Bergmann v Dengiz

[2010] QDC 18

DISTRICT COURT OF QUEENSLAND

CITATION:	Bergmann v Dengiz [2010] QDC 18
PARTIES:	REGINE BERGMANN (Plaintiff) v YASAR TANER DENGIZ (Defendant)
FILE NO/S:	196 of 2009
DIVISION:	Trial
PROCEEDING:	Claim
ORIGINATING
COURT:	District Court, Cairns
DELIVERED ON:	10 February 2010
DELIVERED AT:	Cairns
HEARING DATE:	3 February 2010
JUDGE:	Everson DCJ
ORDER:	Claim dismissed.
CATCHWORDS:	CONTRACT-SALE OF LAND-TERMINATION AND AGENT COMMISSION-oral termination of appointment- recovery of commission
CONTRACT-CAPACITY-METNAL HEALTH AND INTERIM ORDERS- contractual validity – where interim order made under s12 and s33 Guardianship and Administration Act 2000 (Q) – whether contract void ab initio
Property Agents and Motor Dealers Act 2000 (Qld) Guardianship and Administration Act 2000 (Qld), s 12, s34
Gibbons v Wright (1954) 91 CLR 423 followed
COUNSEL:	Mr M Jonsson for the plaintiff Mr H A Mellick (Solicitor) for the defendant
SOLICITORS:	Miller Harris for the plaintiff Mellick Smith & Associates for the defendant

Introduction

1. In this proceeding the plaintiff claims $125,000 for commission owing pursuant to the terms of an agreement in writing dated 31 October 2007, whereby the defendant appointed her as his agent to sell his hotel and restaurant at 95-97 Williams Esplanade, Palm Cove (“the property”). The agreement was in the standard form pursuant to the Property Agents and Motor Dealers Act 2000 and recorded that the appointment was for an open listing (“the appointment”).

2. The issues narrowed considerably prior to and during the course of the trial. The defendant does not dispute that he entered into the appointment, that he purported to enter into a contract of sale for the property dated 29 August 2008 (“the contract”) in respect of which the plaintiff was the effective cause of sale and he does not dispute the calculation of the quantum of the plaintiff’s claim for commission. The defendant asserts, however that he is not obliged to pay the plaintiff the commission claimed on two bases. Firstly, he alleges that the appointment was terminated orally by him in January 2008. Secondly, he asserts that at the time he purported to enter into the contract he was subject to an Interim Order of the Guardianship and Administration Tribunal (“the tribunal”) dated 11 August 2008 (“the Interim Order”) and therefore had no legal capacity to enter into the contract.

   Did the defendant terminate the appointment?

3. The defendant pleads that he orally terminated the appointment but he did not give evidence at the trial. He did not call any evidence from anyone who may have witnessed the alleged termination. The plaintiff gave evidence of her attempts to locate a buyer for the property including the process leading up to the defendant purporting to enter into the contract. She expressly denied the allegation put to her that the defendant telephoned her in January 2008 and terminated the appointment. I accept her evidence in this regard. Moreover, such a scenario is completely inconsistent with the plaintiff’s continuing efforts to locate a buyer which resulted in the defendant purporting to enter into the contract approximately seven months later.

4. I therefore find that the appointment was not terminated by the defendant.

   Did the defendant have the legal capacity to enter into the contract?

5. Prior to purporting to enter into the contract the defendant suffered serious injuries in a motorbike accident. These included brain injuries which necessitated treatment as an inpatient at Townsville General Hospital. After he awoke from a coma, his friend and former physician, Dr Gunes, applied to the tribunal for an urgent interim order on the basis that the defendant was unable to make any complex decisions including financial decisions and in this regard he specifically nominated those relating to the sale of the property.

6. The tribunal then made the Interim Order which appointed the Public Trustee of Queensland (“the Public Trustee”) as the defendant’s administrator for all financial matters. The Interim Order was made on the basis that the tribunal was satisfied that urgent action was required and it was to remain current for three months or until the date of any further order.

7. The contract was signed in the presence of the defendant’s solicitor who had considerable input into its final draft. It was not sanctioned by the Public Trustee, however it was expressed to be conditional upon the defendant removing the administrator noted on the title to the property. The plaintiff gave evidence that she knew when the contract was signed, the Public Trustee had been appointed to administer the financial affairs of the defendant. The application contemplated by the contract resulted in the tribunal making an order on 16 September 2008 revoking the appointment of the Public Trustee as administrator for the defendant. The contract did not proceed to completion in any event.

8. The defendant asserts that the contract was void ab initio as a consequence of the Interim Order. The plaintiff asserts that it was merely voidable at the election of the defendant and that the defendant did not elect to avoid the contract but chose instead to affirm it by notifying the purchaser of the order of the tribunal made on 16 September 2008, receiving and retaining the deposit of $20,000 and subsequently electing to forfeit the deposit. The defendant concedes that if the contract is merely voidable, the conduct of the defendant was such that he affirmed the contract.

9. The plaintiff relies upon Gibbons v Wright[1] as authority for the proposition that a contract entered into in such circumstances is merely voidable at the election of the party suffering from mental incapacity. The principle enshrined by the High Court was subject to an important qualification, however:-

   “The law relating to persons who are lunatics so found must be put on one side at the outset. Such a person is held incompetent to dispose of his property, not because of any lack of understanding (indeed he remains incompetent even in a lucid interval), but because the control, custody and power of disposition of his property has passed to the Crown to the exclusion of himself. Accordingly his
   

   [1] (1954) 91 CLR 423

   [2] Ibid at 439-440

   disposition is completely void...”[2]

10. The defendant submits that, in a contemporary setting, the above passage describes the effect of the Interim Order. The plaintiff contends that the Interim Order did not have the effect of denying the defendant whatever measure of capacity he in truth had at the time the Interim Order was made.

11. The Interim Order was made pursuant to the Guardianship and Administration Act 2000 (“the G.A.A.”). It is described in broad terms in the long title to the Act as –

    “An Act to consolidate, amend and reform the law relating to the appointment of guardians and administrators to manage the personal and financial affairs of adults with impaired capacity, to establish a Guardianship and Administration Tribunal, to continue the office of Adult Guardian, to create an office of Public Advocate, and for other purposes.”

12. Section 12 of the GAA provides for the making of an appointment order in, relevantly, the following terms:-

    “(1) The tribunal may, by order, appoint a guardian for a personal matter, or an administrator for a financial matter, for an adult if the tribunal is satisfied –

    (a)         the adult has impaired capacity for the matter; and

    (b)        there is a need for a decision in relation to the matter or the adult is likely to do something in relation to the matter that involves, or is likely to involve, unreasonable risk to the adult’s health, welfare or property; and

    (c)         without an appointment –

(i)	the adult’s needs will not be adequately met; or
(ii)	the adult’s interests will not be adequately protected.

(2) The appointment may be on terms considered appropriate by the

tribunal.

(3) The tribunal may make the order on its own initiative or on the application of the adult, the adult guardian or an interested person.

…”

1. Following an appointment of the type contemplated by the Interim Order s 33 grants the administrator the following powers:-

   “(2) Unless the tribunal orders otherwise, an administrator is authorised to do, in accordance with the terms of the administrator’s appointment, anything in relation to a financial matter that the adult could have done if the adult had capacity for the matter when the power is exercised.”

2. In the circumstances pertaining to the Interim Order the Tribunal has exclusive jurisdiction pursuant to s 84 of the G.A.A.

3. Although the tribunal has certain ancillary powers including a power to make declarations about the capacity of certain parties before it[3] and although the tribunal is governed by a number of principles[4] these do not derogate from the authority of the Interim Order which took away from the defendant his capacity to enter into a contract for the sale of the property for the duration of the order. He thus fell within the modern equivalent of the qualification noted in Gibbons v Wright and quoted

   above.[5]

   [3]            G.A.A. s 146

   [4]            Ibid s 11

   [5]            At para [9]

   Conclusion

4. The appointment was not terminated. The contract was void ab initio. The plaintiff therefore does not have an entitlement to any commission and the claim is dismissed.