Catanzariti v Lee Road Pty Ltd - [2005] SASC 419

Supreme Court of South Australia
(Full Court)
CATANZARITI & ANOR v LEE ROAD PTY LTD
Judgment of The Full Court
(The Honourable Acting Chief Justice Perry, The Honourable Justice Bleby and The Honourable Justice Anderson)
9 November 2005
CONTRACTS - PARTICULAR PARTIES - PRINCIPAL AND AGENT - AUTHORITY OF AGENTS - CONSTRUCTION AND EXTENT OF AUTHORITY
Appeal against order for specific performance of a contract for the sale of land made following a trial in the District Court - the trial judge held that the vendors' agent had ostensible authority to negotiate the terms of the sale agreement and that the authority extended to his execution of a memorandum or note in writing satisfying the requirements of s 26 of the Law of Property Act 1936 - that requirement was satisfied by the exchange of correspondence between the vendors' agent and the purchaser - the contract was enforceable notwithstanding that it was contemplated that a formal written contract would subsequently be executed - appeal dismissed.
Law of Property Act 1936 s 36, referred to.
Masters v Cameron (1954) 91 CLR 353; Ford v Young (1882) 8 VLR 93; Humphries v Humphries [1910] 2 KB 531; Dal Pont, Law of Agency Butterworths [20.7] 521; Rama Corp Ltd v Proved Tin & General Investments Ltd [1952] 2 QB 147; Freeman & Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480; Newton King v Wilkinson (1976) 2 NZLR 321; Parker v Barnett [1890] 16 VLR 214; Voumard, The Sale of Land 5th edition [2350]; The Laws of Australia The Law Book Company Ltd, Vol 28, Real Property at 28.18 [15]; Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd [1975] 133 CLR 72; Rossiter v Miller (1878) 3 App Cas 1124; Godecke v Kirwan [1973] 129 CLR 629; Von Hatzfeldt-Wildenburg v Alexander [1912] 1 Ch 284; Powell and Berry v Jones and Jones [1968] SASR 394; Allen v Carbone (1975) 132 CLR 528, considered.

CATANZARITI & ANOR v LEE ROAD PTY LTD
[2005] SASC 419
Full Court: Perry ACJ, Bleby and Anderson JJ

PERRY ACJ. The appellants, Patrick Catanzariti and Guiseppe Catanzariti are the registered proprietors of a vacant allotment of industrial land at Burton. Following a trial in the District Court, the court made an order for specific performance by the appellants of an agreement for the sale by them of the land to the respondent, Lee Road Pty Ltd.
In their appeal to this Court, the appellants contend that the trial judge erred in finding that there was a binding contract between the parties for the sale and purchase of the land. They make other complaints to which I will in due course refer, as to other findings by the trial judge.
Background
Only one witness was called at the trial, namely, the respondent’s sole shareholder and managing director, Mr Garry Rogers. His evidence was accepted by the trial judge, and there has been no challenge…

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.

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Details

Case: [2005] SASC 419
Decision Date: 9 November 2005

CaseChat Overview and Summary

The appeal in Catanzariti v Lee Road Pty Ltd involved the enforceability of a contract for the sale of land. The appellants, Catanzariti, contested the trial judge's decision that there was a binding contract between them and the respondent, Lee Road Pty Ltd, for the sale of specific land. The respondents had argued that the vendors' agent, Mr Carlo Peluso, had the authority to negotiate and execute the terms of the sale agreement. The appellants contended that no such contract existed and that the respondent could not enforce any such agreement due to the lack of a written contract signed by the vendors or their authorised agent as required by s 26 of the Law of Property Act 1936.

The court had to determine whether Mr Peluso had the authority to bind the appellants to a contract for the sale of the land and, if so, whether this contract was enforceable despite not being in a formal written form. The trial judge found that Mr Peluso had ostensible authority to negotiate the terms of the sale agreement. The court held that the exchange of correspondence between Mr Peluso and the purchaser, Mr Garry Rogers, satisfied the requirements of s 26, as the parties had reached finality in arranging all the terms of their bargain and intended to be immediately bound by them, even though they planned to have the terms restated in a more formal agreement. The court found that the essential terms of the contract were confirmed in the correspondence between the parties, making the agreement enforceable.

The court dismissed the appeal, affirming the trial judge's decision. The court held that the evidence supported the conclusion that Mr Peluso had the authority to bind the appellants to the contract for the sale of the land and that the requirements of s 26 of the Law of Property Act 1936 were met through the exchange of correspondence. The court's decision stood, and the contract for the sale of the land was enforceable.

Orders

Orders of the court

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Background

Background to the litigation

In their appeal to this Court, the appellants contend that the trial judge erred in finding that there was a binding contract between the parties for the sale and purchase of the land. They make other complaints to which I will in due course refer, as to other findings by the trial judge.Background Only one witness was called at the trial, namely, the respondent’s sole shareholder and managing director, Mr Garry Rogers. His evidence was accepted by the trial judge, and there has been no challenge to it on the appeal. In the result, there is little or no dispute about the facts. Mr Rogers lived in Tasmania at the relevant time. He conducted a business in Tasmania and in other States of building factories and renting them out. Shortly before the transaction now in question, he was asked by a client to see if he could find land in South Australia upon which a warehouse might be built to the client’s specifications. As a result, he came to South Australia on 16 July 2003. He inspected land in the Salisbury/Elizabeth area. He saw a signboard on the land in question (“the land”) which is situated at Diment Road, Burton. From the signboard, he saw that the vendor’s agents were Taarnby & Taarnby Real Estate (“Taarnby & Taarnby”). On the same day, that is, 16 July, he rang Mr Carlo Peluso of that firm. He obtained some information from Mr Peluso which suggested to him that zoning and other features of the land would make it suitable for the proposed development. When he asked Mr Peluso what price was being sought for the land, he was told that it was for sale for $600,000. He responded by saying that he would continue to inspect other areas and would come back to Mr Peluso if he was interested. After making some other inquiries, he decided to pursue the matter with Mr Peluso, whom he rang the next day, that is, 17 July. He said that he was prepared to pay $400,000 for the land on an unconditional contract, and that he would be prepared to settle in 30 days. Mr Peluso said that he would speak to the vendors and let him know whether or not the offer was acceptable. Mr Peluso said that he would send a copy of the certificate of title to the land to Mr Rogers. Mr Rogers returned to Melbourne on the same day, that is, 17 July, and saw that a facsimile had been sent to his Melbourne office attaching a copy of the certificate of title and giving some dimensions of the land. The next day, that is, 18 July, Mr Peluso spoke to Mr Rogers and said that his clients were not prepared to accept $400,000 for the property. Mr Rogers said that he was still interested, and asked Mr Peluso to ascertain from the vendors the price at which they would be prepared to sell. After that conversation, on the same day Mr Rogers wrote a letter to Mr Peluso in the following terms:Carlo,Thank you for your time in regard to my enquiry and subsequent offer on your site at Lot 55 Diment Road Burton.I understand how difficult it can be for an agent when they are acting in the best interests of the vendor and they have an offer in front of them that does not meet the vendor’s expectations.On my limited knowledge of the area I believe my proposed price is fair and realistic. I do not dispute that the site would be relatively easy to develop in terms of size and flat terrain but after my enquiries to the council there are considerable costs to meet compliance with internal driveways, drainage and car parking areas that will add considerable cost to the development.I also believe that an offer such as mine, which is unconditional and cash 30 days has merit and whilst eventually if someone comes along with an offer which is subject to all sorts of conditions, I am sure you are well aware that the end result for the vendor may be no better.I have another option at Wingfield but as I am leaving for a stint overseas on Monday I need to act if my negotiations with you are not to proceed. If your vendor reconsiders I would need to know this today.Regards,GF RogersPS I will be in Melbourne today please contact me on mobile 0417 461 112 or fax (03) 9562 5941.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

PERRY ACJ BLEBY J (dissent) ANDERSON J

Alternatively, they pleaded that no action could be brought by the respondent upon any alleged contract for sale of the land, in that there was no agreement in writing “signed by the defendants or a person lawfully authorised by them to execute the same” as required by s 26(1) of the Law of Property Act 1936.The Trial Judge’s Reasons for Judgment The trial judge first addressed the question whether Mr Peluso was the appellants’ agent with authority to bind the appellants to an enforceable contract for the sale of the land. She referred to the terms of the written Sales Agency Agreement dated 1 July 2003 pursuant to which Taarnby & Taarnby was appointed agent of the appellants for the sale of the land at a price of “$600,000-$650,000, or at such other price as the vendor may specify in writing”. There was no written communication from the appellants to Taarnby & Taarnby nominating a lower price. She held that Mr Peluso:[66]… had actual authority to act as the agent for the defendants in the sale and the purchase of the land, and in particular, to negotiate with Mr Rogers on the price to be paid for it, and other terms, to offer the property for sale on the form of contract issued by the Real Estate Institute of South Australia Incorporated and to accept the payment of a deposit in respect of a sale or proposed sale. That conclusion was, in my view, fully supported by the terms of the sales agency agreement. But the trial judge did not go so far as to find that Mr Peluso had actual authority to enter into a contract for the sale of the land on the terms negotiated with Mr Rogers. However, she held that “Mr Peluso had the apparent or ostensible authority of the defendants to communicate and correspond with Mr Rogers as he did”. She then defined the remaining issues to be addressed in terms of two questions, namely, whether a binding contract between the plaintiff and the defendants for the sale and purchase of the land had come into existence, and if so, whether the respondent was prevented from enforcing it by reason of s 26(1) of the Law of Property Act 1936. As to the first question, the trial judge rejected the appellants’ contention that the parties never proceeded beyond the stage of negotiation and did not reach a concluded agreement. She held that the mere fact that the parties contemplated the execution of a formal agreement embodying the terms of the contract did not necessarily indicate that the parties had not proceeded beyond the stage of negotiation. She held that the case fell into the first of the three categories identified in Masters v Cameron,[1] that category being:… one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect.[1] (1954) 91 CLR 353 at 360. She held that the facsimile sent on 22 July 2003 by Mr Peluso to Mr Rogers confirming his verbal advice that the appellants would accept $410,000 for the land should be characterised as an offer from the appellants or confirmation of an oral offer already made in those terms. She went on to hold that the letter from Mr Rogers to Mr Peluso sent by facsimile shortly afterwards was an acceptance of the offer. She held that the essential terms, namely the identification of the land, the purchase price, the deposit and the fact that the contract was to be unconditional and that settlement was to be within 30 days, were confirmed in the two documents taken together.

Ratio Decidendi

Legal Principle Established

Established by: PERRY ACJ, ANDERSON J

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