Awad v Australian Sales and Leasing Pty Ltd (trading as ASL Real Estate)
[2018] VSC 627
•26 October 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2017 05093
| MAGDY AWAD (also known as Michael Awad) | Appellant |
| v | |
| AUSTRALIAN SALES & LEASING PTY LTD (ACN 115 336 45) (Trading as ASL Real Estate) | Respondent |
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JUDGE: | CROFT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 18 October 2018 |
DATE OF JUDGMENT: | 26 October 2018 |
CASE MAY BE CITED AS: | Awad v Australian Sales & Leasing Pty Ltd (trading as ASL Real Estate) |
MEDIUM NEUTRAL CITATION: | [2018] VSC 627 |
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LEASES AND TENANCIES – Essential terms of lease; a right of exclusive possession for an ascertainable period of time but do not include a reservation of rent – Lace v Chantler [1944] 1 KB 368 – Weston v Ray [1946] VLR 373 – Francis Longmore & Co Ltd v Stedman [1948] VLR 322 – Burns v Dennis (1948) 48 SR (NSW) 266 – Hayes v Seymour-Johns (1981) 2 BPR 9366 – Effect of conditions – Hudson Conway Limited v Colliers Jardine (Vic) Pty Ltd [1986] ANZ ConvR 523 – No implied term that finance be obtained prior to unconditional contract forming – Liverpool City Council v Irwin [1976] QB 319 – Carbure Pty Ltd v Brile Pty Ltd [2002] ANZ ConvR 548; VSC 272 – Implied grant of actual authority by acquiescence in the course of behaviour – Junker v Hepburn [2010] NSWSC 88.
AGENCY – Entitlement to commission – Right of agent to receive commission from principal rests on law of contract and subject to no particular rules or principles – Anderson v Densley (1953) 90 CLR 460 – LJ Hooker Limited v WJ Adams Estates Proprietary Limited (1977) 138 CLR 52 – Trotter v McSpadden [1986] VR 329 – Effect of condition subsequent on entitlement of agent to commission – Trotter v McSpadden [1986] VR 329 – Hudson Conway Limited v Colliers Jardine (Vic) Pty Ltd [1986] ANZ ConvR 523.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr G Parncutt | Nicholas J Sevdalis & Associates |
| For the Respondent | Mr L Virgona | MA Legal |
HIS HONOUR:
Introduction
This is an application by summons filed pursuant to s 109 of the Magistrates’ Court Act 1989. The summons, dated on 19 December 2017, is an application by the Appellant, Magdy Awad (also known as Michael Awad), seeking that orders made in proceeding number G11321542 by Magistrate Mr Peter Mealey on 16 November 2017 (“the Orders”) be set aside.
The Orders require the Appellant to pay Australian Sales & Leasing Pty Ltd, the Respondent, the sum of $47,040, together with interest of $8,058.66, with costs to be agreed between the parties; failing which there was liberty to apply.
Section 109 of the Magistrates’ Court Act 1989 provides for an appeal to this Court from a final order of the Magistrates’ Court on a question of law (see s 109(1)). Consequently, in order to succeed in this appeal, the Appellant must, at the very least, identify an error of law on the part of the Magistrate whose final Orders are appealed from. For the reasons which follow the Appellant has, in my view, failed to do so.
The Appellant submits that the central issue in this appeal is to decide whether the Magistrate erred in determining at what point in time the Respondent was entitled to commission and in what conditions.[1] The Respondent, on the other hand, submits that there is no error of law which would entitle the Appellant to the orders it now seeks.[2]
[1]Appellant’s Outline of Submissions (28 May 2018), [3].
[2]Respondent’s Outline of Reply Submissions (21 June 2018), [4].
The questions of law and grounds of appeal as set out in the Notice of Appeal dated 14 December 2017 are somewhat broader than the submissions by the Appellant now indicates. In any event, the appeal was conducted by the Appellant focusing on this central issue and, if I may say so, sensibly abandoning some peripheral matters, such as the application of s 126 of the Instruments Act 1958; particularly as the latter never arises, there being no disposition of any interest in land by the agent.
Factual Matters
The dispute relates to an Exclusive Commercial Leasing Authority entered into between the Appellant and the Respondent on 16 September 2015 (“the Authority”).
In substance, the Authority provided that the Appellant agreed to appoint the Respondent on an exclusive basis for a period of 14 days (from 16 to 30 September 2015) to lease the property at 84 Olympic Parade, Kangaroo Flat, Victoria (“the Property”), and to sell the Appellant’s plant and equipment (“Chattels”) located at the Property. This period of 14 days—concluding on 30 September 2015—is the “exclusive authority period” for the purposes of the Authority.[3]
[3]See General Conditions, 1.3.
The Respondent’s entitlement to be paid commission under the Authority arose if the Property was leased “within 120 days after the expiration of the exclusive authority period for the rent to a person introduced to the Client’s [Appellant] Property by the Agent [Respondent] within the exclusive authority period and to whom, as a result of the introduction, the Client’s Property is leased”.[4] It is common ground that 28 January 2016 was the 120th day for the purposes of these provisions.
[4]The Authority, Item 1.4, and see the definition of “exclusive authority period” in General Conditions, 1.3.
It is also common ground that the Respondent introduced Ms Tania Avtarovski to the Appellant during the period of the Authority, and that Ms Avtarovski’s company (Macedon Early Learning Centre Pty Ltd (as trustee for the D & T Avtarovski Family Trust)) subsequently both leased the Property from the Appellant, and also purchased the Chattels.
The Magistrate found that the Appellant and Ms Avtarovski (or a company controlled by her) had concluded a lease agreement by the end of the relevant period, which attracted a liability for commission under the terms of the Authority. Consequently it was found that the Respondent was entitled to be paid the commission in accordance with those terms.
Entitlement to Commission
As the Respondent observes in its submissions, the Appellant attempted to establish some general principles in relation to an agent’s entitlement to commission under exclusive authority agreements such as the present one. The weight of authority does, however, indicate that the courts have repeatedly made it clear that there are no general principles which are applicable with respect to such agreements. Rather, the court must determine the proper construction and interpretation of the relevant contractual terms.[5]
[5]Scott v Willmore & Randell [1949] VLR 113; Real Estate City Pty Ltd v Moustafa [2005] VSCA 181; Icon Property Pty Ltd v Wood [2008] VSCA 123; Raffoul (t/as Ttechnique Business Brokers) v Fresh 2 U Pty Ltd [2013] VSC 308.
The first case on which the Appellant relies is the High Court decision in Anderson v Densley, where the Court said:[6]
Where an agent is employed on commission to sell a property (and noncompletion is not due to the default of the vendor) the commission only becomes payable if the sale is completed.
[6](1953) 90 CLR 460 at 467.
The second decision relied upon by the Appellant, also a decision of the High Court, is LJ Hooker Ltd v WJ Adams Estates Pty Ltd (“LJ Hooker”), where Gibbs J said:[7]
It is therefore clear that the appellant is not entitled to recover commission under the contract in the present case simply because it expended considerable time and energy in the interests of the respondent and found a person ready, willing and able to buy and indeed brought that person to the very brink of a sale. The appellant must show that a sale was actually effected.
[7]LJ Hooker Ltd v WJ Adams Estates Pty Ltd (1977) 138 CLR 52 at 67. Gibbs J was a member of the majority that found the agent had not caused the sale. Gibbs J handed down separate reasons, as did all other members of the Court.
In Anderson v Densley, the question to be decided was whether s 23(1)(b) of the Auctioneers and Commissions Agents Act 1922-1951 (Qld) required the engagement or appointment of an agent to be in writing or whether some writing or connected writings, evidencing the creation of the relationship of principal and agent in respect of the transaction pursuant to an oral contract, were sufficient. The effect of that decision insofar as proceedings in Victoria are concerned was discussed in Real Estate City Pty Ltd v Moustafa,[8] where the Court of Appeal observed that, “one must be cautious about treating as generally applicable all that has been said about the earning of commissions by Estate Agents in two Queensland cases considered by the High Court: see Anderson v Densley and Moneywood.”[9]
[8][2005] VSCA 181.
[9]Real Estate City Pty Ltd v Moustafa [2005] VSCA 181, [32] [citation omitted].
In LJ Hooker again the relevant question was not one with respect to the happening, or not, of an event which would have entitled an agent to commission, but, rather, whether the agent was properly considered to be the effective cause of the sale. Gibbs J did make further, more general, comments which are pertinent in the present circumstances in that they emphasise the critical importance of properly construing the commission contract to identify the happening of the event upon which commission is payable. His Honour said:[10]
The right of an agent to receive commission from his principal rests on contract express or implied. It was made clear by the House of Lords in Luxor (Eastbourne) Ltd v Cooper [1941] AC 108; that commission contracts “are subject to no peculiar rules or principles of their own”: per Lord Russell of Killowen ([1941] AC at 108 p 124). In some places special rules have been introduced by statute but there is no statutory provision in force in New South Wales relevant to the questions that arise in the present case. In inquiring whether an agent is entitled to commission it is first necessary, as Viscount Simon LC said in Luxor (Eastbourne) Ltd v Cooper ([1941] AC at 108 p 119) , “to ascertain with precision what are the express terms of the particular contract under discussion, and then to consider whether these express terms necessitate the addition, by implication, of other terms”. The initial question — what, on the proper construction of the contract, is the event upon the happening of which the agent acquires a right to commission — is one which has led to difficulty and to a diversity of opinions in many cases. But it is not the crucial question in the present case. When the question of construction has been determined a second question may arise. If, upon the true construction of the contract, the commission is only payable in the event that a particular transaction was brought about by the agent, eg upon the completion of a sale effected by his instrumentality, the question may arise whether the transaction which in fact occurred was brought about as the result of his agency.
[Emphasis added by Respondent]
[10]LJ Hooker Limited v WJ Adams Estates Proprietary Limited (1977) 138 CLR 52 at 66; see also Respondent’s Outline of Reply Submissions (21 June 2018), [16].
The same approach is demonstrated in the decision of Gobbo J in Trotter v McSpadden,[11] a case concerning an estate agent’s entitlement to commission on the sale of land. In that case the sale note contained a special condition that the relevant sale was:[12]
[11][1986] VR 329.
[12]Trotter v McSpadden [1986] VR 329 at 329.
Subject to and conditional upon the purchasers entering into an unconditional contract of sale for the sale of their property…
Gobbo J, having found that this was properly characterised as a condition subsequent to the contract of sale, said:[13]
[13]Trotter v McSpadden [1986] VR 329 at 330.
It may therefore be said that the contract represented by the sale note in the present case was a contract subject to a condition subsequent. It would also follow that, subject to the condition subsequent, it was a binding contract. The critical question is whether the purchasers here legally bound themselves to become the purchasers of the property and, if they did, did the entitlement to commission accrue immediately upon that act occurring, represented as it was by the vendors and the purchasers signing the contract embodied in the sale note?
Continuing, Gobbo J said:[14]
The present case falls to be decided upon the terms of the engagement. These were extremely cryptic and read as follows:—
“The terms of this engagement are that the commissions payable therefore shall be as prescribed under the Estate Agents Act and that such commission shall be payable by me/us to you upon a person found or introduced by you signing (either by himself or by his agent) a document whereby that person legally binds himself to become the purchaser of the property.”
In my view, a contract, though in some or most respects legally binding, which was conditional upon a particular event occurring that was not related to obligations resting on either of the parties to the contract, was not a binding contract for the purposes of the engagement. I reach this view for a number of reasons. An agent does not become entitled to commission until the condition upon which the binding force of the contract depends is satisfied. It may be true that for certain purposes there is a legally binding contract for the purposes of bringing about an entitlement to commission. Even if this were not so as a matter of principle, this is true here as a matter of construction. The contract of sale is really a statement by the purchaser that there is only a legally binding contract if or only to the extent that a certain event occurs. It is not an event that relates to performance of the contract. It is an event that contemplates that an extraneous event unconnected with performance is necessary to make the contract binding. Moreover, the engagement and entitlement to commission is subject to a possible implication that the commission is not payable in the event of the condition not being fulfilled. This last approach can be put in another way that seems to me to accord with principle and also reflects what would be the normal expectation of the parties in this situation. It can properly be said that the agent is entitled to commission but that entitlement is subject to defeasance if the condition is not satisfied.
[14]Trotter v McSpadden [1986] VR 329 at 331.
Thus it is clear from the authorities that rather than establishing any general principle that an agent’s entitlement to commission only arises where an unconditional contract arises—where the critical event upon which entitlement to commission depends is entering into a contract (or lease)— the cases do show that the critical question is the proper construction of the commission contract, upon which the entitlement may arise.
The Authority
So, on the basis of the authorities, the first step in these proceedings is to consider the proper interpretation of the terms of engagement contained within the Authority and the manner in which the Magistrate dealt with this aspect.
The terms of the Authority relevantly provide as follows:
General Conditions
Definitions and interpretations
1.In this Authority unless otherwise required by the context or subject matter:
1.1“Agent” is the Agent named in the Particulars of Appointment.
1.2“binding offer” means an offer in writing signed by the proposed tenant on the Client’s preferred terms set out in the Particulars of Appointment which would result in a lease, if signed by the Client.
…
1.7“lease” includes an agreement for lease, sub-lease, license, or an assignment.
1.8“leased” is the result of the
1.8.1Agent obtaining a binding offer; or
1.8.2Client and the proposed tenant signing a lease for the Client’s Property.
…
1.13“professional fees” means the total of the commission…
…
1.16“tenant” means the person to whom the Client’s Property is leased.
Other
…
10An agreement of the Client and a tenant to surrender or cancel a lease of the Client’s Property…does not relieve the Client of the obligation to pay the Agent’s professional fees.
…
Notices & Disclosures
Item 1.Agent’s entitlement to commission
The Client agrees to pay the Agent the commission on the terms of this Authority if the Client’s Property is leased –
…
1.4 within 120 days after the expiration of the exclusive authority period for the rent to a person introduced to the Client’s Property by the Agent within the exclusive authority period and to whom, as a result of the introduction, the Client’s Property is leased.
…
…
In the Particulars of Appointment section of the Authority the “Agent” is named as the Respondent and the “Client” the Appellant.
In my view it is clear on the plain wording of the Authority—and on the proper interpretation of that wording—that the Respondent is entitled to be paid the commission where the Property is “leased” within 120 days of the expiration of the exclusive authority period.
More particularly, it is clear from the definition of “leased” that the property is leased for the purposes of the Authority when a lease of the Property is signed. This would also be the position when the Agent obtained a binding offer, but this is not the situation in the present circumstances.
It should be observed that these provisions—critical provisions with respect to the event triggering an entitlement to commission—are cast in broad terms. Thus the word “lease” is itself defined to catch within its net a variety of instruments or agreements which would not otherwise be regarded as leases; including, for example, a licence. Moreover the entitling event also includes the receipt by the Agent of a “binding offer”. The language and approach in this respect is important. It indicates, in my view, that the entitling event for the purposes of commission has not been selected as one which when it occurs the parties to the lease are necessarily bound at all to its terms or that to the extent that they are bound this state of affairs must necessarily continue. Rather, the language of these provisions contemplates commission being payable even though the position of the parties to a lease (as broadly defined) may not continue, whether as a result of the operation of some agreed condition or otherwise. In the first instance, clearly a binding offer may not be accepted and thus goes nowhere in the sense that nobody is bound. In the second instance there is nothing in the Authority which supports a construction that the “lease” must be unconditional.
The Magistrate found, as a question of fact, that a lease was signed by the parties on or about 15 January 2016. There are some issues raised by the Appellant as to whether or not this lease contained all the essential terms which the common law demands of a lease but, for the reasons which follow, there is nothing in this point and the document is, in my view, a lease which satisfies the common law requirements. As this lease was signed within the 120 day period for the purposes of the Authority that disposes of matters in controversy and of this appeal—there being no error of law on the part of the Magistrate with respect to these matters. Other matters are raised in the Notice of Appeal in these proceedings but, for the reasons which follow or otherwise, are either irrelevant to this critical issue or have no foundation and hence no basis for arguing a relevant error of law.
Extent of any implied conditions
As foreshadowed in the preceding discussion, the Appellant sought to argue that the triggering event for the payment of commission as provided for in the Authority did not occur because the lease which was signed was conditional and, or alternatively, deficient in essential terms. It is to the former to which I now turn.
Generally speaking, a court will tend to favour that construction which leads to a conclusion that a particular stipulation is a condition precedent to performance as against that which leads to the conclusion that the stipulation is a condition precedent to the formation or existence of a contract.[15] In any event it would appear that any condition of the type contended for by the Appellant is properly considered as a condition subsequent, rather than a condition precedent. However, as discussed in the preceding reasons, I am on the view that under the terms of the Authority the event now critical to triggering entitlement to commission is the signing of a lease, whether conditional or not. Moreover, I am of the view that it would not affect this position even if there were conditions precedent involved absent any requirement of an unconditional lease and having regard to the provisions with respect to an unconditional offer—where any enforceable relationship between the parties depends on a “condition precedent”, namely acceptance.
[15]Players Pty Ltd v Clone Pty Ltd [2006] SASC 118.
No child-care approval
The first condition alleged—that being that the lease was subject to the issuing of a child care permit—cannot be said to lead to a finding that there was no lease in existence. It was simply a case whereby either party, if not in default, could elect to treat the contract as being at an end if the condition had not been fulfilled or waived.[16]
[16]Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 357; Hudson Conway Ltd v Colliers Jardine (Vic) Pty Ltd [1996] ANZ ConvR 523.
In Hudson Conway Limited v Colliers Jardine (Vic) Pty Ltd,[17] the Victorian Court of Appeal considered the effect of a condition subsequent on an agent’s entitlement to commission. Phillips JA said:[18]
Now, it is clear that this clause does not contain a condition which must be fulfilled before any binding agreement arises; and it is also clear that the conditions imposed by it are not ones which, if not fulfilled, would cause the agreement automatically to come to an end and be of no effect. The conditions are in principle commonplace ones in that they imposes certain obligations upon the lessor and go on to provide that, if these obligations are not performed, the lessee may, unless it chooses to extend the time for performance or waive the relevant condition, elect to bring the agreement to an end, in which event (as cluse 4C.8 of the agreement expressly provides) the lessor is to be liable to the lessee for damages for breach of the condition. It seems to me to be beyond serious argument that an agreement containing a condition having this effect is a binding and enforceable agreement…
[17][1996] ANZ ConvR 523.
[18]Hudson Conway Limited v Colliers Jardine (Vic) Pty Ltd [1996] ANZ ConvR 523, [31].
Even if the lease were subject to a condition that approval for a child care centre was required, that condition is not one of which non-fulfilment would immediately bring about the end of the lease. Rather, it is simply a condition which may bring about a right for either party—or more likely, only the tenant—to be excused from meeting further their already existing obligations under the binding and enforceable lease.
Moreover, it does not follow that because the permitted use covenant under the lease (clause 2.2.1) which provides that the tenant must not, and must not let anyone else, use the premises except for the permitted use—namely, as an “Early Learning Centre (Schedule Item 15)—means, as the Appellant contends, that obtaining the requisite permit is a fundamental term or a condition precedent. Whatever may be the position of the parties to the lease in this respect, this is not a matter which the parties to the Authority have chosen to address in its terms, so that, even if this were the position under the terms of the lease, it does not affect the operation of the terms of the Authority. In any event, in terms of the operation of the lease itself, there is longstanding authority that there is no implied covenant that, under the terms of a commercial lease, such as the present lease or leases, the demised premises can be used for the permitted use, whether due to their physical state or legal restraints.[19] Although, for the reasons indicated, not relevant to the construction or operation of the Authority, it also follows, with respect to the operation of the lease or leases, that issues raised by the Appellant with respect to specific performance are irrelevant.
[19]See Clyde Croft, Robert Hay and Luke Virgona, Commercial Tenancy Law (Lexis Nexis, 4th ed, 2017), [7.8], [8.6].
Thus, if such a condition did exist, it does not, for the preceding reasons, affect the Respondent’s entitlement to commission.
Financial Approval
The Appellant also submits that the lease was subject to the tenant/purchaser obtaining finance in order to be able to proceed with the lease.[20] Nowhere in any of the three leases produced at trial—the 15 January 2016 lease and two subsequent lease—is such a condition to be found.
[20]Appellant’s Outline of Submissions (28 May 2018), [11].
Neither, in my view, is there any basis for its implication. The test for the implication of terms in commercial contracts is well-established.[21] It is readily apparent that the implication of any condition with respect to the obtaining of finance in the present circumstances falls well short of the test. More particularly, it cannot be said on the basis of the provisions of the lease or any material before the Court relevant to these proceedings that the nature or the circumstances of the lease requires implication of a term that finance be obtained prior to the lease becoming unconditional.[22] Moreover, even if such a condition was to be implied it would not affect the Respondent’s entitlement to commission, under the provisions of the Authority—for the reasons already discussed.
[21]BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282–4.
[22]Liverpool City Council v Irwin [1976] QB 319, referred to with approval in Carbure Pty Ltd v Brile Pty Ltd [2002] ANZ ConvR 548; VSC 272.
Matters not raised at the hearing below
In any event, the Respondent contends that the Appellant ought not now be allowed to raise any alleged implied conditions to the lease which were not raised at the hearing before the Magistrate.
The manner in which the an appellate court should deal with any such attempt was considered by the High Court in Coulton v Holcombe, where the Court said:[23]
In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards.
[23](1986) 162 CLR 1 at 7–8; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; and see Jaeger v Bendigo and Adelaide Bank Ltd [2018] NSWCA 116; Anderson v Westpac Banking Corporation [2018] VSCA 226, [113].
In this respect the Respondent submits that financial evidence of Ms Avtarovski could have been led to show that obligations under the lease were capable of being met even in the absence of finance approval from a bank. It would have been open to the Respondent to adduce evidence as to the approval process of a child-care centre licence to show that all steps had been or could be completed for the approval of such licence within the relevant time period.
Thus I accept that, as the Respondent contends, it is open to the Court to infer that the Respondent would have been able to adduce evidence which by any possibility could have prevented the points now sought to be raised by the Appellant; which, as a result, would not have succeeded.
Consequently, the Appellant is not now entitled to raise these matters on appeal.
Incomplete lease
As is the case with agreements more generally, the essential terms of a lease must be agreed upon before it can be said to be binding and capable of being enforced. Thus, a lease will not be enforceable unless at least the essential terms of such a lease have been agreed upon,[24] such essential terms being the duration of the term, its date of commencement, the parties to it, and the subject matter of the demise.[25] Relevantly, with respect to some, so-called, omissions in the 15 January 2016 lease, the reservation of rent is not essential:[26]
The only necessary characteristic of any tenancy is that it should give the right of exclusive possession to the tenant for an ascertainable period of time (Lace v Chantler [1944] 1 KB 368 per Greene MR, at p 370); reservation of rent is not essential: Weston v Ray [1946] VLR 373 at 377; Francis Longmore & Co Ltd v Stedman [1948] VLR 322 at 323; Burns v Dennis (1948) 48 SR (NSW) 266, and other authorities referred to and applied in Hayes v Seymour-Johns (1981) 2 BPR 9366 at 9369.
[24]Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 333 ALR 384 at 394 [31] and at 445 [266].
[25]Clyde Croft, Robert Hay and Luke Virgona, Commercial Tenancy Law (Lexis Nexis, 4th ed, 2017), [1.5].
[26]Clyde Croft, Robert Hay and Luke Virgona, Commercial Tenancy Law (Lexis Nexis, 4th ed, 2017), [1.12], and the cases there discussed.
It is, of course, essential that all necessary parties to a lease are named and have executed the instrument. This is, however, not an issue as the Appellant properly accepts that the wrongful inclusion of Mr Peter Andrew Awad in the 15 January 2016 lease and any subsequent leases does not of itself affect the validity in this respect.[27] Despite this concession, the Appellant submits that the failure of the Respondent to seek rectification of any of these leases due to this so-called error was “noteworthy”.[28] Moreover, it is readily apparent that the reason no order for rectification was sought was that it was unnecessary. As the Magistrate correctly found (and is now conceded by the Appellant), the inclusion as landlord of a party (Mr Peter Awad) with no interest in the demised land—in circumstances where the parties who do in fact hold the interests are included as landlords—is simply irrelevant. In any event, as indicated, there is nothing of significance in this aspect of the matter.
[27]Appellant’s Outline of Submissions (28 May 2018), [22](e), [33](b).
[28]Appellant’s Outline of Submissions (28 May 2018), [22](e).
For the sake of completeness, it should be observed that Mr Peter Awad was the vendor of certain chattels to the tenant, Macedon Early Learning Centre Pty Ltd, the value of which is an element in the commission payable under the Authority; as a percentage of the value of those chattels. The Magistrate made findings in relation to the Chattel Agreement dated 21 January 2016, and the chattels more generally; findings which are only obliquely now challenged, if at all. In any event, there is, in my view, no error in the Magistrate’s findings with respect to this agreement and any issues with respect to the chattels—even assuming they were matters raising questions of law.
Similarly, nothing flows from the point made by the Appellant that the fact that the 15 January 2016 lease and the leases which were executed subsequently did not contain the additional option period, as contained in the variation of lease dated 8 March 2016.
The essential terms of a lease were all contained in the 15 January 2016 lease and each of the two leases executed within the relevant time period. The addition of an extra option period was simply a variation—as the document of 8 March 2017 makes clear—of the existing lease; as were leases executed after the 15 January 2016 lease.
Finally, in relation to completeness with respect to essential terms, it is contended by the Appellants that the 15 January 2016 lease is deficient as a result of what are said to be blanks in the rent review item of the Schedule. However, even assuming rental provisions of this lease were essential terms, the terms for the rent review provisions are sufficiently complete to enable their operation to be determined quite easily (see Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd).[29] In any event, as indicated, I do not regard the rental provisions as being essential to the validity of the lease in the present context.
[29](1982) 149 CLR 600.
Authority of Ms Awad
Ms Awad’s evidence clearly established that she in fact took no active part in the management of the Property, nor was involved in any agreements or negotiations with respect to it. Rather, her evidence established that at all times she knew, and acquiesced, in her brother, the Appellant, negotiating and entering into any agreements with respect to the Property.
In Junker v Hepburn, Hammerschlag J said in relation to similar issues:[30]
An implied grant of actual authority can result from acquiescence in the course of behaviour by persons who have actual authority to delegate. For example, if directors as a board stand by whilst a single director enters into transactions outside his or her authority, the board’s acquiescence in that course of dealing can constitute the grant, by implication of actual authority to enter into those transactions.
[30]Junker v Hepburn [2010] NSWSC 88, [43].
Even if it were the case that Ms Awad had not authorised the Appellant to negotiate with the Respondent in regard to the Authority (which is appears to be highly doubtful and not consistent with evidence given by Ms Awad), her continued acquiescence in allowing the Appellant to enter into all necessary negotiations and transactions in relation to the Property does, in my view, clearly establish an implied grant of actual authority.
Conclusion
For the preceding reasons, I am of the opinion that the findings of the Magistrate were clearly open to his Honour, and contain no appellable error of law.
As the Magistrate correctly found, the overwhelming weight of evidence showed that the relevant parties had entered into a binding and enforceable lease by the end of the relevant time period, and in all likelihood much earlier. Even if the lease did contain the conditions which the Appellant now seeks to raise on appeal, which it did not do so previously, the existence or otherwise of these conditions in no way affects the validity of the lease, nor is it even a relevant consideration under the terms of the Authority properly construed.
The terms of the Authority are clear. The critical event upon which the Respondent’s entitlement to commission under the Authority has occurred and, accordingly, the Respondent should be paid all of the amounts owing to it under the Authority, in accordance with the findings of the Magistrate as reflected in his Honour’s Orders.
Orders
For the preceding reasons, the appeal the subject of the application is dismissed. I reserve the question of costs and will hear the parties further on this issue.
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