Collings Real Estate Pty Ltd v Neit Developments Pty Ltd

[2011] VCC 1355

Unrestricted

IN THE COUNTY COURT OF VICTORIA	Revised
AT MELBOURNE CIVIL DIVISION COMMERCIAL LIST GENERAL DIVISION

Case No. CI-10-04281

COLLINGS REAL ESTATE PTY LTD	Plaintiff
v
NEIT DEVELOPMENTS PTY LTD	Defendant

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JUDGE:	HIS HONOUR JUDGE ANDERSON
WHERE HELD:	Melbourne
DATE OF HEARING:	6 October 2011
DATE OF JUDGMENT:	6 October 2011 (revised 7 October 2011)
CASE MAY BE CITED AS:	Collings Real Estate Pty Ltd v Neit Developments Pty Ltd
MEDIUM NEUTRAL CITATION:	[2011] VCC 1355

REASONS FOR JUDGMENT

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Catchwords:  Practice and procedure – Preliminary discover against proposed defendant –
Potential claim by agent for commission – Order for discovery of contracts
with purchaser – Costs order.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Foster	GSM Lawyers
For the Defendant	Mr B. Carew	Esposito Lawyers
HIS HONOUR:

1     The plaintiff brings an application for preliminary discovery against a prospective defendant pursuant to Rule 32.05. The plaintiff is a real estate agent. The defendant was the registered proprietor of land at Tarneit.

2     On 14 February 2008, the plaintiff and the defendant executed an exclusive sale authority. The agent was appointed to sell the property or lots on the property which had been subdivided. The period of the exclusive authority was 360 days from the date of the agreement, although commission would be payable if sales were made within a further 120 days if the purchaser was a person who purchased the property as a result of an introduction by the plaintiff.

3     On 6 October 2008 a company, apparently associated with the defendant, sent to the plaintiff, drafts of an agreement relating to 56 lots on the Tarneit property and an individual contract relating to one of the lots. The draft individual contract noted in the particulars of sale that the plaintiff was the vendor’s agent. It was not clear whether 56 lots were sold. The draft agreements sent to the plaintiff listed the purchaser as “Deal Property Group”. The plaintiff asserts that it introduced representatives of “Deal Property Pty Ltd” to the defendant. That is denied by the director of the defendant, Mr Payne, who has sworn an affidavit in opposition to the application.

4     The defendant’s solicitor, Mr Rod Saw, sent a letter on 12 June 2009 to solicitors acting for the proposed purchaser of lots at Tarneit. The letter referred to “the proposed sale of lots 1-37 and 40-57, 560 Tarneit Road, Tarneit”. The letter also referred to the “overriding agreement between

the parties of 9 December 2008” and the extension of the expiry date in respect of a special
condition. It was said that the “purchaser has not been able to satisfy the requirements” of the
special condition and that as a consequence, the vendor had terminated the contracts. The letter
noted that “we are further instructed that your client has entered into a heads of agreement to
purchase 30 lots at the property”.

5     Subsequently, in correspondence between Mr Payne, a director of the defendant and the plaintiff’s solicitors on 14 April 2010, Mr Payne advised that “Deal Group Holdings Pty Ltd was only allocated 5 lots” on the subdivision.

6     In the circumstances, it is apparent that:

a.	the plaintiff has reasonable basis to believe it may have a claim for commission in respect of allotments sold to the Deal companies by the defendant;
b.	notwithstanding requests of its solicitors, the plaintiff has been unable to obtain copies of any agreements which might have been executed by the defendant with any of the Deal group of companies for the sale of lots on the Tarneit property, either within the period of 360 days

during which the authority was to operate or the extension of 120 days;

c. the defendant would have that information available.

7     In the circumstances, it is appropriate to make an order for discovery by the defendant. The terms of the order sought by the plaintiff are fairly wide. In my view, this is necessary because of the responses made by the defendant both during correspondence prior to the issue of the originating motion and because of the matters raised by Mr Payne in the affidavit sworn in opposition to the application.

8     It is by no means clear what will be revealed by the discovered documents. They may show that there is no basis for any claim by the plaintiff against the defendant. That is one of the reasons the application is made and proceedings were not simply issued by the plaintiff against the defendant.

9    The orders I will make are on the plaintiff’s summons filed 7 September 2011 are as follows:

a.	The plaintiff be authorised to commence this proceeding by originating motion and any rules requiring an alternative procedure are dispensed with.
b.	By 4:00pm on 4 November 2011, the defendant must make discovery to the plaintiff of all documents of the following description:
c.	contracts of sale with respect of allotments comprising the property known as 560 Tarneit Road, Tarneit between the defendant of the one part and Deal Property Pty Ltd, Deal Property Group Pty Ltd, Deal Group Holdings Pty Ltd or any company associated in any way with those entities;

i.     heads of agreement signed between the defendant and any of the companies or companies associated with them referred to in paragraph 2(a) relating to allotments on the Tarneit property;

ii.    any nomination documents to third party purchasers in respect of allotments on the property nominated by any company or associated company referred to in paragraph 2(a);

iii.   transfers of land from the defendant to the purchasers of allotments referred to in paragraph 2(a);

iv.   all correspondence and other documentation concerning the cancellation or the termination of any contracts of sale referred to in paragraph 2(a).

d.	The plaintiff must pay the defendant’s reasonable costs of complying with the orders in paragraph 2 and if copies of documents are requested, then reasonable photocopying costs of the defendant in respect of the documents requested.
e.	The costs paid by the plaintiff to the defendant pursuant to paragraph 3 for the defendant making discovery, inspection and obtaining copy documents discovered shall be a cost to be determined ultimately as part of the cost of any proceeding subsequently commenced by the plaintiff against the defendant relating to a claim for commission with respect of the sale of allotments at the Tarneit property.
f.	The costs of this proceeding including the costs of the plaintiff’s summons filed 7 September 2011 and the hearing today shall be costs to be determined in any subsequent proceeding commenced by the plaintiff as described in paragraph 4. If the plaintiff does not commence such further proceedings, the costs of this proceeding, including the summons and the hearing today, are reserved for further adjudication.

g. Reserve liberty to apply.

Certificate

I certify that these 3 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 6 October September 2011 (and revised on 7 October 2011).

Dated: 7 October 2011

Hannah Christensen

Associate to His Honour Judge Anderson