^[4].

6. [6]
   At the outset it is appropriate to state that, where the plaintiff’s evidence is inconsistent with the defendant’s evidence, I find the defendant’s evidence to be reliable and credible. I reject the plaintiff’s evidence and Ms Pomytkina’s evidence on contentious issues where their evidence is inconsistent with the defendant’s evidence and the documentary evidence. I will return to the issue of credibility and reliability below. The chronology of events summarised is based on the evidence I accept.

Factual Chronology

7. [7]
   On 26 June 2008 the plaintiff, the defendant and Ms Pomytkina, met at the defendant’s office where they discussed the defendant appointing the plaintiff to act as agent to sell the property at 52 Old Pacific Highway, Pimpama. The plaintiff presented to the defendant a PAMDA Form 22a ‘Appointment of Real Estate Agent’. The document reflected the listing price of the property as $2.4 million and the start date of the agency appointment as 27 June 2008. The end date of the appointment was determined by the parties to be 26 July 2008. Part 5 of Form 22a stated the appointment was for exclusive agency until the end date, after which the appointment was to continue as an open listing. The plaintiff filled out the agreed commission in Part 7 as $60,000 plus $6,000 GST, i.e. the commission on sale as 2.5% plus 10% GST on commission.

8. [8]
   The defendant amended Clause 2.1 of the Form 22a document of the Terms and Conditions (as amended) provided as follows:-

“2.1 the Client agrees to pay the Agent commission as specified in the Appointment if a Contract of Sale of the Property is entered into with a buyer, whether within the Term or after the Term, where the Relevant Person is the effective cause of the sale within the Term, provided that:

1. The Contract of Sale of the Property is completed; or

2. The Client defaults under the Contract of Sale and that Contract is terminated by reason of or following that default; or

3. The Contract of Sale is not completed and the whole or part of the deposit paid is liable to be forfeited; or

4. The Contract of Sale is terminated by mutual agreement of the Client and the buyer.”

9. [9]
   The defendant also amended Part 8 of the Form 22a to read: “Commission is payable as per clause 2.1 of the terms and conditions or at another time as specified” by deleting the plaintiff’s words “upon deposit disbursement” and inserting the words “Upon Settlement”. The plaintiff says the defendant signed the Form 22a at the meeting on 26 June 2008 after amending Part 8.2 of the appointment to that effect. The defendant gave evidence he did not sign the Form 22a until later that day after speaking to the deceased’s son, Mr Berg. The defendant says he then made the amendments referred to above to the Form 22a and sent it by facsimile to the plaintiff.^[5]It is common ground that the plaintiff then sent three pages of the appointment document to the defendant and requested the defendant initial all the amendments, including the amendments to Clause 2 and Part 8 of the Form 22a. After the defendant initialled the amendments his secretary sent the amended pages back to the plaintiff. Although the plaintiff and defendant gave conflicting evidence of how and when the Form 22a was finalised, it is not in dispute that the Form 22a tendered as Exhibit 1 accurately reflects the appointment agreement between the plaintiff and the defendant on 26 June 2008.

10. [10]
    On 7 July 2008 the plaintiff telephoned the defendant and said he had found a company, “16 Queensland Avenue Pty Ltd”, interested in purchasing the property (the buyer).  The director was Mr Andy Schwarz. The plaintiff informed the defendant that the buyer was agreeable to certain terms including a purchase price of $2.4 million, a 10% deposit to be paid immediately, and the balance of $230,000 deposit released after a due diligence of three months from the date the contract was entered into. The buyer suggested a settlement date of five months after the contract was signed. The buyer’s solicitors were Parker Simmonds Lawyers.^[6]

11. [11]
    On 8 July 2008, the plaintiff rang the defendant and asked whether, when the deposit was released after due diligence, he could have 10% of his commission (namely $6,600) paid to him. The defendant agreed and said he would send the plaintiff a letter confirming this rather than making it part of the contract. The defendant sent the plaintiff a letter on 8 July 2008 confirming this and that, in the event the contract doesn’t settle for any reason other than default by the seller, the seller may require the return of the $6,600.^[7]

12. [12]
    On 8 July 2008 the plaintiff attended the defendant’s office where the plaintiff and defendant discussed the Contract of Sale that the defendant had prepared. The buyer and seller signed the contract on 17 July 2008^[8]. The settlement date was listed as 17 February 2009. On 7 August 2008 the plaintiff attended the defendant’s office with a deposit cheque from the buyer. He requested his $6,600 commission (10% of total commission due upon settlement).^[9]The defendant paid the plaintiff the $6,600. The plaintiff at some point provided the defendant with a tax invoice for $6,600.^[10]

13. [13]
    On 2 February 2009 the buyer’s new lawyers, Whitehead Gupta Lawyers, sent the defendant a letter requesting a settlement extension of time for a further six weeks from the settlement date of 17 February 2009.^[11]On 6 February 2009 the defendant and the plaintiff discussed the possibility of an extension during a phone call. The defendant received instructions from the seller to agree to the extension and informed the plaintiff. The defendant gave evidence that he told the plaintiff he would agree to the extension but that it had to settle on that day. The plaintiff said it definitely would.^[12]On 6 February 2009 the defendant sent a letter to the buyer’s lawyers confirming the seller’s instructions to grant an extension of time for settlement to 7 April 2009. The letter stated:

“In granting this seven week extension, while our clients do not expect your client to ask for any further extension, we do, for the record, advise that no further extension will be granted beyond 7 April 2009.”^[13]

The Defendant gave evidence he also spoke to the plaintiff by telephone and said that if the contract did not settle the sellers would be terminating the contract.^[14]

The alleged meeting

14. [14]
    The plaintiff gave evidence that on a day a few weeks before the settlement date of 7 April 2009, he and Ms Pomytkina met by arrangement with the defendant at his office where the plaintiff requested a further extension of time to settle of one month after 7 April 2009. The plaintiff was unable to say exactly when the meeting occurred, other than that it took place several weeks before the first contract came to an end. ^[15]

15. [15]
    The plaintiff gave evidence that the defendant stated to him and to Ms Pomytkina that, unless the settlement occurred on time, the contract would be terminated and a new contract would be drawn up and another $200,000 deposit paid. The plaintiff stated that his understanding from the meeting was that the first contract was to come to an end via a mutual agreement.^[16]The plaintiff gave evidence the defendant said at the meeting: “we’ll have to bring the contract to an end … and start a new contract with a new deposit for $200,000”^[17].

16. [16]
    Under cross-examination, the plaintiff maintained that the meeting occurred, during which he and the defendant made an agreement that “Well, there was an agreement that as long as there was another $200,000 paid, and that was many weeks before, a few weeks before the 7th, that there was ‑ that as long as he had a new contract and finished the first contract that paid $200,000, that that would be enough to satisfy, but yet we were still attempting to settle, or he was still attempting to settle.”^[18]The plaintiff stated that he then went and told Mr Schwarz what had occurred at the meeting.

17. [17]
    The plaintiff accepted under cross-examination that the defendant was ready, willing and able to complete settlement by the due date of 7 April 2009.^[19]The plaintiff maintained, however, that the failure of the buyer to settle was because the seller did not require the buyer to settle by that date.^[20]The plaintiff conceded under cross-examination that the defendant informed him that if the contract did not settle on 7 April 2009, that the defendant would terminate the contract.

18. [18]
    The defendant denied in evidence that the meeting occurred and he denied that any such conversation occurred in which he agreed to terminate the first contract and start a new contract. Ms Pomytkina was called by the plaintiff. She did not give any evidence of that meeting or alleged conversation.

19. [19]
    On 3 April 2009 the buyer’s solicitor sent a letter to the defendant requesting a further extension of time because their client was seeking new finance approval from another lender after the buyer’s financier had rejected the buyer’s finance offer. The letter stated:

“The buyer is prepared to pay a further $200,000 as part settlement monies, to be deducted from the settlement figures on settlement, non refundable by 5.00 pm Tuesday 7 April 2008, should the purchaser be agreeable to the extension requested.”^[21]

20. [20]
    On 3 April 2009 the defendant received instructions from the seller refusing any further extension beyond 7 April 2009 but the sellers were open to possibly entering a new contract.

Events of 6 and 7 April 2009

21. [21]
    The defendant’s evidence was that, on 6 April 2009 the day before settlement was due, the defendant spoke to the plaintiff and advised him there would be no further extension of time and that the seller was ready to settle the following day. The defendant reiterated to the plaintiff that if settlement did not occur the seller would terminate the contract.^[22]On 6 April 2209 the defendant also spoke to the buyer’s solicitor, Mr Whitehead of Whitehead Gupta Lawyers, and advised him that if settlement did not occur the seller was terminating the contract, as per his previous advice. The defendant told Mr Whitehead that the seller would consider a new contract (the second contract) but the buyer should try to settle the first contract.^[23]

22. [22]
    The defendant gave evidence that on 6 April 2009, he formed the opinion that the plaintiff was the buyer’s agent rather than the seller’s agent. The defendant decided to conduct all further dealings through the buyer’s solicitors, Whitehead Gupta Lawyers. On 6 April 2009 the defendant then sent a facsimile to the buyer’s solicitors informing them the seller was ready, willing and able to complete settlement. The defendant provided settlement figures and confirmed he held all relevant documents for settlement. The defendant stated in the facsimile “the seller is ready to complete settlement by any time up to 5.00 pm on 7 April 2009”.^[24]The facsimile continued:

“While the seller is ready, willing and able to complete settlement and his preference is that the contract be completed by its due date being tomorrow 7 April 2009, the seller does note the inability of the buyer to be able to provide the balance settlement funds for a settlement tomorrow and in relation to discussions concerning the new contract, we enclose a copy letter to agent Anthony Hudson with enclosures. As we understand the position from Mr Hudson he will attend at our office tomorrow morning and collect the letter and then attend with the buyer at your offices for signing of the documents and return the signed contract and letter to us together with the deposit which we will hold in our trust account pending the seller signing the contract and us forwarding to you by facsimile a copy of the contract signed by the seller. We will then release the deposit of $200,000 to the seller.”

23. [23]
    The enclosures the defendant sent to the buyer’s solicitors included a letter dated 7 April 2009 to be signed by the buyer acknowledging he “is unable to effect settlement of that Contract on the due date of today 7 April 2009” and acknowledging the deposit of $240,000 as forfeited; a copy of a new Contract and Form 30C PAMDA warning statement. The defendant also left copies of these documents with his secretary for the plaintiff to collect.

24. [24]
    The plaintiff conceded in evidence that he had agreed to attend the office of the defendant’s solicitors, only for the purpose of collecting a letter addressed to the plaintiff, with enclosures^[25]. He agreed the arrangement was for the plaintiff and Mr Schwarz to attend at the office of Whitehead Gupta Lawyers to sign the documents enclosed in the letter, and return the signed letter acknowledging termination of the first contract and the signed second contract to the defendant, together with the $200,000 deposit which was to be held in the defendant’s solicitor’s Trust Account, pending the seller signing the contract and the defendant forwarding the buyer a copy of the contract signed by the seller.^[26]

25. [25]
    On 7 April 2009 the defendant spoke to Mr Whitehead of Whitehead Gupta Lawyers who confirmed the buyer could not settle. On 7 April 2009 the plaintiff attended the defendant’s office with Mr Schwarz because it was not convenient for Mr Schwarz to travel to his solicitor’s office.^[27]Mr Schwarz signed the letter regarding repudiation which stated:

“I refer to the contract for the purchase of 16 Queensland Avenue Proprietary Limited dated 17 July 2008. I confirm the advice from the company’s solicitors, Whitehead Gupta Lawyers that the company is unable to effect settlement of that contract on the due date of today 7 April 2009. I acknowledge that the deposit of $240,000 paid on that contract is forfeited by the company and that contract is now at an end.

Yours faithfully

Andy Schwarz.”^[28]

26. [26]
    Relevant to the defendant’s acceptance of the buyer’s repudiation, the defendant gave evidence the order of events was “the letter was signed first and I said “that contract’s terminated” and then… (Schwarz).. signing the new contract”.^[29]The settlement date on the second contract was 1 July 2009. The second contract included a condition the deposit of $200,000 was to be released to the seller upon the seller’s solicitor advising the buyer’s solicitor the seller had signed the contract.^[30]

27. [27]
    The second contract also contained the following special condition:

“In the event that the seller is liable to pay commission for this sale to agent, the buyer will indemnify the seller with respect to the payment of such commission and all costs incurred by the seller in relation to dealing with the payment of commission.”^[31]

28. [28]
    The defendant’s evidence of the events of 6 and 7 April 2009 was unchallenged by the plaintiff except for the following issue. The plaintiff gave evidence that, on 6 April 2009 he went to the defendant’s office with Mr Schwarz at which time Mr Schwarz signed the letter of rescission dated 7 April 2009^[32]. He then signed a new contract^[33]and a cheque.^[34]The plaintiff’s version is not corroborated by any other evidence. The plaintiff stated he had proof that Mr Schwarz signed the letter on 6 April, not the 7^th April but he was unable to present any proof to the court. The date on the letter Mr Schwarz signed is 7 April 2009. The date on the new contract is entered as 7 April 2009. I accept the defendant’s evidence that it was after Mr Schwarz signed the letter acknowledging the buyer was unable to settle the contract the defendant orally terminated the contract and Mr Schwarz then signed a new contract of sale. I accept the defendant’s evidence that this occurred on 7 April 2009, not 6 April 2009.

Conduct post 6 and 7 April 2009

29. [29]
    On 9 April 2009 the defendant returned a phone call to the plaintiff during which the plaintiff said words to the effect, that because of the special condition in the second contract about commission, he wouldn’t get his commission. The defendant gave evidence and noted on a contemporaneous file note that he did not understand what the plaintiff was talking about.^[35]At some point after this the defendant received a letter from the plaintiff which stated the plaintiff expected sales commission to be payable upon settlement of the second contract.^[36]

30. [30]
    On 22 June 2009 the buyer’s solicitors sent a facsimile to the defendant requesting he obtain the seller’s instructions as to whether they would be willing to provide vendor finance in the sum of $760,000 because the buyer was having problems raising finance.

31. [31]
    On 23 June 2009 the defendant sent a facsimile to the buyer’s solicitors stating he would obtain instructions as to whether the seller would be willing to provide vendor finance and confirming the second contract’s settlement date of 1 July 2009.^[37]On 24 June 2009 the defendant sent a letter to the buyer’s solicitors to the effect the seller was not willing to provide vendor finance. The defendant provided a settlement statement to the buyer’s solicitors in anticipation of settlement on 1 July 2009. At the plaintiff’s request the defendant sent an amended settlement statement to the buyer’s solicitor which included, pursuant to the special condition of the second contract that the buyer was required to pay agent’s commission of $59,895 upon settlement. On 29 June 2009 the buyer’s solicitors sent a facsimile to the defendant requesting a further extension of time until 3 July 2009 to allow the buyer to obtain further finance.^[38]The sellers ultimately granted a further extension until 4.00 pm Friday 10 July.^[39]

32. [32]
    On 3 July 2009 the buyer’s new solicitor Hickey Lawyers sent the defendant a letter purporting to withdraw the buyer’s offer to purchase the property on the basis the seller’s agent had failed to direct the buyer’s attention to the PAMDA Form 30C prior to the buyer entering the contract. On 6 July 2009 the defendant sent Hickey Lawyers a facsimile rejecting the allegation there was any basis for the buyer terminating the contract. The defendant stated the buyer’s actions were a wrongful repudiation of the contract and advised that the seller terminated the contract.^[40]

33. [33]
    The defendant gave evidence (not objected to and not challenged) that the first contract was not mutually terminated. He stated that in the case of mutually terminating a contract the procedure he would have carried out was to enter a deed of rescission. If a new contract was then entered into there is a waiver of the cooling off period so that any deposits paid or acceptances after the cooling off period remain alive. The deed of rescission is then forwarded with a “resale contract of mutual termination” to the office of State Revenue in order to avoid double duties^[41].

34. [34]
    As at the time of trial the property had still not sold.

Credibility and Reliability of the Evidence

35. [35]
    It is necessary to state my conclusions as to the reliability of the respective witnesses’ evidence. The plaintiff was not an impressive witness. There are numerous examples during his evidence where he made claims that events had definitely occurred which he later had to concede did not in fact occur, when shown the defendant’s file notes and when shown correspondence between himself and the defendant.^[42]The plaintiff had no recollection of numerous conversations and events that in my view were quite significant.^[43]

36. [36]
    In saying this I have no doubt that the plaintiff, in his mind truly believes he has a legitimate right to the commission and a belief that certain events occurred. I do not accept events or conversations occurred in the manner he described, where his evidence is inconsistent with that of the defendant. The plaintiff was an extremely inaccurate historian and appeared confused as to what in fact occurred in his dealings with the defendant. He appeared to reconstruct events rather than give evidence of what he actually recalled occurring.

37. [37]
    On the other hand, I accept the evidence of the defendant as reliable and credible. He had made numerous file notes which make up Exhibit 23 and which he dictated soon after each conversation or meeting with the plaintiff. His evidence was largely unchallenged.

38. [38]
    I do not accept the plaintiff’s evidence that he and his partner, Ms Pomytkina, attended the defendant’s office a few weeks before 7 April 2009, to ask for an extension of one month past the settlement date of 7 April 2009 where he alleges the defendant stated, “We’ll have to bring the contract to an end … and start a new contract with a new deposit for $200,000.” I note that his partner, Ms Pomytkina, made no mention of this meeting in her evidence. I accept the defendant’s evidence that this meeting and conversation never occurred. I accept the defendant’s evidence that no such agreement was made and that the first he became aware that the buyer could not settle was when he received a letter dated 3 April 2009 from the buyer’s lawyers.^[44]The letter explained the buyer was having problems obtaining finance in time to effect settlement on 7 April 2009. The letter requested an extension of time for settlement to 22 May 2009. I accept the defendant’s evidence that on 6 April 2009, the day before settlement was due, he spoke with the buyer’s solicitors and advised them the seller wished to settle on 7 April 2009 and he would terminate the contract if the buyer did not settle, after which he was prepared to enter into another contract of sale with the buyer. I accept the defendant’s unchallenged evidence that he spoke with the buyer’s solicitors advising that the seller had decided to terminate the contract but the seller would be willing to enter into a new contract for a reduced amount of $2,160,000 due for settlement on 31 July 2009. I accept that the defendant prepared a letter regarding rescission of the contract to be signed by the buyer, as well as other documents sent to the buyer’s solicitors on 6 April 2009, and that he did so in anticipation of the buyer’s default.^[45]I accept the defendant’s evidence, which was not contested, that on 7 April 2009 he spoke with the solicitors for the buyer and was advised that the buyer was unable to settle the contract on that date.

39. [39]
    I accept the defendant’s uncontested evidence that, after the buyer’s director Andy Schwarz had signed the letter confirming the buyer’s inability to settle the contract, the defendant orally terminated the contract and then Mr Schwarz signed a second contract to buy the property.

40. [40]
    The plaintiff was unable to call Mr Schwarz as a witness because he is dead. The plaintiff also did not call Mr Whitehead or someone from Whitehead Gupta who were the buyer’s solicitors at the time the first contract was terminated to give evidence about any alleged agreement of mutual termination made with the defendant. I also note the defendant’s evidence was that there was no mutual termination and that this aspect of his evidence was not challenged during cross-examination.

The Plaintiff’s Submissions

41. [41]
    The plaintiff submits that the court should find that when the buyer signed the “letter of rescission” dated 7 July 2009 it repudiated the first sale contract and that action did not terminate the contract. The plaintiff submits that it was up to the defendant to determine what to do at that point, and that, by signing the second sale contract the parties ‘brought to an end’ the first sale contract which was in effect a mutual termination. The plaintiff relied on the Court of Appeal decision in Yong Internationals Pty Ltd v Gibbs & Ors [2011] QCA 161 to submit that the threshold test for a contract to be mutually terminated is low. The plaintiff submits, in the same way as in Yong; the ‘necessary consequence’ of the second sale contract was that the first sale contract was brought to an end.

42. [42]
    The plaintiff submits, that although the buyer did not have a ‘basis upon which to oppose the termination by the defendant’, that is not the proper enquiry. The proper enquiry is whether the document (the second contract), that the parties mutually agreed, had the ‘necessary consequence’ of ‘bringing the [first sale] contract to an end’.^[46]The plaintiff submits it did and that the defendant’s submissions concerning the plaintiff’s evidence about extensions of time,^[47]and agreements made some weeks before the date of the second contract are irrelevant.^[48]The plaintiff submits, relying on Yong, the proper focus should be on the meaning of the document and its effect.

43. [43]
    The plaintiff submits this construction is buttressed by the purpose behind clause 2.1, and that the object of clause 2.1 is to enable the plaintiff to obtain a commission. The plaintiff submits there is no justification for the plaintiff being denied his commission when the second sale contract is a direct consequence of the first sale contract which itself was a contract that the plaintiff had performed work under the agency contract to procure.

44. [44]
    Yong’s case is of limited assistance to the plaintiff’s case. It deals with a different factual scenario where the parties entered into a deed which provided the parties released each other from “any actions, claims, suits or demands in any way connected to the contract”^[49]. As submitted by the defendant the present case is one where the parties signed no such release. The evidence in the present case is that, to the contrary, the defendant at all times intended the first contract be performed. The second contract was not entered into until after the first contract had been orally terminated by the defendant.

45. [45]
    The plaintiff next submits, in any event, that the facts prove that the parties brought the first sale contract to an end by mutual agreement. The plaintiff submits the evidence is that on 6 April 2009 the parties agreed that if the buyer could not complete the first contract the Defendant and the buyer would enter into a new contract. In my view, the effect of the evidence is that the parties did not agree to complete the first contract, rather the defendant made it clear that if the buyer did not settle, the defendant would terminate the first contract. The plaintiff submits the evidence is to the effect that the defendant prepared a letter for the buyer to sign in which the buyer repudiated the first contract and drew up a second sale contract, and delivered those documents on 6 April 2009 to the buyer’s solicitor. I accept this evidence, which is not disputed by the defendant. The plaintiff relies on evidence that on 7 April 2009 Schwarz signed the letter of repudiation and then the defendant and the buyer entered into the second sale contract, which reflected an agreement, formed on 6 April 2009 to enter a second contract. The plaintiff submits the effect of the evidence is important because it shows:

• The parties agreed to enter into the second sale contract on 6 April 2009. It was not as though the buyer arrived at settlement unable to do so. Rather, the inability to settle had been discussed and a plan put in place;
• The defendant drafted the letter of repudiation for the buyer to sign. In other words, this process was one that the defendant was intimately involved in orchestrating;
• The second sale contract was drafted so as to reflect the payment of the deposit under the first contract. In other words, it was a reproduction of the first sale contract;
• The defendant did not find another buyer in lieu of the buyer under the first sale contract, nor did the defendant attempt to do so by putting the subject property on the market for the price of $2,400,000.00 which was the purchase price under the first sale contract, but instead continued with the existing buyer;
• The defendant did not sue for damages in respect of the first sale contract.

Consideration

46. [46]
    The plaintiff’s submissions do not persuade me that the effect of all of the evidence is that that first contract was terminated by mutual agreement. On the evidence I am satisfied the defendant had determined and communicated to the buyer that they were ready for the first contract to settle on 7 April 2009 and, in default of settlement they would terminate the contract for breach by the buyer. The buyer advised the defendant on 3 April 2009 that it would be unable to settle. The buyer’s inability to settle breached the contract. The buyer’s letter of rescission drafted by the defendant and signed by Mr Schwarz on 7 April 2009 is evidence the buyer acknowledged it had repudiated the contract. The defendant was entitled to terminate the contract for anticipatory breach.^[50]

47. [47]
    The defendant then acted to terminate the contract by advising the buyer the contract was terminated^[51]. The defendant did not send a letter to the buyer’s solicitors stating that he terminated the first contract, which would have been prudent; however the defendant’s evidence that he told the buyer in the presence of the plaintiff that the first contract was terminated, prior to the buyer signing the new contract was not challenged. At that point the defendant terminated the contract and the contract was at an end. I also consider the defendant and buyer’s conduct of entering into the new contract is evidence consistent with the defendant accepting the repudiation and terminating the first contract.

48. [48]
    I accept the defendant’s evidence that he did not intend, nor did the seller intend that the first contract be terminated by mutual agreement. I accept the defendant’s evidence that he never at any stage discussed with the buyer’s representative Mr Schwarz, or with the plaintiff, or with the buyer’s solicitors, a mutual agreement to terminate the contract.

49. [49]
    As stated above, I reject the plaintiff’s evidence that a meeting occurred in the weeks prior to 7 April 2009 during which agreement was reached between the plaintiff and defendant to mutually terminate the first contract. I note there is no evidence from Ms Pomytkina that such a discussion ever took place. There is no evidence from Mr Schwarz or Mr Whitehead of any mutual agreement between the parties to terminate the first contract. There is no correspondence or other documentation to support the plaintiff’s claim that the first contract was terminated by mutual agreement other than that to which I have already referred. I am satisfied on balance the plaintiff and the buyer resisted the termination of the first contract at all times up until the date of settlement. It can be inferred from the evidence the buyer wanted the first contract to continue by the defendant granting a further extension of time to settle. The fact that the parties entered into a second contract after termination of the first contract is not evidence in this case of any mutual decision by the parties to terminate the first contract. Rather, the evidence is consistent with the defendant’s case that the first contract was terminated unilaterally by the defendant and the deposit forfeited to the seller. The fact the seller did not sue for damages in respect of the first contract is understandable based on the conditions in the second contract entered into between the buyer and seller.

Conclusion

50. [50]
    The plaintiff has failed to prove on the balance of probabilities that the defendant and buyer mutually terminated the contract dated 17 July 2008. The plaintiff has not satisfied me that the contract was terminated under any of the terms of Clauses 2.1 or 8.2 of the 22A PAMDA agreement. The claim is dismissed.

Second issue in dispute: Whether the plaintiff complied with his pre appointment obligations under PAMDA

51. [51]
    I intend to state my conclusions on the second issue raised by the defendant.

52. [52]
    I accept the defendant’s evidence as to what occurred at his meeting with the plaintiff and Ms Pomytkina on 26 June 2008, that the plaintiff did not bring to his notice any information in the form 22A PAMDA as required under s 134A of PAMDA or s 135 of PAMDA.

53. [53]
    The plaintiff gave evidence that on 26 June 2008, he told the defendant that he would prefer an exclusive agency. He gave evidence he told the defendant that an exclusive agency would allow only the plaintiff to market that property for the amount of time. The plaintiff also gave evidence that he explained to the defendant the operation of a sole agency and of an open listing. The plaintiff stated that midway through this meeting, the defendant “took control” of the PAMD Form 22a, and indicated that he already knew all about “it”, and started altering it.^[52]

54. [54]
    The plaintiff stated that at this meeting, he indicated to the defendant that he would only need a 30 day agency, despite the defendant offering the plaintiff a 60 day term of agency.^[53]

55. [55]
    In cross-examination, the plaintiff maintained that he explained to the defendant the differences between exclusive agency, open listing and sole agency. He stated that he brought the PAMD Form22a to the meeting, and that he had not fully completed it. He said that he stated to the defendant, as follows:

“I said an open listing is anybody can have an open listing if you sign it off and if you sell it, I'm the only one that gets the commission. Now, if I don't sell it don't get anything. A sole agency is if you sell it or I sell it, only the person who sells it gets commission. An exclusive agency is if it sells at all, I get commission.”^[54] 

56. [56]
    The plaintiff stated that he specifically drew the defendant’s attention to Part 5 of the Form 22a, which deals with the type of listing. He stated that this section does not itself explain the differences between the listing options, but rather, that he drew the defendant’s attention to the options listed, and explained each of them himself.^[55]He further stated that the defendant was “quite familiar” with section 5, and that he “knows them back to front”.^[56]

57. [57]
    The defendant’s outline of submissions helpfully summarises a number of examples where the plaintiff gave different versions of what occurred at the meeting on 26 June 2008.^[57]

58. [58]
    The plaintiff’s versions were internally inconsistent, and inconsistent with Ms Pomytkina’s evidence of what the defendant said at the meeting. For example, in one version, the plaintiff claimed to have drawn the defendant’s attention to relevant parts of the Form 22a, yet, only specified Part 5 of Form 22a, which does not contain any explanation concerning the difference between a sole and exclusive listing. Ms Pomytkina was obviously trying to assist the plaintiff’s case when she gave evidence of what the plaintiff said at the meeting. Her evidence was unconvincing. She gave evidence that the plaintiff did not direct the defendant to any parts of the Form 22a. This was inconsistent with the plaintiff’s evidence. Although she gave evidence that the plaintiff explained the differences between a sole, exclusive and open listing, she could not explain what he had in fact said.

59. [59]
    I gained the firm view that Ms Pomytkina was not a reliable witness and her evidence of what occurred was a reconstruction, rather than an honest recollection of what the plaintiff told the defendant.

60. [60]
    The plaintiff’s evidence on what occurred at the meeting was unconvincing. In addition, the plaintiff’s evidence concerning other material issues reflects his inability to recall conversations and events. On occasions his answers appeared to be evasive and non-responsive.

61. [61]
    The defendant gave evidence that at the meeting on 26 June 2008, the plaintiff merely presented with a partly completed Form 22a and stated he wanted an exclusive agency contract for 30 days. The defendant gave evidence that here was no discussion about the terms of the agency or the terms of the Form 22a.

62. [62]
    I am satisfied on balance that the plaintiff did not bring to the defendant’s attention information in the Form 22a about the effect of an open listing, exclusive agency or sole agency, which is a mandatory requirement of s 134A and s 135 PAMDA, before the appointment was signed on 26 June 2008.

63. [63]
    The plaintiff therefore committed an offence under s 134A and s 135 PAMDA and, pursuant to s 137(3) PAMDA, the appointment is deemed ineffective.

64. [64]
    The consequence is that the plaintiff is not entitled to sue for, recover or retain a reward/expense for acting as a real estate agent because he was not properly appointed.^[58]

65. [65]
    Compliance with s 134A and 135 is mandatory.^[59]

66. [66]
    The plaintiff does not submit the effect of the statutory requirements is otherwise. The plaintiff’s only submission is that, irrespective of the state of the plaintiff’s evidence of what occurred during the meeting, I should accept the plaintiff’s evidence that his usual practice in relation to the appointment of pre-appointment advice was to “point out the differences between a sole agency, an exclusive agency and an open listing, and what the consequences of each are.”^[60]

67. [67]
    Irrespective of what his usual practice might be, for the reasons stated above, I am not satisfied on the balance that the plaintiff provided this advice to the defendant on 26 June 2008.

Third issue: undisclosed agent

68. [68]
    Having reached these conclusions on the first two issues it is unnecessary to consider the final issue as to whether the plaintiff acted as an undisclosed agent of the buyer and whether, if so he was not entitled to commission.

Order:

69. [69]
    The parties agreed at the commencement of the trial that if the plaintiff’s claim is dismissed, it follows the plaintiff on the counterclaim, (Mr Standfield), succeeds on the counterclaim.^[61]

70. [70]
    The plaintiff’s claim is dismissed. On the claim the judgment of the court is that the there be judgment for the defendant against the plaintiff. On the counterclaim the judgment of the court is there be judgment for the plaintiff on the counterclaim against the defendant on the counterclaim in the sum of $6,600.00 plus interest in the sum of $3,465.00 ($6,600.00 x 10% x 5.25 years from 13 August 2008 to today’s date).

Costs

71. [71]
    It is ordered that submissions on costs, if any, be filed and served by 4pm 28 November 2013.