Cross Country Realty Victoria Pty Ltd v Ubertas 350 William Street Pty Ltd
[2015] VCC 1012
•31 July 2015
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-14-04284
| CROSS COUNTRY REALTY VICTORIA PTY LTD (ACN 084 613 552) | First Plaintiff |
| and | |
| PARK TRENT PROPERTIES GROUP PTY LTD (ACN 101 491 507) | Second Plaintiff |
| v | |
| UBERTAS 350 WILLIAM STREET PTY LTD (ACN 115 133 223) | Defendant |
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JUDGE: | HIS HONOUR JUDGE LACAVA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22 July 2015 | |
DATE OF JUDGMENT: | 31 July 2015 | |
CASE MAY BE CITED AS: | Cross Country Realty Victoria Pty Ltd & Anor v Ubertas 350 William Street Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 1012 | |
REASONS FOR JUDGMENT
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Subject: PRACTICE AND PROCEDURE
Catchwords: CIVIL PROCEDURE – summary judgment – striking out pleadings – defendant seeks summary judgment dismissing the plaintiffs’ claim and judgment in its favour on the counterclaim – whether plaintiffs’ claims do not disclose a cause of action – whether there is no defence to the counterclaim – whether plaintiffs’ claims are scandalous, frivolous or vexatious or otherwise an abuse of process of the Court - County Court Civil Procedure Rules, r23.02 – Court held that plaintiffs’ claim based on breaches of the Estate Agents Act 1980 cannot succeed – plaintiffs’ claim dismissed – no reasonable prospect of success in defending the counterclaim – defendant awarded judgment on the counterclaim
Legislation Cited: County Court Civil Procedure Rules, r23.02; Civil Procedure Act 2008, s63; Estate Agents Act 1980, s49A, s50
Cases Cited:Zullow Enterprises Pty Ltd v Sutton [1998] QCA 417; Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (2007) 18 VR 250; [2007] VSCA 280; Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351; [2001] HCA 2; Overmyer Industrial Brokers Pty Ltd v Campbells Cash & Carry Pty Ltd [2003] NSWCA 305; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; Joscelyne v Nissen (1970) 2 QB 86; Munt v Beasley [2006] EWCA Civ 370; Ryledar Pty Ltd & Anor v Euphoric Pty Ltd (2007) 69 NSWLR 603; Franklins Pty Ltd v Metcash Trading Limited [2009] NSWCA 407; Western Export Services Inc v Jireh International Pty Ltd (2011) 282 ALR 604; Royal Botanic Gardens and Domain Trust v South Sydney City Council [2002] 240 CLR 45; Oliver Hume (Australia) Pty Ltd v Land Source Australia Pty Ltd [2015] VSC 77; Maxwell v Moorabool Developments Pty Ltd [2004] VSC 392
Judgment: Plaintiffs’ claim dismissed. Defendant awarded judgment on the counterclaim
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr C B Thompson | Leverage Solicitors |
| For the Defendant | Mr T North QC with Ms S Cherry | Brand Partners |
HIS HONOUR:
1 By a Summons issued by the defendant/plaintiff by counterclaim dated 11 May 2015, the defendant seeks summary judgment dismissing the plaintiffs’ claim and seeks judgment in its favour on the counterclaim.
2 The basis of the application brought by Summons to dismiss the claims by each of the plaintiffs is rule 23.02 of the County Court Civil Procedure Rules. The defendant claims that the claims brought against it by each of the plaintiffs do not disclose a cause of action and there is no defence to the counterclaim and, the claims brought are scandalous, frivolous or vexatious, or otherwise an abuse of process of the Court.
3 The defendant seeks judgment on the counterclaim on a similar basis; alternatively, pursuant to s63 of the Civil Procedure Act 2008. The defendant also seeks costs and, other consequential relief.
4 The proceeding was commenced by Writ issued by the plaintiffs on 2 September 2014. On 15 October 2014, the defendant filed a Defence and Counterclaim. The first plaintiff’s claim is for the sum of $186,455.47 for estate agent’s commission said to be owing by the defendant.
5 The second plaintiff’s claim against the defendant is put on the same basis, except its claim is for $49,355.20. Each of the plaintiffs are Estate Agents and the defendant is a builder and developer of a multi-unit development at 350 William Street, Melbourne.
6 It is common ground that the plaintiffs or one or other of them introduced purchasers who ultimately purchased units in the development and that the plaintiffs have been paid some commissions for introducing some of the purchasers.
7 In its Defence and Counterclaim, the defendant denies that any money was owing to the plaintiffs and, by counterclaim, it seeks the repayment of the total sum of $3,084,774.00 paid by it to the plaintiffs being $1,670,889.00 to the first plaintiff and, $1,413,885.00 to the second plaintiff.
8 The defendant pleaded a number of breaches by the plaintiffs of mandatory disclosure requirements of the Estate Agents Act 1980 (“the Act”).
9 Those breaches are admitted on the pleadings. The defendant pleads that in those circumstances, having regard to the sections 49A and 50 of the Act, the plaintiffs are prohibited from suing for any unpaid commissions and, also cannot now retain any commissions previously paid to it by the defendant for introducing purchasers of units in the development. Hence the counterclaim.
10 Relevantly, that Act provides as follows:
“49A Offence not to give certain information about commission
(1)An estate agent must not obtain, or seek to obtain, any payment from a person in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent unless—
(a)the agent holds a written engagement or appointment that is signed by the person (or the person's representative); and
(b)before obtaining the person's signature to the engagement or appointment, the agent (or an agents' representative employed by the agent) informed the person (or the person's agent or representative) that the commission to be paid to the agent under the engagement or appointment and any money to be paid by the person in respect of outgoings were subject to negotiation; and
(c) the engagement or appointment contains—
(i)details of the commission and outgoings that have been agreed; and
(ii)if a fee is to be calculated on a percentage basis, a statement of that fee expressed as both a percentage and as the dollar amount that would be payable on the reserve price or any other relevant amount set out in the engagement or appointment; and
(iii)a rebate statement that complies with subsection (4); and
(iv)a statement in a form approved by the Director as to where a complaint concerning any commission or outgoings in the engagement or appointment can be made; and
(v) anything else required by the Director; and
(d)the agent (or an agent's representative employed by the agent) gave the person a copy of the signed engagement or appointment.
Penalty: 100 penalty units.
(2)An estate agent or agent's representative must not destroy any document required by this section and must retain any such document for the prescribed period.
Penalty: 100 penalty units.
(3)If an estate agent takes any money in respect of commission or outgoings from any money held in trust by the agent on behalf of a person, the agent must give the person written notice of the amount taken, and why it was taken, within 7 days of taking it.
Penalty: 100 penalty units.
(4)A rebate statement complies with this subsection if it is in a form approved by the Director and it contains—
(a)a statement of whether or not the agent will be, or is likely to be, entitled to any rebate in respect of—
(i) any outgoings; or
(ii)any prepayments made by the person engaging or appointing the agent (the client) in respect of any intended expenditure by the agent on the client's behalf; or
(iii)any payments made by the client to another person in respect of the work; and
(b)if such an entitlement will, or is likely to, occur, details of—
(i)the goods or services to which the rebate relates; and
(ii)the name of the person providing the rebate; and
(iii)the amount of the rebate that will be attributable to the engagement or appointment, or if that amount is not known at the time the statement is made, an estimate (in dollars) of the amount; and
(c)a statement that the agent is not entitled to retain any rebate and must not charge the client an amount for any expenses that is more than the cost of those expenses; and
(d)any other statements or details required by the regulations.
(5) Section 48C also applies for the purposes of subsection (4)(b)(iii).
50 Commission
(1)An estate agent is not entitled to sue for or recover or retain any commission or money in respect of any outgoings for or in respect of any transaction unless—
(a)at all material times in relation to the transaction he or she is the holder of an estate agent's licence; and
(b)the agent has complied with section 49A(1) with respect to the engagement or appointment to undertake the transaction and is not in breach of section 49A(2) with respect to the engagement or appointment; and
(c)the agent has complied with sections 48A and 48B with respect to the engagement, appointment or transaction.
… .”
11 In its Defence and Counterclaim, the defendant pleaded breaches by the plaintiffs of these relevant provisions of the Act. They also plead that, as a result of those breaches, the plaintiffs had and, have no entitlement, to “obtain, seek to obtain, sue for, recover or retain” any commission in respect of the development, having not complied with s50 of the Act. Because s50 of the Act expressly provides that an estate agent cannot retain any commissions paid to it, the defendant counterclaims for return of all monies paid to either plaintiff in relation to the development.
12 On the pleadings, the plaintiffs admit the alleged breaches of the mandatory disclosure provisions in the Act.[1]
[1]See Reply and Defence to Counterclaim at paragraph [2(a)] and paragraph [5(a)]
13 In the pleadings as currently before the Court, the plaintiffs rely on a defence of quantum meruit.[2] The defendant argues that a purported defence based on quantum meruit is unavailable at law and must fail. It relies upon the decisions of Zullow Enterprises Pty Ltd v Sutton;[3] Equuscorp Pty Ltd v Wilmoth Field Warne (a firm);[4] Moneywood Pty Ltd v Salamon Nominees Pty Ltd.[5]
[2]See Defence to Counterclaim at paragraphs [17] and [25]
[3][1998] QCA 417
[4](2007) 18 VR 250; [2007] VSCA 280
[5](2001) 202 CLR 351; [2001] HCA 2
14 On the current pleadings, the plaintiffs also rely upon a defence of estoppel.[6] The defendant argues that a defence of estoppel cannot lie in the face of the statute; namely s50 of the Act, and must fail. In this regard, the defendant relies on Overmyer Industrial Brokers Pty Ltd v Campbells Cash & Carry Pty Ltd.[7]
[6]See Reply and Defence to Counterclaim at paragraphs [3](a) and [6](a)
[7][2003] NSWCA 305 at paragraphs [55] – [57]
15 Given the plaintiffs’ admitted breaches of the relevant provisions of the Act, the defendant argues the plaintiffs have disclosed no cause of action against the defendant and submit there is no sustainable defence to the counterclaim. In essence, the defendant argues that the plaintiffs’ claim in the Writ and in the Reply and in the Defence to Counterclaim are frivolous and vexatious and cannot succeed and should be regarded by the Court as an abuse of process in the circumstances, entitling the defendant to judgment within Rule 23.02.
16 The defendant’s Summons is supported by an affidavit of the solicitor for the defendant, Jeremy Brand. That affidavit was sworn on 11 May 2015 and it has a number of exhibits to it.
17 On 14 November 2014, the plaintiffs’ former solicitors, Martin & Co, advised that it had come to its attention that part of the dealings between the plaintiffs, or one or other of them, and the defendant that related to the Singers Lane Project was in fact between the defendant and the first plaintiff and not the second plaintiff. The plaintiffs foreshadowed amendments to the Writ and Statement of Claim. On the same day, the plaintiffs’ solicitors delivered a Reply and the Defence to Counterclaim which purported to raise the equitable claims in a quantum meruit and estoppel.
18 On 18 November 2014, the defendant’s solicitors, Brand Partners, wrote to the plaintiffs’ then solicitors, Martin & Co, and identified what it contended were deficiencies in the plaintiffs’ case, including, amongst others, that equitable claims and defences based on quantum meruit or estoppel pleaded in an attempt to defeat s50(1) of the Act were not available at law. The letter is detailed and was exhibit JRSB3 to Mr Brand’s affidavit.
19 On 25 November 2014, Martin & Co wrote to the defendant’s solicitors and stated that they accept the position as stated by the defendant’s solicitors with regards to the defences of quantum meruit and that they would be removing the quantum meruit grounds from the pleadings. That exhibit is JRSB4.
20 On 5 February 2015, Martin & Co provided the defendant’s solicitors with a proposed Amended Writ and Amended Statement of Claim. That is exhibit JRSB5. On 13 February 2015, the defendant’s solicitors, Brand Partners, advised Martin & Co that the defendant did not consent to the plaintiffs being granted leave to file and serve the Amended Writ and the Amended Statement of Claim in the form sought. That letter is JRSB6.
21 On 30 April 2015, the proceeding came on for directions before his Honour Judge Cosgrave. The plaintiffs were represented by Mr Thompson of counsel, who appeared both then and, before me on the hearing of this Summons. I infer the Court was informed of the defendant’s attitude to the plaintiffs’ claim on that occasion. His Honour ordered the defendant/plaintiff by counterclaim to file and serve any application for judgment and affidavit in support, and listed the application to be heard on 16 June 2015. His Honour also ordered that the plaintiffs/defendant by counterclaim file and serve any affidavit in response. There were other directions made for answering affidavits. His Honour adjourned the directions hearing to 14 May 2015.
22 On 11 May 2015, the defendant issued the Summons now before me to strike out the defendant’s Reply and Defence to Counterclaim and to move for judgment on the Counterclaim.
23 By 25 May 2015, the plaintiffs had failed to file any affidavit in response to the application by the defendant as ordered by his Honour Judge Cosgrave. The defendant had served an Outline of Submissions in accordance with the Orders made by his Honour Judge Cosgrave on 3 June 2015, but the plaintiffs failed to file any outline of submissions by 15 June 2015, as ordered by his Honour.
24 The matter then came on for hearing before his Honour Judge Anderson on 16 June 2015. On that occasion, the plaintiff sought an indulgence from the Court and obtained Orders that the defendant’s Summons be adjourned to 20 July 2015. His Honour ordered that the plaintiffs file and serve any proposed amended statement of claim and an affidavit of a director and summary of any further submissions.
25 In accordance with the Orders of his Honour Judge Anderson, the Summons came on for hearing before me on 20 July 2015. By that time, the plaintiffs had not complied with the Orders of Judge Anderson made on 16 June 2015. On 16 June 2015, the plaintiffs had, through counsel, advised the Court that the plaintiffs were intending to amend the Reply and Defence to Counterclaim to plead rectification. Hence the reference in his Honour’s Orders to the plaintiffs serving any proposed amended statement of claim.
26 When the matter came on for hearing before me on 20 July 2015, I was asked by the defendant to adjourn the matter again. Because of the poor history in the conduct of the matter disclosed by the plaintiffs in prosecuting their case, and, because the defendant, having complied with the Orders made, was anxious to proceed, I ordered that the Summons be adjourned for a period of 48 hours to 22 July 2015 before me and, I ordered that the time be extended for the plaintiffs to file and serve the form of a proposed amended statement of claim and an affidavit from a director of the plaintiffs verifying the cause of action. Mr Thompson appeared before me on 22 July 2015 but by that time, there were no solicitors on the record. He assured me that there would be solicitors on the record for the plaintiffs shortly. On that basis, I agreed to proceed to hear the matter.
27 The only affidavit filed in response to the Summons by the plaintiffs is an affidavit of Ronald Malcolm Cross sworn 22 July 2015. That was the day I heard the Summons. Mr Cross deposes to being a director of both of the plaintiff companies and he deposes that he is authorised by them to swear the affidavit. He purports to do so from knowledge and belief. The affidavit does no more than produce a proposed amended statement of claim and a proposed amended reply and defence to counterclaim. Mr Cross deposes that “the facts contained and asserted” in each document “are to my knowledge true and correct”. He also produces a letter dated 15 October 2010 purporting to be from the defendant to one, Jennifer Hogan, the general manager of Park Trent Properties Group, relating to agents’ commissions on the developments in question.
28 The Summons taken out by the defendant in May of this year was fought on the basis that the proposed amended statement of claim and the proposed amended reply and defence to counterclaim were the best possible position which could be pleaded by the plaintiffs.
29 On the pleadings, the plaintiffs admit that in their dealings with the defendant, they did not comply with s49A(1) and (4) and s50(1)(b) and (4) of the Act.[8] Each of the plaintiffs also admits receipt of payments made by the defendant set out in the Counterclaim.[9] There has been no application to withdraw admissions. Under the provisions of the Act therefore, amounts retained by the plaintiffs paid to them by the defendant must be repaid.
[8]Reply, paragraphs [2](a) and [5](a)
[9]See Defence, paragraphs [11] and [19]
30 The argument before me centred around the proposed pleading for rectification of the admitted agreement between the parties. The proposed pleading is the first time that the question of rectification has been raised save for the brief mention of it before his Honour Judge Anderson. Until this litigation, it was never contended by the plaintiffs that the agreement between them and the defendant did not accord with what the parties had always intended. The defendant submits there is no suggestion of rectification in any of the correspondence between the parties or their solicitors, or in the filed pleadings or in the unfiled amended pleadings of February 2015.
31 The defendant relies upon what was said by his Honour Mason J, as he then was, in Codelfa Constructions[10] at paragraph 5:
“The implication of a term is to be compared, and at the same time contrasted, with rectification of the contract. In each case the problem is caused by a deficiency in the expression of the consensual agreement. A term which should have been included has been omitted. The difference is that with rectification the term which has been omitted and should have been included was actually agreed upon; with implication the term is one which it is presumed that the parties would have agreed upon had they turned their minds to it — it is not a term that they have actually agreed upon. Thus, in the case of the implied term the deficiency in the expression of the consensual agreement is caused by the failure of the parties to direct their minds to a particular eventuality and to make explicit provision for it. Rectification ensures that the contract gives effect to the parties’ actual intention; the implication of a term is designed to give effect to the parties’ presumed intention.”
[10]Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
32 The plaintiff’s proposed amended pleadings do not assert a factual basis by which a common intention can be found and nor is there any evidence in this case that the parties had a common intention. Nor could there be. It was the plaintiffs only that had the obligation to comply with the relevant provisions of the Act. Those provisions had no application to the defendant.
33 The law provides that the parties to a contract seeking rectification are required to show that there was an outward expression of accord. For the plaintiffs to succeed in arguing rectification there must be some evidence of some prior agreement between the parties before the document was drawn up. No suggestion has been made in this case and, importantly, Mr Cross does not suggest that there was any such accord in his affidavit. There must be some evidence that objectively demonstrates a common intention such as heads of terms or correspondence. See Joscelyne v Nissen[11] and Munt v Beasley.[12] There is no such evidence in this case. The plaintiffs only allege a written or implied term. No oral conversation is suggested.
[11](1970) 2 QB 86
[12][2006] EWCA Civ 370
34 The defendant points out that in Australia the question whether outward expression of accord is required has been questioned. The defendant also points out that the issue seems unresolved. If an outward expression of accord is not required, then, in any event, the parties must, in order to establish a continuing common intention, demonstrate each party’s subjective intention (that they did not mean what they had written), disclosed to the other party in some way. See Ryledar Pty Ltd & Anor v Euphoric Pty Ltd.[13] In this case, there is no suggestion of disclosure in accordance with the Act. Indeed, non-disclosure is conceded by admitted contravention of the relevant provisions of the Act.[14]
[13](2007) 69 NSWLR 603 at [180]-[187] and [273]-[315]
[14]See Reply at paragraphs [2](a) and [5](a)
35 In Ryledar,[15] the following statement of principles relating to a pleading of rectification is found, as follows:
[15]Supra
“[182] … first, the common intention which must be established by clear and convincing proof to justify rectification must be the actual or true common intention of the parties. Second, evidence of that intention may be ascertained not only from the external or outward expressions of the parties manifested by their objective words or conduct but also from evidence of their subjective states of mind.
[183] Third, where, for instance, the correspondence between and/or conduct of the parties establishes a positive lack of an “objective” common intention, then that evidence must be taken in conjunction with the evidence (if any) of their subjective states of mind to determine whether the necessary common intention has been established. In the example posited, that would be highly unlikely.
[184] Fourth, in Westland Savings Bank v Hancock [1987] 2 NZLR 21 at 31 it was held by Tipping J that a party subsequently acting as if the instrument stood in the form into which it is sought to be rectified was strong evidence of that party’s intention at the time to execute the instrument in its rectified form. Such conduct is obviously of significance but, depending on other evidence, if any, is not necessarily conclusive although in the absence of any such evidence it may be.
[185] Fifth, it follows that where the correspondence and/or conduct positively establishes the necessary common intention, then assertions by the party opposing rectification of his or her subjective state of mind which is inconsistent with that party’s outward manifestation of his or her intention, being unexpressed and uncommunicated, is unlikely to trump his or her expressed intention. But this is because that party is unlikely to be believed.
[186] Sixth, where as in the present case, the outward expression of the parties’ common intention is at best inconclusive, then establishing that the subjective states of mind of the parties evinces the relevant common intention becomes critical if the necessary standard of proof to support an order for rectification is to be achieved.
[187] … The whole of the objective and subjective evidence must be considered for the purpose of determining whether the party claiming rectification has established the actual and true common intention of the parties by clear and convincing proof.”
36 And then, at paragraph [281] in Ryledar, the following is found:
“In my view, when the fundamental requirement for granting rectification is a continuing common intention of the parties, it is of more assistance to concentrate on what is needed before an intention of the parties to a negotiation counts as a common intention. In my view, when that intention relates to the terms upon which they will contract with each other, it is still necessary for them to know enough of each other's intentions for it to be said that there is a common intention. They might come to know of each other’s intentions in this way through those intentions being directly stated, or they might come to know of them through the various other means by which one person’s intention can become known to another person. Those means can sometimes involve a process of conscious and deliberate inference. … What matters for present purposes is that for a negotiating party to perform actions or say words from which the other party can gather his or her intention is itself a form of communication. ... .”
37 Following Ryledar, the New South Wales Court of Appeal considered rectification again in Franklins Pty Ltd v Metcash Trading Limited.[16] There, the Court said as follows:
[16][2009] NSWCA 407 at paragraphs [445]-[449]
“[445] Before that rationale [for the remedy of rectification] can apply there has to actually be an intention of both contracting parties concerning the subject matter of the terms in which it is submitted the contract should be rectified. If the matter that has come to be the subject of debate [it] is a matter that was not addressed during the negotiations, and/or was not otherwise shared by the parties … so that there was no subjective common intention concerning it, then there is no room for rectification.
…
[449] Subjective intentions of people are almost always formed within a universe of discourse. Matters that are outside the scope of that universe of discourse are not part of the common subjective intention of the parties
38 There is no evidence in this case of any discourse between the parties save for the letter appended as exhibit 3 to Mr Cross’s affidavit dated 15th October 2010. But that letter was written a long time after the first plaintiff and the defendant had entered into their written agreement on the 15th February 2010 and can play no part in evidencing common intention at the time the written agreement was entered into.
39 In Codelfa,[17] the Court limited the circumstances in which evidence may be admitted to “assist” in interpreting a contract so that evidence may only be admitted if the language of the contract is ambiguous on its face. That approach has been reaffirmed by the High Court in Western Export Services Inc v Jireh International Pty Ltd,[18] and see also Royal Botanic Gardens and Domain Trust v South Sydney City Council.[19]
[17]Supra
[18](2011) 282 ALR 604
[19][2002] 240 CLR 45 at [62]-[63]
40 In this case the relevant contractual provisions are unambiguous and are, for the large part, admitted. The agreements are in writing and admitted. Contravention of the statute is conceded by the plaintiffs. Further, there is no evidence before the Court of any discussions that might assist in the claim for relief in rectification. There is simply no factual basis pleaded and no evidence that could be led that could support a case for rectification in the way now pleaded. The parties could not have agreed to avoid the consequences that flow from the plaintiffs’ failure to comply with the relevant provisions of the Act.
41 Mr Thompson seeks to rely upon an interlocutory decision of her Honour Justice Cameron on Oliver Hume (Australia) Pty Ltd v Land Source Australia Pty Ltd,[20] a decision of her Honour dated 6 March of this year. That, too, was a case where the plaintiff, an estate agent, claimed commission, and it was resisted on similar grounds to what the defendant seeks to make out in this case. At paragraph [14], her Honour sets out that the plaintiff submits (as here) that it has substantially complied with the requirements of the Act and seeks to amend its statement of claim to rely upon the doctrine of rectification to rectify the sale agreements to remedy any failure in the sale agreements to comply with the provisions of the Act. Her Honour was dealing with an application by the plaintiff to file and serve an amended writ and statement of claim. Her Honour set out the issue before her in paragraph [27], when she said that the threshold issue to be decided on an interlocutory basis is whether s50 of the Act precludes the Court from granting leave to plead rectification of the sale agreements. Her Honour noted that there was no authority which expressly deals with the availability of rectification in the context of the Act. Her Honour also noted that in analogous cases, courts have held that estate agents cannot avoid the requirements of similar legislation by relying upon equitable principles such as estoppel, restitution, quantum meruit and unjust enrichment. Her Honour referred to a decision of Habersberger J in Maxwell v Moorabool Developments Pty Ltd,[21] where Habersberger J stated that the wording of s50 of the Act “… could not have been wider or stronger” and, would bar any claim whether in contract or in equity such as restitution and unjust enrichment.
[20][2015] VSC 77
[21][2004] VSC 392 at paragraphs [210]-[211]
42 At paragraphs [38] and [39], her Honour went on to add:
“It is clear from the plain and ordinary meaning of the words of the Estate Agents Act that the legislation is intended to have a strict operation. There is no scope, on that plain reading, for distinguishing between sophisticated parties or those who may be commercially inexperienced. Given the construct of the legislation, harsh consequences may follow from a failure to comply with its terms.
The authorities have construed such provisions strictly. They stand for the proposition that it is not for litigants to seek the aid of equity to nullify what Parliament has decreed, nor to permit parties to recover remuneration or commission in clear circumvention of Acts of Parliament.”
43 Justice Cameron, in the interlocutory application before her, permitted an amendment to the writ and statement of claim enabling the plaintiff to plead rectification. Her Honour’s decision is not binding on me, as it was interlocutory and, there is nothing in the ruling that shows how the case was to be put before her. I am grateful for Mr Thompson bringing this matter to my attention, because the cases referred to by her Honour, and indeed the statements of principle made by her Honour herself, show how strong the defendant’s claim in the Summons is.
44 In argument, Mr Thompson could not point to any evidence by which the plaintiffs could prove the rectification sought to be pleaded. In this case, the breaches of the Act are admitted and clear, and there has been no evidence put forward that would show that at trial the claim for rectification would have any prospect of success.
45 In argument, I raised with Mr Thompson whether he had given any consideration to whether the principles of illegality could be called in aide, especially in relation to the Defence to the Counterclaim. I raised that, as it seemed to me that I had a duty to do so, and I allowed Mr Thompson further time to make some further brief submissions, if he was so instructed. In due course he did file further brief submissions on that issue as did counsel for the defendant. Having considered the matter I am of the opinion that the agreements between each of the plaintiffs and the defendant cannot be said to be void for illegality.
46 The defendant/plaintiff by counterclaim must succeed on the Summons. The plaintiffs’ claims cannot succeed. The claim must be dismissed applying rule 23.02.
47 For the same reasons the plaintiffs/defendants by counterclaim have no defence to the counterclaim made against each of them and in my opinion there is no reasonable prospect of either defendant successfully in defending the counterclaim. For these reasons, the defendant/plaintiff by counterclaim should have judgment on the counterclaim against each of the defendants to the counterclaim.
48 I will hear the parties on the form of the orders and costs.
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