Fitzpatrick v Brunskill

[2002] QDC 369

DISTRICT COURT OF QUEENSLAND

CITATION:	Fitzpatrick and Anor. v Brunskill [2002] QDC 369
PARTIES:	ROBERT FRANCIS FITZPATRICK and DONNA JULIE FITZPATRICK

Plaintiffs

And

PATRICIA HELEN BRUNSKILL

Defendant

FILE NO/S:	743 of 2001
DIVISION:
PROCEEDING:	Claim
REGISTRY:	Southport
DELIVERED ON:	24 April 2002
DELIVERED AT:	Brisbane
HEARING DATE:	12 March 2002
JUDGE:	Judge McLauchlan QC
ORDER:	Claim awarded
CATCHWORDS:
COUNSEL:	Mr M Campbell for Plaintiffs Mr R Anderson for Defendant
SOLICITORS:	Deborah Jean-Therese Kelly, Lawyer for Plaintiffs D L McLelland & Co for Defendant

REASONS FOR JUDGMENT

1. This is an action for specific performance of an agreement for sale and purchase of real estate on the Gold Coast, the agreement being dated the 8 May 2001. In addition damages are claimed for loss suffered by the plaintiffs arising out of the defendant’s refusal to complete, that being alleged to be a breach of the aforesaid contract. The claim is defended on the basis that the contract was lawfully terminated by the defendant, and there is a counterclaim arising out of the lodgment of a caveat by the plaintiff over the property, the subject of the contract, on or about 19 July 2001.

2. On 30 April 2001 the defendant appointed Paradise Realty as her agent to sell the property at 120 Barrier Reef Drive, Robina. On 8 May, 2001 a contract was entered into by the defendant as vendor and the plaintiffs as purchasers relating to that property, the agent being therein identified as Paradise Realty Gold Coast Pty Ltd. The purchase price was $225,000 and a deposit of $10,000 was paid. The date of settlement was fixed for 6 August 2001 and the Gold Coast was nominated as the place for settlement. The contract was subject to and conditional upon a satisfactory building and test report within 14 days of the date of the contract but nothing now turns on that provision. The contract was also subject to finance in an amount sufficient to complete, and the finance date is expressed to be “14 days” which I take to be a shorthand way of stipulating a period of 14 days from the date of the contract. Detailed provisions in relation to the finance condition are contained in the schedule headed “Terms of Contract for Houses and Land”. Clause 3 of that document provides as follows:-

“3.

Finance

3.1	This contract is conditional upon the Buyer obtaining approval of a loan for the Finance Amount from the Financier by the Finance Date on terms satisfactory to the Buyer. The Buyer must take all reasonable steps to obtain approval.
3.2	The Buyer must give notice to the Seller that:

(1) approval has not been obtained by the Finance
Date and the contract is terminated; or

(2) the finance condition has been either satisfied

or waived by the Buyer.

3.3	The Seller may terminate this contract by notice to the Buyer if notice is not given under clause 3.2 by 5 pm on the Finance Date. This is the Seller’s only remedy for the Buyer’s failure to give notice.
3.4	The Seller’s right under clause 3.3 is subject to the Buyer’s continuing right to terminate this contract under clause 3.2(1) or waive the benefit of this clause 3 by giving written notice to the Seller of the waiver.”

1. Other provisions relevant to the dispute between the parties are contained in clause 10 of the schedule and in particular in clause 10.1 and 10.4. 10.1 relates to the agent, and provides that the agent is appointed as the seller’s agent to introduce a buyer. Clause 10.4 is concerned with notices given under the contract and provides as follows:-

“10.4

Notices

(1)	Notices under this contract must be in writing and may be given by a party’s solicitor.
(2)	Notices are effectively given if:

(a)	delivered or posted to the other party or its solicitor; or
(b)	sent to the facsimile number of the other party or its solicitor.

(3)	Posted notices will be treated as given 2 business days after posting.
(4)	Notices sent by facsimile will be treated as given when the sender obtains a clear transmission report.
(5)	Notices given after 5 pm will be treated as given on the next Business Day.
(6)	Notices or other written communications by a party’s solicitor (for example, varying the Inspection Date, Finance Date or Settlement Date) will be treated as given with that party’s authority.

1. It will be noted with respect to clause 3, that no time is stipulated for the giving of the notice required by clause 3.2, so that such a notice may be given at any time after the formation of the contract, up until the completion or other termination of the contract. The continuing right which the buyer has to do this under clause 3.2 is recognised in clause 3.4, although the reference is imperfect in that it refers only to the buyer’s right to waive the benefit of clause 3, whereas it is clear that the buyer also has the right to give notice that the finance condition has been satisfied. Since the giving of either notice has precisely the same effect, it is of little consequence that clause 3.4 fails to refer to the latter.

2. Clause 10.1 states the limited extent of the agency between the seller and the agent. As a matter of general law it is clear, in any event, that the appointment of an agent to sell property does not constitute the agent, an agent for the seller for the purposes of the contract generally. The estate agent, although referred to as an agent is an independent person, and, for example, has no authority to accept a deposit on behalf of the seller: Petersen v Maloney (1951) 84 CLR 91; Sorrel v Finch 1977 A.C.728. In Petersen, at page 94 the judgment reads as follows:

   “In connection with sales and purchases of property the word “agent” is apt to be used in a misleading way. The legal conception of agency is expressed in the maxim ‘qui facit per alium facit per se’, and an ‘agent’ is a person who is able, by virtue of authority conferred upon him, to create or affect legal rights and duties as between another person, who is called his principal, and third parties. When a person is employed to find a buyer of property, he is commonly said to be employed as an agent, and the term ‘estate agent’ is a common description of a class of persons whose business is to find buyers for owners who wish to sell property. But the mere employment of such a person under the designation of agent does not, apart from the general rule that the employer will be responsible for misrepresentations made by him, necessarily create any authority to do anything which will affect the legal position of his employer. He may, of course, be given any express authority which the employer thinks fit to give him, and estoppels may arise, but the law does not imply from the mere fact of employment to find a purchaser a general authority to do on behalf of the employer anything which may be incidental to the effecting of a sale. In the present case it I clear that the plaintiff employed Pulbrook to find a purchaser for her house and its contents. But it must, we think, be regarded as settled law that an agent employed to find a purchaser has no implied authority to receive the purchase money in the sense that a receipt by him is a receipt by his principal and will therefore discharge the purchaser…. . On the other hand, the act of the agent in receiving the purchase money may, if he has purported to receive it on behalf of the vendor, though without authority, be subsequently ratified by the vendor.”

3. In Sorrell v Finch, at page 753 the judgment of Lord Russell states:-

   “An estate agent, despite the style, is an independent person, engaged, ordinarily on a commission basis, to find and introduce a willing purchaser: he is not the agent of the vendor to contract on his behalf: his actions are attributable to the vendor only in a strictly limited case, as for example the making of representations as to the condition of the property. In my opinion an estate agent has neither actual (implied) nor ostensible (apparent) authority to ask for or receive a pre-contract deposit as agent for the vendor.”

4. As is provided in clause 10.1, the agent appointed in relation to this contract is appointed merely to introduce a buyer. In my view the agent is not the agent of the vendor for any other purpose and in particular, the agent is not the agent of the vendor for the purpose of the giving of notices to the vendor, which are required to be given to the vendor in relation to the satisfaction or non-satisfaction of conditions to which the contract is subject or in relation to anything else arising under the contract, including the exercise of a power to terminate the contract.

5. The provisions in relation to notices are clearly expressed and call for little comment. No doubt, although a notice may be given by a party’s solicitor, it may also be given by the party, and it also seems to me that although sub-clause (2) refers to circumstances in which notices are “effectively given”, this does not imply that all other notices are to be treated as not effectively given. In other words, I take the purpose of the clause to be to put beyond argument the effectiveness of notices given in particular ways, but that that is without prejudice to the possibility of giving an effective notice in other ways. If the contrary had been intended, it would have been appropriate and simple to have used the expression “if, and only if” in sub-clause 2. However notices are given, however, they are required to be in writing under sub-clause (1) and the dates upon which they will be treated as given are also regulated by other sub-clauses of that clause.

6. The “Finance Date” provided for in the contract was 22 May, 2001. Prior to that date, on 17 or 18 May Miss Keenan-Dunn, who represented the agent advised the male plaintiff in the course of a conversation with him that the defendant no longer wished to complete the sale to the plaintiffs. Nevertheless, the plaintiffs obtained approval from the financier by the late afternoon of 22 May and their solicitor Ms Deborah Kelly, prior to 5 pm on that date, telephoned the defendant and told her that finance had been approved. The defendant told Ms Kelly that she did not have a facsimile machine, and she either could not or would not provide the name of her solicitor. Following that conversation it seems that Ms Kelly forwarded to Paradise Realty by facsimile a letter which is addressed to Diamonds Solicitors, and which indicates a copy forwarded to Paradise Realty. The letter is dated May 22, 2001 and refers to another real estate transaction having nothing to do with the parties in this case. The letter referred to that unrelated matter and advised that Ms Kelly’s clients had received finance approval. Miss Keenan-Dunn received that facsimile letter. On the same day another facsimile letter was sent to Paradise Realty, and addressed accordingly which referred to the correct transaction and again confirmed a verbal advice that finance had been approved. The evidence does not establish however that that facsimile letter had in fact been sent, and Miss Keenan-Dunn has no recollection or record of having received it.

7. The first letter, even if sent to the defendant’s solicitor would not have been an effective notice, because it referred not to the transaction in question but to some unrelated matter, and the advice given to the estate agent could not be an effective notice under clause 10.4 because there is no evidence that the estate agent was constituted the agent of the seller to receive such notices. Indeed, the evidence in relation to the agency between the seller and the estate agent points to a contrary conclusion.

8. The verbal notification given to the seller by Ms Kelly on 22 May was clearly an ineffective means of giving notice in accordance with the contract.

9. Miss Kelly might have arranged to have a notice delivered to the defendant on 22 May. It may not have been possible to do this by 5 pm but, as already noted, a notice under clause 3 was not required to be given by that time, the failure to do so merely enlivening a power on the part of the defendant to terminate the contract by an effective notice to the purchasers.

10. On 23 May, 2001 the purchasers’ solicitor, Deborah Kelly wrote to the defendant at her residential address, referring to her previous oral advice that finance had been approved and that the contract was unconditional. She asked the defendant to provide her with “contact details” of her solicitors so that she could forward transfer documents and attend to pre-settlement matters. It is not contested that that letter was posted on the date on which it was written. On the same date Donald W Dickie, Solicitors wrote to the real estate agent, Paradise Realty Gold Coast Pty Ltd by facsimile advising that they acted on behalf of the vendor. The letter referred to clause 3.3 of the contract and continued, “we are instructed to hereby give notice that the Seller terminates this contract for the Buyer’s failure to satisfy condition 3.2.” The letter further advised that the agreement dated 8 May 2001 was now at an end and requested a return of the Buyer’s deposit as soon as possible. On 24 May 2001 that letter was forwarded by facsimile by the real estate agent to Deborah Kelly, Solicitors.

11. In writing the letter of 23 May 2001, Donald W Dickie, Solicitors appear to have been under the impression that the real estate agent was the agent for the purchasers and, indeed this appears to have been the view of the vendor, Mrs Brunskill. However this contention which also is reflected in the pleadings, was abandoned at the hearing, and it is clear enough that the estate agent was in fact the agent for the vendor. Consequently the letter to the estate agent from Donald W. Dickie, Solicitor could not, in itself, constitute notice to the purchaser under the contract.

12. A copy of that letter was forwarded by facsimile from the estate agent to Deborah Kelly, Solicitors on 24 May, 2001. It appears from the evidence of Ms Keenan- Dunn, that prior to faxing the letter from Donald W. Dickie, Solicitors to Deborah Kelly’s office, she rang the office, because the letter had sought the return of the deposit. She believes that she was asked by Deborah Kelly or a member of her staff to fax a copy of the letter to the solicitor’s office, which she did. It would appear that her principal interest in the letter from Donald W. Dickie, and the reason she telephoned Deborah Kelly, was that she was being asked to return the deposit to the vendor who was the estate agent’s “client” in the matter.

13. The situation with respect to the letter from Donald W. Dickie appears to me to be as follows. Notice was purportedly given under the contract terminating the agreement and requesting the return of the deposit. This notice was not given to the purchasers, but instead to the vendor’s own agent. There is in my view no basis upon which that could be regarded as notice to the purchasers, which is what is required by the contract, however that notice may be given. The letter came into the hands of the purchasers’ solicitor, as a result of discussions between the estate agents and the solicitor or her office. It did not come into the hands of the solicitor by reason of anything stated or implied in the letter from Donald W. Dickie. It seems plain, on the perusal of that letter that it was intended to be and to constitute a complete notice under the contract. The fact that for reasons which had nothing to do with Donald W. Dickie or the vendor, a copy of the “notice” came into the hands of the purchasers’ solicitors on 24 May, 2001 does not, in my view, produce the result that notice has been given to the purchasers under the contract.

14. I have been referred to two authorities on behalf of the defendant. The first is ex parte Dally-Watkins; re Wilson (1955) 72 NSW Weekly Notes 454. Relevantly, that case referred to service of a notice in respect of a breach of covenant under a lease, the question being whether there had been proper service as required by s.170 of the Conveyancing Act 1919-1943. Section 170 provided that any notice required by the Act to be served should be in writing and should be sufficiently served if delivered personally or if left at the last known place of abode or business of the person to be served; or if sent by post in registered letter; or if served in such manner as the court may direct. In this case the notice was not served personally as indicated in the section but was served by being sent in a letter written by the respondent’s solicitors to the applicant’s solicitors, that being done pursuant to an earlier request made by the applicant that communications intended for her should be sent to her solicitors. Evidence also established that she in fact received the notice through the medium of her solicitors. At pp.456, 457, Street C.J. giving the judgment of the court stated:

    “Section 170 is not intended to put a clog on bringing a notice to the attention of the person to whose attention it is intended to be brought. It is a section designed to extend or widen the sets of circumstances which will amount to a sufficient service, but it is quite clear that it is not intended to be an exclusive description and to prescribe the only ways in which service can be effected. Here the notice was in writing. It was brought to the attention or into the possession of the application through the medium of her selected channel, namely, her solicitors and I think it is impossible to suggest that that is not a sufficient service within the requirements of the Conveyancing Act.”

15. That case is readily distinguishable, since service was effected by the means actually stipulated by the person upon whom the notice had to be served.

16. The second case is Spectra Pty Ltd v Pindari Pty Ltd (1974) 2 NSWLR 617. This case again concerned a lease, specifically an option to renew. The relevant provision in the lease read:

    “Should the lessee desire to exercise this option it shall give the lessor notice in writing to be sent by pre-paid registered mail to the lessor’s last known place of residence of its desire so to do not later than ( ) calendar months prior to the expiration of the term hereby granted.”

    The lessee wrote to the lessor exercising the option, but not by registered post, and the lessor received the letter before the expiration of the original term of the lease. At p.623 Wootten J observed:-

    “… in the absence of a very clear indication of a contrary intention, it would not be reasonable to construe a provision for service by registered mail as excluding the giving of notice by other equally expeditious means which do in fact result in the actual receipt of the notice by the offeror, eg personal delivery or unregistered mail, although of course in the latter event the offeree will run the risk of non-delivery.”

17. This again was a case of a notice deliberately intended for and received by the correct party, but by a means other than that provided for in the relevant document. Again, I consider the authority to be distinguishable. Both this and the former case concerned notices addressed to the party upon whom it was required to be served. In the present case the “notice” is addressed to another entity altogether, apparently in the belief that that entity was the agent of the purchasers for that purpose. That that notice actually came to the attention of the purchasers was entirely fortuitous, since, for example, the solicitors might not have requested a copy of the letter to be sent to them but simply advised the estate agent that the status of the contract was in dispute and that the deposit was not be refunded. Although the discussion between the estate agent and Deborah Kelly or a member of her staff, no doubt extended to the assertion made in the letter on behalf of the vendor that the contract was terminated by that letter, that could not in itself constitute notice, which the contract required to be in writing, and which could not in any event be given on behalf of the vendor by the estate agent.

1. In my opinion the letter from Donald W. Dickie, Solicitor is not a notice given under the contract, or sufficient for the purposes of the contract, because the party giving the notice intended it to be given to the addressee of the letter acting on the view, which was false, that the addressee was the agent of the purchasers to receive such a notice. So far as it constituted or purported to constitute a notice in my view that document was void of effect, and the fortuitous circumstance that a copy of it was passed on by the estate agent to the purchasers’ solicitor does not alter that situation.

2. On 24 May, 2001 Deborah Kelly sent by facsimile transmission to Donald W. Dickie a letter of that date and enclosed a copy of her letter to the defendant of May 23, 2001.

3. The vendor’s solicitors responded to the facsimile of 24 May 2001 from the purchasers’ solicitor by a letter of 25 May which was also sent by facsimile transmission and received at 10.14 am on May 25. That letter reiterated that, as far as the vendor was concerned, the letter to the agent dated 23 May 2001 rightfully terminated the contract and that that remained the situation. In a subsequent letter dated 28 May, 2001 from the vendor’s solicitors it is said:-

   “The reason that our letter terminating the contract was forwarded to Paradise Realty was because the writer was unaware of a solicitor acting for the purchasers at the time. Further even if the facsimile to the agents did not constitute notice of termination our letter of 25 May 2001 does.”

4. However it seems to me to be clear that the letter of 25 May 2001 does not purport to constitute a notice in itself but rather refers to a previous notification which is asserted to have been effective notice.

5. The letter of May 23 from Deborah Kelly to the vendor is, in my view, to be treated as a written confirmation of an earlier oral notice, and as such constitutes written notice in accordance with the contract. Pursuant to s.10.4 of the contract the notice is treated as given 2 business days after posting, which is to say May 25, 2001. The copy of the letter which was faxed to Donald W. Dickie, Solicitor on 24 May, 2001 by facsimile is treated as having been given on that day. The result of this is, in my opinion, that notice that the finance condition had been satisfied was given by the purchasers under clause 3 of the contract, although subsequent to the finance date, before the seller had terminated the contract pursuant to clause 3.3. The contract thereafter remained on foot, and the vendor has, without justification, refused to complete the contract. No issue with respect to the specific performance of the contract has been raised other than the issue that the contract was lawfully terminated by the vendor, and in respect of that issue I find in favour of the plaintiffs.

6. As well as specific performance of the contract the plaintiffs seek damages for losses suffered as a result of the defendant’s breach. A claim is made for storage costs of the plaintiff’s furniture, which would not have had to be met had the contract been duly completed by the defendant. These amount to $2,357.05 and the plaintiff has given evidence that he has paid that amount. In addition to that there is also a claim for removal costs which appears to relate to the costs that will be incurred in transporting furniture from the storage facility at Nerang and from the unit occupied by the plaintiffs in Surfers Paradise, to the house at Mermaid Waters. One quote is for the sum of $840 and the other quote is for the sum of $1,800. The first quote condescends to some detail but the second does not. The male plaintiff added very little to what can be gleaned from the quotes in question. In the circumstances I think that, on the state of the evidence, a claim is made out for a sum of approximately $800 for removal costs. There is then a further claim for what is termed “additional travelling costs” amounting to $7,001.67. It is conceded that the amount is overstated because the distance involved has been overstated and there is also evidence that the motor vehicle in question is not the property of the plaintiffs personally, but belongs to a business in which the purchasers are interested. In my view the claim for travelling costs is attended by too much vagueness and uncertainty to permit an award to be made under that head. In the result I will award damages in the sum of $3,157.05 being the amounts referred to above in respect of removal costs and storage costs.

7. The defendant has counterclaimed alleging that the caveat which was lodged by the plaintiffs over the property, the subject of the contract, on or about 19 July, 2001 was lodged without reasonable cause within the meaning of that expression in s.130 of the Land Title Act 1994. Since, in accordance with these reasons, the plaintiffs are entitled to have the property conveyed to them pursuant to the contract, it follows that they did in fact have reasonable cause for the lodgment of the caveat, the defendant alleging that they had no such right. The counterclaim is therefore dismissed.

8. There will be judgment for the plaintiffs in the sum of $3,157.05 for damages for breach of contract and I declare that the agreement in writing dated 8 May, 2001 between the plaintiffs as buyers and the defendant as seller for the sale and purchase of real property situated at 120 Barrier Reef Drive, Robina for $225,000.00 should be specifically performed and carried into execution. Counsel can prepare a minute of any further orders that may be necessary to be made consistently with these reasons and present it to me for consideration.