Combined Property Consultants Pty Ltd v Mitchell - [2019] NSWSC 652

Supreme Court

New South Wales

Medium Neutral Citation: Combined Property Consultants Pty Ltd v Mitchell [2019] NSWSC 652
Hearing dates: 8, 9 August 2018
Date of orders: 06 June 2019
Decision date: 06 June 2019
Jurisdiction: Equity
Before: Parker J
Decision:
The plaintiff’s claim be dismissed.
The cross-claim be dismissed.
The plaintiff to pay the defendant’s costs of the proceedings.

Catchwords:
CONTRACTS — Identification of terms – whether terms and conditions of written agreement form part of contract in fact reached – where clear agreement between the parties that agency agreement be “sole” rather than “exclusive” - where “exclusive” struck out and “sole” written and changes initialled – where parties did not turn their minds to further terms and conditions of written agreement which became inapposite to the “exclusive” agency agreement reached – relevance of parol evidence rule - party may prove there was in fact no agreement on particular term within an apparently complete written agreement.

CONTRACTS — Rectification — Intention — Common intention – rectification appropriate where clear mistake - parties did not avert to inclusion of term which was inapposite to their agreement – rectification appropriate to delete “exclusive” or read “exclusive” as “sole”.

CONTRACTS — Construction — Interpretation - where option agreement provided for exercise of option by party or its nominee – whether purchase by exercise of option a “purchase” within meaning of agency contract so as to make the commission payable – where clause equating exercise of option with purchase appropriately excluded by construction or rectification – proper juridical analysis of an option – whether service of notice per contractual procedure brought about “purchase” within meaning of contract to make commission payable – where agency contract must be interpreted in a commercially sensible way – party exercising option cannot be seen as a “purchaser” as agency contract premised on voluntary transaction – commission not payable.

CONTRACTS — Construction — Interpretation - Natural and ordinary meaning - where contract specifically required agent to introduce purchaser to vendor during agency period – whether “introduced” extends to bringing purchaser “into contact” with vendor during period of agreement notwithstanding that initial contact occurred prior to agency period – purchaser not “introduced” to vendor during agency period as natural implication of “introduced” is that an introduction can only happen once and alternate construction would render term meaningless.
CONTRACTS —Termination — Frustration - whether agency contract frustrated where sale did not take place by way of fresh contract following release of option – where common assumption not expressed in terms of agency agreement but discerned from relevant surrounding circumstances subject matter of contract may be expressed as sale of property free from option - where agent aware of purchaser’s sole interest to proceed by way of fresh contract for sale excluding option - where terms of agency agreement reflected common assumption – where agent would have no authority to sell property absent release of the option - agency contract deprived of continuing legal effect when option not released.
Legislation Cited:

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: [2019] NSWSC 652
Decision Date: 06 June 2019

CaseChat Overview and Summary

Combined Property Consultants Pty Ltd (CPC) was engaged by Mitchell to sell Mitchell’s property. A dispute arose over the terms of their agreement, including whether the agreement was exclusive or sole. CPC claimed commission for a sale that was not completed. The court had to determine if the written agreement reflected the actual contract between the parties, the proper interpretation of certain terms, and whether the agency contract was frustrated when the sale did not proceed.

The court found that the parties had a clear agreement for a "sole" agency rather than "exclusive," despite the written agreement stating "exclusive." The court considered the parol evidence rule but allowed rectification to correct the mistake. The court also addressed the interpretation of the option agreement and whether exercising the option constituted a "purchase" under the agency contract, concluding that it did not. Additionally, the court ruled that the term "introduced" in the agency contract did not extend to bringing the purchaser into contact with the vendor during the agency period. Finally, the court determined that the agency contract was frustrated when the sale did not proceed following the release of the option.

The court rectified the written agreement to reflect the parties' true intention of a "sole" agency. It found that the exercise of the option did not constitute a purchase under the agency contract, and therefore no commission was payable. The court also ruled that the purchaser was not "introduced" to the vendor during the agency period. Finally, the court determined that the agency contract was frustrated when the sale did not proceed following the release of the option. The court's decision resulted in CPC not being entitled to commission and Mitchell not being liable for the amount claimed.

Orders