Five Star Realty Ltd v. Tabtill No. 2 Pty Ltd as Trustee for the Tabtill Property Trust
[2007] QDC 263
•5 October 2007
DISTRICT COURT OF QUEENSLAND
CITATION:
Five Star Realty Ltd v Tabtill No. 2 Pty Ltd as Trustee for the Tabtill Property Trust [2007] QDC 263
PARTIES:
FIVE STAR REALTY PTY LTD
Plaintiffv
TABTILL NO. 2 PTY LTD AS TRUSTEE FOR THE TABTILL PROPERTY TRUST
DefendantFILE NO/S:
440 of 2006
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
Southport
DELIVERED ON:
5 October 2007
DELIVERED AT:
Brisbane
HEARING DATE:
23 August 2007
JUDGE:
O’Sullivan DCJ
ORDER:
(1) I dismiss the plaintiff’s claim.
(2) I order the plaintiff to pay the defendant’s costs of the
action to be assessed on the standard scale.
CATCHWORDS:
Property Agents and Motor Dealers Act (2000), Forms 22a and 27c; agents’ entitlement to Commission; whether an open listing continued; which legal entity was the selling agent.
COUNSEL:
Mr T Collins for plaintiff
Mr K Howe for defendant
SOLICITORS:
MBA Lawyers for plaintiff
Mott & Associates for defendant
REASONS FOR JUDGMENT
The plaintiff sues the defendant for commission on the sale of a unit in “Belle Maison” (the unit). The parties have agreed that the quantum of the commission is $131,120.00 which includes GST.
Five Star Realty Pty Ltd
The plaintiff is Five Star Realty Pty Ltd. It is the holder of a licence under the Property Agents and Motor Dealers Act (2000), (the Act), Licence No. 2004742.
A.Mr Moore gave evidence at trial that Five Star Realty Pty Ltd moved out of its premises in Broadbeach and closed down those premises on 30 June 2006. He also gave evidence that the company continued to operate and received commission and continued to operate a Trust Account.
B.Mr Creswick gave evidence that he asked Mr Moore on Sunday 1 July “what happened to Five Star Realty?” (when he noticed it was not on the contract) and Mr Moore told him that the company had closed business on 30 June and it did not have a Trust Account any more. (T102).
C.Mrs Creswick gave evidence that at the same meeting, when Mr Moore first came into the room, he told her husband and her that he had closed down Five Star, it didn’t have a Trust Account; she immediately said, “Oh well, you’re retiring then, Graham, are you?” and his reply was, “Oh no, no, I’ll be operating, you know, from home.” She noticed that the agency on the contract was Silvafox, and she said to Mr Moore, “Oh is that you? Is that you?” and he said, “Whatever.” (T149).
The Form 22a under the Act (Exhibit 4) shows the agent as “Five Star Realty Pty Ltd”, under heading 2 “Agent”.
On page 5 of the Contract between the parties, under the heading 9 (“signatures”), the agent’s name is “Grahame Moore (Five Star Realty)”, and the signature is “G H Moore”.
Graham Moore
Grahame Harvey Moore is the holder of a licence under the Act, Licence No. 2204093. His name appears under heading 9 of the Contract (as described above). His name also appears in the Form 27c under heading 1 “Selling Agent details” as “Grahame H Moore” and Licence No 2204093.
Contracts
The REIQ Contract in issue in the proceedings is dated 1 July 2006. It shows the agent as “Silvafox Realty”, the seller as “Tabtill No. 2 Pty Ltd as Trustee for the Tabtill Property Trust” (the defendant in these proceedings), the buyer as “Dwicks Enterprises Pty Ltd as Trustee for C & I Family Trust”. The Contract date is initially shown in handwriting as 30 June 2006 and is crossed out and the date 1 July 2006 is inserted in handwriting. The purchase price is shown as $4,750,000.00. The Contract is signed by the buyer and witnessed by Mr Moore.
There is a further Contract dated 5 July 2006 with the same seller and buyer and purchase price, signed by the buyer and witnessed by someone whose signature is indecipherable but is not Mr Moore’s. It is not in issue in the trial that the unit was subsequently sold by the defendants in these proceedings to the buyer nominated in the Contract and the Contract was signed by Christopher McKibben, who gave evidence at trial in the plaintiff’s case.
Silvafox Realty
Silvafox Realty is a business name which was registered on 19 June 2006; its place of business is Runaway Bay and it is owned by Kingbrook Pty Ltd as Trustee for the Moore Family Trust with a start date of 16 June 2006.
During re-examination, Mr Moore agreed that the business name “Silvafox” is owned by Kingbrook as Trustee for the Moore Family Trust and that Kingbrook is a company of which he is a director. Kingbrook conducted Silvafox as of 1 July 2006. It was put to him that he did not conduct Silvafox and he agreed. (T79).
Agency
The plaintiff relies on an agency agreement between the plaintiff and the defendant, in Form 22a (Exhibit 4). There was evidence at trial about the agency, which included the following:-
| Open listings | “You sell” “Another agent sells” In 5.1 open listing is ticked. Mr Creswick said he did not tick it. | Mr Moore says Mr Creswick put this tick in. Mr Creswick says he did not, and it was not on the Form 22 when he signed it. |
| Sole agency | A cross against “you sell” and ticks against “another agent sells” and “agent sells”. The box for sole agency has a cross and a start date of 7/7/05 and an end date of 5/9/05. | Mr Moore and Mr Creswick gave evidence that the sole agency heading was ringed by Mr Creswick, he put the cross in the sole agency box and he put in the dates. |
| Exclusive agency | Ticks against “you sell”, “another agent sells” and “agent sells”. This box has been crossed out with the word “no”. The box “exclusive agency” has a cross against it and start date of 7/7/05 and an end date of 5/9/05. There is a cross against these entries and a handwritten “no” beside the large cross. | Mr Moore and Mr Creswick gave evidence that the cross in the “exclusive agency” was generated by a computer, the large crosses and the two “no” were in the handwriting of Mr Creswick. |
| Clause 5.2 – “the appointment will continue as an open listing until notified”, in handprinting. | Mr Moore gave evidence that this is his tick and his handprinting and it was there at the time Mr Creswick signed the Form 22a. Mr Creswick gave evidence that it was not there at the time he signed and is neither his tick nor his handprinting. |
The schedule to the REIQ Contract includes the notation in handprinting “Owner is Firm at $5 million”, and this is initialled by Mr Creswick. The commencement of the appointment is noted as 7 July 2005 and is initialled by Mr Creswick and signed by Mr Moore as agent.
It was in issue in the trial who ticked the box “open listing” in clause 5.1, when the words “the appointment will continue as an open listing until notified” were written. The plaintiff contends that Mr Creswick, on behalf of the defendant company gave the plaintiff a sole agency from 7 July to 5 September 2005 and an open listing thereafter, until notified. The defendant contends that Mr Creswick on behalf of the defendant gave Five Star Realty Pty Ltd a sole agency for a particular buyer for the nominated period, that there was no open listing thereafter, and a further Form 22a was proffered at the meeting on Sunday 1 July in the name of Silvafox but not signed. Counsel for the defendant submitted that Form 27c, together with Mr Moore’s admissions at trial, support the proposition that the plaintiff was not the agent, and is therefore not entitled to any commission.
The plaintiff’s case is that although Form 27c shows Mr Moore as the agent, this was in error; at the time of filling in Form 27c, Mr Moore did not refer to Form 22a which shows Five Star Realty Pty Ltd as the agent. Counsel for the plaintiff submitted that the reference to “Silvafox” in the Contract is consistent with the plaintiff’s case that Mr Moore had a conversation with Mr Creswick in which he explained that Mr Moore wished the commission to go to Silvafox rather than Five Star Realty for reasons connected with winding down Five Star Realty Pty Ltd and taxation purposes and because it was more convenient for the payment to go to Silvafox.
Mr Moore’s evidence concerning Silvafox was:
“Silvafox is the private company that I have, that I work from home. My retirement company, you might say.” (T38).
He said he had a conversation with Mr Creswick on Sunday, 1 July when Mr Creswick was pursuing the Contracts. Mr Moore said to him:
“Do you mind if we name the agent as Silvafox Realty in this case?”
(Silvafox had already been written onto the Contract prior to the meeting).
Mr Creswick said, “No. Why?” Mr Moore said:
“Well, if it’s going to be a longer settlement, I am trying to wind down the other company and I want to get my taxation done for the end of the year. This way, it will still go on. I’ll – the same person will get the commission. It will be Silvafox Realty instead of Five Star.”
Mr Creswick said, “All I want to do is to get the money.” (T39-40).
Mr Moore admitted in cross-examination that the agent in the transaction was Silvafox. He agreed that Silvafox did not have a trust account. It was put to him in cross-examination that he asked Mr Creswick to sign a Form 22a for Silvafox which he had taken to the meeting, and his response was: “That’s a lie. At no time did I ever put a 22a in front of John and Shan Creswick to be signed.” (T52).
Mr Moore agreed in cross-examination that at the meeting Mrs Creswick had referred to the agent being Silvafox and had a bit of a giggle about that. (T61).
Mr Moore was asked in cross-examination to explain the name “Grahame H Moore” on Form 27c. His response was:
“At the time that we were doing the Contracts, I asked John Creswick the question, ‘Does it matter if I change the agent to Silvafox Realty?’ He asked me why and I said, ‘Because I’m trying to wind down Five Star Realty taxation-wise, and if this is going to be a long settlement, I can’t draw it back into that year, any rate.’ Mr Creswick said he had no objection and ‘what you do with the commission is up to yourself’.” (T72).
In cross-examination it was put to Mr Moore that he deliberately put the different Licence No. on Form 27c because he, Grahame Moore, was to be the selling agent. His response was:
“As a matter of fact, when we did the Contract originally, it was in Five Star Realty, right? And I altered the first page, right? … now it says Silvafox. When I first spoke to McKibben, I did that in Five Star Realty, so the licence numbers were the same. When I then did it in Silvafox and explained why I had to alter that first page, he signed it, Mr McKibben. He was quite happy to do that when we did the change of signatures, but we thought it was going to be a 90 day settlement, and my idea was that if that was the case I could not put back into the financial year with my taxation something that settles 90 days after the end of the financial year. So I then put it into Silvafox. There’s nothing wrong with that.” (T75).
Mr Moore agreed that Mr and Mrs Creswick first heard of Silvafox for the transaction when Mr Moore showed it to them on the Sunday night. He said: “If either had an objection they would have done it then and I could have done a 22a on the spot but they had no objection.” He was then asked: “You had a 22a relating to Silvafox?” to which he replied: “Still in Grahame Moore’s name.” It was put to him that Mr Creswick would not sign it and he said: “I never had a 22a there in front of him at any time.” (T77). In the same passage of evidence Mr Moore said:
“…. It was Silvafox, Grahame Moore, that was the selling agent and he (Mr Creswick) didn’t object.” (T77).
Various entries in Mr Moore’s diary were tendered, including the entry on 30 June which says “close Five Star Realty”. He explained that the front doors had to be closed because another agent was taking over the following morning, the office was closing, the lease had run out because someone else had taken over the lease and there was a new agent from 1 July. He said the business was still operating but the office was closed. He was then asked: “Hence the reason why you say that the selling agent is to be Silvafox?” to which he replied: “Correct.” (T78). It was put to him in cross-examination that the selling agent on Form 27c is Grahame Moore under Licence No. 2204093 and asked whether this was true, to which he replied: “That’s true.” (T79).
There was evidence at trial concerning the sequence of events surrounding the listing of the unit, an offer in 2005 from an overseas buyer, and conversations in June and July 2006. Most of this evidence is not directly relevant to the key issues in this case and goes to the issue of the credibility of Mr Moore and Mr Creswick.
Mr Moore gave evidence of conversations with Mr Creswick when he found out that a tenant had been put in the unit, and later finding out that the unit had been vacated, whereupon he asked Mr Creswick whether he could put the unit back on the market again because he had taken the window card out of his window and Mr Creswick agreed. (T23). Mr Creswick denies this conversation. He says that the only conversations that occurred between the signing of Form 22a in July 2005 and being approached with the offer from Mr McKibben were about a possible overseas buyer.
In evidence-in-chief, Mr Moore was asked about the selling agent details in Form 27c and whether he had looked at Form 22a at the time he filled in Form 27c, and his reply was:
“No, I didn’t your Honour, I’m sorry that I have made a mistake there, but the mere fact that Mr Creswick was working with me as Grahame Moore from Five Star Realty, it is not as if I changed to a different person. I’ve made a mistake there, put the wrong numbers in. It’s very similar to my Licence held for the proprietary limited Company of Five Star Realty, but it is the wrong number.” (T34).
Mr Creswick was cross-examined about conversations with Mr Moore concerning a tenant for the unit and the relationship between that tenancy and the unit being for sale. He was unable to recall any details of the circumstances whereby someone came to be living in the unit following a house being burnt down. I find this curious and it does indeed impact on his credibility.
Mr Creswick gave evidence of a conversation in which he informed Mr Moore not to be concerned about the period of the sole agency expiring, that if he had another buyer for the unit all he had to do was to contact Mr Creswick even though it was rented; if Mr Moore found a buyer, “we would have to enter into another agency agreement” (T98).
Mr Moore had a different recollection of a conversation about the expiry of the sole agency, namely, that he rang Mr Creswick, “We’ve got a 60 day sole agency. We’re only 14 days into it and all of a sudden you’ve rented it. What would you like me to do?” and Mr Creswick replied, “Give me a call when the rental ends, which will be December or January.” (T58).
Mr Creswick gave evidence that on the Sunday night he saw a Form 22 in front of him with Silvafox on it. He said he then went to the commission form and said to Mr Moore, “Well, now we better discuss the issue of commission” (T102). This is not consistent with what he had earlier said: “Mr Moore came into the unit, sat down, and said to me, ‘Right, there’s the figure, all the rest of it. Now, let’s negotiate the commission’.” (T132).
I have some difficulty in accepting the evidence that a further Form 22a in the name of Silvafox was proffered to the Creswicks at the meeting.
Mr Creswick was cross-examined extensively as to why he shifted from his initial insistence on a selling price of $5 million to his subsequent agreement to sell for $4.75 million, including furniture. Counsel for the plaintiff submitted that this is relevant to the issue of credibility. I accept Mr Creswick’s evidence that at the time he accepted the lower offer he did so because it fitted in with his commercial interests at that time.
Mr Creswick gave evidence that at the time he gave instructions to Mr Moore to accept $4.75 million, that “absolutely there was no agency agreement” (T130). In cross-examination he was asked, “Why didn’t you get, before any of this went through, why didn’t you insist on an agency agreement being done up?” His reply was that he had trusted Mr Moore and Mr Moore had trust in him.
“The paperwork, the contract, the 22, the 27, the commission, would all be done on the day and furthermore Graham knew that if I got 5 million, he would get full REIQ commission… if there were changes form (sic) that, there would be discussions and negotiations which on the 9th (sic) there were” (T130).
Mr Creswick gave evidence that Mr Moore told him at the meeting that “Mr McKibben was surprised at the commission factor. Mr Moore told me that he assured Mr McKibben that this is going to be nowhere near what he has got to do to get the commission, that he has to go upstairs and negotiate that further” (T131). This was not put to Mr McKibben, and I find that a little curious and relevant to my assessment of the credibility of Mr Creswick.
Mr Creswick gave evidence that he queried Mr Moore as to the reason he had changed Form 27c to Silvafox and Mr Moore told him that “Five Star Realty no longer existed, that it had closed business. It did not have a trust account any longer and that he was going on his own and he was in semi-retirement and this would be the selling agent and that fitted in with the fact that the deposit cheque – I asked him to have that changed over to my solicitor’s trust account because you verified that he didn’t have a trust account any longer.” (T145).
Mrs Creswick gave evidence of a conversation at the unit with Mr Moore, her husband and herself. Earlier in these Reasons, I have referred to evidence concerning the conversation about Silvafox being the agent. She also gave evidence that Grahame had said, “We will have to sign the new form now because we don’t have one signed in Silvafox” (T160). She said there was discussion that a Form 22a “had to be signed before this deal could be done”. (T165). She gave the same evidence as Mr Creswick, namely that Mr Moore said Five Star, “had no trust fund”. (T166).
I agree with Counsel for the defendant in his address that even if there were a continuing open listing, that does not overcome the insurmountable problem of the plaintiff that the agent is Grahame Moore under an entirely different licence to that in Form 22a.
I agree with Counsel for the defendant that it is not open to me to accept the suggestion that Mr Moore and Five Star Realty Pty Ltd are interchangeable. As I have set out at the beginning of these Reasons, it is clear what the legal entities were, and what entities had licences under the Act.
Council for the defendant submitted that the contents of Form 27c, consistent with Form 22a and the evidence of Mr Moore at trial point to Five Star Realty Pty Ltd not being the agent.
Counsel for the plaintiff submitted that there was an agency based on an open listing, and it continued after 5 September 2005, was never terminated, and was “resurrected or utilised when McKibben came on the scene”. (T184).
Counsel for the plaintiff referred me to the execution of Form 22a, the fact that there was no corporate seal, and that it was signed by Mr Moore. He submitted: “It’s obviously intending to bind Five Star Realty and that is the party who always remained.” I am unable to agree that this is obvious. He also submitted that the important thing about Silvafox is that it is not run by Grahame Moore; it is Kingbrook Pty Ltd. He submitted Mr Moore’s writing his name on Form 27c is consistent with Five Star Realty Pty Ltd being the agent and Mr Moore’s mistake was in writing the wrong licence number on Form 27c. He submitted that the real issue is whether the agency agreement with Five Star Realty Pty Ltd had been terminated.
I agree with Counsel for the defendant that it is difficult to go against the evidence of Mr Moore. At trial he was asked repeatedly who the agent was, and he repeatedly said it was him or Silvafox. This is consistent with Form 22a and the Contract. I find that his explanation of a mistake is unconvincing.
I do not accept that the conversation between Mr Moore and the Creswicks was to the effect that nominating Silvafox and payment to Silvafox was a matter of convenience and related to taxation. I prefer the explanation that Five Star Realty Pty Ltd had ceased to exist as at 30 June 2006, and Mr Moore realised this, and either proffered a Form 22a to Mr Creswick or simply hoped the problem would go away by asking for payment to be made to Silvafox.
Counsel for the plaintiff submitted that the presence of Mr Moore’s name on Form 27c is explained in terms that he did not use Kingbrook and if he was going to use Silvafox/Kingbrook, he would have used it; he used Silvafox to put it into an account that was more convenient (T189). The crucial finding which Counsel for the plaintiff invites me to make is that Mr Moore wanted the money to go to Silvafox as a matter of convenience, not because it was the agent for purposes of the sale. I find that the latter is more probable.
I find that the plaintiff has failed to discharge its onus of proving that it was the selling agent for purposes of the sale.
I dismiss the plaintiff’s claim.
I order the plaintiff to pay the defendant’s costs of the action to be assessed on the standard scale.
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