Lauderdale v Cairns - [2011] NSWSC 29

Supreme Court

New South Wales

Medium Neutral Citation: Lauderdale v Cairns [2011] NSWSC 29
Hearing dates: Monday 7 February 2011
Decision date: 08 February 2011
Jurisdiction: Equity Division
Before: Associate Justice Macready
Decision:
I make orders 1 and 2 in the originating process filed 23 November 2010.

Catchwords: CORPORATIONS LAW - Application to set aside statutory demand - Claim for commission by a real estate agent - Held there was an off-setting claim based upon the agent's actions in acting as the purchaser's agent without informing the vendor for whom he also acted - Demand set aside
Category: Principal judgment
Parties: Lauderdale Project Pty Limited (Plaintiff)
Cairns Property Consultants Pty Ltd (Defendant)
Representation: Counsel:
Mr D Klineberg (Plaintiff)
Mr D Meltz (Defendant)
Solicitors:
Levitt Robinson (Plaintiff)
MacGillivrays (Defendant)

File Number(s): 2010/389942

Judgment

HIS HONOUR: This is an application to set aside a statutory demand dated 2 November 2010 for an amount of $148,500 served on the plaintiff by the defendant. The subject matter of the demand is a claim for commission payable under a Real Estate agency agreement dated 29 January 2010.

The ground advanced to set aside the demand is the plaintiff has an offsetting claim based on misleading and deceptive conduct in relation to the agency agreement and the negotiation of the sale which ensued.

Background

Prior to January 2010 the plaintiff owned a property at Boat Harbour Drive, Hervey Bay in Queensland. Mr Hooley was the principal of the defendant Real Estate company and he was aware in late 2009 that the property was not available as it was under an offer to a purchaser. He became aware that it was available for sale in January 2010. In late January 2010 he discussed with Mr Sanchez of the plaintiff company as to whether it was for sale. He said he had an interested purchaser who wanted to secure the agency agreement with the vendor before he proceeded further.

This was agreed to and an agency agreement was entered into on 29 January 2010. Further, even before the agreement was signed, on the day before Mr Hooley had received an offer from the purchaser to pay $7 million for the property. He sent it to Mr Sanchez and it was in this form:

" Offer to Purchase

200 Boat Harbour Drive, Pialba (Hervey Bay)

We confirm that we wish to make the following offer to purchase:

Purchaser RSP Property Investments Pty Ltd
Purchaser Contact C/O - Ian Hooley
Qld Property Agents
0418 773 699
Property Lot 1 on RP896205
Lot 39 on RP35178
Land Area 30,000mÂ²
Purchase Price $7,000,000 ($233/mÂ²)
Deposit $700,000
Due Diligence 90 days
Settlement 30 days from the contract becoming unconditional

(signed) On behalf of RSP Property Investments Pty Ltd."

Mr Sanchez received the document and he refused the offer.

On 2 February 2010 another offer of $8.9 million was made by the same purchaser and was rejected. The same day a third offer from the same purchaser for $9 million was made and was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] NSWSC 29
Decision Date: 08 February 2011

CaseChat Overview and Summary

The matter of Lauderdale v Cairns arose in the Federal Circuit Court of Australia, involving a dispute between a real estate agent, Lauderdale, and their client, Cairns. Lauderdale had issued a statutory demand against Cairns, seeking commission owed for acting as the agent in the sale of property. Cairns sought to set aside the demand, arguing that Lauderdale had acted as the purchaser's agent without informing Cairns, thus creating an off-setting claim. The court was required to determine whether the statutory demand could be set aside due to the existence of an off-setting claim.

The central legal issue was whether the defendant's claim that the plaintiff had acted as the purchaser's agent without informing the vendor was sufficient to set aside the statutory demand. This required the court to examine the nature of the off-setting claim and its potential to defeat the demand. The court needed to assess whether the off-setting claim was genuine and substantial, as required by the applicable provisions of the Corporations Act 2001 (Cth).

In delivering judgment, the court held that the plaintiff's failure to inform the defendant that they were also acting as the purchaser's agent created an off-setting claim. The court found that this claim was genuine and substantial, as it potentially undermined the basis of the plaintiff's demand for commission. Consequently, the court set aside the statutory demand, ruling that the existence of the off-setting claim justified this outcome. The court's decision was grounded in the requirement that an off-setting claim must be genuine and substantial, and in this case, the defendant's claim met that threshold.

Orders