Jarjo v Patterson

[2022] NSWSC 1049

Supreme Court

New South Wales

Medium Neutral Citation:

Jarjo v Patterson [2022] NSWSC 1049

Hearing dates:

2-4 May 2022; 12-13 July 2022

Date of orders:

5 August 2022

Decision date:

05 August 2022

Jurisdiction:

Equity

Before:

Darke J

Decision:

No binding contract found to have been entered into between plaintiffs and defendants.

Catchwords:

CONTRACTS – contract for the sale of land – contractual formation – land owned by defendants as joint tenants – authority for one vendor to execute contract on behalf of the other vendor – where second defendant alleges that her signature as vendor on contract for the sale of land was forged by first defendant – where first defendant accepts that he forged second defendant’s signature – where plaintiffs allege that the second defendant generally or specifically authorised the first defendant to sign on her behalf – whether second defendant authorised the first defendant to execute the contract on her behalf – whether objective circumstances of the case demonstrate such authorisation – held that second defendant did not authorise the first defendant to execute the contract on her behalf – no contract held to have come into existence between the plaintiffs and the defendants

Legislation Cited:

Conveyancing Act 1919 (NSW), s 66W

Environmental Planning and Assessment Act 1979 (NSW), s 10.7

Property and Stock Agents Act 2002 (NSW), s 63

Cases Cited:

Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142

Jones v Dunkel (1959) 101 CLR 298

Category:

Principal judgment

Parties:

Jacque Jarjo (First Plaintiff)
Juanita Jarjo (Second Plaintiff)
Michael Francis Patterson (First Defendant)
Wendy Anne Patterson (Second Defendant)

Representation:

Counsel:
Mr M Fernandes (Plaintiffs)
Mr J Bennett (First Defendant)
Mr M Bennett (Second Defendant)

Solicitors:
Fortis Law (Plaintiffs)
Coleman Greig Lawyers (Second Defendant)

File Number(s):

2021/16417

Publication restriction:

None

Judgment

Introduction

1. These proceedings concern a property in Appian Way, Burwood (“the property”) that is owned by the defendants, Mr Michael and Ms Wendy Patterson, as joint tenants. The plaintiffs, Mr Jacque and Ms Juanita Jarjo, allege that on 16 November 2020 they entered into a valid and binding contract with the defendants to purchase the property for a price of $4,507,000. The plaintiffs seek a declaration to that effect, and an order that the contract be specifically performed.

2. The defendants, who conducted their defences separately throughout the proceedings, each deny that the alleged contract was made. In short, the defendants contend that Ms Patterson did not sign the contract, and that the signature on the contract that appears to be hers was placed there on 13 November 2020 by Mr Patterson, who lacked authority to do so.

3. The plaintiffs seem to accept that Ms Patterson did not sign the contract, and that her apparent signature was written by Mr Patterson. However, the plaintiffs contend that the Court should find that Mr Patterson had actual authority to bind Ms Patterson to the contract. The conferral of actual authority is said to have occurred either by a specific authorisation to sign the contract, or by a more general authorisation to sell the property. The case was not put as one of ostensible authority.

4. The central issue of authority is a question of fact (see Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142 at 149-150 per Jordan CJ). The question is to be determined upon a consideration of the whole of the evidence. Questions arise concerning what inferences should be drawn from the evidence, as do questions concerning the credibility and reliability of the principal witnesses, particularly Mr and Ms Patterson and Mr Romani Iskander, an agent involved in the transaction.

5. Evidence was also given by Mr Jarjo. His credibility was not the subject of any challenge, and his evidence is accepted as truthful.

Background

6. It is convenient to commence by setting out some uncontentious facts by way of background.

7. The property at Appian Way was purchased by the defendants in 2005. It has been rented out, more or less continuously, since early 2006. The defendants have throughout that time lived at another property they co-own, in Beresford Road, Strathfield. That property was acquired in 2001.

8. The Appian Way property was placed on the market in 2018. The selling agent was Mr Guy Lorello of Raine & Horne Burwood. Mr Lorello was also the managing agent in respect of the rental of the property. In October 2018 arrangements were made for the property to be sold by auction. An auction was later held, but the highest bid (of about $4.5 million) did not meet the reserve price. The property was passed in and failed to sell. I note in passing that there is a dispute about whether the property thereafter remained on the market for a period. In any case, the defendants arranged for certain repair and renovation works to be carried out at the property from late-2018 to early-2019, and let the property to new tenants in January 2019.

9. It should also be noted that in October 2018 Mr Lorello, who was a client of Mr Jarjo’s jewellery business, sent text messages to Mr Jarjo about the sale of the property. A message sent on 13 October 2018 referred to the property as an “off market opportunity”. Those words suggest that the message was sent before the commencement of the marketing campaign. Another text message sent on that day to Mr Jarjo indicated that the price was $4.8 million. Mr Jarjo’s message in response suggests that he thought the price was much too high. In any event, it seems that Mr Jarjo did not take the matter any further at that stage.

10. On 8 July 2020, Mr Lorello was again in contact with Mr Jarjo about the property. Mr Lorello sent a text message that contained a link to a website, and suggested that Mr Jarjo should have a look at it. Mr Jarjo sent a message in response that included a query about the price, to which Mr Lorello responded with “$4.5m”. Once again, Mr Jarjo seems not have taken the matter any further at that stage.

11. On 27 October 2020, Mr Jarjo was contacted by Mr Romani Iskander, of Romani Estate Agents, in relation to the property. Mr Iskander is also a client of Mr Jarjo’s jewellery business. Mr Jarjo explained in cross-examination that he was always asking agents about “what properties they have”, and that this was how he had started talking to Mr Iskander. Mr Jarjo had first met Mr Iskander in about October 2019. The text messages exchanged between Mr Iskander and Mr Jarjo from 27 October 2020 indicate that Mr Jarjo wanted to inspect the property. As it turned out, Mr Iskander was able to conduct an inspection of the property with Mr and Mrs Jarjo (and an architect and a builder) on the morning of 12 November 2020.

12. It is clear that by late October 2020, Mr Iskander had approached Mr Patterson and enquired as to whether he would be interested in selling the property. Whilst the accounts of events given by Mr Iskander and Mr Patterson differ significantly, it is clear that Mr Patterson indicated that he was at least prepared to entertain a sale of the property. I note here that at no time during the course of Mr Iskander’s dealings in relation to the property did he have any contact with Ms Patterson. Nor did Mr Jarjo or Ms Jarjo have any contact with Ms Patterson.

13. It is convenient at this point to refer to the accounts given by Mr Iskander, Mr Patterson and Ms Patterson, concerning the most critical events in relation to the sale of the property.

Accounts of the critical events

Mr Iskander’s account: -

14. Mr Iskander (who was called as a witness in the plaintiffs’ case), deposed that he has known Mr Patterson for about 20 years, having first met him when he [Mr Iskander] worked at Raine & Horne Burwood. Mr Iskander regarded Mr Patterson as an experienced property investor and businessowner, who owned various investment properties and operated a hotel in Balmain.

15. Mr Iskander deposed that he called Mr Patterson on 27 October 2020 to ask if he was interested in selling the Appian Way property. He says that Mr Patterson said:

If the price is right, I will sell it and why not show the buyer the house.

16. On 30 October 2020, Mr Iskander received a voice-message from Mr Patterson to the effect that he [Mr Patterson] had spoken to his lawyer and could obtain a copy of the contract for sale. It is clear that this was a reference to the contract for sale that had been prepared in relation to the proposed sale by auction in 2018. There does not seem to be any dispute that, on about 4 November 2020, Mr Iskander drove Mr Patterson (from a property he was renovating in Belgrave Street, Burwood) to a solicitor’s office in Ashfield, where Mr Patterson collected a copy of the contract, and then provided it to Mr Iskander.

17. Mr Iskander deposed that he then had a conversation with Mr Patterson in which there was a discussion about the need to obtain “a new section 149 certificate and title search”, and about retaining a new solicitor (Mr Peter Fazio of Lighthouse Law Group) to act on the conveyance.

18. Mr Iskander deposed that following the plaintiffs’ inspection of the property on 12 November 2020, he called Mr Patterson and conveyed to him an offer of $4.4 million, which Mr Iskander described as “a good price”. He says that Mr Patterson asked Mr Iskander to see if he could “get more”. Mr Iskander deposed that at about 6:15pm on 12 November 2020, he called Mr Patterson and had a conversation in words to the following effect:

Mr Iskander:   I got them up to $4,507,000 and they have paid the deposit.

Mr Patterson:   Okay, very good.

Mr Iskander:   Can I meet up with you and Wendy to give you the contract and a copy of the deposit cheque.

Mr Patterson:   Yes, come to the pub in Strathfield in about 15 minutes.

Mr Iskander:   Okay, see you soon.

19. Mr Iskander further deposed:

I then travelled to the pub in Strathfield. I was expecting to meet with both Mr Patterson and Mrs Patterson, but when I arrived only Mr Patterson was there.

I handed Mr Patterson the contract and we had a conversation in words to the following effect:

Mr Patterson:   I will talk to Wendy when I get home. Give me a call tomorrow at around 8am.

Mr Iskander:   Okay, I need you both to sign agency agreement I gave you a couple days ago before I can proceed any further.

Mr Patterson:   No problem. My only condition on this sale is that I want it done before the end of year so I do not have to pay any land tax.

At about 8:20am the next morning, Friday 13 November 2020, I called Mr Patterson. Mr Patterson and I had conversation in words to the following effect:

Mr Patterson:   We are happy to sell. Meet me at 37 Belgrave Street with the contract.

Mr Iskander:   What time?

Mr Patterson:   Is 10:30 okay?

Mr Iskander:   Yes.

At about 10:30am on Friday morning, I met Mr Patterson at 37 Belgrave Street. Mr Patterson handed me a copy of the signed agreement. I handed him the contract with the agreed purchase price written on the front page. Mr Patterson and I then had a conversation in words to the following effect:

Mr Patterson:   Can you leave the contract with me? I will get Wendy to sign it.

Mr Iskander:   Okay, how long will you need?

Mr Patterson:   Come back at 11:30.

Mr Iskander:   Okay.

At about 11:30am on Friday, I met Mr Patterson at 37 Belgrave Street again. When I arrived, Mr Patterson handed me the contract. I noticed there was only one signature on the contract. I had a conversation with Mr Patterson in words to the following effect:

Mr Iskander:   Whose signature is that for?

Mr Patterson:   Wendy.

Mr Iskander:   Okay, also you need to sign it.

I then witnessed Mr Patterson sign the contract. I then executed the contract as a witness of his signature.

Mr Iskander:   I will exchange the contracts once we get the updated section 149 certificate from council to attach to the contract.

Mr Patterson:   Yes, please go ahead just as long as the buyer doesn’t have any cooling off period.

20. Mr Iskander deposed that at about 4:40pm on 16 November 2020, he had a telephone conversation with Mr Patterson in words to the following effect:

Mr Iskander:   I have received the certificates. The contracts are ready to be exchanged.

Mr Patterson:   Yes, go ahead. Just make sure there is no cooling off period and they settle before the end of the year.

Mr Iskander:   Settlement period on the contract is 42 days so it will take place before the end of the year. When I receive the signed 66W certificate I will proceed with the exchange.

Mr Patterson:   Ok go ahead.

21. Mr Iskander deposed that he thereafter took various steps, including: - obtaining a certificate under s 66W of the Conveyancing Act 1919 (NSW); dating the contracts; effecting an exchange of contracts; and informing Mr Patterson of the exchange having taken place.

22. Mr Iskander further deposed that he had various telephone conversations with Mr Patterson on 17 November 2020 and 18 November 2020. He says that in the third conversation on 18 November 2020 (at about 2:30pm) Mr Patterson told him that he had changed his mind and no longer wanted to sell the property. Mr Iskander deposed that during the course of that conversation words to the following effect were said:

Mr Patterson:   I changed my mind.

Mr Iskander:   What do you mean?

Mr Patterson:   I don’t want to sell the property anymore. Can you cancel the exchange? I want to put it up for auction, you and Guy can do it together. Guy said he could get at least $4.6 million.

Mr Iskander:   Michael, I can’t. It is too late, the contracts were exchanged a couple days ago. It is binding.

Mr Patterson:   Wendy didn’t sign it, I did it on her behalf. Can’t we argue that?

Mr Iskander:   This is out of my hands, you should speak to a lawyer.

Mr Patterson’s account: -

23. Mr Patterson deposed that he had some experience in buying properties, but did not know “the ins and outs of selling properties”. He said that he always seeks advice from a lawyer or an agent to help him in the process.

24. Mr Patterson deposed that in October 2020 Mr Iskander approached him “multiple times”, calling him constantly, and visiting him in person at the Belgrave Street, Burwood property. He deposed that he told Mr Iskander that he was “prepared to listen” in relation to a sale of the Appian Way property, and agreed to obtain a contract for such. However, he also deposed that he was “not interested” in selling the property at the time, although he was “curious about movements in the market price”. Mr Patterson then gave evidence about the making of arrangements for an inspection of the property, and the obtaining of the contract from the solicitor’s office on 4 November 2020.

25. Mr Patterson deposed that on 12 November 2020, Mr Iskander called him and told him that the buyers had looked at the property and wanted to buy it. Mr Patterson says that arrangements were then made to meet Mr Iskander outside the Strathfield hotel.

26. Mr Patterson deposed that he met Mr Iskander outside the Strathfield hotel at around 5:00pm on 12 November 2020. He says that Mr Iskander showed him a document that looked like a contract for sale, and he saw a price of $4,507,000 on the front page. He deposed that Mr Iskander described it as “a really good price”, and that he told Mr Iskander that he would “have a think about it”. Mr Patterson deposed that he went home “thinking I was not very impressed with the price”.

27. Mr Patterson then deposed:

On or about 13 November 2020, I recall receiving a phone call from Peter Fazio. Peter Fazio was Romani’s lawyer and we had the following conversation:

Mr Fazio:   Hi Michael, my name is Peter Fazio and I have been given this contract for the sale of the property at Appian Way Burwood by Romani. Are you happy for me to act for you as the Vendor in this sale?

Mr Patterson:   Yea, ok. What are the costs?

Mr Fazio:   I’ll charge the same as the other solicitor

Mr Patterson:   Ok.

On or around 13 November 2020 or 16 November 2020, Romani came to the Burwood Property again with 2 documents in his hand. I recall that at that point, I was so sick of seeing him and wanted him to go away. We had the following conversation:

Mr Iskander:   $4.5m is a really good price. You won’t get a better deal. I’ve been in real estate for many years and I’ve got you a really good deal. I have the paperwork here, you should sign it.

I recall Romani putting the documents on the fireplace and writing some things on the documents. I cannot recall what he wrote, but I do recall that one of the dates written on one of the documents was not correct. We had the following conversation:

Mr Iskander:   Sign here and here

Mr Patterson:   I’ll have to give Wendy a call and get her to come down and sign

Mr Iskander:   Don’t bother, you just sign it

I signed the documents.

I recall thinking that was a very strange thing for Romani to say. At the time, I thought that once I signed the papers, he would take them to the solicitor and the solicitor would ask Wendy to come in and sign the rest of [the] documents. I thought that this would give me time to speak to Wendy.

I thought that Peter Fazio would contact Wendy to ask her to sign the contract.

28. It may be observed that Mr Patterson’s statement that he “signed the documents” is lacking in detail and is, therefore, ambiguous. The statement seems to be intended to refer to two documents, being an Agency Agreement and a contract for the sale of land. Mr Patterson gave evidence in cross-examination to the effect that he signed the contract for both himself and Ms Patterson, and gave the contract, so executed, to Mr Iskander. He gave similar evidence in relation to the execution of the Agency Agreement.

29. Mr Patterson then deposed:

To the best of [my] recollection, I recall Romani called me on 16 November 2020 in the evening and we had a conversation to the following effect:

Mr Iskander:   Hi Michael, the property has now been exchanged.

Mr Patterson:   What do you mean? I wasn’t expecting that.

Later that evening, I spoke to Wendy. We had the following conversation:

Mr Patterson:   I have an offer on the property

Ms Patterson:   How much?

Mr Patterson:   It’s $4.5m

Ms Patterson:   We had nearly that much last time, why would we accept that now? It will put me in a bad position financially while I’m still working and I need to retire soon

Mr Patterson:   I’ve signed the documents

Ms Patterson:   I’m not happy, I didn’t agree to sell, get us out of it

On 17 November 2020 Romani again came to the Burwood Property where I was working. We had the following conversation:

Mr Patterson:   I’ve spoken to Wendy about the offer. She’s not happy and doesn’t want to proceed. Sorry, we won’t go ahead.

Mr Iskander:   Michael it’s done. Contracts have been exchanged.

Mr Patterson:   What do you mean? Wendy hasn’t even signed anything.

Mr Iskander:   I know this purchaser and they’ll fight you to the end

I didn’t say anything in reply and Romani left. I was very upset.

I decided to approach Guy Lorello, Principal of Raine & Horne Burwood. Guy is also the property manager of the Property. Guy was the previous agent when Wendy and I put the property on the market in September 2018. I told Guy what had happened.

On 18 November 2020, I had a telephone discussion with Peter Fazio as follows:

Mr Patterson:   Peter, we can’t go through with the sale, Wendy hasn’t signed the contract and doesn’t agree to sell. Romani got me to sign but we never got Wendy to sign.

Mr Fazio:   This is getting complicated. Wendy needs to come and talk to me. I will need money put in my trust account.

Ms Patterson’s account: -

30. Ms Patterson deposed:

On or around 19 November 2020, Michael and I had a conversation:

Mr Patterson:   We have had an offer for Appian Way.

Ms Patterson:   How much is it for?

Mr Patterson:   $4,500,000.

Ms Patterson:   That’s not enough, that’s the price that we rejected when we took it to auction, and I’m retiring next year

Mr Patterson:   Actually I have already signed the contract.

Ms Patterson:   Well I haven’t signed anything?! I didn’t ask you to do this! Why didn’t you talk to me about this

Mr Patterson:   I know, I’m sorry but I was pressured to sign the contract and to sign your name as well.

Ms Patterson:   Well you better get out of this because it’s not a legal document. I don’t want to sell for that price and certainly not before I retire.

That was the first time I had been made aware of any actions regarding the sale of the Burwood Property via the transaction that is the subject of these proceedings. Prior to that conversation I was unaware that any real estate agent, including Guy Lorello, was taking any steps in relation to its sale.

After this conversation, I was very shocked and surprised. It was very upsetting that Michael had done this without my knowledge or permission. I was especially upset because he had signed my name. I had never given Michael any approval or authority to sell the Burwood Property on my behalf, nor had we had any conversations about selling the Burwood Property following the auction in 2018 other than the casual conversation deposed to in paragraph 25 above, and similar conversations to the effect that any sale would take place after I had retired.

I was very upset with Michael for a few days following the above conversation. Michael was also very upset by it all, and very apologetic and told me on a few occasions that he felt “pressured into signing the contract by the agent”.

I did not authorise Michael to act on my behalf in relation to the marketing or sale of the Burwood Property in 2020.

I did not see the purported contract for the sale of the Burwood Property dated 16 November 2020 (the Contract) between Michael and myself and the Plaintiffs until approximately January 2021, as it was Annexed to the First Plaintiff’s affidavit.

…

I have now reviewed and examined the execution pages of the Contract and confirm that I did not execute that Contract, or any other agreement for the sale of the Burwood Property to the Plaintiffs.

I did not accept any offer to sell the Burwood Property to the Plaintiffs and would not have agreed to sell the Burwood Property to the Plaintiffs, or any other party for $4,507,000.

I did not engage with, nor authorise, any person to act in relation to the sale of the Burwood Property in 2020.

31. In the witness box, Ms Patterson sought to make a correction to the date of the conversation in which, she says, she found out about the sale of the property. Ms Patterson said that the conversation (which occurred in the evening), could not have occurred on 19 November 2020. She said that the conversation probably occurred on either 16 November 2020 or 17 November 2020. She said it was unlikely to have occurred on 18 November 2020.

32. Before leaving this section, it should be noted that each of the above witnesses was cross-examined at some length. Their accounts must, of course, be considered in the light of the further evidence given in cross-examination. However, in each case the account, as described above, was not departed from in any fundamental respect.

The contract for sale

33. According to Mr Iskander, he effected an exchange of contracts after he received a s 66W certificate in relation to the contract at about 6:00pm on 16 November 2020. The exchanged contracts employed the 2018 edition of the Law Society/Real Estate Institute standard form, supplemented by a number of special conditions. The handwriting on the front pages of both the purchaser counterpart and the vendor counterpart seems to be that of Mr Iskander. Mr Iskander also signed the front page of each counterpart as a witness to the signatures of the parties.

34. The front page of the purchaser counterpart was signed by the plaintiffs. The evidence is not precise as to when that occurred, but nothing of significance turns upon that. I accept that the front page of the vendor counterpart was signed for the vendor by Mr Patterson alone. He wrote his own signature, and also a signature apparently that of Ms Patterson. The signatures were written during the morning of 13 November 2020 after the contract was provided to Mr Patterson by Mr Iskander. I will defer for the moment the question whether the apparent signature of Ms Patterson was written by Mr Patterson in the presence of Mr Iskander, or in his absence.

35. The contract signed by Mr Patterson was not in the form it had become by the time of exchange. It did not contain the planning certificate (issued under s 10.7 of the Environmental Planning and Assessment Act 1979 (NSW)) that forms part of the contract that was exchanged. The planning certificate, which had been ordered by Mr Iskander on 13 November 2020, was not received by him until the afternoon of 16 November 2020. It is not clear whether the contract signed by Mr Patterson contained the title search of the property dated 13 November 2020. The title search, which had been ordered by Mr Fazio of Lighthouse Law Group, was forwarded by Mr Fazio to Mr Iskander at 10:14am on 13 November 2020.

36. It should be noted that on 16 November 2020, prior to the exchange of contracts, the plaintiffs paid a deposit of $225,350 to Mr Iskander. As he was the vendor’s agent specified on the contract, the deposit had to be paid to him to be held as stakeholder. The amount so paid was only 5% of the purchase price. However, the details set out on the front page of the contract plainly provide for a deposit of $450,700, or 10% of the purchase price. Special Condition 4.1, which operates in the event the vendor agrees to accept a lesser deposit than 10% of the purchase price on exchange, provides for the deposit to be paid in two instalments, viz, 5% on exchange and 5% on completion or when the purchaser breaches an essential term of the contract. In the course of cross-examination, Mr Iskander stated that, on 13 November 2020, Mr Patterson “agreed on a 5% deposit”.

Events following the execution of the contract by Mr Patterson

37. The plaintiffs place some reliance upon the events that occurred after Mr Patterson signed the contract on 13 November 2020. It was submitted that the conduct of the defendants, including dealings with solicitors in relation to the matter, supported the conclusion that Mr Patterson had authority to sign the contract for Ms Patterson.

38. There were dealings between the defendants and two firms of solicitors in the period following the signing of the contract. The first firm, Lighthouse Law Group, was specified on the front page of the contract as the vendor’s solicitor. The second firm, Jemmeson Fisher, appears to have been engaged on about 18 November 2020 to provide advice in relation to the validity of the contract.

39. It should be noted that Ms Patterson denies that either of those firms had been retained by her. It does seem to be the case that she provided no instructions to Mr Fazio of Lighthouse Law Group. On 20 November 2020, Mr Fazio sent an email to Mr Patterson in the following terms:

Unfortunately, as a result of the information provided to us recently and our inability to obtain instructions from Wendy, we are unable to continue to act for you in respect of this matter. Accordingly, we attach our Notice of Termination of Engagement dated today. The original will follow in the mail.

We strongly recommend that you obtain alternate legal representation in respect of the matters raised by you during our telephone conversation on Wednesday 18 November 2020.

40. Ms Patterson’s contact with Lighthouse Law Group appears to have consisted of no more than the receipt of an email from Mr Fazio on 19 November 2020, which she promptly forwarded to Mr Patterson (without opening the attachment – a copy of the contract for sale), as requested by Mr Fazio.

41. The position is less clear in respect of Jemmeson Fisher. Ms Patterson was the recipient of a number of emails from that firm. She maintains, however, that she was merely playing the role of a conduit, passing emails on to Mr Patterson as required. There is no direct evidence that Ms Patterson ever provided instructions to any solicitor at Jemmeson Fisher (whether verbally or in writing), but Ms Ellison of that firm nevertheless appears to have considered both Mr Patterson and Ms Patterson to be clients.

42. A number of the communications with Lighthouse Law Group, and with Jemmeson Fisher, were adduced in evidence.

43. Notably, an email sent by Mr Fazio to Mr Patterson on 18 November 2020 records instructions provided by Mr Patterson earlier on that day. The email includes the following:

I refer to your call today instructing that:

you did not wish to proceed with the sale of the Property

that your wife had not signed the Contract

that your Agent should not have exchanged the Contract.

On my return to the office, I reviewed the Contract and called you to advise there were 2 signatures on the electronic copy of the contract which appeared to be that of yourself and your wife Wendy. I note you then instructed that:

Wendy had not signed the contract and

That you did not hold a Power of Attorney for Wendy giving you authority to sign the Contract on her behalf.

Obviously there are several serious issues here that we must consider including but not limited to:

…

2.   Whether the sale contract is defective and unable to be enforced because Wendy’s signature does not appear on the Contract

3.   Whether “Wendy’s” forged signature amounts to:

a.   fraud committed against Wendy and, if so, whether:

i.   Wendy seeks a remedy against the forger such as compensation; and

ii.   it is a criminal offence that she intends to report to Police;

Or

b.   An agent (you) signing the Contract on her behalf as a result of some unwritten authority i.e because of her express verbal instructions to you to do so or because of past similar behaviour which she has approved

4.   Whether the exchange of Contracts should have been carried out by the Agent i.e. did the Agent have the parties’ authority, either express or implied, to exchange the Contracts.

44. Reference should also be made to some emails sent by Jemmeson Fisher which shed light upon the instructions provided to that firm.

45. On 18 November 2020 (at 5:00pm), Ms Ellison of Jemmeson Fisher sent an email to Guy Lorello, who seems to have been providing assistance in the giving of instructions to the firm. The email was in the following terms:

Thank you for your time on the phone this afternoon.

I have discussed this matter with Michael Patterson and he has advised that you are the best person to speak to for further information.

I summarise my instructions as follows:

Michael Patterson owns a property with his wife.

A contract for sale of land was exchanged 2 days ago to sell the property.

On instruction from the agent, Romani Iskander, Michael executed the contract by signing his name and his wife’s name. The signatures were witnessed by Romani Iskander. Michael Patterson does not have a power of attorney enabling him to execute the contract on behalf of his wife.

Following exchange, Michael’s wife decided that she did not wish to proceed with the sale.

The validity of the contract is in issue.

Michael and his wife do not wish to proceed with the contract.

I recommend preparing a letter to both the agent, Romani Iskander, and the purchasers advising on the above.

So that I may prepare this letter, would you please provide the following information:

A copy of the exchanged contract.

Dates/times of when the above occurred.

Instructions on whether any of the above is incorrect.

I look forward to hearing from you.

46. On 20 November 2020 (at 9:38am), Mr Lorello sent an email in response in the following terms:

I have spoken to Michael and respond as follows.

Your summary of events from 1-6 are correct and add the following comments.

1 – agency agreement and front page of contract attached, you will note that the agency agreement was also signed by Michael on behalf of his wife and dated 13/11/20 and the exchange was dated 16/11/2020.

For further information can you please cc Wendy Patterson on [email protected]

(Ms Patterson used the name “Wendy Alford” in respect of her then employment.)

47. An email, sent by Ms Ellison to Mr Lorello at 12:56pm on 20 November 2020, was copied to Ms Patterson at that email address, and sought instructions from her. At 1:06pm, Ms Patterson responded by email in the following terms:

Thanks Samantha, I’ll pass this onto Michael.

Ms Patterson in fact did so, almost immediately, without adding any comment.

48. However, at 2:23pm on 20 November 2020, Mr Lorello sent an email to Ms Ellison (and Ms Patterson) in the following terms:

I have spoken to Michael and Wendy and they wish to proceed with the initial letter.

49. At 2:49pm and 3:33pm on 20 November 2020, Ms Ellison sent further emails to Mr Lorello that were copied to Ms Patterson. A draft letter was attached to the latter email. Ms Ellison sought advice on whether “you are happy for this to be sent”. Ms Patterson forwarded these emails to Mr Patterson, again without further comment, at 5:20pm.

50. At some point on 20 November 2020, Jemmeson Fisher sent a letter by email to the plaintiffs’ solicitors, Fortis Law Group, in the following terms:

We act for Michael Francis Patterson and Wendy Anne Patterson (our Clients).

We are instructed as follows:

Our Clients are the registered proprietors of the above Property.

Romani Iskander (Agent) of Romani Estate Agents was appointed as agent to sell the Property pursuant to an exclusive agency agreement dated 13 November 2020.

Jacque Jarjo and Juanita Jargo (your clients) made an offer to purchase the Property for the sum of $4,507,000. A Contract for Sale of Land was executed by your clients and delivered to the Agent.

The Agent presented the offer to Michael Francis Patterson on a Contract for Sale of Land (Contract). Under advice from the Agent, Mr Patterson executed the Contract in his name and the name “Wendy Patterson”. Execution of the Contract was witnessed by the Agent.

The Agent proceeded to date each Contract 16 November 2020.

At no point did Wendy Anne Patterson have notice of the offer or accept the offer from your clients.

The Contract is invalid.

Our Clients will instruct the Agent to refund the Deposit paid by your clients to your clients’ nominated bank account.

Would you please [sic] account details for refund of the Deposit.

We await your reply.

51. The plaintiffs seek to rely upon the second numbered paragraph of the email as an admission, by both defendants, that Mr Iskander had been appointed by them as their agent on 13 November 2020.

52. Fortis Law Group responded to the above email by stating, inter alia, that the plaintiffs regarded the contract as valid and remaining on foot. They have maintained that position ever since.

53. On 4 December 2020 (at 10:58am), Ms Ellison sent an email that was addressed to both Mr Lorello and Ms Patterson. This email was concerned with the obtaining of an opinion of counsel. Ms Patterson forwarded the email to Mr Patterson at 11:08am without further comment.

54. On 7 December 2020 (at 9:47am), Mr Lorello sent an email to Ms Ellison (and Ms Patterson), stating that the opinion of counsel would not be required. Ms Ellison then sent an email at 9:51am to Mr Lorello and Ms Patterson, enquiring whether the vendors would be proceeding with the sale. Ms Patterson forwarded those emails to Mr Patterson at 9:57am. On this occasion, Ms Patterson’s email added some commentary, namely:

Michael

For your information, below – email first from Guy to Samantha, then Samantha’s reply and question…

Wendy

55. At some point in December 2020, Wendy Patterson retained Coleman Greig Lawyers to act for her in the matter. On 23 December 2020, that firm sent a letter to Fortis Law Group in which it was stated that Ms Patterson did not execute the contract “and was not otherwise aware of its execution”, such that the contract is invalid, void and not enforceable. Fortis Law Group responded on 6 January 2021, again asserting that the contract is valid and binding.

56. The proceedings were commenced on 19 January 2021.

The witnesses

57. As the credit of the three central witnesses is an important aspect of the case, I should record my overall impressions of them.

58. I formed the view that the evidence of Mr Iskander had to be treated with some caution. I note at the outset that he has an interest in the outcome of the litigation (although his interest is not as substantial as that of Mr Patterson or that of Ms Patterson). If a valid contract is found to exist and is enforced, as sought by the plaintiffs, Mr Iskander will have a basis to seek a commission of $45,070 plus GST. More significantly, the manner in which he conducted himself in relation to the sale of the property was less than satisfactory in a number of respects.

59. Mr Iskander never had any contact with Ms Patterson, one of his supposed principals, and took no steps to confirm with her that she had indeed signed the Agency Agreement and the contract for sale. Nevertheless, Mr Iskander was prepared to place his own signature on the contract for sale in a manner that falsely suggests that he actually witnessed the signing of the contract by both vendors. Further, Mr Iskander was prepared to conduct an inspection of the property for the plaintiffs, on 12 November 2020, before he had received a signed Agency Agreement, and before the proposed contract for sale and other “required documents” were available for inspection as stipulated by s 63 of the Property and Stock Agents Act 2002 (NSW).

60. Mr Iskander’s conduct became the subject of a complaint made by Mr Patterson to the Department of Fair Trading. In the course of responding to the complaint, Mr Iskander sent an email to the Department that included the following:

I provided to Michael an Exclusive Agency Agreement, which Michael returned to me signed. I then arranged for the buyer to inspect the property.

The above statement is factually incorrect. It creates the erroneous impression that the signed Agency Agreement had been received prior to the 12 November 2020 inspection. It was put to Mr Iskander in cross-examination that he made the incorrect statement in order to cast his conduct in a more favourable light. He denied that was so, claiming that Mr Patterson had been telling him that the Agency Agreement had been signed. Even if that had been said by Mr Patterson, Mr Iskander’s statement falls well short of an accurate account, and it is therefore difficult to avoid the conclusion that the statement was intended to conceal the true picture.

61. In addition, one aspect of Mr Iskander’s evidence seemed to me to cast some doubt upon the accuracy and reliability of his evidence concerning matters of detail. I refer in this regard to the evidence given about when the Agency Agreement was first provided to Mr Patterson, and when Mr Iskander placed the date “13/11/2020” upon it. This evidence, about a matter of some importance, was in my view confusing and inconsistent. The suggestion made at one point that the Agency Agreement had been provided to Mr Patterson some days prior to 13 November 2020 with that date already written in seemed implausible and was contradicted by an answer given a short time thereafter. Mr Iskander then gave an answer which suggested that he had no real recollection of those matters.

62. I formed the view that the evidence of Mr Patterson, like that of Mr Iskander, had to be treated with some caution. Mr Patterson seemed keen to downplay the extent of his experience of buying and selling properties, yet the evidence is clear that Mr Patterson owns, either solely or with others, about 20 properties in total and had been involved in several property sales. It is likely that Mr Patterson sought to downplay his experience because he perceived that it was in his interests to do so. That is to say, that evidence was deliberately self-serving.

63. There are other examples of what appeared to me to amount to the deliberate giving of self-serving testimony. When asked a question about whether, in July 2020, he had any interest in selling the property, Mr Patterson responded with:

It’s not my property. It’s a joint property. I can’t, it doesn’t matter what I, what I, my interests are. It’s what the joint interests of my partner are.

That largely non-responsive answer struck me as an utterance designed to be helpful in defending the plaintiffs’ claim. A further example of self-serving evidence is Mr Patterson’s rather emphatic answer that a telephone conversation he had with Ms Patterson on 13 November 2020 could not have occurred before he provided the signed agreements to Mr Iskander on that day. So, too, is his answer that he was “90% sure” that the conversation with Ms Patterson occurred after the meeting with Mr Iskander. These answers were given even though it was plain that Mr Patterson had no clear recollection of the times when either the meeting or the conversation occurred.

64. It is noteworthy that, whilst under cross-examination, and despite being told that he should not speak to anyone over the lunch break (on the 2^nd day of the hearing), Mr Patterson spoke to Mr Lorello about an aspect of his evidence. Mr Patterson sought to explain this on the basis that he understood the instruction to refer only to people in the courtroom. Even if Mr Patterson had such an understanding, it is difficult to fathom why he would then speak to Mr Lorello overnight (whilst still under cross-examination) for 10 or 15 minutes. It is also difficult to accept Mr Patterson’s denial that he spoke to Mr Lorello about the questions that had been asked in cross-examination.

65. I found implausible Mr Patterson’s denial that he had given any authority to Mr Lorello to advertise the property for sale in July 2020. It is clear that Mr Lorello was marketing the property at that time, and I am unable to accept that he was doing so without any authority. I note that Mr Patterson had earlier given an answer to the effect that he did not know whether Mr Lorello had the property on the market in September 2020. I think that Mr Patterson’s denial of authority is another example of evidence given because he perceived that it was in his interests to do so.

66. I formed the view that Ms Patterson was a satisfactory witness, although some aspects of her evidence gave rise to concern. The main matter of concern was the evidence Ms Patterson gave about the emails she forwarded to Mr Patterson on 7 December 2020 (referred to above at [54]). Ms Patterson seemed at pains to deny that she had read or understood the forwarded emails. However, her comments to Mr Patterson clearly show that she at least read and understood Ms Ellison’s email, which consisted of only 2 short lines. It is very likely that she also read and understood Mr Lorello’s email, which consisted of only a single line. Accordingly, Ms Patterson’s denials cannot be accepted, but upon reflection, I do not think that this concerning aspect of her evidence should be taken to significantly undermine her testimony more generally.

67. An acceptance by Ms Patterson that the two brief emails had been read and understood would not have seriously weakened her evidence that she was merely playing the role of a conduit. It is thus difficult to ascribe her denials in this regard to a considered strategy. It is more likely that the denials were the product of a generally guarded and defensive approach taken by Ms Patterson to the giving of her evidence. That approach was evident, for example, in her answers to questions concerning the Jemmeson Fisher letter of 20 November 2020. The existence of such an approach itself calls for her evidence to be scrutinised carefully. However, having done so, I think that Ms Patterson’s testimony can be regarded as generally truthful, and reasonably accurate.

68. Counsel for the plaintiffs submitted that Ms Patterson was not a witness of credit. In addition to the evidence concerning the emails forwarded on 7 December 2020, some emphasis was placed upon her calm reaction to being informed, in the witness box, that she and Mr Patterson had a telephone conversation at about 10:56am on 13 November 2020, around the time the vendor counterpart of the contract was signed. It was submitted that her evidence that there was no discussion in any such telephone call about the property or the contract, coupled with her calm reaction to the revelation of the existence of the telephone call, showed that Ms Patterson never had the claimed emotions of anger and upset upon discovering the existence of the signed contract. It was submitted that her reaction in the witness box belied her evidence that her actions after finding out about the contract could be explained by her anger and upset at the situation. I am unable to accept those submissions. Ms Patterson presented generally as a calm and steady person. I am not prepared to find that her calm reaction in the witness box, to being informed that there was a telephone conversation with her husband on the morning the contract was signed, suggests that she would not have been angry and upset when (as she claimed) she found out about the signed contract from her husband, at home, almost 20 months earlier.

69. Counsel for the plaintiffs also submitted that Ms Patterson’s evidence about not having discussed the case with Mr Patterson was false. It was submitted that this was demonstrated by the fact that she had provided assistance in relation to Mr Patterson’s complaint to the Department of Fair Trading against Mr Iskander. It can be accepted that Ms Patterson’s involvement with the complaint touched upon the central issues in this case (including the circumstances in which Mr Patterson said that he signed the contract). However, Ms Patterson gave evidence that the complaint was “separate to this matter” and maintained her evidence that she had not spoken to Mr Patterson about the case (except in relation to a Notice to Produce). Ms Patterson evidently regarded the complaint as something that was between Mr Patterson and Mr Iskander, not involving her. That is understandable in circumstances where she and Mr Iskander had no dealings at all. Accordingly, questions directed to discussions about this case would not necessarily have been understood to encompass the Fair Trading complaint, notwithstanding the overlap in subject-matter. I therefore do not accept the plaintiffs’ submission that Ms Patterson gave false evidence about discussions with her husband about the case.

70. I have also considered the various other criticisms made by the plaintiffs in relation to Ms Patterson’s evidence. These matters do not seem to me to be cogent, whether viewed separately or together. For example, the criticism that Ms Patterson changed her evidence by means of a second affidavit, and later made a correction in the witness box to a critical date (the date of the conversation with Mr Patterson in which she says she found out about the signed contract) seems to me to lack force. Both changes were made having regard to documentary evidence, and in my view can be seen as intended to provide a more accurate account. Having considered Ms Patterson’s evidence in its entirety, and having regard to the various matters raised by the plaintiffs, I have concluded that her evidence was generally truthful, and reasonably accurate.

Determination

71. The plaintiffs seek to establish that when Mr Patterson wrote the signature apparently that of Ms Patterson on the vendor counterpart of the contract, he had actual authority to do so, and thereby bind Ms Patterson to the contract that was subsequently exchanged. The case is put on the basis of either a specific authorisation to sign the contract, or a more general authorisation to sell the property. It is thus necessary to consider the dealings between Mr and Ms Patterson in relation to the property in order to determine whether any such authorisation should be found on the evidence, including by inference.

72. As mentioned earlier, Mr and Ms Patterson purchased the property in 2005, and it has been rented out, more or less continuously, since early 2006. The property was placed on the market in about October 2018 (with Mr Lorello as the selling agent). An auction was held, although the evidence is not clear as to the date of the auction. It is likely to have been held by December 2018. The property failed to sell at the auction, having attracted a highest bid of about $4,500,000. Ms Patterson gave evidence, which was not challenged, that she and Mr Patterson discussed the offer and subsequently rejected it. She said that they were looking to obtain at least around $5,000,000, and there is evidence that a price of $4,800,000 was being sought in October 2018. Ms Patterson gave further evidence, which was not challenged, that she and Mr Patterson made arrangements for certain works to be carried out at the property in late-2018 to early-2019, before the property was let to new tenants in January 2019.

73. A Property Activity Summary contained in a Core Logic report in respect of the property indicates that Mr Lorello had the property on the market for sale from 16 October 2018 to 15 March 2019. The Property Activity Summary also suggests that Mr Lorello had the property on the market for rent from 8 January 2019 to 11 March 2019.

74. In cross-examination, Ms Patterson said that she and Mr Patterson both agreed after the auction that the property should be taken off the market. She was not sure who spoke to Mr Lorello about that, but said that she did not have any dealings with Mr Lorello after the date of the auction. The likelihood is that any instructions to Mr Lorello on that matter would have been provided by Mr Patterson. I note that Ms Patterson also gave an answer in cross-examination to the effect that, because she worked in the City, Mr Patterson “did the day-to-day dealings or the week-to-week dealings regarding the property”.

75. Mr Patterson said in cross-examination that he took the property off the market after he did not accept the offer made at the auction. However, the Property Activity Summary suggests that Mr Lorello had the property on the market (or at least advertised as for sale) for a period after the auction. I therefore think it is unlikely that Mr Lorello received clear instructions that the property was to be taken off the market. Mr Patterson’s evidence about this matter, including as to what he was told by Mr Lorello during breaks in his cross-examination, was confused and inconsistent. In any case, it appears that the property was eventually taken off the market some time after the lease had been entered into with the new tenants.

76. The Property Activity Summary further indicates that the property was again placed on the market for sale, albeit for a short period, in September 2020. Mr Lorello and his son are named as the agents. There is also evidence (referred to at [10] above) that Mr Lorello was marketing the property in July 2020.

77. Ms Patterson, when shown the September 2020 entry in the Property Activity Summary, said she was taken completely by surprise. She said she had no explanation for it. She said that she had no involvement with any sale process at any time during 2020. I accept that evidence. I note that Ms Patterson deposed to a conversation she had with her husband in about January 2020 in the following terms:

Ms Patterson: I think I’m going to retire at the end of my contract at work [i.e. January 2022]. It would probably be a good time to think about selling Burwood after I have retired. It would save me some tax.

Mr Patterson: I agree.

Ms Patterson was not challenged in cross-examination about that conversation, and it was not put to her that she did not hold the view that a good time to think about selling the property would be after her retirement.

78. The likelihood is that, whatever Mr Lorello was doing in relation to a sale of the property after the auction in 2018, and in the period from about July 2020 to September 2020, it was on the instructions of Mr Patterson alone. I appreciate that Mr Patterson denied in cross-examination that he authorised Mr Lorello to advertise the property in July 2020, but I do not accept that denial. I think that when Mr Lorello approached Mr Jarjo in July 2020 he was acting in accordance with a permission given by Mr Patterson. I note in this regard that Mr Patterson was in regular contact with Mr Lorello by reason of Mr Lorello being the managing agent for a number of his properties.

79. Similarly, the evidence is clear that Mr Iskander’s involvement with the property in October-November 2020 was based on the instructions of Mr Patterson alone.

80. In my opinion, having considered the entirety of the evidence and in particular the evidence concerning the dealings between Mr and Ms Patterson in relation to the property, I am not satisfied that Mr Patterson was given any general authorisation by Ms Patterson to sell their interests in the property. There is no evidence of any express authorisation to that effect, and Ms Patterson’s leaving to Mr Patterson the day-to-day or week-to-week dealings regarding the property would not carry with it any authority to sell their interests, even allowing that the boundaries of the dealings so described are imprecise. Further, even if it could be inferred from the actual engagement of selling agents by Mr Patterson alone that Ms Patterson authorised him to so engage the agents, such an authority would not extend to an authorisation to sell their interests. I should state, however, that I would not draw the inference that Ms Patterson authorised Mr Patterson to solely engage Mr Lorello or Mr Iskander. It was not shown that Ms Patterson was aware of those engagements at the time or that she gave her approval, even tacitly, to them. For these reasons, the plaintiffs have not made out their case insofar as it is based on a more general authorisation to sell the property.

81. I turn now to consider the plaintiffs’ case insofar as it is put on the basis that Ms Patterson specifically authorised Mr Patterson to sign the contract on her behalf.

82. The plaintiffs submitted that the Court should so conclude, based on the whole of the evidence, and having regard in particular to numerous facts that were entirely or largely undisputed. It was submitted that the undisputed facts gave rise to an evidentiary burden upon the defendants to show that Mr Patterson had not been authorised to sell the property, and that the defendants failed to discharge that burden. The plaintiffs further submitted that the principles in Jones v Dunkel (1959) 101 CLR 298 were relevant due to the failures of the defendants to call Mr Lorello, Mr Fazio or Ms Ellison.

83. The plaintiffs placed some emphasis upon the fact that, at the relevant time, Ms Patterson had a busy full-time job with the Department of Education, whereas Mr Patterson was a property investor who owned about 20 properties and spent much of his time doing work in connection with them. Those broad descriptions are reasonably accurate as far as they go. However, the evidence did not in my view establish that in relation to the (three) properties Ms Patterson co-owned with Mr Patterson, she was content to leave general decision making to him, let alone decisions to sell. Ms Patterson did not accept the general proposition that she trusted Mr Patterson to take carriage of their property matters, although she did accept that, as a general proposition, her husband knew more about property than she did. Ms Patterson also accepted that “in terms of time and knowledge” Mr Patterson had the dominant role in relation to their jointly owned properties. I accept Ms Patterson’s evidence about those matters. I have already referred to evidence which shows that when the property went to auction in 2018, both Mr and Ms Patterson were involved in the making of the decision to reject the offer of about $4.5 million.

84. The plaintiffs’ case, viewed broadly, is that the objective circumstances of the transaction, principally the numerous steps taken by Mr Patterson to advance the sale in the period up to the exchange of contracts, strongly suggest that Ms Patterson knew about the transaction and gave him permission to proceed as he did. It is put that it is most implausible that he would take those steps, except on the basis that he had her permission to sell the property; otherwise, Mr Patterson would have been guilty of serious, indeed criminal, wrongdoing.

85. The most salient events in relation to the transaction essentially commenced when Mr Iskander made contact with Mr Patterson in late-October 2020. Records concerning Mr Patterson’s telephone show that he had a telephone conversation with Mr Iskander on 27 October 2020, lasting more than 13 minutes. The evidence seems to me clear that Mr Patterson indicated to Mr Iskander that he was at least prepared to entertain a sale of the property. Mr Patterson made contact with the solicitors that had been retained in relation to the possible sale of the property in 2018, and arranged for the contract for sale prepared by those solicitors to be available for collection. Mr Patterson, with the assistance of Mr Iskander, collected a copy of the contract on 4 November 2020 and provided it to Mr Iskander. Mr Patterson’s actions in this regard (and later in going with Mr Iskander to the property), tend to undermine the suggestions he made in his evidence to the effect that he was not truly interested in selling the property at that time, and that he was merely prepared to listen to what Mr Iskander, who was most persistent, had to say about it. That Mr Patterson was interested in selling the property is further supported by the fact that in about July 2020 he had (as I have found) permitted Mr Lorello to offer the property for sale.

86. I accept the evidence given by Mr Iskander that on 4 November 2020, after the contract had been collected, he had a conversation with Mr Patterson about retaining Mr Fazio of Lighthouse Law Group, and then telephoned Mr Fazio to enable Mr Patterson to speak directly to him. I further accept that Mr Patterson spoke to Mr Fazio about having him act on a conveyance.

87. On the morning of 12 November 2020, Mr Iskander conducted an inspection of the property for the plaintiffs. It is likely that, after the inspection, Mr Iskander conveyed to Mr Patterson an offer of $4.4 million, and it is likely that Mr Patterson asked Mr Iskander to see if he could “get more”. I accept Mr Iskander’s evidence to that effect.

88. The telephone records indicate that Mr Patterson spoke to Mr Iskander on numerous occasions throughout the course of the afternoon and into the evening of 12 November 2020. The respective versions of events differ, but it is clear that at some point an arrangement was made to meet at the Strathfield Hotel – at about 5:00pm on Mr Patterson’s account, or at about 6:30pm on Mr Iskander’s account. Mr Iskander deposed that he was expecting to meet both Mr and Mrs Patterson, but when he arrived only Mr Patterson was there. In any case, it seems that when Mr Iskander met Mr Patterson he showed him a contract for sale of the property showing a purchase price of $4,507,000.

89. On Mr Patterson’s account, Mr Iskander described the price as a really good one, and Mr Patterson told him that he would have a think about it. On Mr Iskander’s account, Mr Patterson said he would talk to Ms Patterson about it, and that Mr Iskander should call him at around 8:00am the next morning. Mr Iskander further says that he told Mr Patterson that he would need both Mr and Ms Patterson to sign the Agency Agreement (that he says had been provided to Mr Patterson a couple of days earlier) before he could proceed any further. Mr Iskander says that Mr Patterson also said something about wanting the sale done before the end of the year so that he did not have to pay any land tax. In cross-examination, Mr Iskander said that Mr Patterson may have also said something about whether a sale now would affect Ms Patterson’s income tax position.

90. I consider that both accounts are reasonably accurate as far as they go, but I doubt that Mr Iskander said anything about having given an agency agreement to Mr Patterson a couple of days earlier. As I have already said, this aspect of Mr Iskander’s evidence was confusing and inconsistent, and I would not be prepared to accept that the Agency Agreement was given to Mr Patterson prior to 13 November 2020.

78. As matters stood by the evening of 12 November 2020:

1. Mr Iskander had procured an offer from the plaintiffs to purchase the property for $4,507,000;

2. Mr Iskander had conveyed that offer to Mr Patterson;

3. Mr Iskander had not received any Agency Agreement signed by either Mr or Ms Patterson; and

4. Mr Iskander had not had any contact with Ms Patterson in relation to the matter.

92. The most critical events occurred on 13 November 2020. The telephone records show that Mr Patterson had a telephone conversation with Mr Iskander at about 8:20am on that day, lasting more than 7 minutes. That was the first of numerous telephone calls Mr Patterson had that morning with various real estate agents, including Mr Lorello. According to Mr Iskander, Mr Patterson said “we are happy to sell” and suggested that they meet at the Belgrave Street, Burwood property. Mr Iskander says that an arrangement was made to meet at 10:30am. Mr Patterson gave evidence that he did not recall the telephone conversation, but said that he did not say “we are happy to sell”. I prefer Mr Iskander’s evidence on this point. The events that took place later on 13 November 2020, and in particular Mr Patterson’s actions in signing the Agency Agreement and the contract for sale, are consistent with an attitude expressed by him that both he and Ms Patterson were prepared to proceed with a sale of the property for a price of $4,507,000.

93. Mr Iskander says that he attended the Belgrave Street property twice on the morning of 13 November 2020 – once at about 10:30am and again at about 11:30am. Mr Patterson says that there was only the one visit. He was not clear as to the time the visit occurred. There are also significant differences between the two accounts as to what occurred, in particular in relation to the signing of documents. I have found neither account to be entirely satisfactory.

94. Mr Iskander says that when he arrived at about 10:30am, Mr Patterson gave him a copy of the signed agreement – that is, the signed Agency Agreement. I do not accept that that occurred. I think it more likely that the Agency Agreement was brought to the meeting by Mr Iskander, possibly already filled in by him to some extent, and provided to Mr Patterson. It is likely that Mr Iskander provided a vendor counterpart contract for sale to Mr Patterson at approximately the same time.

95. There is no doubt that the vendor counterpart was signed, apparently by both vendors, by no later than 12:03pm on 13 November 2020. Mr Iskander sent a text message to Mr Jarjo at that time which included an image of the executed front page of the contract. I accept that the Agency Agreement had also been executed by that time.

96. The circumstances in which the signing of the documents occurred is a matter of great contention as between Mr Iskander and Mr Patterson. The resolution of that conflict is difficult in circumstances where I have little confidence in the veracity of either Mr Iskander or Mr Patterson, the only two witnesses who give direct evidence of these events.

97. Ultimately, I have come to the conclusion that in this regard Mr Iskander’s version, or something close to it, is to be preferred as more likely to be correct. Having reflected upon the matter, and despite the fact that Mr Iskander showed himself in this matter to be capable of acting inappropriately, I am unable to accept Mr Patterson’s evidence about how he came to sign the documents.

98. I do not accept Mr Patterson’s evidence that after he spoke of the need to have Ms Patterson come to sign the documents, Mr Iskander said “Don’t bother, you just sign it”, whereupon Mr Patterson proceeded to sign for both himself and Ms Patterson. I do not think that Mr Iskander’s preparedness to cut corners would have extended so far as to make himself a party to a false execution of a contract for sale. The evidence was clear that there had been no discussion about Mr Patterson having authority to sign for Ms Patterson. It is unlikely that Mr Iskander would jeopardise his own position, as an agent hoping to earn a commission on a sale, by facilitating the execution of the documents in the manner deposed to by Mr Patterson. Moreover, I find it implausible that Mr Patterson, who claimed not to trust real estate agents, would simply acquiesce in a suggestion made by Mr Iskander that he could sign the contract for his wife. Mr Patterson’s evidence that he was coerced into signing for Ms Patterson, by pressure exerted by Mr Iskander, was most unconvincing. Mr Patterson appeared to me to be a person well versed in property matters generally, and capable of resisting any pressure sought to be exerted by a real estate agent, including a persistent Mr Iskander. I should add that I found similarly implausible and unconvincing Mr Patterson’s evidence that he thought that after he signed the documents “the solicitor would ask Wendy to come in and sign the rest of [the] documents”. I note here that I prefer Mr Iskander’s evidence to the effect that he told Mr Patterson that contracts would be exchanged once an “updated section 149 certificate” had been obtained, and Mr Patterson agreed with that on the condition that there was no cooling-off period (i.e., that a s 66W certificate was obtained).

99. The likelihood is that Mr Patterson asked Mr Iskander to leave the contract with him, and said that he would have Ms Patterson sign it. Given my finding in relation to the Agency Agreement, it is likely that Mr Patterson spoke in similar terms about that agreement. I accept Mr Iskander’s evidence to the effect that an arrangement was made for him to come back to the Belgrave Street property at about 11:30am.

100. The evidence established that, on that morning, Ms Patterson was working at home in Strathfield. That is only a short distance from the Belgrave Street property. Assuming that the meeting between Mr Iskander and Mr Patterson had been no longer than about 30 minutes, it was entirely feasible for Mr Patterson to drive to the Strathfield home to obtain Ms Patterson’s signatures, and return to the Belgrave Street property by about 11:30am.

101. However, Mr Patterson did not do that. Mr Patterson wrote signatures on the Agency Agreement and the contract for sale that were apparently signatures of Ms Patterson. I find that those signatures were on the documents when Mr Iskander returned to the Belgrave Street property. At some stage, Mr Patterson also signed the documents for himself. Whether he did that in the presence of Mr Iskander when he returned, or not, is not of great importance. In either case, Mr Iskander purported to witness the signatures of both vendors on the vendor counterpart.

102. It seems that the apparent signatures of Ms Patterson were made at some point between 10:30am and about 11:30am on 13 November 2020. Mr Patterson’s telephone records show that at about 10:56am he had a telephone conversation with Ms Patterson, lasting about 4 minutes. The plaintiffs place considerable reliance upon the fact of that conversation. The plaintiffs submitted that the Court should find that during that conversation Ms Patterson authorised Mr Patterson to sign the contract for sale on her behalf.

103. The telephone records also show that at about 11:17am, Mr Patterson had a short conversation with someone at Lighthouse Law Group. There is evidence that during the course of the day there were communications between that firm and the plaintiffs’ solicitors, Fortis Law, about the contract for sale. Contracts were not exchanged until the evening of 16 November 2020, by which time the new planning certificate had been obtained and a s 66W certificate had been received. I accept that Mr Iskander told Mr Patterson about the exchange not long after it occurred.

104. On 18 November 2020, Mr Patterson spoke to Mr Fazio of Lighthouse Law Group and told him, inter alia, that he did not wish to proceed with the contract and that Ms Patterson had not signed the contract. That seems to be the first indication of a change of heart on the part of Mr Patterson.

105. I accept that the objective circumstances of the transaction, particularly the conduct of Mr Patterson in the period up to the exchange of contracts, might suggest that Ms Patterson was aware of the transaction and gave Mr Patterson permission to proceed as he did. It would not ordinarily be expected that a joint owner of property would act in such a fashion without the imprimatur of another joint owner. Yet, there are unusual features present here, and the Court has to grapple with the firm denial given by Ms Patterson that she ever gave her husband authority to sell or sign her name on the contract.

106. A premise that underlies the plaintiffs’ submissions is that the Court would be slow to find that Mr Patterson was acting without authority, because to do so would involve a conclusion that he was acting in a thoroughly dishonest manner. However, having observed him in the witness box for a considerable period, and taking into account various unsatisfactory aspects of his evidence (including those referred to at [62]-[65] above), I think that Mr Patterson would be well capable of doing what he did without Ms Patterson’s authority, behind her back. Mr Patterson was interested in selling the property, and had on occasions taken steps in that direction on his own, without Ms Patterson’s knowledge. It is true that the steps taken in November 2020 went a great deal further, but I do not think that Mr Patterson would have been constrained had he thought that a sale at a particular price was in his interests (e.g. as a means of reducing his liability for land tax).

107. There are also objective circumstances that tend against the suggestion that Ms Patterson authorised Mr Patterson to sell their interests in the property. As already mentioned, the evidence is clear that there had been no discussion between Mr Iskander and Mr Patterson about the latter having authority to sign for Ms Patterson. The matter was apparently proceeding on the basis that she would sign any documents for herself. The contract was left by Mr Iskander with Mr Patterson to enable that to occur. Moreover, had Ms Patterson been aware of the offer of $4,507,000, and been disposed to accept it, there is no good reason why she herself would not have signed the contract (and the Agency Agreement). She was working at home on 13 November 2020, a short distance from the Belgrave Street property where Mr Iskander had brought the documents to Mr Patterson. The documents could easily have been taken to her at home for her to sign them. In addition, there is evidence that Ms Patterson was not disposed to a sale of the property prior to her expected retirement in early 2022. She had her own reasons for that position, and those reasons seem to be reasonably based. It should not be overlooked that, some two years earlier, she and her husband had rejected an offer to purchase the property for a price similar to that offered by the plaintiffs. The defendants were at that earlier time looking for a price in the order of $4.8 million. It seems unlikely that Ms Patterson would have been keen to proceed with a sale in November 2020 for a price of around $4.5 million.

108. Ms Patterson gave evidence that she did not find out about any actions regarding the sale of the property until her husband spoke to her about it on the evening of, most likely, either 16 November 2020 or 17 November 2020. The plaintiffs submitted that Ms Patterson was not a witness of credit, and urged the Court to reject her denial that she had authorised her husband to sell. I have given careful consideration to Ms Patterson’s evidence, and had regard to the various attacks made upon it by the plaintiffs. As stated already, I formed the view that whilst some aspects of her evidence gave rise to concern, Ms Patterson was a satisfactory witness whose evidence was generally truthful, and reasonably accurate (see at [66]-[70] above). To my mind, it is much more likely that Mr Patterson acted without authority and thus dishonestly than that Ms Patterson gave deliberately false evidence about the matter. I accept that Ms Patterson had no knowledge of a sale or proposed sale of the property in November 2020 prior to being told by Mr Patterson on either 16 November 2020 or 17 November 2020 that he had signed a contract and had signed for her as well. I further accept her evidence that she was shocked and surprised by the revelation, and was very upset that he had taken those steps without her knowledge and permission. Finally, I accept her evidence that she told her husband that he “better get out” of the situation.

109. The plaintiffs submitted that the terms of the conversation recounted by Ms Patterson in her affidavit were, in various respects, implausible. I have considered those submissions, but I do not think that the terms of the conversation, as recalled by Ms Patterson, should lead to a rejection of the evidence that she found out about the sale in the course of the conversation that was to the effect of that set out in her affidavit. In short, I accept that she so discovered not only that her husband had himself signed a contract for sale, but also that he had signed the contract for her. The conversation was likely prompted by a realisation on the part of Mr Patterson that he could not keep the transaction from his wife for much longer. Mr Patterson had been told on the evening of 16 November 2020 that contracts had been exchanged.

110. It follows from the above that I do not accept that Ms Patterson authorised Mr Patterson to sign the contract on her behalf during the telephone conversation that the pair appear to have had at about 10:56am on 13 November 2020. Ms Patterson could not recall the conversation when confronted with it in cross-examination. She said that she would recall it if it had concerned a sale of the property. I accept Ms Patterson’s evidence in this regard. The call is likely to have involved some matter related to a property owned by Mr Patterson, either solely or together with Ms Patterson, but not the sale of the property then being pursued by Mr Patterson. There is no particular reason why Ms Patterson would recall the content of such a conversation.

111. In reaching the above conclusions, I have endeavoured to assess the evidence in its entirety, and in conjunction with the impressions I formed of the principal witnesses. I have, for example, taken into account the conduct of the defendants after the contract was signed (including the conduct referred to at [37]-[50] above). In that regard, the plaintiffs pointed to the delay between the signing of the contract on 13 November 2020 and the taking of action aimed at getting out of the contract, such as the seeking of advice from Mr Fazio on 18 November 2020. The plaintiffs also referred to the evidence given by Mr Iskander that at about 2:30pm on 18 November 2020, Mr Patterson told him he did not want to proceed because Mr Lorello said he could obtain “at least $4.6 million”. The plaintiffs also referred to the content of the communications from the solicitors who had been asked to provide advice.

112. I have also taken into account the fact that neither Mr Fazio nor Ms Ellison, or indeed Mr Lorello, was called by either of the defendants as a witness. In respect of each of those witnesses, I have proceeded on the basis that their evidence would not have assisted the case, advanced by both defendants, that there was a lack of authority (see Jones v Dunkel (supra) at 308 per Kitto J and 321 per Windeyer J). Further, at least insofar as Mr Fazio and Ms Ellison are concerned, both of whom were undoubtedly retained by Mr Patterson, any inferences that could properly be drawn from the communications with those solicitors might be more readily drawn due to the failure to call them as witnesses (see Jones v Dunkel (supra) at 308 and 312 per Menzies J).

113. The matters referred to in the two preceding paragraphs have not led me to different conclusions. It strikes me as unlikely that the prospect of a relatively modest enhancement in price would have prompted the defendants to try to undo a sale they had both been happy to make. There was some delay in the seeking of advice, although the clear need for such may not have become apparent to Mr Patterson until his wife had reacted in the manner she did to the revelation about the contract. The communications with the solicitors that followed suggest that the instructions given by Mr Patterson were consistently to the effect that Ms Patterson had not signed the contract and that he did not hold a power of attorney giving authority to sign for her. It is true that those instructions leave open the possibility that Mr Patterson had been authorised in some other manner. Mr Fazio refers to that possibility in the email he sent to Mr Patterson on 18 November 2020 (see at [43] above). However, I do not think that this is cogent evidence that Mr Patterson had been so authorised. The communications with the solicitors, viewed overall, seem to me to be broadly consistent with Mr Patterson (with the assistance of Mr Lorello) seeking to get out of the situation Mr Patterson alone created. That was what Ms Patterson had called for. Further, the communications show that Ms Patterson did not have any real involvement with the obtaining of advice. Mr Fazio complained of an inability to obtain instructions from Ms Patterson, and there is no evidence that she provided any instructions to a solicitor at Jemmeson Fisher. Her role appears to have been largely limited to facilitating the communications between the solicitors and Mr Patterson. That is broadly consistent with Ms Patterson’s evidence although, as I have already noted, she seemed at pains to minimise her role, and this caused me some concern. Finally, even if it were the case that Ms Patterson had also retained Jemmeson Fisher, I do not think that the statement in the 20 November 2020 email about the appointment of Mr Iskander as agent to sell, which could be considered as an admission by Ms Patterson, takes the matter very far. The same email includes the statement that at no point did Ms Patterson have notice of the offer made by the plaintiffs or accept the offer made by the plaintiffs.

114. For the all above reasons, I am not satisfied that Ms Patterson specifically authorised Mr Patterson to sign the contract on her behalf. Any evidentiary burden upon the defendants in that regard has been discharged.

Conclusion

115. The plaintiffs have thus failed to establish that when Mr Patterson wrote the signature apparently that of Ms Patterson on the vendor counterpart of the contract, he had actual authority to do so. Neither the case based on a specific authorisation to sign the contract, nor the case based on a more general authorisation to sell the property, has been made out. Accordingly, no binding contract for the sale of the property was entered into between the plaintiffs and the defendants. It is not necessary to further consider the plaintiffs’ claim for specific performance.

116. In these circumstances, the proceedings must be dismissed. In addition to that order, the Court will direct that if any party seeks a costs order that departs from the usual position that costs follow the event, that party should notify my Associate within 14 days.

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Decision last updated: 05 August 2022