Gaocrew Pty Ltd v Keech

[2001] NSWSC 25

CITATION:

Gaocrew Pty Ltd v Keech & Anor [2001] NSWSC 25

CURRENT JURISDICTION:

Administrative Law

FILE NUMBER(S):

SC 30057/2000

HEARING DATE(S):

29 January 2001

JUDGMENT DATE:

2 February 2001

PARTIES :

Gaocrew Pty Ltd
(Plaintiff)

Royston Charles Keech
(First defendant)

Ian McDonell (Deputy Chairperson Fair Trading Tribunal)
(Second defendant)

JUDGMENT OF:

Master Harrison

LOWER COURT JURISDICTION :	Fair Trading Tribunal
LOWER COURT FILE NUMBER(S) :	CM 1999/7425
LOWER COURT JUDICIAL OFFICER :	Deputy Chairperson Fair Trading Tribunal

COUNSEL :	Mr J E Robson (Plaintiff) Mr J-J T Loofs (First Defendant)
SOLICITORS:	Kernans Lawyers Terrigal (Plaintiff) Stoikovich Banfield (First defendant)
CATCHWORDS:	Appeal decision of Fair Trading Tribunal
LEGISLATION CITED:	Fair Trading Act 1998 Property Stock and Business Agents Act 1941
CASES CITED:	BP Refinery (Westernport) P/L v Shire of Hastings (1978) 58 ALJR 20 Codelfa Constructions Pty Limited v State Rail Authority of NSW (1982) 149 CLR 337
DECISION:	(1) The decision of the Referee dated 11 July 2000 is affirmed; (2) The summons is dismissed; (3) The plaintiff is to pay the first defendant's costs.

8

THE SUPREME COURT
OF NEW SOUTH WALES
ADMINISTRATIVE LAW DIVISION

MASTER HARRISON

FRIDAY, 2 FEBRUARY 2001

30057/2000 - GAOCREW PTY LTD v
ROYSTON CHARLES KEECH & ANOR

JUDGMENT (Appeal decision of Fair Trading Tribunal)

1   MASTER: By summons filed 8 August 2000 the plaintiff seeks firstly an order that the decision dated 11 July 2000 of Mr Ian McDonell Deputy Chairperson Fair Trading Tribunal (the second defendant) in proceedings CM 1999/7425 be set aside and secondly, an order remitting the case to be heard and decided again by the second defendant. The plaintiff relied on the affidavit of Anne Terese Glaser sworn 14 November 2000. The second defendant, the Fair Trading Tribunal has filed a submitting appearance.

2   The referee Mr Ian McDonell, Deputy Chairperson in his decision of 11 July 2000 found in favour of the first defendant. The first defendant Royston Charles Keech and Gaocrew Pty Limited t/as Richardson and Wrench entered into a “Sales Inspection Report and Auction Agency Agreement” dated 16 June 1999 for the sale of the property at 28 North Avoca Parade, North Avoca (the property). In the Fair Trading Tribunal, Gaocrew Pty Limited sought its Richardson and Wrench commission in the sum of $32,500 for the sale of the property.

3   The Fair Trading Act 1998 established a Tribunal to adjudicate consumer and commercial disputes. According to s 27 of that Act the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. An appeal to this court from the Referee’s decision is only in relation to a question of law, (s 61 Fair Trading Act 1998).

4 The Referee decided that there was an implied term of the contract that the respondent would retain the benefits of the Richardson and Wrench franchise and would continue to occupy the site at which it was resident as at the date the contract took effect. The Referee also held, on an alternate basis, that pursuant to s 42A(4) and (5) of the Property Stock and Business Agents Act 1941 “The Tribunal is entitled by s 13 of the Consumer Claims Act to make orders which are “fair and equitable”.

5 The Referee held that the lack of transparency and disclosure were such that, under section 42A(4) and (5) of Property Stock and Business Agents Act, the entitlements of the agent to commission should be set no higher than the cost of recovery for any advertisements made in advertising the applicant’s premises between the 16 June 1999 and 19 July 1999, being the date of settlement of the sale of the respondent’s business. As there was no evidence of the costs of advertising, no amount was awarded to Gaocrew Pty Limited. Thus, Mr Keech, the first defendant in these proceedings was successful in the Tribunal on two bases.

6   The plaintiff’s main ground of appeal is stated a number of different ways. Essentially it is that the Referee erred in holding that the Agency Agreement contained an implied term that Gaocrew would remain a member of a Real Estate Franchise Group and in occupation of the site from whence the respondent conducted its business at the date of commencement of the Agency Agreement. The plaintiff submitted that such a term was not necessary to give the Agency Agreement business efficacy; or alternatively, such a term was inconsistent with Clause 7 of the Agency Agreement; and finally the term was not capable of clear expression.

7   The Referee in his decision of 11 July, 2000 found the following facts:

“The Applicant was the owner of the property 28 North Avoca Parade, Avoca, on 16 June 1999, when he signed an Auction Agency Agreement appointing the Respondent as his agent for the purposes of the sale of the property.

On 20 June 1999, the Respondent was approached by a real estate agency seeking to purchase the business of the Respondent, trading as Richardson and Wrench Terrigal.
On 25 June 1999, the Respondent and the buyer, Terrigal Real Estate P/L t/as LJ Hookers, Terrigal, agreed on the sale of the Respondent’s rent roll, equipment and presumably the interest of the lease for the site, ground floor, 108 Terrigal Esplanade, Terrigal.
On the 2 July 1999, contracts for the purchase of the business were exchanged between the Respondent and Terrigal Real Estate t/a L.J. Hookers.
On or about 6 July 1999, one of the Respondent’s directors, Mr. Koch contacted the Applicant and invited him to come to the office in order to brief him on the sale of the business.
On 19 July 1999, the sale of the real estate agency business was settled.
The following day, Terrigal R.E. Pty Ltd commenced refurbishing the premises, converting it to the LJ Hooker Corporate image.
About this time, the Applicant telephoned one of the Respondent’s directors, Ms. Glaser, to express his concern about the changes to the business.
On 29 July 1999, the Applicant entered into a Selling Agency Agreement with Ray White Real Estate Mosman. This Agency subsequently arranged the sale of his house.”

8   The plaintiff agreed that the Referee addressed the correct question, namely whether the applicant remained bound to his contract with the respondent agent up to and including the time of disposal of his property by action through another agent.

9   The Referee considered whether there was an implied term of the contract that Gaocrew Pty Limited would remain a member of a real estate franchise group and in occupation of the site from whence the respondent conducted its business as at the date of commencement of the agency agreement. The Referee expressed the implied term in his judgment in a slightly different way, that in entering the Agency Agreement as a franchisee of a large franchise, Gaocrew would retain the benefits of the franchise and continue to occupy the site at which it was resident at the date the Agency Agreement was entered.

10   The Referee emphasised that the respondent was described in the written contract as “Gaocrew Pty Limited t/as Richardson and Wrench” and no longer operated from the same office. He referred to BP Refinery (Westernport) P/L v Shire of Hastings (1978) 58 ALJR 20 and applied the test that the core element of an implied term of a contract is whether it is “necessary to give business efficacy to the contract”. In Codelfa Constructions Pty Limited v State Rail Authority of NSW (1982) 149 CLR 337, Mason J (at 346) adopted the majority reasoning in B P Refinery and agreed with the statement quoted by the Referee above.

11   The plaintiff submitted that the Referee’s findings does not satisfy the test for that term to be implied into the contract. The test laid was further expressed in Codelfa. The conditions necessary to ground the implication of a term are that it:

(a) is reasonable and equitable;

(b) is necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;


(c) must be so obvious that it goes without saying;

(d) must be capable of clear expression;

(e) must not contradict any of the express terms of the contract.

12   The first defendant agreed that this is the correct test and submitted that it was open to the Referee to find that these conditions were satisfied. Although the Referee did not specifically enunciate how the above conditions were satisfied, he concluded that the implied term constituted essential term of the contract. The Referee considered that it had to be necessary to give business efficacy to the contract. The term is clearly expressed. There was evidence to support the other conditions and his ultimate decision that the implied term was an essential one. In these circumstances it is my view that the decision of the Referee was correct.

13   Alternatively, the plaintiff submitted that the Referee was wrong to imply such a term where there was a contrary written term. Paragraph 7 of the written agreement states:

“7. Unless otherwise instructed, the Agent may allow other agents to act in conjunction with them in order to effect a sale but only one fee will be payable.”

14   After reading the written submissions of both the plaintiff and first defendant given to the Referee, neither made reference to paragraph 7 of the agreement. While it is true that if the written paragraph adequately covers the situation then there is no need to imply a term. This argument was not raised before the Referee so no error of law can arise. In any event, “in conjunction with them” presupposes that the agent identified in the contract would continue to effect the sale. This was found by the Referee not to be the case. Nor did the agent allow the property to be sold in conjunction with “Ray White, Mosman”. This argument had it been raised before the Referee would have been doomed to failure.

15   The plaintiff submitted that the contract had primacy over s 42A of the Property Stock and Business Agents Act 1941. It was not disputed that the Referee was entitled to refer to s 42A. The Referee had a duty to make orders which are fair and equitable to all the parties to the claim.

16   S 42A(5) the Property Stock and Business Agents Act 1941 states that:

“(5) Without limiting the Consumer Claim Act 1998, the Tribunal has jurisdiction to hear and determine any such consumer claim despite:
(a) the terms or conditions of any agreement or contract entered into between the licensee and the applicant, and
(b) the amount being more or less than the maximum amount (if any) of the remuneration to which a licensee is entitled under this Act.”

17   Thus the Referee is entitled to make a determination for commission despite the terms and conditions of any agreement entered into between a licensee and an applicant (my emphasis added). The Referee did so as he considered it fair and equitable. Accordingly I am not satisfied that the Referee erred in law. The Referee’s decision of 11 July 2000 is affirmed. The plaintiff’s claim fails. I dismiss the summons.

18   Costs are discretionary. Costs should follow the event. The plaintiff is to pay the first defendant’s costs as agreed or assessed.

19   The orders I make are:

(1) The decision of the Referee dated 11 July 2000 is affirmed.

(2) The summons is dismissed.,

(3) The plaintiff is to pay the first defendant’s costs.
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Last Modified: 02/05/2001