Hamilton Finley Pty Ltd v Aojia Investment Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S ECI 2016 001295

HAMILTON FINLEY PTY LTD (ACN 162 350 450)	Plaintiff
v
AOJIA INVESTMENT PTY LTD (ACN 145 492 468)	Defendant

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	29–31 MAY, 1 JUNE 2017
FURTHER SUBMISSIONS:	5 JUNE 2017
DATE OF JUDGMENT:	7 JUNE 2017
CASE MAY BE CITED AS:	HAMILTON FINLEY PTY LTD v AOJIA INVESTMENT PTY LTD
MEDIUM NEUTRAL CITATION:	[2017] VSC 319

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CONTRACT – Estate agent – Written sale authorities – Exclusive authority – General authority – Compliance with statutory requirements – Claim for commission – Whether property “sold” – Terms of exclusive authority – Errors in authority – Required notification not provided – Estate Agents Act 1980 (Vic) (as at 2014), ss 47A, 48, 49A, 50.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S Pitt	K & C Law Group
For the Defendant	Mr P Wallis with Mr A Burnett	Henley Legal Lawyers

TABLE OF CONTENTS

A.. Introduction................................................................................................................................... 1

B.. The Exclusive Authority............................................................................................................. 2

C.. Relevant statutory regime........................................................................................................... 4

D.. Relevant facts................................................................................................................................ 7

E... Exclusive Authority – 1 page or 4 pages?............................................................................... 23

E.1... Previous execution of the General Authority............................................................... 24
E.2... “Page 1 of 4”....................................................................................................................... 25
E.3... The Colliers Authority...................................................................................................... 26
E.4... The combination of the matters in E.1, E.2 and E.3 above, together with Song’s and Chen’s experience........................................................................................................................... 27
E.5... Meeting held on 23 October 2014.................................................................................... 28
E.6... Conclusion.......................................................................................................................... 30

F... The Exclusive Authority: failure to meet statutory obligations........................................ 31

G.. The Exclusive Authority: contractual issues........................................................................ 35

H.. Claim under the General Authority........................................................................................ 39

I.... Aojia’s counterclaim................................................................................................................... 40

J.... Other matters............................................................................................................................... 41

K.. Conclusion................................................................................................................................... 43

HIS HONOUR:

A. Introduction

The defendant, Aojia Investment Pty Ltd (“Aojia”), was the registered proprietor of land located at 48–50 A’Beckett Street, Melbourne (“the Property”).

On 27 October 2014, Aojia executed an exclusive sale authority agreement appointing the plaintiff estate agent, Hamilton Finley Pty Ltd (“Hamilton Finley”), to advertise, market and endeavour to sell the Property (“the Exclusive Authority”).[1] In return for its efforts, Hamilton Finley stood to receive a commission of 2.2 percent of the selling price, plus 60 percent of any selling price received in excess of $13,500,000 (“the Commission”). There is a dispute between the parties as to whether the Commission was payable upon a binding contract of sale of the Property being entered into, or only upon the settlement of any such contract.
[1]Exclusive Authority, Particulars of Appointment, item 8.

The Exclusive Authority was the last of a series of authorities that had been executed by Aojia. The first of these authorities was a general sale authority, executed on 15 May 2014 (“the General Authority”), between Aojia and Hamilton Finley. It was a term of the General Authority that, “if at the date the Property is sold, another agent holds an exclusive authority for the sale of the Property and [Aojia] may have to pay the other agent a commission; [Hamilton Finley] cannot claim commission under the terms of this Authority”.

On 31 October 2014, Aojia entered into a binding contract for sale of the Property with Oceania Construction Group Pty Ltd (“Oceania”) for a total sale price of $17,000,000 (“the Sale Agreement”). A deposit of $850,000 was payable in 2 parts: $85,000 on the “Day of Sale”,[2] being 31 October 2014, and the balance 3 months following.[3] The balance of the sale price was payable on the settlement date, 15 September 2015. In accordance with the Sale Agreement, by 22 January 2015, Oceania had paid the deposit in full to Aojia.
[2]“Day of Sale” was defined for the purposes of the Sale Agreement as “the date by which both parties have signed this contract”.
[3]$2,000 had been paid to Hamilton Finley as a “part deposit” on 16 October 2014: see par 73 below.

On 10 August 2015, Hamilton Finley rendered an invoice to Aojia for payment of the Commission. That invoice recorded $2,474,000 due for payment on 15 September 2015. Aojia did not pay the Commission.

On 15 September 2015, Oceania failed to pay the balance of the sale price. Aojia gave Oceania a notice of rescission of the Sale Agreement, notifying Oceania that it was in default. Oceania has never remedied the default.[4]
[4]In a separate proceeding in this court, Aojia is suing Oceania for losses claimed to have been suffered by reason of the failure to complete the Sale Agreement.

By its primary claim, Hamilton Finley seeks damages for breach of the Exclusive Authority because of Aojia’s refusal to pay the Commission. Alternatively, Hamilton Finley seeks to claim a lesser commission pursuant to the General Authority. In addition to filing a defence, Aojia counterclaimed, seeking certain relief with respect to the Exclusive Authority.

For the reasons that follow, Hamilton Finley’s claims and Aojia’s counterclaim will be dismissed.

B. The Exclusive Authority

The Real Estate Institute of Victoria has published a standard form contract entitled “Exclusive Sale Authority”.[5] It was this standard form contract that was used by the parties to enter into the Exclusive Authority. However, on the facts of this case, there is an issue as to whether the Exclusive Authority was duly executed in the standard form, or whether the executed version consisted only of the first page of the standard form.
[5]The relevant form of contract was published in 2014.

In its standard form the Exclusive Authority consists of:

(1)A cover page, sub-titled “Particulars of Appointment”, with various blank spaces to be completed.

(2) A second page, which contains a series of contractual “Items”.
(3)A third page, which contains a contractual item, a privacy policy and some definitions.
(4)A fourth page, which contains the remainder of the definitions and a series of general conditions (“the General Conditions”).

Item 1 of the standard form contract relevantly provides:

The Vendor agrees to pay the Agent the commission on the terms of this Authority if the Property is sold:
1.1during the exclusive authority period by the Agent or by any other person (including the Vendor or another agent); or

…

The commission is due and payable by the Vendor on the Property being sold.

Pursuant to item 10.3, the Vendor expressly acknowledges that the Commission “is payable in accordance with this Authority, if the Property is sold”.

Clause 1.13 of the General Conditions provides that, unless otherwise required by the context or subject matter, “sold” means “the result of obtaining a binding offer”, and “sale” and “sell” have corresponding meanings. “Binding offer” is defined by clause 1.3.2 of the General Conditions to include “an enforceable contract of sale signed by the Vendor and the purchaser”. In turn, an “enforceable contract of sale” is defined as “a contract which may be enforced by an order for specific performance and/or upon the breach of which either the Vendor or the purchaser would be entitled to an award of damages”.

Finally, clause 12 of the General Conditions provides, in effect, that where a sale of the Property fails to be completed following the entering into of an enforceable contract of sale, the obligation to pay the Commission remains enforceable.

There was no dispute that the Sale Agreement amounted to an “enforceable contract of sale” and was therefore the result of a “binding offer” for the purposes of the Exclusive Authority. There was also no dispute that the Sale Agreement was entered into by Aojia and Oceania during the exclusive authority period.

The principal contractual dispute between the parties arises by reason of a small section of the cover page, which I shall refer to as the “Disputed Clause”. It appears like so:

Property sold: [ ] with vacant possession OR [X] subject to a tenancy[6] on payment of [X] full purchase price
OR upon terms on payment of [ ] full deposit and [ ] the sum of $ ___________.

[6]Probuild Constructions Pty Ltd was the tenant at the Property.

Aojia correctly conceded that, if the Exclusive Authority consisted of 4 pages in accordance with the standard form, then the Commission became payable on 31 October 2014, upon the execution of the Sale Agreement.[7] However, Aojia contended that if the Exclusive Authority consisted of only the first page, the effect of the Disputed Clause is that the Property would only be “sold” if and when payment of the full purchase price was received by “the vendor”. It was Aojia’s case that, as Oceania never paid the full purchase price, Aojia was never obliged to pay the Commission to Hamilton Finley. Further, Aojia contended that, as the Exclusive Authority was the binding agreement between it and Hamilton Finley, the terms of the General Authority did not apply.
[7]See, for example, the accepted position in Icon Property Pty Ltd v Wood [2008] VSCA 123, [23], [52], [56], [59], [74] (Dodds-Streeton JA and Osborn AJA, with whom Redlich JA agreed).

C. Relevant statutory regime

Before considering the contractual issues, it is necessary to refer to certain provisions of the Estate Agents Act 1980 (Vic), as it stood in 2014.[8] Relevantly, the Estate Agents Act provided:
[8]Since that time, s 47A has been replaced: see Estate Agents Amendment (Underquoting) Act 2016 (Vic), s 5.

47A Seller must be given estimated selling price
(1)Before obtaining a person's signature to an engagement or appointment to sell any real estate on behalf of the person, an estate agent (or an agent’s representative employed by the agent) must ensure that the engagement or appointment states the agent’s (or representative’s) estimate of the selling price of the real estate, and that the estimate complies with this section.
Penalty:100 penalty units.

(2) The estimate –
(a) may be a single amount or a price range; and
(b)must be the amount the agent or representative believes, on the basis of his or her experience, skills and knowledge, that a willing but not anxious buyer would pay for the real estate, or in the case of a price range, the range within which that amount is likely to fall; and

(c) must be set out in a manner approved by the Director.
(3)If an estimate is expressed as a price range, the difference between the upper and lower limits of the range must not exceed 10% of the amount of the lower limit of the range.
(4)Nothing in this section requires the estimated selling price and the seller's reserve price to be the same amount.

…
48 Notice of commission sharing must be given
(1)This section applies if an estate agent agrees to share any commission to which he or she becomes entitled in respect of any estate agency work with a person who is not—
(a)a licensed estate agent or an agent's representative in his or her employ; or
(b)a licensed estate agent with whom he or she is in partnership.

(2)Before obtaining a person's signature to an engagement or appointment to do any estate agency work on behalf of the person, the agent must ensure that the person is given a statement that complies with subsection (3).
Penalty: 100 penalty units.

(3) The statement—
(a)must state that any commission the agent is entitled to under the engagement or appointment will be shared with one or more other people; and
(b)must identify by name every person who is entitled to share the commission with the agent; and
(c)must contain any other details required by the regulations; and

(d) must be in a form approved by the Director.

…
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.

…
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.

There was no dispute between the parties that, by parliament enacting the provisions set out above, it imposed a regime upon real estate agents in Victoria that included strict disclosure obligations. As the Court of Appeal recently stated:[9]

[T]he statute places prime importance on disclosure by agents before they may claim commission. The required disclosures are explicitly stated in the legislation. Failure to comply with the legislative requirements may have both civil and criminal consequences. Contravention may lead to harsh results but that is a consequence of the legislation that must be accepted. In this regard, the identity, sophistication and capability of vendors to look out for themselves, [do] not lessen the statutory disclosure obligations imposed on agents.

[9]CA & CA Ballan Pty Ltd v Oliver Hume (Australia) Pty Ltd [2017] VSCA 11, [93] (Redlich, Tate and Ferguson JJA). In the present case, Hamilton Finley made no claim for rectification.

In short, the provisions are strict and operate in “an absolute and unforgiving way”.[10]
[10]Kukolovski v Georges [2011] NSWSC 359, [34] (Barrett J). See also Investmentsource Corporation Pty Ltd v Knox Street Apartments Pty Ltd (2002) 56 NSWLR 27, 46 [86] (Barrett J).

D. Relevant facts

In early 2014, Aojia decided to sell the Property. Aojia was under considerable financial pressure and, at least by May 2014, was “desperate” to sell the Property.[11]
[11]Aojia had financed the purchase of the Property in an arrangement entered into in about March 2012 involving Song Zhao (“Zhao”). It was suggested that originally Zhao’s money was to be provided by way of capital, but she had changed her mind and was seeking to recover the invested funds by way of loan repayment. A claim was made against both Aojia and Zhang for in excess of $6.7 million. Ultimately, this gave rise to a proceeding in this court commenced on 28 November 2014, by which nearly $12 million was claimed from both Aojia and Zhang.

At this time, Aojia had 2 directors, Xiao Xia Zhang (“Zhang”) and Jing Chen (“Chen”).[12] Neither Zhang nor Chen spoke English.[13] Neither did Zhang’s husband, Lizhi Li (“Li”). However, Chen’s wife, Yuqing (Cindy) Song (“Song”), spoke English well. Her first language was Chinese.
[12]Chen resigned as a director on 31 January 2017.
[13]Chen described his English as very poor. He gave evidence through an interpreter.

Zhang was based in China for a period of time in 2014, the details of which were not fully explored at trial. Although both Zhang and Chen shared all the responsibilities that came with being a director of Aojia, it was Zhang who was the primary decision maker. That said, with respect to the transaction in question, she was reliant upon advice from Song. Zhang had no direct discussions or other communications with anyone from Hamilton Finley at any relevant time.

Although Chen had very poor English, he had considerable business experience in Australia. He migrated to Australia in late 1995 and soon after began operating a pizza business. In 2003, he started a duty free gift shop. That business still operates from 2 stores. Also, before 2014, he became involved in a migration business, which also still operates.

With respect to his involvement in property, Chen is now a registered agent’s representative.[14] However, this was not the case in 2014. This was despite, at that time, being the sole director, secretary and shareholder of a commercial real estate company, Easylink Property Pty Ltd (“Easylink”), which had been established in November 2013.[15] Chen gave evidence that another person who was a licensed real estate agent was effectively in control of the company in 2014.[16]
[14]Estate Agents Act, s 4(1).
[15]Easylink became licensed as an estate agent on 10 July 2014. A person by the name of Mitchal Carter Towns is presently recorded as the officer effectively in control. Chen did not become an agent’s representative for Easylink until 1 January 2015.
[16]This person was Yun Lou, who was granted an estate agent’s licence on 12 September 2013.

Chen also stated that he had been involved in investing in properties, but in October 2014 he was not familiar with the standard terms and conditions of either a general or an exclusive sales authority. Chen had never had those terms translated into Chinese. When cross-examined about his level of experience with real estate, Chen acknowledged he had engaged real estate agents to help him sell property before. However, with respect to his involvement with general or exclusive sales authorities, he stated that his previous investment was shared with his elder brother who was, in general, “doing those things”.[17]
[17]It was unclear on the evidence whether this involved only 1 or more than 1 property.

Song had been a company director in Australia since 2001, having arrived in 1999. She spent approximately 30 to 40 percent of her time engaged in business activities associated with Knight Pharmaceuticals Pty Ltd, a company of which she had been a director since approximately 2003. Song had a full time personal assistant, Tess Hu (“Hu”). Hu spoke English well.

Hu knew 1 of the directors of Hamilton Finley, Andrew Shen (“Shen”). Accordingly, Hu was asked to speak to Shen about the possibility of Hamilton Finley selling the Property.

As a result of this interaction, on 15 May 2014, Hu returned, by email, a general sale authority to Shen which had been executed by Zhang. This authority, the details of which had been completed by hand, had a number of difficulties with it. First, the name of the vendor was omitted, the relevant space being left blank. Secondly, as it was executed by Zhang alone, there may have been an issue as to whether the proposed authority had been duly authorised and executed by Aojia. Thirdly, the commission percentage proposed by Hamilton Finley of 3.3 percent was struck through and replaced with 2.2 percent, with the signature of Zhang next to the amended amount. However, the dollar amount of estimated commission required to be included,[18] was completed as $412,500, which is 3.3 percent of the vendor’s price of $12.5 million, rather than 2.2 percent.
[18]See Estate Agents Act, s 49A(1)(c)(ii).

A couple of hours after the first general sale authority was submitted by Shen, Hu sent an email to Song and Zhuzhu Li[19] concerning this authority. That email forwarded an email from Shen and noted that “the agent” had requested that various documents be provided. There was no mention of the absence of the name of the vendor or any reference to the mistake with respect to commission in either email.
[19]The daughter of Zhang and Li.

Late in the evening on 15 May 2014, Shen sent an email to Hu recording that he had noticed that the Property was held by Aojia, which had 2 directors, and that Hamilton Finley needed both directors’ signatures. Shen stated a new general sale authority had been prepared and attached for signature. The attached draft, which was typed, included the name of Aojia as the vendor and also recorded the commission as 2.2 percent and the correct dollar equivalent of $275,000. However, this draft incorrectly recorded that the Property was to be sold with vacant possession.

The next day, Hu sent the General Authority, signed by both Zhang and Chen on behalf of Aojia, to Hamilton Finley, along with the other documents requested. However, rather than forwarding the most recent draft that had been provided by Shen, Hu had arranged for Chen to sign the document previously forwarded earlier on 15 May 2014. There was no evidence as to why Hu acted as she did. Further, although the name of the vendor had been inserted, the error with respect to commission and the reference to $412,500, instead of $275,000, remained. No issue was taken with this by Hamilton Finley, or anyone else, at the time.[20]
[20]For completeness, the first page of the General Authority is marked “Agent’s Copy”, the second page is marked “Vendor’s Copy” and the third page is marked “Agent’s Copy”. No issue was raised at trial with respect to the authenticity of this document, so no issue will be raised for the purposes of this judgment.

The General Authority consisted of 3 pages and was in the standard form.[21] It defined “sell” as meaning the result of obtaining a binding offer, with “sale” and “sold” having corresponding meanings. Further, it contained terms which complied with the notice obligations under the Estate Agents Act.
[21]As published by the Real Estate Institute of Victoria in 2013.

As a general observation, at no time did Hu, or anyone else on behalf of Aojia, ask Shen for the terms of the documents being exchanged to be translated from English to Chinese.

The following day, Shen sent an email to Hu expressing his appreciation for the quick turnaround of the General Authority and the other documents. In the email, Shen also noted that the planning permit for the Property was about to come to an end. He asked whether or not Aojia had an updated version as the permit was “extremely important for the future buyer”.

From mid May 2014 until August 2014, Hamilton Finley had no success in obtaining an offer for the Property.

In seeking to obtain such an offer, Hamilton Finley approached Alan Lobley (“Lobley”), who was referred to by Shen as a “buyer’s advocate” but who was, in substance, another selling agent.[22]
[22]Lobley was a licensed real estate agent in Victoria.

On 5 August 2014, Lobley sent an email to Shen, amongst others, that stated his associate was dealing with someone in Singapore in relation to the Property. Lobley stated that he believed that Hamilton Finley had a 2.5 percent commission and that Ron Wilson (“Wilson”), another “buyer’s advocate”, had indicated “we would be able to get a good commission if we achieve a price near 15 million as this is what we are trying to achieve”. The email concluded with the suggestion that Lobley had “a number of people to pay if this deal comes together”. The email attached an earlier email sent to Lobley, suggesting that a written offer was likely in the next 5 days.[23]
[23]The identity of the sender of this email to Lobley was masked.

The significance of Lobley’s email is twofold. It indicated first that there was a real prospect of an offer, and secondly that the other agents involved in attempting to sell the Property were content for a contract of sale to be entered into on the existing commission structure, albeit Lobley was mistaken when he suggested the commission was at 2.5 percent rather than 2.2 percent. Shen gave evidence that after receiving this email he did not have another discussion with Lobley on that day about the commission to be shared amongst various agents.

On 6 August 2014, Lobley sent another email to Shen stating that they were expecting an offer for the Property that day. He suggested that the other agents involved had been quoting $15 million as the purchase price. He also said that “our fee/commission or consultancy” needed to be recorded in a written contract. The email stated that “our Asian counterparts” would not pay a buyer’s advocacy fee. The email concluded with the following:

From indication re fees we were told by [Wilson] that if we get over 14,500,000 that we would be paid accordingly could you please confirm this pending what this offer is going to be like.

Having received this email, Shen promptly sent an email to Lobley stating that he was trying to get an exclusive sale authority in the next 24 hours “and to include the fees stated clearly on the authority, and together with the commission sharing statement included (sic)”. The email concluded by stating, “Leave to me, once I got the ESA,[24] I’ll email you a copy ASAP”.
[24]A reference to an exclusive sale authority.

Less than half an hour later, Shen forwarded the email from Lobley to Hu, explaining that the email was “from my buyer this morning”.[25] The email stated:
[25]The email was in both Chinese and English. All emails the subject of evidence in this proceeding in Chinese were translated before trial and the translation was agreed between the parties. It is not necessary to identify in which language each of the emails were composed.

It is almost certain that we will have an offer today, but they need us to confirm we have the actual authority, which means a short two to three day exclusive for me would do.

After quoting the email referred to in paragraph 40 above, Shen’s email continued:
In the meanwhile, you can see in their email that they need the fee of $500,000 to organise things with different parties, therefore I have attached a new Authority which demonstrates the fees that are required.
However, if there is any concern, we can have another discussion.
Attached is a new Authority for your reference.
(Emphasis added.)

Almost immediately, Hu forwarded the email, together with the proposed exclusive sale authority, to Song. That email asked for the authority to be “sign[ed] off … ASAP” so Hu could instruct Shen to go ahead with the negotiation.

The attached document consisted of 3 pages, 2 pages of a proposed exclusive sale authority and a 1 page document entitled “Notice of Commission Sharing”. The draft exclusive sale authority had “Page 1 of 4” and “Page 3 of 4” of the 4 page standard exclusive sale authority. Shen explained that “Page 2 of 4” and “Page 4 of 4” were on the back of pages 1 and 3 of the document that was scanned and sent.[26] He said the document was inadvertently scanned single-sided, so only ”Page 1 of 4” and “Page 3 of 4” were scanned.
[26]A faint print can be seen on the document as sent, which might suggest these pages were on the back of the document sent.

The draft exclusive sale authority on page 1 was completed in handwriting. The signature box for the vendor was blank. It recorded the details of the Property, Aojia as the vendor, and various other details. It stated the exclusive authority period was to be for 3 days, with no further “continuing authority period”. With respect to the details appearing in the Disputed Clause, the form was filled out in the same manner as is set out in paragraph 16 above. In contrast to the General Sale Authority, the vendor’s price was recorded as “$13,500,000 (inc GST)”, which was proposed to be payable in “90/120/150 days”. According to Shen, the reason for the increase in price was because of discussions between Shen and Hu in which Hu suggested that Aojia now wanted $13.5 million. Shen suspected that this had arisen out of discussions between those representing Aojia and other agents.

With respect to the agent’s estimate of selling price, the amount inserted was “between $12 million and $13 million”. This was a significant increase from the estimate given in the General Sale Authority, which was $9 million to $9.9 million. Shen said he adjusted this estimate based on further searches and what he believed other agents were quoting. He said he did not really know what the Property was worth.

With respect to the proposed commission, the draft exclusive sale authority stated as follows:

A commission (including GST) being the following % of the sale price:
2.2% of the selling price PLUS 60% of any dollar amount above 13,500,000
Dollar amount of estimated commission:
$1,197,000 (297,000 + 900,000) which includes GST of $108,818
If sold at a *GST inclusive~~/*GST exclusive~~[27] sale price of $15,000,000
(*delete the one that does NOT apply).
(Emphasis in bold denotes handwritten sections of the proposed commission, otherwise original emphasis.)

[27]The alternative “GST exclusive” was struck through in handwriting.

There was an error on the face of the details provided as set out in the previous paragraph. The quoted 2.2 percent of the selling price in the example, namely $15 million, amounted to $330,000, not $297,000 as stated. When this was raised with Shen during cross-examination, he stated that he should have included the words “up to $13.5 million” after the words “selling price” when referring to the commission rate of 2.2 percent.[28]
[28]See also par 123 below.

With respect to marketing expenses, advertising and other expenses were both recorded as being nil. Shen said he did this as he was told by Hu that Hamilton Finley was not allowed to advertise and was to keep the sale “secretive”.

The draft exclusive sale authority was dated 6 August 2014 and signed on behalf of Hamilton Finley by Shen.

The second page of the draft, namely “Page 3 of 4”, contained the details of a standard exclusive sale authority as set out in paragraph 10(3) above.

Finally, the document entitled “Notice of Commission Sharing”[29] recorded Lobley as the person with whom commission was to be shared. He was described in the document as a buyer’s advocate. The document stated that it showed “details of all other people who will share in the commission” (emphasis added). The form was silent on when any such commission would be payable.
[29]This document was also dated 6 August 2014 and was signed by Shen.

Only 20 minutes after Hu had forwarded the email to Song attaching the proposed exclusive sale authority, Hu sent Shen a “signed Exclusive Sale Authority & Notice of Commission Sharing for [his] reference and copy”.[30] The attached document consisted of only 2 pages, the first page of the exclusive sale authority and the notice of commission sharing. Shen took no issue with this.
[30]It appears the ability for such a quick turnaround was because the signatures on the document forwarded by Hu were forgeries, and that someone had copied the signatures from another document and physically pasted them on the document sent. Under cross-examination, Song could not explain how this had occurred. Hu was not called to give evidence. Save for issues of credibility, little turns on this as there was no question that Aojia had given its authority for the exclusive sale authority to be sent on 6 August 2014.

On 7 August 2014, Shen executed a referral agreement on behalf of Hamilton Finley. The counterparty to this agreement was Winning Edge Investments Pty Ltd (“Winning Edge”), of which Lobley was the principal. It provided for commission of $500,000 to be paid to Lobley on a proposed sale price of $16.5 million. The referral agreement provided that the obligation to pay $500,000 to Winning Edge would arise no later than 30 days after the Property had settled or when Hamilton Finley had been paid by Aojia, whichever was later. In short, there was no obligation on Hamilton Finley to pay Winning Edge until it received payment from Aojia. This document was not provided to Aojia.

No offer for the Property was forthcoming in August or September 2014.

On 24 September 2014, Lobley sent an email to Hamilton Finley noting there was a request for a possible purchaser to inspect the Property. In the email, Lobley raised the prospect of the proposed purchaser, Hua Cheng International Holdings Group Pty Ltd (“Hua Cheng International”), itself introducing a buyer and having the commission split to include that company. The email concluded:

We will need a mandate drawn covering this accordingly. As you can see I increased the price initially by 100K to cover [others] and me, as I take it that [Shen] is covered from the owner – please advise.

Two days later, Lobley sent a further email to Shen referring to the existing agreement between Hamilton Finley and Aojia and to the fact that it provided for commission of 2.2 percent of the selling price and 60 percent above $13.5 million. Reference was then made to possible purchasers, and to a previous offer that had apparently been made for $15.6 million for the Property. Lobley inquired as to whether, if the purchase price was more than $15.6 million, “we could be included in the commission”. Lobley also stated that the interested party had been told the sale price was $17 million. The email continued:

The situation is as I see this give[n] the increase makes it possible for all to receive a very good commission on the basis of the agency arrangement dated 6^th Aug.
13,500,000 @ 2.2% = $297,000 balance of funds above 13,500,000 = $3,500,000 @ 60% = $2,100,000 total commission being $2,397,000.
To cover the following
Yourself, Bruce Richards, My company, David [Goo] and the Sydney person = 5 divided into $2,397,000 = $479,400 per entity gst inclusive.
The Sydney party have requested a mandate to confirm their commission position and I will forward this once you have had time to consider the above per my call this morning.

As a result of the update from Lobley, Shen sent an email to Hu stating that the “buyer’s advocate on my side is making progress again”. The email suggested a group of buyers from Sydney, with the same background as developers from China, had been found. The email stated that the “original Authority” was attached. Shen asked that the 2 directors “kindly update the date from 6 August to today 26 September, sign it and send it back”. The attached document consisted of 1 page, namely the exclusive sale authority dated 6 August 2014.[31] At this point, Shen was willing to have an authority signed providing an agent’s estimate of selling price of between $12 million and $13 million, notwithstanding he had been told that the likely purchase price was $17 million.
[31]Initially, the exclusive sale authority was sent with the commission details blurred so that they could not be read. Shen stated that this had been mistakenly sent. The document contained the signatures of Zhang and Chen. Although it was not clear on the evidence whether the blurred version was sent separately, it was common ground that a version was sent which contained the details of commission as previously provided on 6 August 2014 absent the signatures on behalf of Aojia.

Later on 26 September 2014, Hu returned the exclusive sale authority that had previously been “executed” on 6 August 2014,[32] save that the date had been altered; the number “2” had been inserted before the “6”, and “Aug” had been struck out and replaced with “Sep”. Further, fresh signatures had been inserted by Zhang and Chen. Accordingly, on its face, the document provided for a 3 day exclusive authority period.
[32]Subject to what is stated in fn 30 above.

Shen acknowledged receipt of the authority dated 26 September 2014 with thanks. The error that was contained in the authority of 6 August 2014 with respect to commission remained, without anyone taking exception to it.

Also on 26 September 2014, a further mandate was executed between Hamilton Finley and the other agents involved in attempting to sell the Property. That mandate recorded an agreement “in relation to the sales commission as per REIV agency agreement with Hamilton Finley Pty Ltd as agents for the vendor that the following commission is applicable”, in the event that the Property was sold “at $17 million or less but not below $15.6 million”. The 6 agents listed on the mandate were Hamilton Finley, Prime Property Partners, Bruce Richards Property Consultants, Winning Edge, David Goo (“Goo”) and Aufang Management. Shen gave evidence that the first 4 of these agents were licensed estate agents, but he was uncertain with respect to Goo or Aufang Management. However, with respect to all of the additional agents, none of them were employed by Hamilton Finley or in partnership with it.[33] This mandate was never provided to Aojia.
[33]See Estate Agents Act, s 48(1).

On 1 October 2014, Lobley sent an email to Shen stating that Goo was seeking to confirm that Aojia was content with a $17 million sale and commission “as per our mandate”. The email also recorded that it seemed that the proposed purchaser was someone who must buy “within a certain time and the vendor now needs to sell to meet the permit”.

Shen contacted Hu to ask for an updated authority. It would appear this was done orally, as there is no record of an email recording this request.

On 2 October 2014, Hu sent an email to Song stating that there was someone “highly interested” in purchasing the Property and that Shen needed a further exclusive sale authority for 7 days. Hu’s email attached 2 versions of the exclusive sale authority signed on 6 August 2014, 1 executed, with blurred information, and 1 unexecuted by Aojia with all the details in handwriting shown clearly.[34]
[34]See fn 31 above.

On 3 October 2014, Hu sent an email to Shen stating that a revised copy of the authority was attached. However, although the authority had been amended to record an exclusive authority period of 7 days rather than 3 days, it was still dated 6 August 2014. It appears this was not immediately detected by Shen, who responded with an email expressing appreciation for Hu’s effort and indicating that he looked forward to reporting positive news soon. But shortly after, Shen sent another email, noting that the date on the authority had to be changed to 3 October 2014.

Later that morning, Hu emailed a “revised and signed authority” to Shen. That revised authority deleted the date of 6 August 2014 in its entirety and replaced it with “03/Oct/2014”, which change was initialled by the directors of Aojia. Further, the directors’ initials had been inserted next to the 7 day exclusive authority period, this change having previously been made without such initialling. The details with respect to the agent’s estimate of selling price and the commission remained as before.

On the evening of 3 October 2014, Shen sent an email to Lobley attaching a memorandum of understanding. That memorandum of understanding recorded “terms acceptable to” Aojia, with a proposed purchase price of $17 million.

Four days later, the memorandum of understanding was returned, executed by Charles Peng, on behalf of Hua Cheng International, recording that the proposed purchaser was Hua Cheng International “or nominee”. The proposed purchase price remained at $17 million, though there was an amendment which provided that the settlement may not occur for a period of up to 12 months. The memorandum of understanding recorded a proposed deposit of $2,000.[35] The covering email stated that the cheque would be mailed within the next 1 to 2 days.
[35]The deposit was to “secure the seat to negotiate” with Aojia for 10 working days.

Shortly after receipt of the executed memorandum of understanding and the covering email, Lobley forwarded it to Hamilton Finley.

On 10 October 2014, Hua Cheng International made a “formal offer”. Again, the proposed purchaser was Hua Cheng International “or nominee”. As anticipated, the offer was for $17 million. Shen forwarded this offer to Hu on the same day. Later on 10 October 2014, Hu sent an email to Shen saying some of the special conditions were not acceptable. It is unnecessary to discuss these issues, as they were ultimately resolved.

At 11.30 pm on 10 October 2014, Shen sent an email to Song attaching a “contract of sale of real estate” executed by Hua Cheng International, again proposing that it or its nominee be the purchaser.

Aojia decided not to accept Hua Cheng International’s offer immediately, but rather sought to explore other possibilities. To that end, an exclusive sale authority was signed by Chen on behalf of Aojia on 11 October 2014 with Colliers International Residential, granting an exclusive authority period of 14 days (“the Colliers Authority”). The Colliers Authority recorded the Vendor’s price of $13.5 million, but with commission fixed at $500,000. In contrast to the exclusive sale authorities that had been provided to date by Hamilton Finley, the document signed by Chen consisted of the full 4 pages. In further contrast, the “Property sold” section of the authority was filled out as follows:

Property sold: [ ] with vacant possession OR [√] subject to a tenancy on payment of [ ] full purchase price OR upon terms on payment of [√] full deposit and [ ] the sum of $ ___________.

On 16 October 2014, Hua Cheng International paid a deposit of $2,000 to Hamilton Finley.

At approximately 11.00 am on 23 October 2014, Shen and his co-director, Li Zou (“Zou”), met Song and Chen at the offices of Easylink. No notes were taken of the meeting.

All 4 witnesses recalled that the earlier stage of the meeting was concerned with a project, referred to as the Avant project, that Hamilton Finley was soon to be promoting. Shen and Zou were keen to impress Chen, and increase their reputation amongst the Chinese community. This was the first time they had met Chen.

As a general comment, none of the 4 in attendance, all of whom gave evidence, had a particularly good recollection of the whole of the meeting. Both Shen and Zou acknowledged during cross-examination that, in 2014, they attended numerous meetings each week in the conduct of the Hamilton Finley business,[36] and continued to do so from that time. However, somewhat remarkably, both Shen and Zou gave evidence of a very clear recollection of a draft exclusive sale authority, consisting of 4 pages, being provided by Shen to both Song and Chen. In particular, both of them gave an account of Shen removing the 4 page authority from a plastic protector, going through the details of the first page at some length[37] and then going through each of the remaining 3 pages. Both also said that the document was left on the table of the meeting room when they departed. Although they were both able to give quite specific details in this regard, their recollection of the remainder of the meeting was largely vague or non-existent. Shen could not recall how long the meeting lasted.
[36]Shen said he had approximately 10 or 15 meetings per week and Lou said he had approximately 5 to 10 meetings per week.
[37]Zou gave evidence that Shen went through the first page “from top to bottom”.

In response to this, Chen was adamant that no draft of an exclusive sale authority was produced at the meeting. Song stated she simply could not recall 1 way or the other.

Then, later in the morning of 23 October 2014, Shen received an email from Hua Cheng International attaching an electronic copy of a cheque from Oceania to Hamilton Finley, dated 23 October 2014, in the amount of $85,000. The covering email suggested the attachment was for Hamilton Finley’s reference. No physical cheque, as attached to this email, was ever received.

Late on 23 October 2014, Shen, by email, provided an update to the other agents involved. The email stated:

Just a quick update for today’s progress:
– The offer has been countersigned, and all documented (please refer to the attached)
– The price of 17M has been accepted by both vendors
– their preferred settlement term is 150 days
and the rest should be fine.
In relation to the settlement, we are gonna have to adjust a bit between 150 days and 365 days, I think we should be able to reach agreement at around 210-240 days.

The email concluded by stating that Shen would have an exclusive authority for 14 days soon.

At 10.00 pm on 23 October 2014, Shen sent an email to Song and Chen, copied to Hu and Zou. The email referred to the meeting earlier that day. It then referred to “attached primary materials for the AVANT project”. Next, the email referred to the exclusive sale authority that needed to be signed, in the following terms:

Attached you can also find the 14-day A’beckett Street Authority. If we do not hear from the other party’s agent upon end of business time tomorrow, I would think there is not much happening on their side.
The starting date of attached Authority is the 27^th next Monday. Please have a look.

The email contained 7 attachments, the last of which was a 1 page draft exclusive sale authority dated 27 October 2014, signed by Shen, with substantially the same details that had been set out in previous exclusive sale authorities.

Pausing there, it must be observed that the email made no reference to the provision of any documents by Hamilton Finley at the meeting held earlier that day. Further, the covering email did not suggest that the proposed exclusive sale authority consisted of any more than the page that was attached.

On 27 October 2014, Song sent an email to Shen simply stating, “Please see attachment”. Attached to this email, amongst other things, was the Exclusive Authority, of the same date and signed by both Zhang and Chen. The Exclusive Authority, consisting of a single page, had the details filled out in handwriting, and was an exact copy of what had been sent by email on the evening of 23 October 2014 (save for the additional signatures).[38]
[38]See par 80 above.

The Exclusive Authority was for a period of 14 days commencing 27 October 2014. The remainder of the details, including concerning the agent’s estimate of selling price and the commission details, were the same as had been provided in all previous exclusive sale authorities since 6 August 2014.

On 31 October 2014, Zhang and Chen, as directors of Aojia, executed the Sale Agreement as vendor. Oceania executed on the same day as purchaser.[39] On 5 November 2014, Shen sent the “final version” of the Sale Agreement to Song and Chen by email. In addition to congratulating them on the sale and referring to work to be done by lawyers, Shen thanked Song and Chen for the opportunity. There was no suggestion in this email that any commission was payable to Hamilton Finley at this time.
[39]See par 4 above.

It was not until 3 August 2015 that Hamilton Finley prepared an invoice with respect to the Commission. As noted above,[40] that invoice was forwarded on 10 August 2015 with the stated due date of 15 September 2015 (the date of settlement).
[40]See par 5 above.

The invoice did not record any part payment from the deposit of $850,000. This appears to be explained by the fact that, although that deposit was initially forwarded to Hamilton Finley, those funds were transferred by Hamilton Finley to Aojia on 17 August 2015.[41]
[41]This transfer occurred as Shen was going to be in China at the time of settlement, with no access to Hamilton Finley’s accounts. He suggested that the funds should be transferred to Aojia so that all funds would be available for distribution at settlement.

Upon the failure of Oceania to settle the sale of the Property on 15 September 2015, Hamilton Finley made no further demand for the Commission.

It was not until 7 June 2016 that Hamilton Finley’s lawyers sent a letter of demand. Both Song and Chen gave evidence that it was upon receipt of this letter of demand that they first learnt that Hamilton Finley was making a claim for the Commission notwithstanding settlement had not occurred.

In making a claim for over $2.6 million, the demand referred to the definition of “Commission … as well as General Condition 2 and General Condition 7 of the Authority”; that is, it referred to the full 4 pages of the standard form contract. Reliance was also placed upon “similar exclusive sale authorities” having been signed on 6 August 2014, 26 September 2014 and 3 October 2014. The demand pointed out that all 4 authorities contained a calculation setting out the indicative commission. The letter also claimed penalty interest in the sum of $170,360.24.

Attached to the letter of demand was the Exclusive Authority, consisting of the first page as executed and forwarded on 27 October 2014, together with the 3 additional pages of this standard form contract. It was not suggested Hamilton Finley ever held an executed Exclusive Authority in the form annexed. Indeed, the copy annexed read “Vendor’s Copy” for “Page 2 of 4”, “Agent’s Copy” for “Page 3 of 4”, and “Vendor’s Copy” for “Page 4 of 4”. Precisely how the copy was collated in this form was not the subject of any evidence.[42]
[42]See also fn 20 above.

Further, the invoice dated 3 August 2015 was included with the demand.

On 24 June 2016, Aojia’s solicitors responded to the demand. There was no suggestion in that response that Aojia had not received the Exclusive Authority in the standard form (consisting of 4 pages), but the claim was disputed in any event.[43]
[43]The position adopted in this letter is no longer maintained: see par 17 above.

E. Exclusive Authority – 1 page or 4 pages?

Aojia’s evidence was that it signed a 1 page authority[44] which, it contended, contained the entirety of the Exclusive Authority. In contrast, Hamilton Finley submitted the Exclusive Authority was a 4 page document. Essentially, Hamilton Finley made this submission based on the following:

(1)Aojia knew and understood that the Exclusive Authority consisted of 4 pages as it was a standard form contract, similar to the General Authority, consisting of 3 pages, previously sighted and signed.[45]
(2)Each of the exclusive sale authorities sighted and signed by Aojia, including the Exclusive Authority, stated in the bottom right hand corner that it was “Page 1 of 4”. Further, the email forwarded on 6 August 2014 included in its attachment a page which contained “Page 3 of 4” in the bottom right hand corner.[46] By reason of these matters, Aojia was on notice that the authorities each consisted of 4 pages, which included the terms of the standard form contract.
(3)The execution by Chen, on 11 October 2014, of the Colliers Authority, which exclusive sale authority was in the same form as the Exclusive Authority and consisted of 4 pages.[47]
(4)A combination of the first 3 matters, together with Song’s and Chen’s experience in real estate up to October 2014.
(5)The events at the meeting on 23 October 2014.[48]
[44]See pars 80-82 above.
[45]See pars 3, 32 and 33 above.
[46]See par 44 above.
[47]See par 72 above.
[48]See pars 74-77 above.

I will deal with each of these in turn.
E.1 Previous execution of the General Authority

In my view, the fact that Aojia executed the General Authority more than 5 months before signing the Exclusive Authority, being a significantly different agreement, is of marginal relevance, at best. It is difficult to see how agreeing to a document with different terms is instructive of the terms that might have been the subject of the Exclusive Authority. Further, the fact that Hamilton Finley provided all 3 pages of the General Authority, in contrast to what Hamilton Finley repeatedly provided with respect to the exclusive sale authorities, when viewed objectively, might suggest to a reasonable person[49] that the decision to include only 1 page with respect to the Exclusive Authority was deliberate.
[49]See Toll (FGCT) Pty Ltd v Alphafarm Pty Ltd (2004) 219 CLR 165, 179 [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ). See also Trumble Szanto Braham (a firm) v Soultanides (unreported, Supreme Court of Victoria Court of Appeal, 9 May 1996), 4 (Hayne JA, with whom Winneke P and Callaway JA agreed).

For completeness, for like reasons, the fact that Aojia executed general sale authorities with respect to the Property with other agents on 7 April 2014 and 9 July 2014 does not assist Hamilton Finley in establishing that the Exclusive Authority consisted of 4 pages.

E.2 “Page 1 of 4”

In small print, on the bottom right hand corner of the Exclusive Authority, the words “Page 1 of 4” appear immediately below the box for the vendor’s signature. There was no evidence that Shen, or anyone on behalf of Hamilton Finley, drew this particular part of the document to the attention of Aojia. Further, the covering email sent on 23 October 2014 did not state, impliedly or otherwise, that the “attached Authority” consisted of anything more than what was in fact attached.[50] Given the background of Hamilton Finley repeatedly sending and accepting a 1 page document to establish what the parties treated as binding exclusive sale authorities,[51] the reasonable person could be expected to believe, as Aojia did,[52] that it was intended that each exclusive sale authority, including the Exclusive Authority, consisted of 1 page.
[50]See pars 80-81 above.
[51]With the partial exception referred to in par 44 above.
[52]This is referred to for completeness. Evidence of “actual intention” was before the court because of the claims made by Aojia concerning unconscionability and rectification: as to the latter, see Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603, 657 [267]-[268] (referring to Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 346.2 (Mason J)) (Campbell JA, with whom Mason P agreed); and see 641 [179], 642 [182] (Tobias JA, with whom Mason P also agreed).

This conclusion is fortified by the fact that, on its face, and leaving aside the reference to “Page 1 of 4”, the body of the 1 page document makes no reference to any term or clause on pages 2 to 4. In other words, it was reasonable and objective for Aojia to believe, and to intend, both from Hamilton Finley’s conduct and the wording of the document, that the exclusive sale authority consisted of a single page.

With reference to “Page 1 of 4”, it was not put to any witness called by Aojia that this wording was, or ought to have been, noticed by them. In these circumstances, given the small print and the language issues of the directors of Aojia, Zhang and Chen, I infer that the small print at the bottom of the page did not come to the attention of anyone acting on behalf of Aojia.

Even if, contrary to that conclusion, someone on behalf of Aojia noticed “Page 1 of 4” at the bottom of the Exclusive Authority or any of the previous exclusive sale authorities, given the course of conduct adopted by Hamilton Finley in deliberately only providing and accepting a single page authority, it could objectively have been understood by Aojia that it was the intention of Hamilton Finley to confine the contract to the single page provided.

E.3 The Colliers Authority

Reliance by Hamilton Finley on the Colliers Authority does not advance its case any further.

As already observed,[53] the Colliers Authority was fundamentally different. Not only did it state that the Property was sold “upon terms on payment of full deposit” (in contrast to “on payment of full purchase price”), but the commission was fixed at $500,000. This amount was less than any likely deposit, whether 5 percent or 10 percent, of the expected purchase price.[54]
[53]See par 72 above.
[54]As already noted, the Vendor’s price was listed as $13.5 million: ibid.

Further, and in any event, the Colliers Authority was provided as a 4 page document, (each page marked “Vendor’s Copy”).[55] For the reasons stated above,[56] the repeated practice of Hamilton Finley in providing and accepting a single page document, and its consequent effect on the ambit and meaning of the terms of the Exclusive Authority, cannot be affected by a prior dealing by Aojia with a third party to which Hamilton Finley was not privy. There is also no suggestion that Hamilton Finley was aware of the terms of the Colliers Authority in October 2014 or at any other relevant time.[57]
[55]Cf the General Authority (fn 20 above) and the Exclusive Authority: par 90 above.
[56]See pars 96-99 above.
[57]The Colliers Authority was not produced until the first day of trial: Hamilton Finley’s further submissions, 5 June 2017, [2].

Furthermore, there was no cross-examination of any witness about the circumstances in which the Colliers Authority was executed. In short, there was no evidence that any link was made by Aojia between the terms of the Colliers Authority and the terms of the Exclusive Authority. This observation is made in the context that neither Zhang nor Chen could read English.

For completeness, although Chen was taken to the Colliers Authority during cross-examination and confirmed his signature appeared on the first page of the 4 page document, no question was put to him relating to his understanding of the terms.

E.4The combination of the matters in E.1, E.2 and E.3 above, together with Song’s and Chen’s experience

Hamilton Finley sought to rely on the matters set out above both individually and collectively to establish that the 4 pages of the standard form of contract were included in the Exclusive Authority. In addition, Hamilton Finley sought to establish that Song and Chen were experienced business persons, particularly with respect to real estate, and must have known that the standard terms were included in the Exclusive Authority.

The cross-examination of each of Song and Chen revealed that both of them had quite limited experience with respect to the standard terms and of dealing with real estate agents in commercial property. Further, although at the relevant times Chen was a director of a licensed real estate agent, his actual involvement in the conduct of the real estate business was limited.[58] Also, any qualifications they now hold relevant to the real estate industry were obtained after the relevant events in this proceeding.[59]
[58]See par 25 above.
[59]Song became licensed as an estate agent on 16 November 2016. Chen was not a licensed estate agent, but was an “agent’s representative” in the employ of Easylink from 1 January 2015: see par 25 above. Both Song and Chen obtained statements of attainment indicating they had completed 3 units in partial completion of a Certificate IV in Property Services (Real Estate) on 24 November 2014. Song gave evidence that those units were completed over 2 days in November 2014.

In the absence of any experience that would indicate that it was probable or even likely that the standard terms would apply to the Exclusive Authority, the matters referred to above, when all viewed in combination or otherwise, do not take Hamilton Finley’s case any further. In short, the various factors all individually, and substantially, fail to establish the standard terms apply to the Exclusive Authority, and do not, when viewed in combination, make the case any stronger.

E.5 Meeting held on 23 October 2014

The onus is upon Hamilton Finley to establish that the terms of the Exclusive Authority were as alleged.[60] To the extent that Hamilton Finley relies upon what occurred at the meeting held on 23 October 2014 to establish the existence of an agreement in such terms, it also has the burden of proof.
[60]Currie v Dempsey (1967) 69 SR (NSW) 116, 125.7 (Walsh JA).

Without suggesting that Shen or Zou were telling deliberate untruths when they gave their evidence concerning what occurred on 23 October 2014, I cannot be satisfied, on the balance of probabilities, that their accounts of that meeting are correct. Leaving aside the contrary evidence of Chen concerning the provision of a draft exclusive sale agreement and the inability of Song to recall such a document,[61] there are a number of objective facts which suggest it was unlikely that Shen produced a proposed exclusive sale authority, let alone went through the first page attentively discussing the details and then went through the remainder of the 4 pages generally.
[61]See par 77 above.

First, there had been 3 previous occasions where Hamilton Finley had knowingly obtained exclusive sale authorities from Aojia without going through, or even attempting to go through, such a process. On each of those prior occasions, Shen believed there was a real prospect of a sale of the Property, and yet saw no need to engage in such a process, or even provide a 4 page document (executed or unexecuted) to Aojia.

Secondly, according to Shen, he believed that Chen was a licensed real estate agent. Although this belief was incorrect,[62] the fact that he held such a belief makes it highly unlikely that Shen would perceive any need to go through any proposed exclusive sale authority, particularly pages 2 to 4. Further, it is difficult to see how adopting such a course would achieve Shen’s stated desire to impress Chen at the meeting.
[62]See par 25 and fn 59 above.

Thirdly, the details on the first page were precisely the same as had previously been agreed in writing on 3 separate occasions, save for the date and duration of the exclusive period. An explanation in this regard was totally unnecessary.

Fourthly, at the time the 23 October 2014 meeting commenced, Hamilton Finley had not been provided the details with respect to when the proposed authority was to commence or for how long it would continue. There was no evidence of these details being completed during the course of the meeting.

Fifthly, no copy of what was purportedly handed over at the meeting on 23 October 2014 was kept. Indeed, the only true copy of the proposed exclusive sale authority held by Hamilton Finley is the single page that was scanned and sent on the evening of 23 October 2014.[63] Presumably, if, as Hamilton Finley contended, it placed considerable significance on the provision of the 4 page document then, acting prudently, it would be expected that Hamilton Finley would have kept a copy.
[63]See par 80 above.

Sixthly, in the email that was forwarded on 23 October 2014 at 10.00 pm,[64] there was no suggestion that the proposed exclusive sale authority had been previously provided or discussed. Further, when introducing the Avant project in this email, Shen stated, “As mentioned in the meeting this morning …”. No such preparatory words were used when referring to the proposed exclusive sale authority.
[64]Ibid.

Seventhly, Song kept a file of all the documents that were provided by Hamilton Finley with respect to this transaction, along with other documents relating to the Property. There was no copy of a 4 page exclusive sale authority in draft or otherwise, save for the version that was forwarded with the letter of demand on or about 7 June 2016.[65] Although Hamilton Finley’s counsel sought to attack the integrity of the file and suggested the alleged document may have been removed, in the circumstances, including where a document that, on its face, demonstrated that it had been forged remained on the file,[66] it is unlikely that such a document (if it had existed) would have been removed, and I find accordingly.[67]
[65]See par 88-91 above.
[66]See fn 30 above.
[67]Song gave evidence that the file was kept in a cabinet to which only she and Hu had access.

Eighthly, Song gave evidence that if she had been provided with a 4 page document on 23 October 2014, not only would it be on the file but she would have also caused it to be forwarded it to Zhang in China. There was no evidence of any such document being forwarded.

In summary, the objective evidence strongly suggests a draft of the Exclusive Authority was not provided by Shen at the meeting on 23 October 2014, and I find accordingly.

E.6Conclusion

In conclusion, I find that only a single page was provided, by email, to Aojia on 23 October 2014. This conduct, when viewed objectively with the surrounding circumstances, and Aojia’s return of the executed document as emailed, establishes that the single page comprised the Exclusive Authority.

F. The Exclusive Authority: failure to meet statutory obligations

The finding above that the Exclusive Authority only consisted of 1 page means that Hamilton Finley’s case fails at the threshold. It was properly accepted by Hamilton Finley’s counsel that, if such a finding were made, it would mean that the Exclusive Authority did not contain a rebate statement or a statement as to where a complaint concerning any commission or outgoings could be made, in contravention of s 49A(1)(c)(iii) and (iv) respectively of the Estate Agents Act.

In light of this, it is unnecessary to address Aojia’s alternate submission that the word “contains” in the chapeau of s 49A(1)(c) requires that the disclosures referred to in paragraph (c)(iii) and (iv) could not be met by the provision of a draft document which later formed part of the contract by reference, but actually had to be contained in the executed contract.

Aojia also alleged that Hamilton Finley contravened s 49A(1)(c)(ii), by reason that the Exclusive Authority did not contain the fee that was to be calculated on a percentage basis expressed as both a percentage and a dollar amount that would be payable on the reserve price or any other relevant amount. Essentially, it was said this provision was contravened for 2 reasons:

(1)The dollar amount did not represent the correct amount of the percentage expressed.
(2)The amount of $15 million was not “the reserve price or any other relevant amount” for the purposes of the provision.

Neither of these contentions is concerned with whether or not the Exclusive Authority consisted of 1 page or 4 pages. In short, on either scenario with respect to what the Exclusive Authority consisted of, these issues arise.

As to the first of these issues, there has plainly been a failure to comply with the provision. The agreed commission at 2.2 percent “of the selling price” of $15 million (as per the example given in the Exclusive Authority) amounts to $330,000, rather than the amount of $297,000 stated in the Exclusive Authority. Further, on this example, the total commission should have been stated as $1,230,000 rather than $1,197,000. Under cross-examination, Shen readily acknowledged this mistake. As noted above,[68] he volunteered that the words “up to $13.5 million” should have been inserted after “selling price”, which would have meant the amount of $297,000 was correct.[69] It follows that Aojia has established a contravention of s 49A(1)(c)(ii).
[68]See par 48 above.
[69]Notwithstanding this evidence, the claim made by Hamilton Finley in this proceeding is for an amount which includes 2.2 percent commission on the full sale price of $17 million.

As to the second submission, the term “relevant amount” is not defined in the Act. Aojia submitted that that term had to have some meaning beyond simply any figure chosen by the agent to include as a possible sale price. It was submitted, therefore, that “any other relevant amount” could only mean the single amount of the agent’s estimate (if applicable), or the higher or the lower amount of the agent’s estimate if a range were given, or any amount falling within the range specified.

As it has already been found that s 49A(1)(c)(ii) was contravened based on the first issue raised, it is not necessary to decide this issue. Suffice to say, there appears to be some merit in Aojia’s contention that the figure to be used for the purposes of calculating the commission should bear some relevance to the figures the subject of the “Vendor’s price” (that is the reserve price) or the agent’s estimate. If it were otherwise, an agent might be able to comply with the Estate Agents Act by providing an estimate of commission based on a figure which bears no resemblance to any likely realistic sale price.

The next defence raised by Aojia relied upon s 49A(1)(d) of the Estate Agents Act. On the evidence, there can be no doubt that Hamilton Finley failed to comply with the requirement as expressly stated in that provision. In short, there was no evidence of Hamilton Finley giving Aojia “a copy of the signed engagement or appointment” (by way of the Exclusive Authority). There is no apparent reason why the words in this provision should be read down, and no submission was made by Hamilton Finley to this effect.

However, Hamilton Finley submitted that there was no need to comply with s 49A(1)(d) in circumstances where a copy of the Exclusive Authority was emailed to Hamilton Finley by Aojia. It was contended in these circumstances, it was clear that Aojia already had a copy. In my view, there are at least 2 answers to this.

First, the provision makes no exception for circumstances in which “the person” already has a copy of the signed engagement or appointment. Sound policy reasons are readily envisaged as to why the statute would require the agent to actually give the relevant document to “the person”.[70]
[70]In this context, the agent includes the agent or an agent’s representative employed by the agent: s 49A(1)(d).

Secondly, on the facts of this case, Hamilton Finley never provided to Aojia, or was provided by Aojia with, a 4 page exclusive sale authority, executed or otherwise. It follows that, to the extent that the case Hamilton Finley relies on such a document as being the Exclusive Authority, no such “signed engagement or appointment” was ever in the possession of Aojia at any relevant time.

Yet another basis upon which Aojia alleged Hamilton Finley contravened the Estate Agents Act was by reference to s 49A(1)(a). It was submitted that the requirement of an agent to hold “a written engagement or appointment that is signed by the person (or the person’s representative)” was a reference to an engagement or appointment that complied with the Estate Agents Act. Hamilton Finley’s counsel properly accepted this was the correct construction.

Aojia contended that the Exclusive Authority did not comply with the Act because it did not contain an estimate of the selling price of the Property that complied with s 47A(2). Essentially, Aojia contended that Hamilton Finley could not have believed, at the time the Exclusive Authority was executed, based on its experience, skills and knowledge, that a willing but not anxious buyer would pay for the Property a price between $12 million and $13 million when Hamilton Finley had already received an offer for $17 million.

There are issues about whether or not Oceania was “a willing but not anxious buyer” at the time it made the offer on 10 October 2014. As noted above,[71] the information available to Hamilton Finley was that Oceania was under certain time pressures. That said, there would need to be a careful consideration of all the evidence concerning the various offers made, or allegedly made, of which Hamilton Finley was aware before this issue could be determined. In circumstances where a ruling on this issue is unnecessary, I will refrain from doing so.[72]
[71]See par 62 above.
[72]For completeness, the fact that there may have been a contravention of s 47A of the Estate Agents Act does not, of itself, amount to a bar for the purposes of s 50(1).

Finally, Aojia contended Hamilton Finley contravened s 49A(1)(b) by reason that it failed to tell Aojia that the commission to be paid was subject to negotiation.

There was no issue that Aojia generally appreciated it could negotiate with Hamilton Finley with respect to commission. This is demonstrated by the fact that it had already done so when negotiating the terms of the General Authority. There was also no issue that Aojia was willing to pay the commission rate as agreed[73] on the basis that it was only payable upon settlement of the Property. This part of the case was put by Aojia on the basis that, when Hamilton Finley first sought an exclusive sale authority, it wrongly represented in its email that that authority “demonstrate[d] the fees that [were] required”.[74]
[73]Leaving aside precisely what was agreed: see par 123 above.
[74]See par 42 above.

Notwithstanding that the representation as to the fees required may have been misleading (as the fees set out were not in fact “required” in order to accommodate the fees of the other agents), such a representation does not, in the context in which it was given, amount to a representation that the fees could not be negotiated. The relevant context was that Aojia already knew the fees could be negotiated. Further, more significantly, the very next sentence of the email stated that, if there was any concern about the fees, Hamilton Finley was willing to have another discussion on the topic.[75] In my view, in the context of the facts of this case, this further representation amounted to Aojia being informed that the commission to be paid was subject to negotiation, for the purposes of s 49A(1)(b) of the Estate Agents Act. In short, there was no contravention of that provision.
[75]Ibid.

As the terms of s 50 of the Estate Agents Act make plain,[76] a failure to comply with s 49A(1) automatically results in an estate agent not being able to sue for or recover or retain any commission or money in respect of the relevant transaction. By reason of the numerous breaches of s 49A(1) as set out above, s 50 operates as a complete bar to Hamilton Finley being able to recover any moneys claimed in this proceeding.[77]
[76]See par 18 above.
[77]See also pars 19-20 above.

Accordingly, Hamilton Finley’s claims based upon the Exclusive Authority must be dismissed.

G. The Exclusive Authority: contractual issues

In light of the findings above, it is not strictly necessary to determine any of the contractual issues arising from the execution of the Exclusive Authority. However, in deference to the submissions made, I will briefly state my conclusions.

Turning to the meaning of the word “sold”, as already noted above,[78] if the Exclusive Authority had consisted of 4 pages, there would be no ambiguity with respect to the meaning of the word “sold”. However, the same could not be said if, as I have found,[79] the Exclusive Authority consisted of only 1 page.
[78]See par 17 above.
[79]See par 119 above.

The principles applicable to contractual construction are uncontroversial. As was stated in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd, a contract is to be construed “objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose”.[80] Further:[81]

In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That inquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract.
(Citations omitted.)

[80](2015) 256 CLR 104, 116 [46] (French CJ, Nettle and Gordon JJ).

[81]At 116 [47].

In cases where the contents of a contract are ambiguous, reference to surrounding circumstances may be necessary to identify the commercial purpose or objects of the contract to facilitate a proper determination of the correct construction.[82]
[82]At 117 [49]. See also Electricity Generation Corporation vWoodside Energy Ltd (2014) 251 CLR 640, 656-657 [35] (French CJ, Hayne, Crennan and Kiefel JJ).

On the basis that the Exclusive Authority only consisted of 1 page, Hamilton Finley submitted that the Disputed Clause should be read in the same manner as it would be read if the Exclusive Authority had consisted of the 4 pages. The submission was based on 2 propositions.

First, the detail in the Disputed Clause was for the purpose of the vendor indicating whether the Property was to be sold with vacant possession or subject to tenancy, and indicating whether it was to be sold absolutely or subject to a terms contract. It was contended that filling out the relevant blanks in this part of the document indicated no more than that. In support of this position, Hamilton Finley suggested the words “is being” should be read between “Property” and “sold” in the Disputed Clause.

The second proposition was that the word “sold” meant, at the very least, a binding contract between vendor and purchaser for the sale of the Property and it was not necessary for that contract to be completed for the Property to be “sold”. It was submitted that this was consistent with the ordinary meaning of the word “sold” in this commercial context.

Aojia accepted the Disputed Clause was relevant to issues of whether or not the Property was to be sold with or without vacant possession and subject to a terms contract or otherwise, but also submitted that the words “Property sold: … on payment of … full purchase price OR upon terms on payment of [ ] full deposit and [ ] the sum of $...” (emphasis added) indicated when the Property was in fact “sold” for the purposes of the agreement.

To support this construction, reference was made to various authorities, including LJ Hooker Ltd v WJ Adams Estates Pty Ltd,[83] in which Gibbs J stated the following:[84]
[83](1977) 138 CLR 52.
[84]At 66.9-67.5.

When an agent is employed to sell a property, or to find a buyer, [she or he] does not earn [her or his] commission simply by finding someone who is ready, willing and able to buy, or who offers to buy. … In Victoria and in New Zealand it has been held that it is enough in such a case that a binding contract has been entered into as a result of the agency, even though the purchaser subsequently proves unable to complete it. In Queensland, on the other hand, it has been held that the agent is not entitled to commission unless the purchaser who signed the contract was ready, willing and able to complete it. In Anderson v Densley three members of this Court, speaking obiter, said:
“Where an agent is employed on commission to sell a property (and non-completion is not due to the default of the vendor) the commission only becomes payable if the sale is completed … If the plaintiff was the effective cause of that sale … he would at common law have earned his commission.”

The Court of Appeal of New South Wales has since followed and applied that statement. As at present advised I see no reason to differ from the view expressed in Anderson v Densley, but it is unnecessary to consider that question more fully because in the present case the contract made was actually completed.
(Citations omitted.)

The reference to Victorian authority in the above passage was a reference to the decision of Scott v Willmore & Randell.[85] The case of Anderson v Densley[86] was decided in the High Court some 4 years later.[87] With respect, it appears the better view is that, as was observed by Kirby J in Moneywood Pty Ltd v Salamon Nominees Pty Ltd,[88] the later decision of the High Court effectively resolved the conflicting authorities.[89] However, the issue is not free from controversy in Victoria.[90]
[85][1949] VLR 113 (Herring CJ, Gavin Duffy and O’Bryan JJ).
[86](1953) 90 CLR 460.
[87]See esp at 467.5 (Williams ACJ, Webb and Taylor JJ).
[88](2001) 202 CLR 351.
[89]At 389, fn 129.
[90]See Icon Property Pty Ltd v Wood [2008] VSCA 123, [52] and fn 5 (Dodds-Streeton JA and Osborn AJA, with whom Redlich JA agreed). See also GE Dal Pont, Law of Agency (3^rd ed, 2014), 331-337 [15.20]-[15.30].

It is unnecessary for me to resolve the possible conflict in the authorities referred to above. In my view, “sold” in the context of the single page Exclusive Authority was a reference to when the sale was completed at settlement. Critically,[91] that is the meaning which appears on the face of the Disputed Clause.[92] Further, that construction is supported by the surrounding circumstances.
[91]Cf Luxor (Eastbourne) Ltd v Cooper [1941] AC 108, 119.8 (Viscount Simon LC), 124.7 (Lord Russell), 130.8 (Lord Wright).
[92]See par 145 above.

Contrary to Hamilton Finley’s submissions, a commercial approach to the construction of the Exclusive Authority does not suggest a construction that meant the commission was payable upon Oceania and Aojia entering into the Sale Agreement. The terms of the single page Exclusive Authority were, relevantly, clearly ambiguous. Taking into account the surrounding circumstances giving rise to the Exclusive Authority,[93] including each of the preceding exclusive sale authorities, it made little or no commercial sense for Aojia to agree to pay Hamilton Finley a commission at the rate that was agreed, which was far in excess of any likely deposit, unless any contract for sale was actually completed. This was particularly so in circumstances where Aojia had no knowledge of the identity of the potential purchaser or its capacity to pay any agreed purchase price. This position pertains even if Aojia was desperate to sell. Further, previously entering into the Colliers Authority is entirely consistent with this approach to construction, given that the commission proposed to be paid pursuant to that arrangement was likely to be far less than any deposit paid upon the execution of a “binding offer”.[94]
[93]See Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, 352.2 (Mason J). To the extent Chen’s evidence might be relevant to the objective commercial approach, he gave evidence he would never have signed the Exclusive Authority if he believed it was to be understood as giving rise to an obligation to pay commission before the settlement of any sale.
[94]See par 101 above.

The fact that the Disputed Clause also has the purposes contended for by Hamilton Finley,[95] does not preclude the construction contended for by Aojia. Further, in contrast to the position put by Hamilton Finley,[96] this construction does not require additional words to be read into the Disputed Clause.
[95]See par 143 above.
[96]Ibid.

For the reasons set out above, if the issue were required to be determined, I would have decided that the Property was not “sold” for the purposes of the Exclusive Authority by Hamilton Finley on behalf of Aojia to Oceania, or anyone else, and accordingly an entitlement to commission pursuant to the Exclusive Authority never arose.

H. Claim under the General Authority

There is no proper basis upon which Hamilton Finley could make an alternate claim under the General Authority. There are a number of reasons for this.

First, both parties agreed to be governed by the Exclusive Authority for a period of 14 days from 27 October 2014. Aojia accepted an offer from Oceania during this period. The material terms of the Exclusive Authority are entirely inconsistent with the General Authority and the 2 documents cannot be read together.

Secondly, and further to the first point, the fact that the Estate Agents Act has been contravened in a number of respects does not mean that the Exclusive Authority was void or ceased to exist at some point in time. The contract created by the Exclusive Authority remained on foot at all relevant times. Although the relevant provisions of the Estate Agents Act preclude Hamilton Finley from recovering any of its commission pursuant to the Exclusive Authority or otherwise, it does not follow that the Exclusive Authority was not the operative agreement.

Thirdly, and in any event, the General Authority failed to comply with the Estate Agents Act. As referred to above,[97] the General Authority failed to state the fee calculated on a percentage basis both as a percentage of the specified amount of $12.5 million and as the correct dollar amount. For reasons already discussed,[98] this amounted to a contravention of s 49A(1)(c)(ii) of the Estate Agents Act. In these circumstances, the bar to recovery under s 50 also applies to the General Authority.
[97]See pars 29-32 above.
[98]See par 123 above.

Aojia’s counterclaim

By its counterclaim, Aojia sought various forms of relief with respect to the Exclusive Authority.[99] In summary, Aojia sought:

(1)Declaratory relief concerning the proper construction of the Exclusive Authority.
(2)An order that the Exclusive Authority be rescinded or rectified so as to embody the term that Aojia would only come under an obligation to pay the Commission if the sale of the Property settled.
(3)Declaratory relief with respect to Hamilton Finley’s conduct on the basis of unconscionability.
(4)A variation of the Exclusive Authority pursuant to s 243 of Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law).

[99]No relief was sought with respect to the General Authority.

As to paragraph 156(1) above, the basis of the dismissal of Hamilton Finley’s claim is because of non-compliance with the Estate Agents Act. In these circumstances, it is not appropriate that a declaration be made as sought.[100]
[100]Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 582.2 (Mason CJ, Dawson, Toohey and Gaudron JJ), 596.5 (Brennan J).

With reference to paragraph 156(2) above, it would be entirely inappropriate to grant such relief when 1 of the 2 directors of Aojia was not called to give evidence.[101] Any claim based on unilateral mistake would need to establish that the directors of Aojia were in fact acting under a mistake when they executed the Exclusive Authority. In any event, by reason of the matters set out above, no mistake as alleged existed because the Exclusive Authority, properly construed, was consistent with the understanding held by Aojia.
[101]See also par 23 with respect to Zhang’s involvement with the matters the subject of this proceeding.

As to paragraph 156(3) above, declaratory relief with respect to unconscionable conduct is also inappropriate, for much the same reasons as those set out in the preceding paragraph. The premise of the unconscionability claim was based on Hamilton Finley being successful in its construction of the Exclusive Authority. In short, the issues do not arise for determination.

As to paragraph 156(4) above, an order as sought is unnecessary in circumstances where the construction contended for by Aojia has been upheld.

In the circumstances, the counterclaim will be dismissed.

J. Other matters

Hamilton Finley sought to attack the credit of both Song and Chen based upon an invoice remitted, apparently by Hong Kong International Investment Ltd (“Hong Kong International”), to Aojia for $1 million on 10 August 2015.

Song was the first witness to be cross-examined about this invoice. She stated that she was instructed by Zhang to forward the invoice to Hamilton Finley, which she duly did on 10 August 2015. She further stated that her husband, Chen, who was the sole director of Hong Kong International, did not say what the invoice was for. Although the covering email sent by Song to Shen raised queries about how goods and services tax might apply to the invoice, it did not state what the invoice was for. Further, the description in the invoice, namely “referral fee”, did not make this apparent. Song gave evidence that she did not know what it meant. She said she received the invoice from an accountant in Hong Kong, whose name she did not know, and could only assume the invoice was for debts of Zhang required to be paid overseas.

When Chen was cross-examined about the invoice, he said he was looking at it for the first time. He said he understood that the purpose of the proposed transfer was part of Zhang’s arrangement to get her money returned overseas. In denying that he was giving evasive evidence and that this invoice was part of a plan by Aojia to avoid tax, Chen stated that, if that was the intention, then presumably the whole of the money would be transferred rather than only $1 million.

In seeking to establish that either Song or Chen, or both, were involved in tax avoidance, Hamilton Finley was making very serious allegations. Taking into account the gravity of such allegations,[102] together with the complete absence of any evidence as to the true purpose of the proposed transaction and that any tax avoidance was actually engaged in, I cannot be satisfied that Song or Chen had any improper involvement with respect to the invoice from Hong Kong International.
[102]Evidence Act, s 140; Briginshaw v Briginshaw (1938) 60 CLR 336, 362.2 (Dixon J).

Hamilton Finley also sought to attack the evidence of Song and Chen, and more generally the position of Aojia with respect to the construction for which it contended with relation to the Exclusive Authority, by referring to an “Exclusive Selling Agency Authority” executed by Aojia on 1 February 2016 with an agent, Auz Property Pty Ltd (“the Auz Property Authority”).

The Auz Property Authority provided that the Property was “sold” if a “Binding Offer”[103] was obtained. Further, Aojia agreed to pay 100 percent of the selling price by way of commission for any sale over $14.5 million, which was estimated to be $500,000.[104]
[103]“Binding Offer” was defined to mean “an offer on the terms set out in the Particulars of Appointment, which if obtained in compliance with this Appointment, would (or does) result in a contract enforceable against the purchaser”.
[104]Self-evidently, this was on a possible sale price of $15 million, whereas the agent’s estimated sale price was between $15.5 million and $17 million.

It was submitted by Hamilton Finley that the Auz Property Authority demonstrated the willingness of Aojia to expose itself to the payment of commission far in excess of any likely deposit in circumstances where that commission would be payable upon obtaining a binding offer, whether or not that binding offer was the subject of a contract or the completion of a contract.

In my view, the Auz Property Authority is of little relevance to the issues in this proceeding. First, it was not a surrounding circumstance that could properly be taken into account at the time the Exclusive Authority was entered into, the Auz Property Authority having been entered into more than 3 months later. Secondly, save for the written document being tendered without objection, there was no evidence at all of the circumstances in which the Auz Property Authority was agreed to. No witness called on behalf of Aojia was taken to the document during the course of her or his evidence.

In the circumstances, the Auz Property Authority, and its execution, did not materially undermine the credibility of the witnesses called by Aojia, or Aojia’s case.

K. Conclusion

For the reasons set out above, the claims made by Hamilton Finley pursuant to the Exclusive Authority and the General Authority will be dismissed. Aojia’s counterclaim will also be dismissed.

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[2017] VSC 319

7 JUNE 2017