Commissioner for Consumer Affairs v Piantadosi - [2018] SASCFC 109

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
COMMISSIONER FOR CONSUMER AFFAIRS v PIANTADOSI & ANOR
[2018] SASCFC 109
Judgment of The Full Court
(The Honourable Justice Peek, The Honourable Justice Stanley and The Honourable Justice Hinton)
23 October 2018
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION
PROFESSIONS AND TRADES - AUCTIONEERS AND AGENTS - CONSTRUCTION OF STATUTORY PROVISIONS - SOUTH AUSTRALIA - CONTROL OF MONEY
Appeal against a judgment of a District Court judge reversing a determination by the Commissioner for Consumer Affairs (the Commissioner) to reject a claim for $200,000 compensation from the agents’ indemnity fund under s 30 of the Land Agents Act 1984 (SA) (the Act).
The respondents were advised by officers and employees of the Charterhill Group to invest in residential real estate and determined to purchase a property in Melbourne. The purchase price of the property was $545,000. The respondents were directed to pay $54,500 to Nova by way of a holding deposit. The respondents elected to make the payment to an interest bearing account which was in the name of LSI. It was proposed by Charterhill that the respondents would contribute a further $200,000 from their superannuation fund to meet the purchase price. The respondents were advised the interest earned would be applied to the property. Acting on this advice, the respondents paid the sum of $200,000 to the LSI account. The respondents executed the land sale contract. Subsequently, the $254,500 was misappropriated. The respondents made a claim on the indemnity fund for their loss.
The Commissioner allowed the respondents’ claim in respect of the $54,500 paid as a holding deposit, but rejected their claim in respect of the $200,000 on the ground that the payment of $200,000 was made so the respondents could earn interest on that money. The payment was voluntary not mandatory. The $200,000 was not received by Nova / LSI while acting as an agent and, therefore, was not trust money as defined by s 12 of the Act.
The judge allowed the appeal on the ground that the $200,000 was received by the putative agent on trust for the purchase of real estate. Central to the reasoning of the Commissioner and the judge was the Full Court’s judgment in Commissioner for Consumer Affairs v McMurray (2017) 128 SASR 1.
The Commissioner appeals against the judge’s allowance of the appeal.
Held, per Stanley J (Peek and Hinton JJ concurring): Appeal dismissed.
1. The $200,000 was received pursuant to the only contractual relationship that existed between the respondents and Nova/LSI which was solely concerned with the purchase of the property.
2. There is nothing in the text, context or purpose of s 30 and the relevant definitional provisions in the Act which requires that to satisfy the definition of trust money the money must be received by an agent acting as an agent pursuant to some mandatory obligation.
3. The $200,000 was being held by Nova/LSI on trust awaiting settlement of that contemplated purchase. That purpose cannot be altered by the fact that interest was to be paid on the trust money.
4. The facts of this matter are clearly distinguishable from McMurray where LSI received the $106,100 not as an agent but as a borrower pursuant to the fixed term deposit investment.
5. The meaning of agent in s 4 of the Act is wide. The judge was correct in concluding that when LSI received the $200,000 it did so as agent for Nova and Nova, for that purpose, was carrying on a business that consisted of or involved the purchase of land on behalf of the respondent, or at the very least, was conducting negotiations for that purpose.
6. Appeal dismissed.
7. Parties to be heard as to costs.
Land Agents Act 1994 (SA) s 4, s 12, s 29, s 30, referred to.
Commissioner for Consumer Affairs v McMurray (2017) 128 SASR 1, distinguished.
Piantadosi v Commissioner for Consumer Affairs [2018] SADC 9; IW v City of Perth (1997) 191 CLR 1, considered.

COMMISSIONER FOR CONSUMER AFFAIRS v PIANTADOSI & ANOR
[2018] SASCFC 109
Full Court: Peek, Stanley and Hinton JJ

PEEK J. I would dismiss the appeal. I agree with the reasons of Stanley J.
STANLEY J.
Introduction
This is an appeal against a judgment of a District Court judge who allowed an appeal from a determination by the Commissioner for Consumer Affairs (the Commissioner) rejecting a claim for $200,000 compensation from the agents’ indemnity fund under s 30 of the Land Agents Act 1994 (SA) (the Act).
In 2013, the respondents, who were the trustees for their self-managed superannuation fund, were advised by officers and employees of the Charterhill Group to invest in residential real estate. The Charterhill Group included Nova Real Estate Pty Ltd (Nova) and Lending Solutions International Pty Ltd (LSI). On 2 October 2013, the respondents executed an Expression of Interest (EOI) in purchasing an apartment in a suburb in Melbourne, Travancore. The apartment was Apartment 2104 in the Alexander Lombard Tower (the Travancore property). The purchase price of the Travancore property was $545,000. The respondents were directed to pay $54,500 to Nova by way of a holding deposit. They were offered a choice of accounts in which to pay the deposit, one being interest bearing and the other non-interest bearing. The respondents elected to make the payment to the interest bearing account which was in the name of LSI with BankSA. They paid the $54,500 in two tranches of $1,000 and $53,500. It was proposed by Charterhill that the respondents would contribute a further $200,000 from their superannuation fund to meet the purchase price, with the balance of the finance arranged through the Charterhill Group. Subsequently, on or about 20 October 2013, Mrs Piantadosi spoke to Mr Tim Pitt, an employee at the Charterhill Group, enquiring whether it would be appropriate for Nova to hold the balance of the deposit required to settle on the Travancore property in the LSI account so that the superannuation fund could benefit from the interest payable in that account. Mr Pitt advised Mrs Piantadosi that this could be done and the interest earned would be applied to the Travancore property, or any subsequent property purchased by the respondents’ superannuation fund. Acting on this advice, on 25 October 2013 the respondents paid the sum of $200,000 to the LSI account. The respondents executed the land sale contract on 28 October 2013. Subsequently, the $254,500 was misappropriated. The respondents made a claim on the indemnity fund for their loss. The Commissioner allowed their claim in respect of the $54,500 paid as a holding deposit, but rejected their claim in respect of the $200,000.
The Act provides for the establishment of an indemnity fund maintained by the Commissioner for the purpose, inter alia, of compensating persons who have suffered pecuniary loss as a result of a fiduciary default.[1] “Fiduciary default” is defined to include misappropriation of trust money occurring while the money is in the possession or control of an agent.[2] “Trust money” is defined to mean in relation to an agent, money that is received by the agent when acting as an agent and to which the agent is not wholly entitled in law and in equity.[3]
[1] Sections 29 and 30.
[2] Section 12(1).
[3] Section 12(1).
By reason of the definition of “fiduciary default”, claims can only be made on the indemnity fund for the misappropriation of “trust money” as defined, namely, money received by an agent when acting as an agent, i.e. relevantly dealing with land on behalf of others, being money to which the agent is not wholly entitled in law and in equity.[4]
[4] Commissioner for Consumer Affairs v McMurray [2017] SASCFC 16 at [37], (2017) 128 SASR 1 at 8.
The Commissioner rejected the claim on the ground that the payment of $200,000 was made so the respondents could earn interest on that money. The payment was voluntary not mandatory. The $200,000 was not received by Nova and LSI while acting as an agent and, therefore, was not trust money as defined by the Act.
The judge allowed the appeal on the ground that the $200,000 was received by the putative agent on trust for the purchase of real estate.
McMurray’s case
Central to the reasoning of the Commissioner and the judge was the Full Court’s judgment in Commissioner for Consumer Affairs v McMurray.[5] McMurray concerned the same agent. In that case, the respondent had expressed interest in investing in residential real estate in Queensland. The agent proposed the purchase of a property in Griffin. The purchase price was $389,000. The respondent was advised by the agent that a 10 per cent deposit was required and, in due course, the respondent would be required to pay from its own resources a total of $145,000 including the deposit. The respondent agreed to purchase the property. The facts in McMurray resemble the facts of this case. However, there are significant differences.
[5] [2017] SASCFC 16.
The respondent in McMurray executed an EOI, but subsequently LSI sent a Deposit Investment Letter which referred to the respondent proceeding with a request for a super fund deposit investment of $106,100 at a 6 per cent interest rate, for an initial term of 90 days with an option to renew. Mr McMurray transferred $145,000 into the LSI account. In response, LSI issued to Mr McMurray a Certificate of Deposit for $106,100. On the same day, LSI issued to the respondent a receipt for $38,900 for payment of the deposit on the purchase of the property at Griffin. Later, LSI issued to the respondent separate interest statements in respect of the separate amounts of $106,100 and $38,900. Following this, Mr McMurray went to Queensland to inspect the Griffin property. He was unhappy with the property and cancelled the purchase. Two weeks later, the agent informed Mr McMurray that he could purchase an alternative property at Mango Hill in Queensland for the same price, on the basis that the 10 per cent deposit of $38,900 would be transferred to the Mango Hill property. Mr McMurray agreed to purchase that property. The purchase never proceeded and Mr McMurray’s money was lost. Mr McMurray made a claim on the indemnity fund for $145,000, identifying Nova as the land agent in question. The Commissioner accepted the claim for loss of $38,850,[6] as a result of the fiduciary default of Nova. The Commissioner rejected the claim in respect of $106,100 because that money was paid as a separate investment and was not received by Nova as part of its business of dealing with land. On appeal, a judge of the District Court overturned the Commissioner’s decision holding that Nova was acting as a land agent in respect of the $106,100.
[6] This represented the deposit less $1,000 purportedly transferred to the vendor of the Mango Hill property, plus $950 legal expenses.
The Full Court allowed an appeal from the judge’s decision. Blue J, with whom Parker and Hinton JJ agreed,[7] held that Mr McMurray’s entitlement to claim compensation in respect of the sum of $106,100 turned on the ultimate legal issue whether that sum was received by Nova or LSI when acting as an agent within the meaning of the Act. This depended on the construction of the contracts between the superannuation fund and Nova/LSI. Blue J held that the $38,900 was paid as the deposit for the purchase of the property, but, the other hand, the terms of the Deposit Investment Letter showed that the $106,100 was a deposit investment made by the superannuation fund with LSI. There was a fixed initial term with an option to renew or to withdraw the money. The Certificate of Deposit issued by LSI after receiving the sum of $106,100, related exclusively to the term deposit transaction and not to a deposit under the contemplated land sale contract. On the other hand, the terms of the receipt referred to $38,900 as the deposit for the purchase of the Griffin property. The payment of $38,900 was mandatory under the terms of the contract to secure the holding of the Griffin property for purchase. By contrast, the investment of $106,100 with LSI was voluntary, even though it was intended that that sum would be needed to meet the purchase price at settlement on the land contract. Accordingly, Blue J held that, on the true construction of the contracts between the parties, there were two separate transactions. $38,900 was received by Nova in its capacity as a land agent as a deposit on a contract for the purchase of land, and $106,100 was received by LSI as a loan by way of term deposit by the superannuation fund.
[7] Hinton J delivered separate reasons concerning a separate aspect of the appeal.
Blue J made the further obiter observation:[8]
Mr McMurray does not contend that, if $106,100 was received by LSI as a loan by way of term deposit by the Superannuation Fund, the mere fact that it was contemplated or intended that this sum would ultimately be used by the Superannuation Fund towards payment of the balance of the purchase price at settlement of the purchase of the Griffin property rendered it money received by an agent when acting as an agent, ie dealing with land on behalf of others. Such a contention would in any event be untenable.
[8] Commissioner for Consumer Affairs v McMurray [2017] SASCFC 16 at [70], (2017) 128 SASR 1 at 14.
Reasons of the judge in this case
The proceedings before the judge in this case took an unusual course. After the Commissioner had determined to reject the respondents’ claim for compensation for its loss of the $200,000, the Full Court delivered judgment in McMurray. In response, the Commissioner sought to re-determine the claim. On re-determination, he confirmed the rejection of the respondents’ claim. The parties proceeded before the judge on the basis that the appeal was against the re‑determination. The judge allowed the appeal, distinguishing the facts of this case from McMurray. The judge reasoned:[9]
[9] Piantadosi v Commissioner for Consumer Affairs [2018] SADC 9 at [29]-[35].
As Blue J explains, whether an agent is ‘dealing with land on behalf of others’ turns ‘on the construction of the contracts between the parties’. The relevant contracts in McMurray were comprised or evidenced by the Expression of Interest, the Deposit Instrument letter, a Certificate of Deposit and a Receipt for the deposit of $38,900. The Expression of Interest was characterised in McMurray as ‘exclusively a land transaction’, limited to a ‘holding deposit of $38,900.
In the result the court concluded:
[69]The Judge erred in holding that there was a single transaction involving a single sum of $145,000 received by Nova in its capacity as a land agent as a deposit on a contract for the purchase of land. On the true construction of the contracts between the parties, there were two separate transactions: $38,900 was received by Nova in the capacity as a land agent as a deposit on a contract for the purchase of land and $106,100 was received by LSI as a loan by way of term deposit by the Superannuation Fund.
The Court in McMurray further held the ‘that balance of the purchase price at settlement’ was not ‘money received by an agent when acting as an agent i.e. dealing with the land on behalf of others.’
The situation here is not on all fours with McMurray. Most importantly, there was no ‘Deposit Investment letter’ unequivocally assigning the $200,000 advance as a loan for a fixed term, and there was no ‘Certificate of Deposit’ designating it was for ‘security purposes’. Although this deposit attracted a favourable interest rate, the same rate applied equally to the deposit of $54,500, which as observed earlier was the situation in McMurray.
Unlike McMurray there was no fixed term for the advance and no option for renewal. It is not established that the Piantadosis could have requested the return of the $200,000 for ‘an alternative investment with a financial institution of their choosing …’ as it was in McMurray. On the other hand it appears clear enough that this sum would become refundable to them on the contingency that the contract did not proceed.
Otherwise the circumstances coincide: ‘the two components … were payable at two different times’; ‘the initial deposit was “mandatory” whereas the “deposit” of $200,000 was “voluntary” under the contracts of sale, and the Piantadosis understood the $200,000 would be applied to the “Travancore Property”’, a consideration of itself ‘incapable of leading to a different construction of the contract(s)’.
Conclusion and orders
The position here is that the $200,000 deposit was impressed with a trust earmarking it as money to be applied solely to the purchase of the subject property for so long as it remained deposited into the agent’s account. It was not designated as a loan either for a fixed period or for security purposes. On that view of matters the circumstances amount to ‘fiduciary default’ by an agent carrying on business dealing with land, because the $200,000 was applied in part performance of the covenant to purchase and settle contained in the agreement of sale and because that payment is only referable to the contract of sale itself. In McMurray the advance was referable to a separate loan agreement.
Nevertheless McMurray remains binding authority for the proposition that when the contractual arrangements between the parties for the payment of monies are properly understood as amounting to loans or investments, that situation does not amount to dealing with land on behalf of others by an agent when acting as an agent. That was not the situation here for the reasons articulated above.
[Footnotes omitted.]
Submissions on appeal
The Commissioner submits that the judge erred in distinguishing McMurray. He submits that the judge erred in finding that the $200,000 was “trust money” for the purposes of s 12 of the Act. The judge should have found that the putative agent received the sum of $200,000 so the respondents’ superannuation fund could benefit from the high interest rate. Further, the judge erred in failing to give proper weight to the fact that the $200,000 was a voluntary payment and the respondents’ intention that it would ultimately be used to pay the settlement sum was irrelevant. Finally, the Commissioner submits that the judge erred in placing an onus on him to establish that a statutory requirement for compensation was not met before the Commissioner could reject a claim for compensation under the statute.
The respondent submits that the principal issue in the case was whether the $200,000 was received by Nova/LSI when acting as an agent. The respondent submits that this question is to be answered by reference to the broad definition of agent in s 4 of the Act which relevantly provides that a person is an agent if a person carries on a business that consists of or involves selling or purchasing or otherwise dealing with land on behalf of others or conducting negotiations for that purpose. In this case the only basis upon which the $200,000 was received by Nova was for the purpose of Nova carrying on a business that consisted of or involved the purchasing of the Travancore property on behalf of the respondents. Accordingly, the respondents’ claim for compensation for the fiduciary default of the $200,000 had to be allowed under the Act. The judge was correct on the distinction between the facts of this case and McMurray. Further, the passage in the judge’s reasons where he observed that it was not established that the respondents could have requested the return of the $200,000 for an alternative investment with a financial institution of their choosing, as was the case in McMurray, did not involve reversing the onus of proof.
Consideration

The right to compensation for pecuniary loss as a result of a fiduciary default by a land agent is statutory. Claims can only be made on the indemnity fund for the misappropriation of “trust money”. “Trust money” in relation to an agent means money that is received by the agent when acting as an agent and to which the agent is not wholly entitled in law and in equity. A person is an agent if he or she carries on a business that consists of or involves selling or purchasing or otherwise dealing with land on behalf of others, or conducting negotiations for that purpose. The relevant provisions of the Act are to be construed in accordance with their text, context and purpose. The purpose of s 30 is beneficial. It should be afforded a broad, liberal construction.[10] The definition of an agent is in wide terms reflecting the beneficial purpose of the indemnity scheme established by the Act. At issue is whether the putative agent has received the money in the course of carrying on a business that consists of or involves selling or purchasing or otherwise dealing with land on behalf of others, or conducting negotiations for that purpose, and the agent is not wholly entitled to the money in law and in equity. The touchstone of the definition of an agent is whether the person receives money in the course of a business that either consists of or involves dealing with land or conducting negotiations for that purpose. It can be seen that a person can be an agent notwithstanding he or she is not conducting a business solely for the purpose of selling or purchasing or otherwise dealing with land, so long as the business being conducted merely involves dealing with land or conducting negotiations for the purpose of selling, purchasing or otherwise dealing with land on behalf of others.
[10] IW v City of Perth [1997] HCA 30, (1997) 191 CLR 1 at 12.
In this matter there is no question that Nova/LSI was not wholly entitled in law and in equity to the $200,000. The question is whether it or they received the $200,000 when acting as an agent i.e. in the course of carrying on a business that consists of or involves selling or purchasing or otherwise dealing with land on behalf of others or conducting negotiations for that purpose. This directs attention to the contractual relationship of the parties. The critical evidence is the EOI.
The EOI is a proforma form which provides for the insertion of details of the buyer, buyer’s solicitor, property, purchase price and holding deposit. The form does not provide for the insertion of details of the vendor, nor does it provide for execution by any party other than the buyer. The buyer is shown as “Piantadosi Investments 2 Pty Ltd atf The Piantadosi Holding Trust for the beneficial ownership of Piantadosi Investments Pty Ltd atf the Piantadosi Superannuation Fund”. A Melbourne firm of solicitors is shown as the buyer’s solicitor. The property is identified as “Apartment 2104 – Alexander Lombard Tower – Furnished Apartments”. The purchase price is identified as $545,000 and the holding deposit as $54,500 which is said to be payable when the buyer signs the EOI.
The EOI includes a box relating to the deposit as follows:
IMPORTANT
I/We hereby authorise Nova Real Estate to direct your deposit under your instructions as follows (please tick):
Non-Interest Bearing Deposit
BSB:                 105 074  Account No:               047018840
Bank:                Bank SA, Torrensville SA
Account Name:     Nova Real Estate Pty Ltd
Nova Real Estate Pty Ltd can deposit the funds on higher level Interest Bearing Deposit terms for the period that they are held by Nova Real Estate Pty Ltd on your behalf with:
BSB:                105 074  Account No:               046799440
Bank:                Bank SA, Torrensville SA
Account Name:     Lending Solutions International Pty Ltd
NB: Once you authorise Nova Real Estate Pty Ltd to release the funds for the vendor’s solicitor, Interest Bearing Deposit earnings will cease.
NOTE: If the property contract requires the deposit to be paid directly to the vendor’s solicitor, then we will provide you with separate instructions regarding the payment.
The EOI also contains the following terms:
Terms of Expression of Interest
1. In this Expression of Interest unless the context otherwise requires:
(a) “Contract” means a contract in the form of an REI Contract from the appropriate State and on terms and conditions consistent with the details of this expression of interest and any other conditions imposed by the Seller;
2.By signing this Expression of Interest the Buyer confirms its genuine interest to purchase the Property.
3.As an expression of the Buyer’s genuine intention to purchase the Property, the Buyer tenders the Holding Deposit to be held in the designated account.
4.The Buyer requests that once the Seller is in a position to do so, the Seller prepare and deliver to the Buyer a Disclosure Statement and a Contract.
5.If the Buyer after receiving the Disclosure Statement and Contract wishes to proceed with the purchase of the Property, the Buyer must sign and return the Contract and other related documents to the Seller within fourteen (14) days of receiving them together with the Initial Deposit (if any).
6.The Holding Deposit paid (if any) will become part of or all of the Initial Deposit payable pursuant with the Contract.
7.In the event that the Contract and other related documents (if any) are not returned to the Seller within the fourteen (14) day period, the Seller may assume that the Buyer does not wish to proceed with the purchase of the Property and further may offer the Property to other interested parties.
The EOI further provides for the payment of an administration fee of $10,000 to be deducted from the deposit held under the EOI if the buyers change their mind and decide not to proceed with the purchase of the property for no valid reason and through no fault of Charterhill.
The EOI was executed by the respondents on 2 October 2013. The respondents paid $1,000 on or about that same day and a further $53,500 on 16 October 2013.
Subsequent to the transfer of the $200,000 the respondents executed the contract of sale for the Travancore Property on 28 October 2013.
In this case there was no transaction equivalent to the fixed term deposit investment which occurred in McMurray. In my view the $200,000 was received by Nova/LSI for the purpose of funding the purchase of the Travancore property. It was received as part payment of the purchase price of $545,000. There was no other relevant contractual relationship between the respondents and Nova/LSI. The only dealings between them were concerned with the subject matter of the purchase of the investment property. In my view this case is clearly distinguishable from the facts of McMurray and the judge was correct in distinguishing McMurray.
I reject the submission that the character of the receipt of the $200,000 by Nova/LSI was affected by the fact that the respondents were interested in earning interest on the $200,000. The judge was correct to identify the payment of interest as entirely neutral in these circumstances. So much is apparent from the fact that the receipt of the holding deposit of $54,500 also attracted interest. Nonetheless, this was not an obstacle to the Commissioner’s conclusion that the holding deposit was received by Nova/LSI as trust money.
I also reject the submission that the character of the receipt of the $200,000 was affected by the fact that the payment was made voluntarily. It is the case that in McMurray Blue J drew a distinction between the payment by the McMurrays of $38,900, which was mandatory under the terms of the contract if they wished to secure the holding of the Griffin property for their purchase, and the investment of $106,100 which was voluntary as far as the land purchase was concerned. However, that observation has to be read in its context. The reference to the payment being voluntary occurs in the context of Blue J’s reasons that the terms of the Deposit Investment Letter in McMurray are unambiguous. They show that the sum of $106,100 was a fixed term deposit investment separate from the contemplated land sale contract. There is nothing in the text, context or purpose of s 30 and the relevant definitional provisions in the Act which requires that to satisfy the definition of trust money the money must be received by an agent acting as an agent pursuant to some mandatory obligation. The relevant focus is on the basis upon which the agent receives the money. If the money is received by the agent when carrying on a business that consists of or involves, in this case, the purchasing of land on behalf of another, the agent receives the money when acting as an agent. That directs attention to the basis of the receipt of the money. In this case Nova/LSI received the money for the purpose of funding the purchase of the Travancore property pursuant to the contemplated land sale contract.
Further, I reject the Commissioner’s submission that the mere intention of the respondents that the $200,000 would be used towards payment of the balance of the purchase price at settlement, does not mean the money received by the agent is trust money. This submission is based on the obiter observation of Blue J in McMurray set out above. Those obiter remarks are conditioned by the proposition that if the $106,100 in McMurray was received by LSI as a loan by way of term deposit by the superannuation fund, the mere fact that it was intended that this sum would ultimately be used towards the purchase of the balance of the purchase price would not render it money received by an agent when acting as an agent. That observation is both unremarkable and irrelevant to this case because the $200,000 was not received by LSI as a loan by way of term deposit. The $200,000 was received pursuant to the only contractual relationship that existed between the respondents and Nova/LSI which is solely concerned with the purchase of the Travancore property. The $200,000 was being held by Nova/LSI on trust awaiting settlement of that contemplated purchase. By contrast LSI received the $106,100 in McMurray as a borrower pursuant to the fixed term deposit investment.
Equally, the fact that the respondents could have invested the $200,000 with another financial institution rather than depositing it with Nova/LSI is irrelevant. At issue is not how the respondents might otherwise have used the $200,000. At issue is the basis upon which it was received by Nova/LSI. For the reasons set out above, it was only received on trust for the purpose of funding the purchase price at settlement. The fact that the $200,000 would attract interest pending settlement is an entirely neutral indicium. Further, whether the respondents could have withdrawn the $200,000 prior to settlement also is irrelevant. The focus is on the receipt of the money by the putative agent. Whether the respondents could withdraw the $200,000 from LSI to invest does not alter the basis upon which LSI received the money. In any event, Blue J’s observations simply reflect the trite proposition that, in accordance with the objective theory of contract, the mere subjective intention of a party to the contract is irrelevant to the contract’s proper construction. No reliance is placed on the respondents’ subjective intentions in this case.
Finally, I reject the submission that the judge’s reasons where he refers to it not being established that the respondents could have requested the return of the $200,000 for an alternative investment with a financial institution of their choosing, as was the case in McMurray, reflect the impermissible reversal by the judge of the onus of proof so as to require the Commissioner to negate an element of the claim. In my view that submission by the appellant involves a misreading of the judge’s reasons. In my view the judge’s observation rises no higher than that the evidence before him did not establish one way or the other whether the respondents could have requested the return of the $200,000 and that contrasts with the position in McMurray where the evidence was clear on that matter.
In summary, in this matter there was only one relevant contractual relationship between the respondents and Nova/LSI. That was a contract concerning the contemplated purchase of an investment property in which Nova was to act as the respondents’ agent. LSI received the payment of $200,000 for the purpose of funding that purchase. It did not receive it for any other purpose and that purpose cannot be altered by the fact that interest was to be paid on the trust money. The facts of this matter are clearly distinguishable from McMurray where LSI received the $106,100 not as an agent but as a borrower pursuant to the fixed term deposit investment. The meaning of agent in s 4 is wide. I am satisfied the judge was correct in concluding that when LSI received the $200,000 it did so as agent for Nova and Nova, for that purpose, was carrying on a business that consisted of or involved the purchase of land on behalf of the respondent, or at the very least, was conducting negotiations for that purpose.
For these reasons I would dismiss the appeal.
Conclusion
I would dismiss the appeal. I would hear the parties as to costs.
HINTON J:
I agree with Stanley J for the reasons he gives that the appeal should be dismissed.