Betella v O'Leary
[2001] WASCA 266
•30 AUGUST 2001
BETELLA -v- O'LEARY [2001] WASCA 266
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 266 | |
| THE FULL COURT (WA) | |||
| Case No: | SJA:1121/2000 | 15 AUGUST 2001 | |
| Coram: | WALLWORK J WHEELER J BURCHETT AUJ | 30/08/01 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed | ||
| A | |||
| PDF Version |
| Parties: | ADRIAN BETELLA CHARLES PATRICK O'LEARY |
Catchwords: | Real Estate and Business Agents Act 1978 Prohibition in s 64 against agent or sales representative having interest in any transaction in which the agent acts unless principal has given prior written consent Sales representative shareholder and director of company which for consideration guaranteed sale would be achieved at a price Discussion of the nature of an "interest" directly or indirectly held Whether the proposed sale was a "transaction" within s 64 Whether the interpretation section of the Act applied Literal application of interpretation section excluded by content Whether prior written consent can be construed from signature to agreement signed with knowledge of the sales representative's interest |
Legislation: | Real Estate and Business Agents Act 1978, s 64(2) |
Case References: | Barron (Inspector of Taxes) v Littman[1953] AC 96 Blue Metal Industries Ltd v R W Dilley [1970] AC 827 City of London Electric Lighting Company, Limited v London Corporation [1903] AC 434 Deputy Commissioner of Taxation (NSW) v Mutton (1988) 79 ALR 509 Duperouzel v Cameron [1973] WAR 181 England v Inglis [1920] 2 KB 636 Gillett v Peppercorne (1840) 3 Beav 78; 49 ER 31 Greenberg v Inland Revenue Commissioners [1971] 3 All ER 136 Greenwood v Harvey (1965) 66 SR (NSW) 496 Guinness Plc v Saunders [1990] 2 AC 663 Hall v Jones (1942) 42 SR (NSW) 203 Hambro v Duke of Marlborough [1994] Ch 158 In the Matter of the Application of The Fourth South Melbourne Building Society (1883) 9 VLR (E) 54 Kehoe v Porter [1957] SR Qd 480 Knightsbridge Estates Trust, Limited v Byrne [1940] AC 613 Kosciusko Thredbo Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1987) 168 CLR 147 Meinhard v Salmon (1928) 249 NY 458 Newcastle City Council v GIO General Limited (1997) 191 CLR 85 Petrocorp Exploration Ltd v Minister of Energy [1991] 1 NZLR 1 Real Estate and Business Agents Supervisory Board v Hajac Nominees Pty Ltd (Murray, Parker and Wheeler JJ, 17 November 2000, Butterworths Unreported Judgments - BC200006980) Regina v Bow Street Metropolitan Stipendiary Magistrate, Ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119 Transport Accident Commission v Treloar [1992] 1 VR 447 Waugh v Kippen (1986) 160 CLR 156 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : BETELLA -v- O'LEARY [2001] WASCA 266 CORAM : WALLWORK J
- WHEELER J
BURCHETT AUJ
- Appellant
AND
CHARLES PATRICK O'LEARY
Respondent
Catchwords:
Real Estate and Business Agents Act 1978 - Prohibition in s 64 against agent or sales representative having interest in any transaction in which the agent acts unless principal has given prior written consent - Sales representative shareholder and director of company which for consideration guaranteed sale would be achieved at a price - Discussion of the nature of an "interest" directly or indirectly held - Whether the proposed sale was a "transaction" within s 64 - Whether the interpretation section of the Act applied - Literal application of interpretation section excluded by content - Whether prior written consent can be construed from signature to agreement signed with knowledge of the sales representative's interest
(Page 2)
Legislation:
Real Estate and Business Agents Act 1978, s 64(2)
Result:
Appeal allowed
Category: A
Representation:
Counsel:
Appellant : Mr R M Mitchell
Respondent : Mr A R Beech
Solicitors:
Appellant : State Crown Solicitor
Respondent : Mazza & Mazza
Case(s) referred to in judgment(s):
Barron (Inspector of Taxes) v Littman[1953] AC 96
Blue Metal Industries Ltd v R W Dilley [1970] AC 827
City of London Electric Lighting Company, Limited v London Corporation [1903] AC 434
Deputy Commissioner of Taxation (NSW) v Mutton (1988) 79 ALR 509
Duperouzel v Cameron [1973] WAR 181
England v Inglis [1920] 2 KB 636
Gillett v Peppercorne (1840) 3 Beav 78; 49 ER 31
Greenberg v Inland Revenue Commissioners [1971] 3 All ER 136
Greenwood v Harvey (1965) 66 SR (NSW) 496
Guinness Plc v Saunders [1990] 2 AC 663
Hall v Jones (1942) 42 SR (NSW) 203
Hambro v Duke of Marlborough [1994] Ch 158
In the Matter of the Application of The Fourth South Melbourne Building Society (1883) 9 VLR (E) 54
Kehoe v Porter [1957] SR Qd 480
Knightsbridge Estates Trust, Limited v Byrne [1940] AC 613
(Page 3)
Kosciusko Thredbo Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1987) 168 CLR 147
Meinhard v Salmon (1928) 249 NY 458
Newcastle City Council v GIO General Limited (1997) 191 CLR 85
Petrocorp Exploration Ltd v Minister of Energy [1991] 1 NZLR 1
Real Estate and Business Agents Supervisory Board v Hajac Nominees Pty Ltd (Murray, Parker and Wheeler JJ, 17 November 2000, Butterworths Unreported Judgments - BC200006980)
Regina v Bow Street Metropolitan Stipendiary Magistrate, Ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119
Transport Accident Commission v Treloar [1992] 1 VR 447
Waugh v Kippen (1986) 160 CLR 156
Case(s) also cited:
Nil
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1 WALLWORK J: I agree with the reasons for judgment of Burchett AUJ and with the orders proposed by his Honour. There is nothing I wish to add.
2 WHEELER J: I have had the advantage of reading in draft the reasons for judgment of Burchett AUJ. I agree with those reasons, and with the orders which his Honour proposes.
3 BURCHETT AUJ: Section 64 of the Real Estate and Business Agents Act 1978 provides:
"(1) An agent shall not have, directly or indirectly, any interest, otherwise than in his capacity as an agent, in any transaction in which he acts or purports to act as agent, unless his principal has given prior written consent thereto.
Penalty: $5 000 or imprisonment for 6 months.
(2) A sales representative or other person in the employment of an agent shall not have, directly or indirectly, any interest, other than an interest that exists by virtue only of his employment, in any transaction in which the agent acts or purports to act unless the agent's principal has given prior written consent thereto.
Penalty: $5 000 or imprisonment for 6 months.
(3) A court before which any person is convicted of an offence under this section may order that person to pay over to the agent's principal any profit that that person has made, or is, in the opinion of the court, likely to make from the transaction.
(4) An agent shall not, whether directly or indirectly, demand, receive, or hold any reward or other valuable consideration for or in relation to any transaction in respect of which the agent or an employee of the agent has an interest in contravention of this section.
(5) Any reward or other valuable consideration received or held in contravention of this section may be recovered as
(Page 5)
- a civil debt recoverable summarily in any court of competent jurisdiction."
- This section (with subs (2) of which the present appeal is particularly concerned) is plainly intended to provide legislative reinforcement, so far as real estate and business agents and their sales representatives and employees are concerned, for the doctrine of the Common Law that demands of any agent full and undivided loyalty to his principal: Greenwood v Harvey (1965) 66 SR (NSW) 496. In that case, Asprey J (with whom Sugerman and Collins JJ agreed) cited (at 499 - 500) the statement of Lord Langdale MR in Gillett v Peppercorne (1840) 3 Beav 78 at 83 - 84; 49 ER 31 at 33 that "where a man employs another as his agent, it is on the faith that such agent will act in the matter purely and disinterestedly for the benefit of his employer", and the dictum of Cardozo CJ in "the still leading United States case" (as Cooke P called it in Petrocorp Exploration Ltd v Minister of Energy [1991] 1 NZLR 1 at 36) Meinhard v Salmon (1928) 249 NY 458 at 464 that "[t]he rule of undivided loyalty is relentless and supreme". See also Guinness Plc v Saunders [1990] 2 AC 663 at 690 - 692.
4 It is necessary to set out briefly the circumstances under which, so the appellant asserts, the respondent came into collision with the prohibition contained in s 64(2). From a day in October 1995 until 17 or 18 July 1996, the respondent was employed as a sales representative by a licensed real estate and business agent, Mrs Jacobs, who carried on business as such under the name Realty Executives, Jacobs and Associates ("Realty Executives"). During an overlapping period, from 15 June 1996 to 1 September 1998, he was also a director and the sole shareholder of Sure Sale Systems (Australasia) Pty Ltd ("Sure Sale"), a company that was not licensed under the Act. Sure Sale carried on a business in the course of which, for a "contribution", it offered to prospective vendors guarantees that the sales of their houses would be achieved at not less than agreed valuations. In June 1996, Mr and Mrs Smith (whose case is accepted as typical of the three involved in the appeal) were anxious to sell their home. They saw a Sure Sale brochure, and spoke to the respondent. On 25 June 1996, the respondent and another sales representative of Realty Executives called at their home and handed to them a form of exclusive agency agreement (headed "Multilist Selling Agency Agreement") providing for the appointment of Realty Executives as their agent, then signed by the respondent on behalf of Realty Executives, together with some Sure Sale documents, including a form of contract with Sure Sale, signed by the respondent on behalf of Sure Sale. Mr and Mrs Smith signed these documents on 3 or 4 July 1996, and from
(Page 6)
- that time there were operative agreements between them and both Realty Executives and Sure Sale.
5 Arising out of this transaction and others like it, the respondent was charged before a magistrate with an offence under s 64(2). He was found guilty, and appealed. The learned judge before whom his appeal came took the view that the respondent did not have an interest, within the subsection, in the sale of the property the subject of the exclusive agency agreement, and that, if he did, it was not without the prior written consent of the principal. The respondent's appeal was therefore allowed, and it is from that decision that the appellant now, in his turn, appeals.
6 The arguments of the parties centred, at the hearing of the appeal, as they had before the judge, upon the terms of the Sure Sale agreement involving Mr and Mrs Smith. This was made between them as the principals (described as "Vendor"), Realty Executives (described as "Agent"), and Sure Sale (described as "Guarantor"). It was recited (inter alia) that "[t]he Vendor has appointed the Agent to sell the Property" (their home, identified in the Schedule), and that the Guarantor "warrants that the Vendor shall receive not less than the Market Value [ie, $135,000] for the Property". By cl 2.1 the "Vendor engages the Agent to offer the Property for sale by auction under the Sure Sale system". By cl 3.1 the "Contribution" [ie, $7,199] is to be paid by the Vendor to the Guarantor at settlement. It is further provided by cl 3.1:
"The Guarantor shall apply the Contribution towards payment of or in reimbursement of:
(a) the cost of advertising and promoting the Property for sale;
(b) expenses incurred by the Agent including auctioneers fees and travelling expenses;
(c) a selling fee negotiated between the Agent and the Guarantor;
(d) guarantee fees or other expenses incurred by the Guarantor in respect of the Sure Sale System.
The balance of the Contribution remaining shall be retained by the Guarantor."
7 It is expressly provided by cl 4.3:
(Page 7)
- "The Vendor authorises and consents to the Guarantor and parties associated with the Guarantor bidding at the auction. The Vendor shall not bid at the auction."
- This, it may be remarked in passing, is a particularly interesting clause, for it confers a right on Sure Sale, and it contains a written consent to Sure Sale "and parties associated with" Sure Sale having that right.
8 Clause 6 makes provision regarding commission in the following terms:
"6. Agents Commission
6.1 No Agent's commission is payable by the Vendor to the Agent.
6.2 A selling fee shall be paid by the Guarantor to the Agent as agreed between them."
9 Finally, the guarantee is contained in cl 7:
"7. The Guarantee
7.1 If the Property is sold at auction at a price less than the Market Value and provided that the Vendor is ready willing and able to effect settlement then the Guarantor shall at the Settlement Date pay to the Vendor a sum equal to the difference between the Market Value and the sale price.
7.2 If the Property is not sold at auction the Guarantor undertakes to produce a purchaser who is ready willing and able to purchase the Property on the same terms as the Property was offered for sale at auction. If the purchase price offered is less than Market Value and provided that the Vendor is ready willing and able to effect settlement then the Guarantor will at the Settlement Date pay to the Vendor a sum equal to the difference between the Market Value and the purchase price offered."
10 At the hearing of the appeal, cll 3, 6 and 7 of this agreement were identified as being arguably the sources of an "interest" within s 64(2), indirectly held by the respondent in the sale transaction in question. The reason the learned judge held there was not a relevant interest was that he
(Page 8)
- drew a distinction between Sure Sale's reward for furnishing a guarantee in relation to the transaction and any reward (or other interest) "in" the transaction. The word "transaction" used in s 64 is a word which has received, in s 4, an interpretation, "unless the context otherwise requires", expressed as follows:
"'transaction' means a real estate transaction or a business transaction, or both a real estate transaction and a business transaction".
But that formulation itself requires resort to interpretations, also operative "unless the context otherwise requires", of "real estate transaction" and "business transaction". For present purposes, it is sufficient to consider the former:
"'real estate transaction' -
(a) means a sale, exchange, or other disposal and a purchase, exchange, or other acquisition of real estate and any exclusive right whether deriving from the ownership of a share or interest in a body corporate or partnership, or otherwise, to the use or occupation of real estate including the leasing, and letting, and the acquisition under lease or letting of tenancy or occupation of real estate; and
(b) includes any sale, exchange, or other disposal and any purchase, exchange, or other acquisition of goods, chattels or other property relating to a real estate transaction of a kind specified in paragraph (a); and
(ba) includes the collection of rents or other payments for use or occupation; and
(c) also includes an option to enter into a real estate transaction".
On the footing that the relevant transaction was thus the "sale" the agent, Realty Executives, was engaged to effect, the judge held the respondent, through Sure Sale, did not have any interest "in" it, but in a guarantee of it. With respect, that seems to me to be much too narrow a view to take of s 64. The Sure Sale agreement and the agency agreement were intertwined. Each affected the operation of the other. They were entered into at the same time and in association with each other. Very importantly, the Sure Sale agreement modified the right to commission
(Page 9)
- under the agency agreement so as to give Sure Sale an interest in the one amount of $7,199 to be paid, and a right to negotiate (pursuant to cl 6.2) with the agent for a share of it.
11 In any case, I agree with counsel for the appellant that cl 7 also provides a relevant interest. That clause operates directly upon the sale price (as the commission would normally do, if not affected by the Sure Sale agreement). Potentially, under cl 7, the sale may cause Sure Sale to incur a debt, and this potentiality must involve the respondent, as a sales representative of Realty Executives, in a conflict of interest. An interest in the avoidance of an obligation is as much a material interest as an interest in making a gain. If authority be needed for that proposition, it is to be found in England v Inglis [1920] 2 KB 636, where Salter J said (at 639 - 640):
"As was pointed out by Lindley LJ in Nutton v Wilson [(1889) 22 QBD 744, 748] the object of sections of this kind is 'to prevent the conflict between interest and duty that might otherwise inevitably arise.' An 'interest' within the meaning of the section must, I agree, be something more than a sentimental interest, such as arises from the natural love and affection of a man for his son; it must be a pecuniary or, at least, a material interest; but I do not see on what principle it must necessarily be a pecuniary advantage, because, if a public man is likely to suffer pecuniary loss by his interest in any particular contract, his judgment is as likely to be deflected as where he is obtaining a pecuniary advantage from it."
- Roche J (as Lord Roche then was) took a similar view (at 641).
12 It was not argued that the definition of "transaction" was not here applicable because a sale was not actually achieved. That view of the effect of the definition would detract severely from the operation s 64 was obviously intended to have, and would be contrary to the reasoning of the Full Court in Real Estate and Business Agents Supervisory Board v Hajac Nominees Pty Ltd (Murray, Parker and Wheeler JJ, 17 November 2000, Butterworths Unreported Judgments - BC200006980). There Murray J (with whom Parker and Wheeler JJ agreed), in concluding that a defalcation, of moneys paid in respect of a real estate scheme that never eventuated, occurred "in the course of the business of [a] licensee" within the definition in s 4 of "defalcation by a licensee", said (at pars 32 and 34):
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- "That boiled down to the question whether the particular transaction which was proposed would fall within the definition of a 'real estate transaction' and in my opinion it did, simply because it involved the acquisition of real estate.
…
In the final analysis it seems to me to be sufficient that the defalcation occurred in circumstances which made it that of the licensee because it was by a director of the company, Ideal Realty Pty Ltd, and that it was in the course of the business of the licensee because Paterson acted as the licensed agent in so far as pecuniary loss was caused to the respondents, in respect of a real estate transaction which involved the acquisition of land. It is not necessary, in my opinion, that the land or any interest therein be acquired by the respondents personally. It was sufficient that their interest would be acquired by means of their interest in the company which was to be the purchaser."
- Similarly, in Kehoe v Porter [1957] SR Qd 480, Stanley J (with whom Townley J agreed), discussing a provision forbidding an agent to purchase property placed in his hands for sale "without having previously obtained the consent in writing of [the] principal to such purchase", said (at 485):
"I do not think the Legislature used the word 'purchase' in the sense that there was no purchase until the last legal technicality necessary to complete the transaction was fulfilled. The section is intended to prevent an agent from acquiring by way of sale and purchase an enforceable right to the ownership of - or title to - any property entrusted to him as a commission agent unless the principal has used in writing such words as indicate that he consented to the acquisition of such right to ownership by the agent and has signed such writing before the agent has acquired such right."
(Page 11)
- Commission v Treloar [1992] 1 VR 447 at 449, per McGarvie and Gobbo JJ; Knightsbridge Estates Trust, Limited v Byrne [1940] AC 613 at 621, per Viscount Maugham (with whom Lord Atkin, Lord Wright and Lord Porter agreed). In the first of these cases, Holroyd J (at 58), having affirmed that an interpretation clause "must always of necessity be understood" to define the meaning "supposing there is nothing else in the Act which is opposed to the particular interpretation", added:
"Interpretation clauses must be themselves interpreted reasonably, to promote, and not to defeat, the purposes of the Act which they are intended to elucidate."
In the last case, Viscount Maugham said (ubi cit):
"It is perhaps worth pointing out that the words 'unless the context otherwise requires,' which we find in the consolidating Act of 1929, are not to be found in the amending Act of 1928. I attribute little weight to this fact, for in my opinion some such words are to be implied in all statutes where the expressions which are interpreted by a definition clause are used in a number of sections with meanings sometimes of a wide and sometimes of an obviously limited character.
On the other hand I think due weight ought to be attributed to the words 'otherwise requires' in the Companies Act of 1929, and it is incumbent on those who contend that the definition does not apply to s 74 to show with reasonable clearness that the context does in fact require a more limited interpretation of the word 'debenture' than s 380 has assigned to it."
"General words in an Act of Parliament must always be construed in accordance with the circumstances to which the Act is intended to apply … . Everything depends upon the subject matter and the context."
- The context is also emphasised by Lord Morris of Borth-y-Gest in Blue Metal Industries Ltd v R W Dilley [1970] AC 827 at 846, a passage quoted by Mahoney JA in a discussion of the demonstration of contrary
(Page 12)
- intention in Deputy Commissioner of Taxation (NSW) v Mutton (1988) 79 ALR 509 at 512 - 513:
"Words in the singular will include the plural unless the contrary intention appears. But in considering whether a contrary intention appears there need be no confinement of attention to any one particular section of an Act. It must be appropriate to consider the section in its setting in the legislation and furthermore to consider the substance and tenor of the legislation as a whole: see Sin Poh Amalgamated (HK) Ltd v Attorney-General (HK) [1965] 1 WLR 62. In that case a test was indicated which often may be helpful. In the judgment of the board delivered by Lord Pearce it was said (at 67): 'The Interpretation Ordinance was intended to avoid multiplicity of verbiage and to make the plural cover the singular except in such cases as one finds in the context of the legislation reason to suppose that the legislature, if offered such amendment to the Bill, would have rejected it.' "
Of course, as it is a matter of context, the question whether a particular context is sufficiently close and relevant will always be important: cf the remarks of Burt J in Duperouzel v Cameron [1973] WAR 181 at 182 - 183.
15 Applying these principles to the present problem, it may be observed that s 64 is in the same part (Part V) of the Act with s 61. For the purposes of s 61(4), there is provided (by s 61(4a)) a special definition of "transaction", not expressed as subject to any indication to the contrary, which, like the definition in s 4, refers unqualifiedly to "a sale, exchange, or other disposal … of real estate". Yet s 61 is expressly concerned (inter alia) with transactions involving proposed sales, exchanges or other disposals which are never completed. In relation to those cases, it must be using "transaction" in a sense that comprehends transactions intended to involve sales etc.
16 Section 64, although penal, is fundamentally a provision protective of those dealing with real estate and business agents and their sales representatives (cfWaugh v Kippen (1986) 160 CLR 156 at 164 - 165; Newcastle City Council v GIO General Limited (1997) 191 CLR 85 at 102 - 103). It is intended, as I indicated at the outset of these reasons, to strengthen the hedge against conflict of interest provided by the Common Law. There is no doubt that the Common Law itself would apply during the subsistence of the agency relationship, prior to the actual effecting of a sale. And the protection is needed from the beginning of the relationship:
(Page 13)
- a conflict of interest may prevent a particular sale, perhaps diverting the hopeful vendor to an undesirable proposal that suits the undisclosed interest of the agent or sales representative. Thus, perhaps, half the mischief at which the section is aimed would be missed by a literal application of the interpretation provision. There is no reason to think Parliament intended so to restrict the reach of its remedy. The Privy Council test referred to by Mahoney JA would suggest the interpretation provision ought not to be given this effect.
17 In itself, as Lord Normand pointed out in Barron (Inspector of Taxes) v Littman[1953] AC 96 at 113, "'transaction' is a comprehensive word which includes any dealings with property". In that case, he regarded it (ubi cit) as including an "attempt to sublet at a rent in excess of the rent payable by [the lessee], and the success or failure of this attempt". It is a "word … of the widest import": see Hambro v Duke of Marlborough [1994] Ch 158 at 166. It may, according to its context, go beyond bilateral activity "to denote an activity in which only a single person is engaged": Greenberg v Inland Revenue Commissioners [1971] 3 All ER 136 at 149, per Lord Reid.
18 In my opinion, consistently with the view taken in Real Estate and Business Agents Supervisory Board v Hajac Nominees Pty Ltd, from the time Realty Executives entered into an agency agreement with Mr and Mrs Smith, the purpose of which was to effect a sale of their property, there was a transaction within s 64 in which Sure Sale had an interest insofar as it stood to gain a reward if the sale was completed, and it stood to suffer a financial disadvantage if the sale was completed on terms unfavourable to it. As a consequence, the respondent, who was its director and sole shareholder, also had an interest: City of London Electric Lighting Company, Limited v London Corporation [1903] AC 434. Indeed, counsel for the respondent did not mount an argument that, if Sure Sale had a relevant interest, the respondent nevertheless did not. The company referred to as Sure Sale was so much his alter ego that an argument to that effect would have been futile.
19 In Regina v Bow Street Metropolitan Stipendiary Magistrate, Ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119, the principal issue was whether Lord Hoffmann had had an "interest" in the litigation sufficient to disqualify him from sitting. In discussing this issue, Lord Browne-Wilkinson made it clear (at 133) that "a substantial shareholding" in a litigant company would be such an interest, and, in Lord Hoffmann's case, an interest as director and chairman of a charity which had a non-pecuniary interest was established (134 - 135) so as to disqualify his
(Page 14)
- Lordship. Lord Goff of Chieveley expressed the same view at 137 - 139, and the other members of the House also agreed. That was in the context of the question whether a judge had an interest requiring him not to sit, and much of the reasoning would not be applicable here. However, the same consequence would, in my opinion, follow under s 64 from a significant shareholding in a company with an interest, and, at least generally, from a directorship. That the word "interest", in the present context, has a wide meaning is suggested by the reference to "an interest that exists by virtue only of [the sales representative's] employment". It is also important that it may be held "indirectly".
20 The remaining issue is whether the respondent was sheltered by the words "unless the agent's principal has given prior written consent thereto". In my opinion, there is a short answer to this. Nowhere in the Sure Sale agreement, which is the only writing relied on, is there anything in the nature of a relevant consent. There is, as I noted when setting out the salient terms of the document, a consent to another matter, which demonstrates that some drafting problem is not the explanation. What the respondent seeks to do is to construct a written consent out of oral evidence that Mrs Smith knew of his involvement in Sure Sale, combined with the fact of the signatures of Mr and Mrs Smith on the document. But Mrs Smith (or Mr Smith, for that matter) may have known about the involvement without appreciating either its practical or its legal effect. They might not have known their consent was required, from the respondent's point of view, or could be withheld, from their own. A major objective of the legislation is to ensure openness, and to shine into hidden corners of self-interest of agents the light of an understanding on the part of the principal. It is only a fully informed and actual written consent that will suffice to serve the purposes of the Act.
21 Reference was made to Kosciusko Thredbo Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1987) 168 CLR 147 at 158 - 159 where a required written consent was found by a process of construction. But what was there involved (as appears from clauses set out at 154 - 155) was far removed from anything in the Sure Sale agreement. Section 64(2) requires "prior written consent", and there was no consent.
22 Since there was no consent in the agreement, it is unnecessary to consider whether the signing of the agreement by Mr and Mrs Smith could have been "prior … thereto", that is, to the sales representative having an interest in the transaction. See Kehoe v Porter [1957] SR Qd 480.
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23 In my opinion, the appeal should be allowed; the orders made below should be set aside; in lieu thereof, the appeal from the Magistrate's orders should be dismissed with costs; and the respondent should be ordered to pay the costs of the appeal.
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