BETWEEN: JEFFERIS ST CLAIR BROCKWAY
JOYCE MARILYN BROCKWAY
Appellants (First Defendants)
AND
CATHERINA PANDO
First Respondent (Plaintiff)
VINCENZO MADAFFARI
Second Respondent (Second Defendant)

Catchwords:

Contract and Tort - Real estate agency's direct and vicarious liability for fraud of sales representative - Sales representative fraudulently induced sale of property to himself - Breach of contract, fraudulent misrepresentation, negligence and deceptive conduct - Section 10 and s 82(4) Fair Trading Act 1987

Contract - Breach of "Authority to Sell" - Whether employee's breach of warranty of authority had consequence that there was no contract between vendor and employer - Turns on scope of authority and or ratification

Negligence - Failure to adequately supervise employee - Whether employee's breach of authority broke the nexus between the employer and vendor - Turns on scope of authority and or ratification

Vicarious Liability - Whether employer liable for sales representative's fraudulently inducing sale of property to himself - Breach of office policy - Concealed personal involvement and offer by another purchaser from vendor and employer - Whether real estate agency liable for fraud of sales representative - Scope of authority - Employer on notice - Employer participated in meeting with vendor's nephew at which vendor dissatisfaction about sale price was discussed and documents prepared to resolve the dissatisfaction - Ratification - Estate agency liable for vendor's loss

Fresh evidence - Magazine article published after trial to the effect that vendor knew sales representative was purchaser before involvement of employer - Evidence did not affect the finding that the fraud continued and that employer ratified the fraud

Evidence - Cross-examination - Whether rule in Browne v Dunn breached by failure to cross-examine - Whether party already on notice

Damages - Challenge to assessment based on evidence of another prospective buyer - Evidence not "glaringly improbable"

Claim for indemnity and contribution - Refused because fraud occurred within sales representative's authority and employer ratified conduct of employee

Natural justice - Sufficiency of Judge's reasons - Whether relevant findings of fact were open on the evidence - Whether findings and reasons sufficiently elucidated - While less than perfectly set out, read as a whole the reasons are sufficient to preserve and facilitate any rights of appeal

Legislation:

Fair Trading Act 1987, s 10, s 82(4)

Law Reform (Contributory Negligence) Act 1947, s 7(1)(c)

Real Estate and Business Agents' Act 1984, s 64

Result:

Appeal dismissed

Representation:

Counsel:

Appellants (First Defendants)                  :   Mr C J L Pullin QC & Mrs D M Templeman
First Respondent (Plaintiff)  :   Mr D H Solomon
Second Respondent (Second Defendant) :   No appearance

Solicitors:

Appellants (First Defendants)                  :   Minter Ellison
First Respondent (Plaintiff)  :   Solomon Brothers
Second Respondent (Second Defendant) :   No appearance

Case(s) referred…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Brockway v Pando

Details

AGLC: Brockway v Pando [2000] WASCA 192
Case: [2000] WASCA 192
Decision Date: 7 AUGUST 2000

CaseChat Overview and Summary

The case of Brockway v Pando involved a dispute in the Federal Circuit Court of Australia, where the plaintiff sought damages from the defendants for various causes of action arising from a fraudulent real estate transaction. The plaintiff, Brockway, had sold a property through the defendants, a real estate agency and its sales representative, Pando. Pando fraudulently induced the sale of the property to himself and concealed this personal involvement from both the plaintiff and the agency. The plaintiff alleged breach of contract, fraudulent misrepresentation, negligence, and deceptive conduct under the Fair Trading Act 1987.

The legal issues before the court included whether the real estate agency could be held liable for the sales representative's fraudulent conduct, both directly and vicariously. The court had to determine the scope of Pando's authority and whether the agency could be held liable despite the sales representative's breach of his warranty of authority. The court also needed to assess whether the agency was negligent in failing to adequately supervise Pando and whether his breach of authority severed the contractual nexus between the plaintiff and the agency. Furthermore, the court examined whether the agency could be held liable for Pando's fraud, considering the scope of authority and whether the agency had ratified the fraudulent conduct.

The court found that the real estate agency was liable for the sales representative's fraudulent actions. It held that the agency was on notice of the fraud and had participated in discussions with the plaintiff to resolve dissatisfaction about the sale price, thus ratifying the fraud. The court rejected the argument that the agency was not liable due to the sales representative's breach of authority, holding that the fraud occurred within the scope of Pando's authority. The court also dismissed the argument that the agency should not be held liable due to the plaintiff's prior knowledge of the fraud, as evidenced by a magazine article published after the trial. The court held that the employer had ratified the fraud, making this evidence irrelevant to the outcome. The court further held that the damages assessed by the trial judge were not clearly erroneous and that the plaintiff's claims for indemnity and contribution were refused because the fraud occurred within the sales representative's authority and the employer had ratified the conduct of the employee.

The court concluded that the reasons provided by the trial judge, while not perfectly set out, were sufficient to preserve and facilitate any rights of appeal. The court held that the relevant findings of fact were open on the evidence and that the findings and reasons sufficiently elucidated the issues for the purposes of appeal.

Orders