Glamoren Pty Ltd v Lee
[2012] QCATA 176
•14 September 2012
| CITATION: | Glamoren Pty Ltd v Lee and Anor [2012] QCATA 176 |
| PARTIES: | Glamoren Pty Ltd t/as Keyline Realty (Applicant/Appellant) |
| v | |
| Andrew Lee Carey Lee (Respondents) |
| APPLICATION NUMBER: | APL114-12 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Justice Alan Wilson, President |
| DELIVERED ON: | 14 September 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Glamoren Pty Ltd is granted leave to appeal. 2. The appeal is allowed. 3. The order made on 7 March 2012 is set aside. 4. Order, in lieu, that Andrew Lee and Carey Lee shall pay Glamoren Pty Ltd $16,720.00 within 60 days of today’s date. |
| CATCHWORDS: | CONTRACTS – PARTICULAR PARTIES – PRINCIPAL AND AGENT – RIGHTS OF AGENT AGAINST PRINCIPAL – REMUNERATION OR COMMISSION – CONDITIONS ESSENTIAL TO ENTITLE AGENT TO REMUNERATION – ESTABLISHMENT OF RELATIONSHIP PRINCIPAL AND THIRD PARTY – RELATIONSHIP ESTABLISHED BY PRINCIPAL OR BY ANOTHER AGENT – where agent introduced purchaser – where sole agency expired – where purchase completed through another agent – whether agent entitled to commission – where Magistrate applied “effective cause” test – whether correct test applied – whether interest should be awarded Queensland Civil and Administrative Tribunal Act2009, ss 14(3), 32,143(3), 143(5),146 Coombes v Wollombi Real Estate (General) [2006] NSWCTTT 591 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers in accordance with s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (‘QCAT Act’).
REASONS FOR DECISION
Mr and Mrs Lee appointed Glamoren Pty Ltd to act as their agent in the sale of a property at Bli Bli. The appointment was as a sole agent from 21 January 2011 to 21 March 2011. In February 2011, Glamoren presented a contract for $599,000 from a Mr and Mrs Perkins. Mr and Mrs Lee declined the offer.
Mr and Mrs Lee terminated Glamoren’s agency by email of 5 March 2011. On 7 April 2011, Mr and Mrs Lee appointed Ray White Bli Bli as their agent. Ray White presented a contract from Mr and Mrs Perkins at $615,000 subject to finance. After negotiations, Mr and Mrs Lee eventually sold the property to Mr and Mrs Perkins for $590,000. Ray White Bli Bli did not charge commission on that sale.
Glamoren claimed commission from Mr and Mrs Lee on the basis that it introduced Mr and Mrs Perkins to the property. The learned Magistrate who heard the matter in QCAT’s minor civil disputes jurisdiction dismissed the claim, stating that Glamoren was not the effective cause of the sale and, therefore, not entitled to commission.
Glamoren has applied for leave to appeal the learned Magistrate’s decision. It claims that commission is payable upon the introduction of a purchaser, so the learned Magistrate erred in applying a test of ‘effective cause’.
Glamoren also seeks an extension of time in which to file the application for leave to appeal.
The extension of time
An application for leave to appeal must be filed within 28 days of the relevant day.[1] The ‘relevant day’ is the day a person is given written reasons for a decision.[2] Glamoren received a copy of the learned Magistrate’s reasons on 2 April 2012. The application for leave to appeal was filed on 3 April 2012. The application was filed within time, and an order is unnecessary.
[1] Queensland Civil and Administrative Tribunal Act 2009, s 143(3).
[2] Queensland Civil and Administrative Tribunal Act 2009, s 143(5).
Entitlement to commission
The learned Magistrate made his decision based on a common law principle of effective cause[3]. The High Court has confirmed that, in the absence of a contrary agreement, the law implies a term that an agent is not entitled to commission merely because it has introduced the purchaser of property. The Court will interpret the agreement as meaning that commission is payable only when the agent has introduced or found a purchaser who is ready, willing and able to complete the purchase.[4]
[3] Transcript, page 15, first paragraph.
[4]Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351, per McHugh J at [27].
Until 2009, the standard Form 22A – appointment of an agent – provided that commission was payable if the agent was the effective cause of the sale. It is, therefore, understandable that the learned Magistrate adopted this test in deciding whether Glamoren was entitled to commission. However, the learned Magistrate could not apply that test unless he had first satisfied himself that Glamoren and Mr and Mrs Lee had not come to a “contrary agreement”.
Glamoren points, however, to clause 7.3 of Form 22A in its current form – Glamoren’s appointment as an agent – which states that it will be entitled to commission:
…if an enforceable contract is entered into with a person introduced to the property … after the conclusion of the Agency, the Property is sold to a purchaser effectively introduced to the Property by the Agent during the Agency.
Glamoren says that clause 7.3 does not require a consideration of who has, or has not, been the effective cause of the sale. It says that the clause is clear on its face: there is no reference to “effective cause of sale” in the clause, and it should be read in its literal sense.
Provisions similar to clause 7.3 have been considered by the Consumer, Trader and Tenancy Tribunal of New South Wales. The learned Members of that Tribunal have determined[5] that the proper approach is to look at the terms of the agreement to find the parties’ rights and obligations, and that there is no need to imply a term as suggested by the High Court.
[5] See, for example Coombes v Wollombi Real Estate (General) [2006] NSWCTTT 591.
I agree with that approach. Clause 7.3 is clear and unambiguous. The parties could have agreed that commission was payable only if Glamoren was the effective cause of the sale, but they did not. I can find no reason to imply that test into an agreement that is clear in its terms and which the parties entered into voluntarily. The learned Magistrate applied, with respect, the wrong test. That is an error of law, and leave to appeal should be granted.
Glamoren is entitled to commission if it introduced the purchasers to the property and the property was sold to the purchaser “effectively introduced to the property by the agent”.
The learned Magistrate did find that Glamoren introduced Mr and Mrs Perkins to the property.[6] The learned Magistrate also found[7] that Ray White was the effective cause of sale because it negotiated a reduction in the price of the property Mr and Mrs Lee wanted to buy and reduced its commission so that the sale price was acceptable to them.
[6] Transcript, page 16.
[7] Transcript, page 15.
The High Court has determined that, if an agent introduces a person who ultimately becomes the purchaser, the agent has been an effective cause of the sale and the intervention of the seller, or another person, is irrelevant.[8] That approach has been endorsed by the New South Wales Supreme Court in circumstances similar to this case.[9]
[8] LJ Hooker Ltd v WJ Adams Estates Pty Ltd (1977) 138 CLR 52 per Barwick CJ.
[9] Newman v Anserdoro Pty Ltd [2008] NSWSC 371.
Clause 7.3 was designed to ensure that the agent would still be entitled to commission in this precise situation, and there is no reason for me to interpret it in any other way.
Glamoren is, therefore, entitled to commission on the sale at $590,000. The agreement provided that Mr and Mrs Lee would pay commission at the rate of 5% on the first $18,000 and 2.5% on the balance plus GST. Glamoren has correctly calculated that amount as $16,720.
Glamoren has also claimed interest at 10% from 12 April 2011. The Tribunal does have power to award interest in minor civil disputes in circumstances where it considers it appropriate.[10] Unlike the Courts, the Tribunal does not have a wide statutory discretion to award interest.[11] I appreciate that Glamoren has not had the benefit of the commission for some period of time and, ordinarily, interest would compensate for the loss of that benefit. However, I am aware that Mr and Mrs Lee persuaded Ray White to waive its right to commission and arranged their affairs in the belief that no commission was payable. The interests of justice are not served by adding an additional burden of over $2,000 in interest.
[10] Queensland Civil and Administrative Tribunal Act 2009, s 14(3).
[11] Supreme Court Act 1995, s 47.
The appeal should be allowed and the decision of the learned Magistrate set aside. Under s 146 of the QCAT Act, the Appeal Tribunal may not only set aside the original decision, but also substitute its own. In light of the conclusions reached above, it is clear the correct decision was to allow Glamoren’s original claim for commission and that should be ordered: the respondents Andrew Lee and Carey Lee[12] shall pay Glamoren Pty Ltd the claim of $16,720.00 within 60 days of today’s date.
[12]Previous orders of this Appeal Tribunal have wrongly shown only Mr Lee as a respondent; it is clear, however, that the original application for leave to appeal named both Mr and Mrs Lee.
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