Knezevic v Trevor Jacobs Pty Ltd trading as Ray White (Hobart)
[2002] TASSC 109
•9 December 2002
[2002] TASSC 109
CITATION:Knezevic & Anor v Trevor Jacobs Pty Ltd trading as Ray White (Hobart) [2002] TASSC 109
PARTIES: KNEZEVIC, Mirko
KNEZEVIC, Lucy Wendy
v
TREVOR JACOBS PTY LTD [ACN 061 728 130]
trading as Ray White (Hobart)
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 90/2002
DELIVERED ON: 9 December 2002
DELIVERED AT: Hobart
HEARING DATES: 26 November 2002
JUDGMENT OF: Blow J
CATCHWORDS:
Professions and Trades - Auctioneers and Agents - Construction of statutory provisions - Tasmania - Estate agents - Remuneration - Leave to sue without valid written appointment.
Auctioneers and Real Estate Agents Act 1991 (Tas), s24(1).
Aust Dig Professions and Trades [33]
REPRESENTATION:
Counsel:
Appellants: M E O'Farrell
Respondent: A L Valentine
Solicitors:
Appellants: Hugh Murray
Respondent: Ware & Partners
Judgment Number: [2002] TASSC 109
Number of Paragraphs: 14
Serial No 109/2002
File No LCA 90/2002
MIRKO KNEZEVIC and LUCY WENDY KNEZEVIC v
TREVOR JACOBS PTY LTD [ACN 061 728 130]
trading as Ray White (Hobart)
REASONS FOR JUDGMENT BLOW J
9 December 2002
Introduction
This is an appeal pursuant to the Magistrates Court (Civil Division) Act 1992, s28 from an order of a magistrate granting leave pursuant to the Auctioneers and Real Estate Agents Act 1991, s24(1) for a real estate agent to sue for a commission of $10,000 plus $1,000 GST in relation to the sale of a property. The appellants, who were the vendors of the property, contend that the learned magistrate erred in law in restricting cross-examination during the hearing of the application for such leave, and in failing to take into account relevant considerations that weighed against the granting of such leave. It is common ground that the appeal is an appeal stricto sensu: Clark v Eadie [2000] TASSC 32.
The appellants sold their house by a written contract dated 29 August 2001 for $430,000. The purchaser was introduced by a director of the respondent company named Adrian Gray. He negotiated the purchase price. The respondent did not have an agency contract with the purchaser or anyone associated with the purchaser. The respondent's case in the court below is that an oral contract was entered into by Mr Gray on its behalf and Mr Knezevic on behalf of both appellants for the provision of its services as a real estate agent in consideration of a commission of $10,000. That sum was less than the commission chargeable on a sale for $430,000 according to the Real Estate Institute of Tasmania's scale. The appellants admit Mr Gray said he wanted a commission of $10,000, but deny that this was agreed to, and deny that a contract was entered into. It is common ground that there was no written contract, and no written appointment of the respondent as the appellants' agent.
The Auctioneers and Real Estate Agents Act, s24, provides as follows;
"24 ¾ (1) Except by leave of the court, a real estate agent is not entitled to sue for, or recover, or retain any valuable consideration for services provided to a person by the agent in the capacity of a real estate agent unless the agent has a valid appointment to act for that person in that capacity that is –
(a)in writing; and
(b)signed by that person or by a person authorized to sign on behalf of that person.
(2) An appointment is not valid for the purposes of subsection (1) unless it is contained in a document that ¾
(a)generally sets out the services to be rendered by the agent; and
(b)if a specific property is the subject of those services – clearly identifies the property; and
(c)clearly indicates how any valuable consideration the agent may receive is to be calculated; and
(d)clearly indicates the nature and extent of the expenses the agent may incur on behalf of the client, and how those expenses are to be recouped.
(3) An appointment is not valid for the purposes of subsection (1) unless the person obtaining the signature to the document of appointment gives a copy of it to the signatory as soon as possible after it is signed.
(4) The onus of proof that subsection (3) was complied with is on the person who obtained the signature.
(5) A real estate agent shall not demand any valuable consideration in contravention of subsection (1).
(6) Any valuable consideration received by a real estate agent in contravention of subsection (1) is recoverable as a debt."
The restricting of cross-examination
The evidence before the learned magistrate was primarily by affidavit. Mr Gray and the purchaser were cross-examined on their affidavits. Before Mr Gray was called for cross-examination, counsel for the respondent company submitted that there should be no cross-examination. Mr O'Farrell submitted on behalf of the appellants that there should be cross-examination, and identified three subjects about which he wanted to cross-examine. The learned magistrate decided to let him cross-examine as to two of those subjects, but not the other. He refused to allow cross-examination as to Mr Gray's knowledge and training as to the legal requirements concerning a real estate agent's remuneration. Mr O'Farrell began his submission in relation to this topic by saying there was evidence that Mr Gray was a licensed real estate agent, and referring to the statutory requirements for real estate agents and managers to satisfy the Auctioneers and Real Estate Agents Council of Tasmania as to their knowledge of the real estate agency business before being granted licences. The learned magistrate said that the question of Mr Gray's licensing was not a matter upon which he would be persuaded to grant leave. He said, "Mr Gray says that he is licensed and in my view for the purposes of the exercise of the discretion whether or not to grant leave, that's an end to that matter."
It is common ground that the learned magistrate had a discretion to limit cross-examination: Magistrates Court (Civil Division) Rules 1998, rr4, 10. From reading the transcript, it seems he did not realise that the topic in question was not so much the licensing of Mr Gray as his knowledge and training as to the legal requirements concerning a real estate agent's remuneration. In that respect, I think he made an error that could well have made a difference to the way he exercised his discretion as to the scope of cross-examination. But I have no reason to think that error made any difference to the way he exercised, or should have exercised, his discretion to grant leave under s24(1). Plainly, Mr Gray either knew or ought to have known of the requirements of s24(1) and (2). He did nothing to obtain a valid written appointment quantifying his company's commission. If he did not know that that was required, he was incompetent. If he did know that that was required, he knowingly failed to satisfy s24. The fact that he knew or ought to have known what s24 required is a factor weighing against the granting of leave. Precise evidence as to the scope of his knowledge and training would have made no significant difference to the weight to be attached to that factor, in my view. As Ms Valentine pointed out, the Supreme Court Rules 2000, r693(6) provides as follows:
"(6) An appeal is not to succeed merely on the ground of misdirection or the improper reception or rejection of evidence unless some substantial wrong or miscarriage has been occasioned by the misdirection, reception or rejection."
I do not think the wrongful rejection by the learned magistrate of the evidence that Mr O'Farrell proposed to elicit by cross-examining Mr Gray as to his relevant knowledge and training could possibly have resulted in any substantial wrong or miscarriage of justice. This ground of appeal must therefore fail.
The discretionary grant of leave to sue
Mr O'Farrell's principal contentions as to the grant of leave pursuant to s24(1) were that the learned magistrate erred by failing to consider why s24 was not satisfied, and by failing to make an assessment as to the strength or weakness of the respondent company's case. There is not a body of case law establishing principles for the exercise of the discretion conferred by s24(1). Whilst most Australian jurisdictions have legislation preventing real estate agents from suing for their remuneration when they have not been formally appointed in writing, Tasmania may well be the only jurisdiction where an agent can be granted leave to sue in such circumstances. Provisions like s24 exist in order to protect the public from dishonesty and sharp practices, and to avoid disputes: Thornes v Eyre (1915) 34 NZLR 651 at 659 - 660; Gardiner v Fiannaca [1967] WAR 35 at 41 - 42; Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351 at 363, 380 - 381, 395 - 396. Given the nature of a real estate agent's work and remuneration, the legislative purposes underlying s24, and the effect that a grant of leave under s24(1) has, I think that the relevant considerations that must be considered by a court whose leave is sought under that subsection must include the question whether the agent has a prima facie case, the strength of the agent's case, the respects in which s24 was not complied with, and the reasons for such non-compliance. There may be other factors that should be taken into account in some or all cases. Thus I agree with Mr O'Farrell that the learned magistrate was obliged to consider why s24 was not complied with, and to consider the strength of the respondent company's case.
The learned magistrate stated his reasons for granting leave orally, referring at times to passages in an outline of argument that had been provided by Mr O'Farrell. In the course of his reasons, he referred to some of the evidence as to why s24 was not complied with. When listing factors that would favour the granting of the leave application as an exception to the general rule created by s24, he said the following:
"Sixth, finally, it is alleged that the applicant did not request a written appointment because of the previous relationship ¾ a former sale ¾ the nature of the instruction for a quiet listing and because of the insistence of Mr Knezevic upon Mr Gray trusting his word."
He was referring to evidence of the appellants having completed an earlier sale and paid a commission to the same real estate agency; to evidence from Mr Gray that his company had shown the property intermittently as a "quiet listing" since 1997; and to evidence from Mr Gray that Mr Knezevic, after agreeing orally to pay a commission of $10,000, repeatedly told him that he was a man of honour and a man of his word. In their affidavits, the appellants neither admitted nor denied the assertion that Mr Knezevic had repeatedly said that he was a man of honour and a man of his word, but I think that assertion should be regarded as controversial. The learned magistrate did not make any findings as to disputed factual matters.
Mr O'Farrell's written outline of his argument contained the following:
"16The claimant has not established a prima facie case. The claimant's evidence is, at best, equivocal as to the existence of an agreement that the defendant's [sic] should pay commission. When taken together with the defendants' evidence, none of the material parts of which the claimant disputes, the inference must be that there was no valid appointment in accordance with the section.
17The claimant has failed to establish an adequate explanation for its non compliance with s24. To the contrary, it maintains an informal arrangement, entirely inconsistent with the requirements of the Act, s24."
The learned magistrate concluded his oral reasons as follows:
"I disagree with the submissions contained in paragraphs 16 and 17 which overlook important corroborated evidence. On the claimant's case there was a contract. There was a recognition the vendors would be liable for commission. This is, I think, accordingly a case where there is a justifiable exception to the rules. The burden on the applicant has been discharged and leave will be granted. To do otherwise would risk a situation where the respondents could gain an unfair advantage by allegedly reneging on the clear terms of the alleged oral agreement and take advantage of a situation which, after all, allegedly operated to their benefit and I emphasise that that point relies upon acceptance of the claimant's case which I do only for the purposes of deciding this application.
I grant leave pursuant to s 24 for the application to sue for value of consideration for services allegedly provided."
When the learned magistrate said the submissions in pars16 and 17 overlooked "important corroborated evidence", I think he must have been referring to Mr Gray's evidence that Mr Knezevic had agreed to a commission of $10,000. That evidence was corroborated to the extent that the purchaser had deposed to having overheard a conversation between Mr Gray and Mr Knezevic about Mr Gray's commission during which Mr Gray offered to reduce his commission in order to secure the sale. The corroborative evidence of the purchaser scarcely went further than Mr Knezevic's evidence that Mr Gray had said he wanted a commission of $10,000. I do not think there was any corroborated evidence as to any matter in controversy relating to the reasons for non-compliance with s24. I can understand the learned magistrate's reasoning in relation to par16 of Mr O'Farrell's outline: a prima facie case had been established by Mr Gray's evidence that, prior to the execution of the contract of sale, Mr Knezevic agreed to pay him a commission of $10,000, and there was some corroboration of Mr Gray by the purchaser. However I do not understand his reasoning in relation to par17 of Mr O'Farrell's outline, which related to the explanation for non-compliance with s24. No corroborated evidence relating to any such explanation existed. The learned magistrate referred to "a recognition the vendors would be liable for commission", but there was no direct evidence from anyone but Mr Gray as to any such recognition on the part of either vendor, and his Worship deliberately avoided making any findings as to factual disputes that needed to be determined at trial.
Whilst I have some difficulty following what the learned magistrate was saying about par17 of Mr O'Farrell's outline, it is clear from his reference to that paragraph that he took into account the question whether there had been an adequate explanation for non-compliance with s24. It is clear from his earlier comments that he took into account the evidence that the appellants had paid a commission on the sale of an earlier property through the same real estate agency, the fact that the respondent had been showing prospective purchasers through the property for some years, and the evidence as to the conversation in which Mr Gray said he wanted a commission of $10,000. Looking at the learned magistrate's reasons as a whole, I think he took the view that Mr Gray had advanced an explanation as to non-compliance which was adequate if what he said was true, and that it was preferable not to determine before trial whether what he said was true. As the pleaded claim was based on the existence of an oral contract made at the time of the conversation between Mr Knezevic and Mr Gray, the details of which are in dispute, the claim for $10,000 plus GST would fail if Mr Gray were disbelieved at trial, though the learned magistrate did not spell this out. With that in mind, I do not think it can be said that the learned magistrate failed to consider whether there had been an adequate explanation for non-compliance with s24, nor that he gave insufficient weight to that non-compliance, the undisputed facts relevant to that non-compliance, or the disputed evidence as to that non-compliance.
Similarly, I do not think the learned magistrate fell into error in failing to make a more detailed assessment as to the strength or weakness of the respondent company's prima facie case. In his oral reasons, he referred to the important parts of Mr Gray's evidence ¾the listing of the property in 1997, the showing of the property to prospective purchasers, the introduction of the purchaser, the negotiation of the price, the preparation of the contract, the supervision of its execution, the alleged oral promise to pay a commission of $10,000, the evidence tending to explain why there was no written appointment quantifying the commission, and the sale of the property for $10,000 more than a sum offered by the purchaser. He also referred, albeit obliquely, to the fact that there was some corroboration of Mr Gray's evidence, and to the fact that the appellants dispute Mr Gray's evidence as to the promise to pay $10,000 and the repeated assertions that Mr Knezevic was a man of honour and a man of his word. It is true that the learned magistrate did not undertake a thorough exposition as to what parts of Mr Gray's disputed evidence were uncorroborated, what parts were corroborated, how they were corroborated, and to what extent. However, to adopt the words of Kirby J in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 291, I do not think I should "adopt a narrow approach, combing through the words of the decision-maker with a fine appellate tooth-comb". I think the learned magistrate made a sufficient assessment as to the strengths and weaknesses of the respondent's case.
On the basis of my analysis of the learned magistrate's reasons, I am not satisfied that he erred in law in exercising the discretion conferred by s24(1).
Conclusion
For these reasons, the appeal is dismissed.
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