Floyd v Nevgold Pty Ltd[2024] QDC 105

DISTRICT COURT OF QUEENSLAND

Summary

1. [1]
   The plaintiff applies for summary judgment of its claim for commission, he claims, due to him, as a real estate agent, upon the sale of four properties formerly owned by the defendant. 
2. [2]
   The application is opposed. 
3. [3]
   The plaintiff relies upon material combined with admissions in the pleadings to argue that there is no real contest in respect of the claim, based upon the plaintiff introducing a prospective purchaser to the properties who entered into the call option deed which provided for the prospective purchaser to nominate the ultimate buyer in terms of that deed and the form of contract of sale contained in the deed.  By that mechanism, he contends that the plaintiff was the effective cause of the sale ultimately made to that buyer.
4. [4]
   The defendant contends that the plaintiff was not the effective cause of sale to the ultimate buyer, but instead substantial marketing efforts were carried out by another agent who introduced the ultimate buyer who entered into a contract of sale, albeit using the mechanism of the call option deed, but it did so as a matter of commercial convenience for the benefit of the potential purchaser, so as not to lose a payment made under that option.
5. [5]
   I have concluded that the defendant has a slim, if not shadowy, argument in respect of the utility of this mode of determination of the proceeding.  Nevertheless, it seems to me that it has some merit that necessitates a trial of the proceeding.  Accordingly, I dismiss the application and order costs be costs in the proceeding unless a different order is sought within 14 days.

Summary Judgment

6. [6]
   When a plaintiff seeks summary judgment against a defendant, rule 292 of the Uniform Civil Procedure Rules 1999 (Qld) provide that:

“If the Court is satisfied that—

1. (a)
   the defendant has no real prospect of successfully defending all or a part of a plaintiff’s claim; and
2. (b)
   there is no need for a trial of the claim, or the part of the claim;
3. (c)
   the Court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the Court considers appropriate.”

7. [7]
   The test to be applied in relation to applications for summary judgment is now well-settled.  Its genesis comes from the Deputy Commissioner of Taxation v Salcedo [2005] QCA 227, where the Court of Appeal engaged with the new provision, reviewed the cases for the precursor provision, and emphasised that the clear wording of the real rule determined its application.  Williams JA (with whom McMurdo P agreed) said, at paragraph 17:

“That review of the authorities clearly establishes to my mind that there has been a significant change brought about by the implementation of rule 292 and rule 293 of the UCPR.  The test for summary judgment is different, and the Court must apply the words found in the rule.  To use other language to define the test (as was contended for in this case by counsel for the appellant relying on the reasoning of Chesterman J in Gray v Morris) only diverts the decision-maker from the relevant considerations.  But, and this underlies all that is contained in the UCPR, ultimately the rules are there to facilitate fair and just resolution of the matters in dispute.  Summary judgment will not be obtained as a matter of course and the Judge determining such an application is essentially called upon to determine whether the respondent to the application has established some real prospect of succeeding at trial; if that is established then the matter must go to trial.  In my view, the observations on summary judgment made by the Judges of the High Court in Fancourt are not incompatible with that application of rule 292 and rule 293; what is important is that in following the broad principle laid down by their Honours the test as defined by the rules is applied.”

8. [8]
   The plaintiff here also relies upon rule 190, which relevantly provides for admissions as follows:

“190. Admissions

1. (1)
   If an admission is made by a party, whether in a pleading or otherwise after the start of the proceeding, the Court may, on the application of another party, make an order to which the party applying is entitled upon the admission.
2. (2)
   The Court may give judgment or make another order even though other questions in the proceeding have not been decided…”

Issues

9. [9]
   The determined issues in this application are:

1. does the defendant have no real prospect of successfully defending all or part of the plaintiff’s claim, and

2. is there no need for a trial of the claim, or the part of the claim.

Does the defendant have no real prospect of successfully defending all or a part of the plaintiff’s claim?

10. [10]
    Here, the plaintiff must demonstrate that, in terms of the agency appointment, he was the effective cause of the sale subject of the contract of sale between the defendant and the ultimate purchaser, RRAF3 Holdings Cairns Pty Ltd as trustee (RRAF3).
11. [11]
    The parties have provided outlines of arguments and supplemented them with detailed oral submissions as to the authoritative treatment of the meaning of “effective cause of sale”.  Particular focus has been had on the High Court decisions of LJ Hooker Ltd v WJ Adams Estates Pty Ltd [1977] 138 CLR 52 and Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] 202 CLR 351, as well as decisions referred to by those Justices.^[1]  Additionally, I have considered the recent decision in Freedom Development Group Pty Limited v D’Ettorre Properties Pty Limited T/as.  D’Ettorre Real Estate [2023] NSWCA 81, and additionally, an earlier decision of Bradley v Adams [1989] 1 Qd R 256.^[2]
12. [12]
    The distillation of the principles is, in effect, that the Court must embark on a factual enquiry as to whether or not the agent, on the consideration of such facts as are before the Court, was the effective cause of sale, being something more than a mere introduction, but demonstrable of some causal relationship with the sale.  The agent need not be the sole cause of the sale.  There may be other such causes that contribute to the sale to a ready, willing, and able buyer. 
13. [13]
    That plaintiff points to the state of undisputed facts on pleadings consistent with the documents forming the basis of the claim subject of affidavits, and not otherwise contradicted.  In particular: 

    1. The defendant was the proprietor of the four separate properties prior to the appointment of the plaintiff as its agent for the sale of those properties;
    2. One of the properties, being lot 3 on SP121854, situated at 446-456 Mulgrave Road, Earlville, QLD 4870 was a motel;
    3. OneFin Property Pty Ltd, by its agent Mr Mitch Paul, had dealings with the plaintiff, expressed an interest in buying the motel, but OneFin did not wish to acquire that motel property alone at the price that it was being offered at that time;
    4. On the 27^th of August 2021, Mr Paul contacted the plaintiff agent to say that he had ascertained that the defendant owned three properties adjoining the motel property, and that all four properties together created a rectangular corner site, and he asked the plaintiff to ascertain whether the defendant was prepared to sell all the properties;
    5. The plaintiff spoke to the sole director of the defendant owner on the 2^nd of September 2021, who said that the defendant would sell all four properties together if suitable terms could be reached;
    6. Two appointments of agent were entered into by the plaintiff and the defendant, through its agent.  Each of such appointments provided, by clause 5.1, that the defendant would pay commission if a contract of sale of the properties was entered into with a buyer and the agent is the effective cause of sale within the term of the appointment provided that, relevantly here, a contract of sale of property is completed;
    7. The plaintiff then contacted OneFin and the negotiations for sale and purchase of the four properties were undertaken with the plaintiff acting as agent for the defendant in the form of email and text exchanges, amongst other things;
    8. On the 14^th of December 2021, the defendant and OneFin entered into a call option deed whereby, in consideration of OneFin as prospective purchaser paying the call option fee to the defendant, the defendant would grant to OneFin and irrevocable option to purchase after the commencement date the property and business from the defendant on the terms set out.  Those terms included the payment of a performance security payment pursuant to clause 4, comprising an initial performance security payment of $20,000 and a second performance security payment of $500,000 within defined timeframes.  Further, the call option deed prescribed the form of contract of sale, which was included by way of attachment, itself, identifying the plaintiff as agent, and also provided, in terms of the deed for such sale to be completed by nomination by the prospective purchaser OneFin to a nominee;
    9. In that regard, clause 9 provided that OneFin may nominate another person or entity to be the buyer under the contracts by serving a notice of nominee on the grantor defendant.  In doing so, the deed expressly provided by clause 9(b) that the nominee does not acquire any rights under the call option or this deed, and is not entitled to exercise the call option, and upon the exercise of the call option, the defendant must enter into the contract with the nominee.  It was further provided by clause 9(c) that OneFin’s obligations under the deed were not affected by it nominating a nominee.  By clause 3 of the call option deed, if the call option granted in the deed is exercised, the defendant and OneFin or its nominee will immediately be deemed to have entered into the contract, notwithstanding any failure to execute the contract.  The date of the contract was also deemed to be the date of the exercise of the call option;
    10. The performance security payments were duly made and subsequently released to the defendant on or about the 24^th of February 2022 in the sum of $520,000;
    11. On or about 14 August 2023, OneFin exercised the call option and nominated RRAF3 as its nominee to purchase the properties in accordance with the call option deed, and the attached contract;
    12. On or about 14 August 2023, as deemed by the deed in any event, the defendant entered into the contract with RRAF3 for the sale price of $6,000,000, in accordance with the terms of the attached contract, which nominated the plaintiff as agent in that form;
    13. On or about 1 November 2023, the defendant completed the sale by that contract to RRAF3.
14. [14]
    The plaintiff points to those factual matters to argue that the plaintiff’s efforts providing for the mechanism of sale through the deed of the call option deed and related contract resulted in the defendant entering into and completing the contract with the ultimate purchaser, RRAF3.  It points to the mechanics of entry into the option deed, payment of the non-refundable performance security payments being the deposit for the purposes of the ultimate sale, entry into the contract of sale in its terms the subject of the call option deed, including nomination of the plaintiff as agent, payment of the non-refundable deposit to the defendant, and ultimately, the sale through the contract with the purchaser or the buyer, RRAF3.
15. [15]
    On that basis, it seems to me that the plaintiff has established a prima facie entitlement to summary judgment, which triggers a shift in the evidentiary onus to the defendant to bring evidence in support of its contentions in defence, or other need for a trial.  The defendant also points to the state of the pleadings and the treatment of the final pleading, pursuant to rule 168 in respect of matters the subject of implied non-admissions and the need for proof at trial. 
16. [16]
    In any event, it is contended that there is an existing factual dispute on the pleadings as to the circumstances in which the ultimate buyer, RRAF3 came to be nominated by OneFin, and as to whether the plaintiff was the effective cause of sale of the properties to that ultimate purchaser, as distinct from its role in the mechanism set by the call option deed vis-à-vis OneFin.  It is also contended, although it seems to me with less force, that there is a factual dispute that concerns when and how OneFin was introduced to the properties.
17. [17]
    The defendant seeks to distinguish between OneFin and the ultimate purchaser, RRAF3, to argue that the factual matrix involved a significant effort and marketing campaign by another agent in order to achieve the sale to RRAF.  These included:

    1. In April 2023, a representative of OneFin made contact with a real estate agent, HTL Properties, to list the properties on the market for sale, by way of nomination of a successor purchaser under the call option deed;
    2. HTL Properties was appointed by OneFin to market and sell the properties in that way;
    3. HTL Properties then conducted an intensive marketing campaign, receiving some 80 inquiries;
    4. Mr Nyholt travelled to Cairns to meet with the director of the defendant at the properties;
    5. Mr Nyholt and Mr Simarro travelled to Cairns on further occasions to introduce the properties to prospective purchasers, including a director of RRAF3;
    6. Mr Simarro liaised with representatives of OneFin, RRAF and their respective solicitors, which resulted in RRAF3 entering into a contract of sale of the properties by virtue of their nomination under the option agreement;
    7. HTL Properties then received commission for that sale;
    8. HTL Properties assert that the plaintiff had no contact with the defendant and the ultimate purchaser, RRAF3, vis-a-vis that purchase.
18. [18]
    The defendant, seeking to make out the distinction between OneFin and RRAF3, asserts that OneFin did not enter into the contract of sale, nor did it complete the sale; but rather RRAF3, a different and separate entity; was the ultimate purchaser.  It points to the absence of any commonality or relationship between the entities and that the plaintiff had nothing to do with the ultimate purchase by RRAF3.  Instead, that effort is attributed to HTL Properties as the effective cause of the ultimate sale.
19. [19]
    Some matters of fact are inescapable for the defendant.  They are those matters relied upon by the plaintiff to form the foundation of this application for summary judgment, which are clothed with the mechanism of sale through the call option deed and the contemplated contract in the way that was agreed in those terms, albeit to an unrelated third party entity, RRAF3, as the ultimate buyer. 
20. [20]
    It seems to me that it is not to the point that HTL Properties were the effective cause of sale, but rather, in my view, HTL Properties were no more than an extension by way of agency of OneFin in fulfillment of its obligations, which continued under the call option deed.  How it carried out those obligations and the effort and cost of such, in my view, adds little to the factual matrix, and it is potentially a distraction from the critical inquiry that is ‘was the plaintiff the effective cause of the sale to RRAF3?’
21. [21]
    It seems to me that the plaintiff demonstrates a strong factual foundation to answer that question yes.  However, as much as that foundation has superficial attraction, it nevertheless leaves a factual void in relation to the ultimate sale being achieved to RRAF3 which are not readily before the Court in this application.
22. [22]
    In that respect, it seems to me that the defendant has a slim, if not shadowy, argument in respect of the utility of this mode of determination of the proceeding.  Nevertheless, it seems to me that it has some merit that necessitates a trial of the proceeding.

Is there no need for a trial of the claim or a part of the claim? 

23. [23]
    Having regard to my discussion thus far, it seems to me that the question as to whether a trial is required must be answered ‘yes’. 
24. [24]
    While the trial may not involve complex legal issues, an inquiry is warranted in respect of the factual circumstances leading to the ultimate sale to RRAF3.  In that regard, such a trial would be contained and of short compass. 
25. [25]
    In all of the circumstances, I invite the parties to consider whether it is appropriate that the defendant be required to pay an amount into Court as a condition for the future conduct of the proceedings in the order of something less than the claim, but nevertheless, a substantial amount.  That may be rendered unnecessary if the matter can be accommodated in the near future in the Court’s current calendar.

What should happen with the costs of this application? 

26. [26]
    It seems to me that costs of the application ought reflect the very fine balance of its outcome, such that it seems to me that unless either party applies for different orders, the costs of the application should be costs in the proceedings, which will be ultimately determined by the final determination of the proceedings, when costs are likely to follow the event of that determination.

Orders

27. [27]
    For these reasons, I make the following orders:

1. The application for Summary Judgment is dismissed;
2. Unless either party applies for, or the parties otherwise agree on, a different costs order within 14 days, the costs of the application will be each party’s cost in the proceedings.

Judge DP Morzone KC