Lee Road Pty Ltd v Catanzariti & Anor - [2005] SADC 64

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
LEE ROAD PTY LTD v CATANZARITI & ANOR
Judgment of Her Honour Judge Simpson
10 June 2005
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES
Application of general contractual principles - offer and acceptance - agreement contemplating execution of formal document - whether a concluded contract for the sale and purchase of land - whether a sufficient note or memorandum in writing of an agreement for the sale and purchase of land - whether signed by the person to be charged - whether the agent had authority to sign a memorandum or note of agreement for the sale and purchase of land. Held: the defendants by their agent concluded an enforceable agreement with the plaintiff for the sale and purchase of land.
Law of Property Act 1936 s 26, referred to.
Petersen v Moloney (1951) 84 CLR 91; Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 211 ALR 342; (2004) 79 ALJR 129; Freeman & Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480; Haydon v McLeod (1901) 27 VLR 395; Kennedy v Lee (1817) 3 Mer 442; 36 ER 170; Holland v Eyre (1825) 2 Sim & St 194; 57 ER 319; Allen v Carbone (1975) 132 CLR 528; Pacific Carriers Ltd v BNP Paribas (2004) 78 ALJR 1045; 208 ALR 213; Farmer v Honan and Dunne (1919) 26 CLR 183; Niesmann v Collingridge (1921) 29 CLR 177; Godecke v Kirwan (1973) 129 CLR 629; Powell and Berry v Jones and Jones [1968] SASR 394; Masters v Cameron (1954) 91 CLR 353; Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622; Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310; Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68; Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647; Harvey v Edwards Dunlop & Co Ltd (1927) 39 CLR 302; Moore v Hart (1683) 1 Vern 110; 23 ER 352; Lawrence v Fordham [1922] VLR 705; Thomson v McInnes (1911) 12 CLR 562; Ogilvie v Foljambe (1817) 3 Mer 53; 36 ER 21; Cohen v Roche [1927] 1 KB 169; Gibson v Holland LR 1 CP 1; 35 LJ CP 51, applied.
Clifton v Palumbo [1944] 2 All ER 497; B Seppelt and Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147; Bigg v Boyd Gibbons [1971] 1 WLR 913; Bailey v Sweeting (1861) 9 CB (NS) 843; 142 ER 332; Ryrie v Cruikshank (1896) 17 LR (NSW) 195; Huddleston v Briscoe (1805) 11 Ves Jr 583 at 592; 32 ER 1215; Ford v Young (1882) 8 VLR 93; Humphries v Humphries [1910] 2 KB 531; Rosenbaum v Belson [1900] 2 Ch 267, considered.

LEE ROAD PTY LTD v CATANZARITI & ANOR
[2005] SADC 64

The plaintiff in this action is a duly incorporated company, Lee Road Pty Ltd. It has brought an action seeking, amongst other relief, an order for specific performance of a contract for the sale and purchase of land contained in Certificate of Title Volume 5550 Folio 779, situated at Lot 55 Diment Road, Burton, South Australia (“the land”).
The orders sought in the Statement of Claim are:
1.   An order by way of specific performance requiring the defendants to transfer the land to the plaintiff within such period as determined by the Court.
2.   Damages in lieu of, or in addition to, specific performance of the contract.
3. In the alternative, damages for misleading and deceptive conduct pursuant to section 84 of the Fair Trading Act1987.
4.   Costs.
5.   Interest.
6.   Any such further or other orders as the Court thinks fit.
At the hearing, the plaintiff confined the relief it seeks to an order for specific performance. No evidence as to damages was called.
The defendants, Mr Patrick Catanzariti and Mr Guiseppe Catanzariti, are the registered proprietors of the land. The defendants deny that the plaintiff is entitled to any relief, and in particular, deny that there is a contract between the parties for the sale and purchase of the land.
In the alternative, the defendants say that there is no agreement in writing signed by the defendants or a person lawfully authorised by them to execute an agreement and they rely on section 26 of the Law of Property Act1936.
Section 26 of the Law of Property Act1936 provides:
(1) No action shall be brought upon any contract for the sale or other disposition of land or of any interest in land, unless an agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some person thereunto by him lawfully authorised.
(2) This section does not affect the law relating to part performance, or sale by the court.
The defendants accept that if the plaintiff succeeds in establishing a contract for the sale and purchase of the land, on which an action may be brought, an order for specific performance is an appropriate order.
The Evidence
The plaintiff called its managing director, and only shareholder, Mr Gary Rogers, to give evidence. Mr Rogers gave his evidence in a straightforward manner and I accept his evidence. A number of documents were tendered by the plaintiff by consent.
The defendants called no evidence. There is little or no dispute about the facts.
Mr Rogers said that he was living in Tasmania at the time of the relevant events. He conducted his business in Tasmania, Victoria and New South Wales. His business is to build factories and to rent them out. He also runs a V8 Supercar racing team.
He came to South Australia on 16 July 2003, for two days, after he had been approached by a client for whom he had previously worked. He was asked to look for land in South Australia on which a warehouse might be built to the client’s specifications. He has had involvement in property in South Australia, in the Salisbury/Elizabeth area. He drove around and started to look about. He saw vacant land and made enquiries of various councils.
On about 16 July 2003, Mr Rogers saw a signboard placed on the land at Diment Road, Burton, advertising the property for sale. He noted that the land was flat. There was a big building going up on the adjacent land and there appeared to be development occurring nearby. He considered the area was likely to be suitable for his requirements. He decided to enquire about the site. He obtained the agent’s details from the signboard.
Mr Rogers telephoned Mr Carlo Peluso, from Taarnby and Taarnby Real Estate (‘Taarnby and Taarnby’), the same day. He made general enquiries as to the zonings and broad specifications of council requirements. Mr Peluso told Mr Rogers about developments in the area and recommended the area to him. Mr Rogers established that the land was likely to be suitable for the warehouse development proposed by his client. Mr Rogers asked Mr Peluso what the price for the land was. Mr Peluso told him that the land was for sale for $600,000.
Mr Rogers told Mr Peluso that he was going to look around in other areas and he would be in touch with him if he were interested. Mr Rogers continued looking further afield. He spoke to the council. He decided that the land at Burton appeared to be a good site for what he wanted to do.
On 17 July 2003, Mr Rogers had a telephone conversation with Mr Peluso. Mr Rogers made an offer to buy the property for $400,000. He told Mr Peluso the offer was unconditional and that he was prepared for settlement on the property in 30 days. Mr Peluso told him that he would speak to the vendors and let Mr Rogers know if the offer were acceptable. Thee was some further discussion about what could be done on the land. Mr Peluso suggested that he send the Certificate of Title details to Mr Rogers. On the same day, Mr Peluso sent a facsimile to Mr Roger’s Melbourne office, attaching a copy of the Certificate of Title and the dimensions for the land. Mr Rogers saw the facsimile after he returned to Melbourne on 17 July 2003.
On the following day, Mr Peluso advised Mr Rogers that the vendors were not prepared to accept his offer. Mr Rogers told Mr Peluso that he was still interested. He asked Mr Peluso to enquire of the vendors the price at which they would be prepared to sell the land. Mr Peluso said he would. Mr Rogers believed that the offer he had made was fair, taking into account the research he had done in the area. Mr Rogers wrote to Mr Peluso the same day. His letter of 18 July 2003 reads as follows:
Carlo,
Thank you for your time in regard to my enquiry and subsequent offer on your site at Lot 55 Diment Road Burton.
I understand how difficult it can be for an agent when they are acting in the best interests of the vendor and they have an offer in front of them that does not meet the vendor’s expectations.
On my limited knowledge of the area I believe my proposed price is fair and realistic. I do not dispute that the site would be relatively easy to develop in terms of size and flat terrain but after my enquiries to the council there are considerable costs to meet compliance with internal driveways, drainage and car parking areas that will add considerable cost to the development.
I also believe that an offer such as mine, which is unconditional and cash 30 days has merit and whilst eventually if someone comes along with an offer which is subject to all sorts of conditions, I am sure you are well aware that the end result for the vendor may be no better.
I have another option at Wingfield but as I am leaving for a stint overseas on Monday I need to act if my negotiations with you are not to proceed. If your vendor reconsiders I would need to know this today.
Regards,
GF Rogers
PS I will be in Melbourne today please contact me on mobile 0417 461 112 or fax (03) 9562 5941.
On around 22 July 2003, Mr Peluso rang Mr Rogers and told him that the vendors would accept $410,000 for the property. Mr Rogers asked for confirmation in writing.
At about 10.20 am on 22 July 2003, Mr Peluso sent a handwritten facsimile to Mr Rogers, on Taarnby and Taarnby Real Estate letterhead, as follows:
Lot 55 Diment Road Burton
Vendors will accept
$410,000 plus GST
30 day settlement/ Unconditional contract
Mr Rogers spoke to Mr Peluso after receiving the facsimile. Mr Rogers advised him that he would need to speak to his principal to confirm that the price was acceptable. He said that in light of their conversations so far, he believed it would be acceptable. Mr Rogers said that he had a conversation with Mr Peluso about the payment of a deposit. Mr Peluso advised him that a deposit of 10%, or $41,000, was required, to be transferred into the trust account of Taarnby and Taarnby. Mr Peluso said that he would provide details of the bank account to Mr Rogers. Mr Rogers said that Mr Peluso asked that written details of the bank transfer of deposit funds be provided as confirmation that the purchaser had concluded the contract.
Mr Rogers informed his client that the vendors would accept $410,000 for the land and he was told he could go ahead.
Later the same day, probably some time between about 2.30 and 2.50 pm EST, Mr Rogers sent a facsimile to Mr Peluso in these terms:
Carlo,
Thanks for all your assistance in this matter, I have now confirmed with my boss that we are prepared to proceed on the figure you put forward today being $410,000 plus GST. I confirm as previous that the contract will be unconditional and settlement thirty (30) days.
The contract is to be in the name of Lee Road Pty Ltd, Old Princes Highway Longwarry North, Victoria, 3186.
Could you please advise me as to the paperwork procedures for the contract and the payment of the deposit at your earliest convenience including your bank account details, BSB, Account Number/Name etc.
Regards,
G F Rogers
N.B. I am contactable on mobile phone 0417 461 112 or fax today (03) 9562 5941.
At about 3.15 pm CST, on 22 July 2003, Mr Peluso sent Mr Rogers a facsimile comprising the facsimile front cover sheet, a letter dated 22 July 2003, and several enclosures:
·Form 1- Statement under section 7 - Land and Business (Sale and Conveyancing) Act 1994, relating to particulars to be supplied to the purchaser of land before settlement;
·Contract Terms and Conditions approved by the Real Estate Institute of South Australia for the exclusive use of REISA members;
·Schedule (Contract-General) with Execution Clause;
·Schedule – Particulars of Mortgages, Charges and prescribed Encumbrances Affecting the Land, Fire Safety Requirements; and
·Register Search Certificate of Title Volume 5550 Folio 779.
The letter reads as follows:
Garry,
Please initial every page of the Contract and Schedule Pages 1-9 of 10 and a Managing Director to sign Page 10 of 10.
Managing Director to sign Page 5 of 5 of Form 1 Statement under Section 7.
$41,000 deposit payable to Taarnby and Taarnby Trust Account.
Commonwealth Bank
BSB: 065127 Account: 10016604
Vendors will sign the contract in my office on Wednesday 23^rd July at 4.00pm.
I will fax you the fully signed contract immediately upon the Vendors signing the full contract.
Kind Regards
(signed)
CARLO PELUSO
The Contract - Terms and Conditions - comprises six pages and the Schedule four pages, ten pages in all.
Clause 2 of the Contract provides:
Subject to clause 8.8 and the Special Conditions, the Vendor agrees to sell the Property to the Purchaser who agrees to buy the property from the Vendor for the Price together with any GST payable.
Clause 8.8 relates to Goods and Services Tax and is not relevant here. There were no special conditions.
Clause 1 of the Contract provides for the interpretation of terms in the Agreement, including:
·‘the Agent” means the Vendor’s Agent named and described in the Schedule;
·“Certificate of Title” means the Certificate of Title or other best evidence of the Vendor’s interest in the Land;
·“the Deposit” means the sum identified as the Deposit in the Schedule;
·“the Land” means the land described in the Schedule together with rights, privileges and appurtenances referred to on the Certificate of Title and the improvements and Vendor’s fixtures and fittings on that land;
·“the Price” means the sum identified as the Price in the Schedule;
·“the Purchaser” is the party named and described in the Schedule;
·“Settlement” means completion of this Agreement for Sale and Purchase by transfer of the property from the vendor to the Purchaser;
·“the Settlement Date” means the date shown in the Schedule and fixed by this Agreement as the date for settlement;
·“the Vendor” is the party named and described in the Schedule.
The Schedule names as the Vendor the defendants, Patrick Catanzariti of 1 undivided 2^nd Part (sic) and Guiseppe Catanzariti of 1 undivided 2^nd Part both of Taylors Road Waterloo Corner SA 5110. The Vendor’s Agent is described as Taarnby and Taarnby Real Estate Pty Ltd of 47 Woodville Road Woodville 5011. The Schedule names the plaintiff, Lee Road Pty Ltd, Old Princes Highway, Longwarry, Victoria 3816 ABN 16719002067 as the Purchaser. The land is described as Allotment 55 Hundred of Munno Para, Certificate of Title Register Book Volume 5550 Folio 779, being vacant land situated at Lot 55, Diment Road, Burton in the council area of the City of Salisbury.
The Price is identified as $410,000, plus GST. The Deposit is identified as $41,000. The condition in relation to payment of a deposit reads as if it is payable on the next business day following the expiration of the cooling-off period pursuant to section 5 of the Land and Business (Sale and Conveyancing) Act 1994, although pursuant to subsection (7), section 5 does not apply in respect of a contract for the sale of land where the purchaser is a body corporate. The Settlement Day and Date is fixed as 22 August 2003.
The Agreement was not subject to any conditions.
Section 7 of the Land and Business (Sale and Conveyancing) Act 1994 - provides:
(1) A vendor of land must, at least 10 clear days before the date of settlement, serve, or cause to be served, on the purchaser a statement in the form required by regulation (signed by or on behalf of the vendor) setting out--
(a) the rights of a purchaser under section 5; and
(b) the particulars required by regulation of--
(i) all mortgages, charges and prescribed encumbrances affecting the land subject to the sale; and
(ii)where the vendor obtained title to the land within 12 months before the date of the contract of sale, all transactions involving transfer of title to the land occurring within that period; and
(iii) any prescribed matters.
The Form 1 - Statement under Section 7 of the Land and Business (Sale and Conveyancing) Act 1994 – was provided with the Contract and appears to have been completed and signed by Mr Peluso on 22 July 2003 on behalf of the defendants as vendors.
Mr Rogers initialled each of the first four pages of the Form 1 and signed the Acknowledgment of Receipt of Form 1 on page 5 below the title “Managing Director”.
He also initialled each of the first nine pages of the Contract and signed his name on page 10 above the title of Managing Director. The date of 22 July 2003 appears next to the Execution clause for the purchaser.
Mr Peluso’s signature appears as a witness to the signature of the purchaser (and the vendor). Mr Roger’s evidence was that apart from his initials and signature, none of the handwriting on the documents is his. Mr Peluso’s signature may already have been on the documents he received. He was not sure. It is clear that Mr Peluso was not physically present when Mr Rogers signed the documents.
Mr Rogers said that he arranged for the return of the signed documents to the agent. In accordance with discussions he had had with Mr Peluso, a bank cheque in the sum of $41,000 in favour of Taarnby and Taarnby Trust Account was paid directly into the agent’s trust account on 23 July 2003. Confirmation of the payment was sent by the company secretary of the plaintiff, Mr Stubblety, by facsimile to Mr Peluso on the same day, with a copy of the bank cheque and the deposit slip stamped by the Commonwealth Bank, as requested.
Mr Roger’s evidence was that he understood that he had, by his letter of 22 July 2003, concluded the agreement for the sale and purchase of the land. While he knew that there were documents to be signed, the sale was not conditional on the preparation of those documents, which he believed had either already been prepared, or were in the process of being prepared, at the time of his conversations on 22 July 2003 with Mr Peluso. He knew that it was necessary for a contract to be signed, so that the transfer could proceed.
His understanding was that he was bound by the agreement to proceed with an unconditional purchase of the land for the agreed price, and that he was to pay a deposit of 10% into the agent’s bank account, details of which were provided to him by the agent.
Mr Rogers said that he has no legal qualifications. His understanding, as a businessman, was that the defendants, as the vendors, had confirmed their agreement to sell the land to him for $410,000 and on receiving written confirmation of that from their agent, he had sent the deposit. He would not have sent it otherwise. He would have waited for the contract.
Mr Rogers said that he knew that the vendors had to sign the contract, so the transfer could proceed, but his agreement with them was not subject to the vendors executing the written contract. The contract he signed was in accordance with his understanding of the agreement and he considered himself bound by it.
Mr Rogers first learned of a difficulty in relation to the agreement when he telephoned Mr Peluso to thank him for his help in the transaction. Mr Peluso told him that the vendors had changed their minds and that they would not now sign the contract.

Solicitors were instructed on behalf of the plaintiff. A caveat was lodged over the land on 25 July 2003.
By letter dated 12 August 2003, Moody Rossi & Co, solicitors for the defendants, advised the defendants’ agent, Taarnby and Taarnby Real Estate, that the defendants wished to withdraw the property from sale. Moody Rossi & Co, the solicitors for the defendants, requested on their behalf that the agent return to the “prospective purchaser” any monies received in respect of the property. The agent drew a cheque in favour of the solicitor’s trust account and sent it to Moody Rossi & Co, who in turn returned it for forwarding to the plaintiff. Mr Rogers received the cheque some weeks later. He said that, as at the time of trial, he had not banked it.
The solicitors for the plaintiff sought copies of the file of the vendors’ agent, Taarnby and Taarnby, in May 2004. The defendants, through their solicitors, consented to those documents being provided. Two bundles of copy documents representing the file were admitted as an exhibit at trial (exhibits P27 and P28). The documents first provided are those in the bundle P27 and are:
·Letter dated 26 May 2004 from Taarnby and Taarnby to the plaintiff’s solicitors enclosing: -
·Copy of Manila file;
·Brochure with hand written notes on reverse;
·Cooling off statements, which are initialled and signed by Mr Rogers; and
·Advertising account forwarded to vendors.
The documents provided in response to further enquiry are those in the bundle P28 and are:
·Sales Agency Agreement dated 1/7/03
·Copies of various searches in relation to the land
·Title Register Search Certificate of Title Volume 5550 Folio 779
·Facsimile cover sheet dated 17/7/03 from Mr Peluso to Mr Rogers attached to Copy Certificate of title and dimensions
·Letter from Mr Rogers to Mr Peluso dated 18/7/03, with additional handwritten notations:
“offered $400,000 30 day settlement unconditional”
and
“Vendor will accept $410,000”
·Letter from Mr Rogers to Mr Peluso dated 22/7/03
·Facsimile cover sheet dated 22/7/03 for facsimile of 17 pages from Mr Peluso to Mr Rogers
·Schedule to the Contract which is executed by Mr Rogers
·Form 1 – Statement under s 7 Land and Business (Sale and Conveyancing) Act 1994 (not initialled and acknowledgement not signed by Mr Rogers) and attachments
·Facsimile dated 23/7/03 to Taarnby and Taarnby from Mr Stubblety
·Invoice dated 15/8/03 from Taarnby and Taarnby directed to “Pat & Joe Catanzariti 87 Taylors Road, Waterloo Corner” in the sum of $968.00 for advertising in relation to the subject property
·Letter from the defendants’ solicitors to Taarnby and Taarnby dated 18/8/03.
The documents produced by Taarnby and Taarnby were admitted as a business record of the real estate agent. It appears on the face of the file documents that the file is not a complete record of communications and/or correspondence between Mr Peluso and Mr Rogers, nor between Mr Peluso and the vendors. The documents are however entirely consistent with the other evidence called by the plaintiff.
There is some additional handwriting on the documents about which there is no evidence. Mr Peluso was not called by the plaintiff. I draw no inference adverse to the plaintiff on that account. In the event, I have not found it necessary to rely on any of the hand written notes on the documents provided to the plaintiff’s solicitors by the vendors’ agent.
The Plaintiff’s Case
It is the plaintiff’s case that the first facsimile from Mr Peluso to Mr Rogers on 22 July 2003 advising him that the vendors would accept $410,000 plus GST, 30-day settlement/unconditional contract should be characterised as an offer by the defendants to the plaintiff. It identified the land and it contained the essential terms of the bargain. The offer is in writing, from the vendors’ agent, whose name appears in hand writing.
The plaintiff’s case is that the offer was accepted by the written response of Mr Rogers in which he confirmed his acceptance of the terms on behalf of the plaintiff and asked further, “Could you please advise me as to the paperwork procedures for the contract and the payment of the deposit at your earliest convenience.” The agreement as formed is not made subject to the signing of a formal contract. It was anticipated that the plaintiff was to pay the deposit forthwith and that the parties would sign a contract, in accordance with the terms of the agreement.
The plaintiff’s case is that the further facsimile of the same date put into effect what the parties had contemplated and agreed, that is, that a formal contract would be signed by both parties in accordance with the terms already agreed, and by which they were bound, and that the plaintiff would pay the deposit, as had already been discussed between Mr Rogers and Mr Peluso.
The Defendants’ Case
The defendants accept that Mr Peluso had, at the least, apparent or ostensible authority to act as their agent in the sale and purchase of the land.
The defendants’ case is that there is no concluded agreement between the plaintiff and the defendants. It is the defendants’ case that the first facsimile from Mr Peluso of 22 July 2003 should be characterised as an invitation on behalf of the defendants to the plaintiff to enter into negotiations. It does not bear the signature of Mr Peluso. The further facsimile he sent on the same day provided the opportunity to the plaintiff to make a formal offer to the defendants, who were free to accept or reject it. It is the defendant’s case that Mr Peluso’s authority was limited to conducting negotiations. He had no authority to make, and sign his name to, an offer on behalf of the defendants which bound the defendants to a contract for the sale and purchase of the land.
In the alternative, the defendants’ case is that if there is a contract for the sale and purchase of the land, there is no agreement or any memorandum or note thereof, in writing, and signed by the defendants or by some person lawfully authorised by the defendants to sign on their behalf. It is the defendants’ case that Mr Peluso had no authority to sign on their behalf any memorandum or note of an agreement, enforceable against them, in relation to the sale of the land.
It is suggested on the pleadings that Mr Peluso was acting outside the scope of his actual authority in representing in the letter of 22 July 2003 to Mr Rogers that the defendants would sign the contract forwarded to Mr Rogers on the following day in Mr Peluso’s office. It has not been necessary to determine the scope of Mr Peluso’s authority to make representations on behalf of the defendants and on which the plaintiff might rely to its detriment. The plaintiff did not pursue a claim pursuant to the Fair Trading Act 1987 based on misleading and deceptive conduct.
Agency
It is relevant to bear in mind the nature of the agency between Mr Peluso and the defendants.
In connection with sales and purchases of property the word "agent" is apt to be used in a misleading way. The legal conception of agency is expressed in the maxim "Qui facit per alium facit per se", and an "agent" is a person who is able, by virtue of authority conferred upon him, to create or affect legal rights and duties as between another person, who is called his principal, and third parties. When a person is employed to find a buyer of property, he is commonly said to be employed as an agent, and the term "estate agent" is a common description of a class of persons whose business is to find buyers for owners who wish to sell property. But the mere employment of such a person under the designation of agent does not, apart from the general rule that the employer will be responsible for misrepresentations made by him, necessarily create any authority to do anything which will affect the legal position of his employer. He may, of course, be given any express authority which the employer thinks fit to give him, and estoppels may arise, but the law does not imply from the mere fact of employment to find a purchaser a general authority to do on behalf of the employer anything which may be incidental to the effecting of a sale. (Petersen v Moloney (1951) 84 CLR 91)
The question to be asked is not, “Was Mr Peluso the defendants’ agent?”, but rather, “Was Mr Peluso the defendants’ agent with the authority to bind the defendants to an enforceable contract for the sale of the land?”. (Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 211 ALR 342; (2004) 79 ALJR 129)
By paragraph 3 of their Defence, the defendants:
1.admit that the Real Estate firm of Taarnby and Taarnby was appointed as their lawfully appointed agent for the purpose of effecting a sale of the land; and
2.say further that Taarnby and Taarnby was appointed as the defendants’ agent to effect a sale of the land in the manner and at the price specified in a sales agency agreement dated 1 July 2003 between Taarnby and Taarnby and the defendants.
The evidence relating to the appointment of Taarnby and Taarnby Real Estate, and Mr Carlo Peluso in particular, as the agent for the defendants in the sale of the land is not disputed. It is not disputed that on 1 July 2003, the defendants entered into a written agreement appointing the real estate agent, Taarnby & Taarnby, to effect a sale of the land (“the Sales Agency Agreement”). It is a standard form Sales Agency Agreement (Residential Property) approved by the Real Estate Institute of South Australia Inc. and it is in evidence as exhibit P1.
The land which is the subject of the Sales Agency Agreement is described as 10 acres of vacant land at Lot 56, Diment Road, Burton. In fact, it appears that the land is incorrectly described as Lot 56. The copy Title Register Search and attached diagram for Certificate of Title Volume 5550 Folio 779 refers to the land as Allotment 55, Diment Road, Burton. There is no suggestion that the misdescription in the Sales Agency Agreement is material.
The Sales Agency Agreement was apparently executed by the second defendant on behalf of the Vendor and receipt of a copy of it acknowledged by both defendants. Nothing turns on the manner of execution of the document.
The Sales Agency Agreement provided that:
The Vendor appoints the Agent and the Agent accepts the appointment to effect a sale of the Property upon the terms and conditions set out below.
The agency was a sole agency for a term of four months, to 1 November 2003. The Sales Agency Agreement provided for the property to be offered for sale by private treaty at the price of $600,000 -$650,000, or at such other price as the Vendor may specify in writing. The preferred settlement period was 30 days. The professional fee payable to the agent was 3% of the gross selling price, inclusive of GST.
The Marketing Plan provided for expenses limited to a total of $1100 for advertising the property in the print media, on the Internet and by signboard.
Clause 2 of the Sales Agency Agreement provided:
The Vendor appoints the Agent as its agent to effect a sale of the Property in the manner and at the price specified in the Schedule or at such other price as the Vendor after consultation with the Agent may nominate in writing to the Agent. The Agent accepts this appointment and undertakes to use its best endeavours to effect a sale of the Property.
The agent was authorised by the Vendor, pursuant to clause 4 to: -
1.advertise the property for sale in accordance with the information supplied by the Vendor and the agreed marketing plan and in such a manner as the Agent considers appropriate including the placing of signage on the Property;
2.unless otherwise specified by the Vendor, to offer the property for sale on the form of Contract and, if the sale is to be by way of auction, under the terms and Conditions for the conduct of auctions issued by the Real Estate Institute of South Australia Incorporated;
3.appoint, if appropriate, an auctioneer to assist the Agent in conducting an auction of the Property;
4.sign on behalf of the Vendor any contract for the sale of the Property effected by public auction and to authorise an employee of the Agent or an auctioneer engaged by the Agent to sign any such contract on behalf of the Vendor;
5.accept any monies receivable by the Vendor prior to settlement in respect of any sale or proposed sale of the property;
6.incur the Expenses up to the Expenses Limit;
7.deduct any monies due and payable to the Agent pursuant to the Agreement from any monies received by the Agent for and on behalf of the Vendor, to pay the remainder of any such monies to the Vendor or the Vendor’s appointed conveyancer, and upon written request, account and render written statements to the Vendor for all monies received paid or appropriated.
Clause 5 of the Sales Agency Agreement relevantly provided that:
·during the term of the sole agency, the Vendor would not endeavour to sell the property to any person other than one introduced by the Agent to the Vendor but would refer any interested person to the Agent and advise the Agent accordingly, and
·The Agreement could not be terminated by either party during the term of the sole agency without the consent in writing of the other party.
There can be no dispute that the defendants appointed the Real Estate firm known as Taarnby and Taarnby, and in particular, Mr Carlo Peluso, as its lawfully appointed agent for the purpose of effecting a sale of the land. That is admitted.
Under clause 4 of the Sales Agency Agreement, the agent’s authority specifically included authority to offer the property for sale on the form of Contract issued by the Real Estate Institute of South Australia Incorporated.
In my opinion, on the evidence, Mr Peluso had actual authority to act as the agent for the defendants in the sale and the purchase of the land, and in particular, to negotiate with Mr Rogers on the price to be paid for it, and other terms, to offer the property for sale on the form of contract issued by the Real Estate Institute of South Australia Incorporated and to accept the payment of a deposit in respect of a sale or proposed sale.
Under the Sales Agency Agreement, amongst other things, the defendants appointed the agent to effect a sale of the land by private treaty at the price of $600,000-$650,000 or at such other price as the vendor after consultation with the agent, may nominate in writing.
No written communication from the defendants to Mr Peluso nominating a different price from the price appearing in the Sales Agency Agreement was discovered. The plaintiff has not established that the agent, Mr Peluso, had actual authority, express or implied, from the defendants to offer the land for sale at $410,000 plus GST. On the other hand, while the absence of evidence to the contrary cannot be used as proof in support of the plaintiff’s case, there is no evidence to suggest that Mr Peluso did not have the actual authority of the defendants to agree to the purchase price of $410,000 plus GST.
Actual authority and apparent or ostensible authority are separate and distinct. While each may exist without the other, and the scope and extent of each may differ, generally they co-exist and coincide. (Freeman & Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480)
The actual authority of Mr Peluso, as the defendants’ agent is a legal relationship between Mr Peluso and the defendants, his principals. The plaintiff, through Mr Rogers, can have had no knowledge of the nature and scope of any agency agreement between Mr Peluso and the defendants at the time of dealings with Mr Peluso.
The apparent or ostensible authority of Mr Peluso, on the other hand, is a legal relationship between the principals, the defendants, and the other party to the contract, the plaintiff, created by a representation - made by the defendants to the plaintiff, intended to be and in fact acted upon by the plaintiff –
…that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the “apparent” authority, so as to render the principal liable to perform any obligations imposed on him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor, by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract.
(Freeman & Lockyer v Buckhurst Park Properties (Magnal) Ltd [1964] 2 QB 480 at 502-503 per Diplock LJ)
The defendants accept, and in my opinion, it is clear that Mr Peluso had the apparent or ostensible authority of the defendants to communicate and correspond with Mr Rogers as he did.
The issues are:
1. Has a binding contract between the plaintiff and the defendants for the sale and purchase of the land come into existence?
The plaintiff contends that there has been an offer and an acceptance constituting a binding agreement between the parties. The defendants, on the other hand, contend that the correspondence discloses only continuing negotiation between the parties, rather than a concluded agreement. In particular, by paragraph 5 of the Defence, the defendants say that the letter of 22 July 2003 from Mr Peluso to Mr Rogers (exhibit P9) should be characterised as an invitation to the plaintiff to submit an offer to the defendants. The defendants contend that in any event, without the exchange of a written contract, no binding agreement came into effect.
2. If so, is the plaintiff prevented from enforcing it on account of the operation of section 26(1) of the Law of Property Act 1936?
The plaintiff contends that there is a memorandum or note of the agreement in writing, signed by a person lawfully authorised by the defendants to do so. The defendants say their agent did not have their actual authority to sign a contract, or a note or memorandum of it, so as to bind them to an enforceable agreement.
Has a binding contract between the plaintiff and the defendants for the sale and purchase of the land come into existence?
The relevant legal principles are well settled. An agreement for the sale and purchase of land may be in writing, or it may be an oral one, supported by a written note or memorandum of it. (Haydon v McLeod (1901) 27 VLR 395 at 401-402)
A contract for the sale of land is capable of conclusion by correspondence, ‘reading the correspondence fairly with a view to collect the sense of it’. In Kennedy v Lee, Lord Eldon L. C. said:
In order to form a contract by letter … nothing more is necessary than this; that when one man makes an offer to another to sell for so much, and the other closes with the terms of his offer, there must be a fair understanding on the part of each, as to what is to be the purchase money, and how it is to be paid, and also a reasonable description of the subject of the bargain.
((1817) 3 Mer 442 at 447; 36 ER 170 at 172; and see Huddleston v Briscoe (1805) 11 Ves Jr 583 at 592; 32 ER 1215 at 1218: referred to by Greig and Davis The Law of Contract, The Law Book Co Ltd, 1987 at p 16)
The answer to any written proposal must be a simple acceptance of the terms proposed, without the introduction of any new or different term. (Holland v Eyre (1825) 2 Sim & St 194 at 195; 57 ER 319 at 320)
The rights and liabilities of the parties are to be determined objectively. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement.

The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. (Allen v Carbone (1975) 132 CLR 528 at 531-532; Pacific Carriers Ltd v BNP Paribas (2004) 78 ALJR 1045 at 1050-1051 [22]; 208 ALR 213 at 221)
The correspondence in this case refers to a contract in written form which it is clearly contemplated the parties will sign. It is necessary to consider whether the intention of the parties is that there is a binding agreement between them, or whether the correspondence between the parties constitutes a record of the terms on which the parties were agreed as a basis for the negotiation of a contract. (see for instance, Clifton v Palumbo [1944] 2 All ER 497; B Seppelt and Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147; cp Bigg v Boyd Gibbons [1971] 1 WLR 913)
The question is one of construction in each case of the document or documents advanced as evidence of a concluded agreement. If the essential terms of an agreement between the parties can be found in the course of correspondence, ‘embracing all of the particulars essential for finality and completeness’, including the thing to be sold, and the price to be paid, even though the parties contemplate the agreement being put into a more formal shape, the correspondence may constitute an agreement in the full sense between the parties.
The fact that it is contemplated that a formal agreement, embodying the terms, is to be signed does not necessarily indicate that the parties are continuing in negotiation. Provided the final mutual assent of the parties is established so that those drawing up a formal agreement may not vary the settled terms, a contract is completed. (Farmer v Honan and Dunne (1919) 26 CLR 183 at 192,194-5; Niesmann v Collingridge (1921) 29 CLR 177 at 181-182)
It is also a question of construction as to whether or not a reference to the execution of a further document in correspondence said to constitute a contract, is a term of the agreement or a reference to how the agreement is to be carried out.
It has been held repeatedly that the question is one of construction in each case of the documents which are put forward as showing that a contract has been made. In Von Hatzfeldt-Wildenburg v. Alexander (1912) 1 Ch 284, at pp 288-289 Parker J. used language which has been cited with approval in many later cases. He said: "It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplate the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored."
(Godecke v Kirwan (1973) 129 CLR 629 at 638 per Walsh J)
There are many cases where a reference to the subsequent preparation or execution of a formal document has been held to make the concluding of the agreement conditional on its execution. Conversely, there are many cases where an agreement has been held to be binding, notwithstanding that a term of the agreement is that a formal document will be executed.
It is indeed everyday practice for such agreements to be executed. Where then is the line to be drawn? It seems to me that, leaving aside cases where a further agreement between the parties is necessary falling under the first head, the criterion is whether the provision about the formal document amounts to a condition so that there be no binding contract until the formal document has been prepared, or more usually both prepared and executed, or whether it is a mere term of the bargain.
(Powell and Berry v Jones and Jones [1968] SASR 394 at 400 per Bray CJ)
In Masters v Cameron, the High Court (comprised of Dixon CJ, McTiernan and Kitto JJ) identified three categories of cases where the parties ‘who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract’.
It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. ((1954) 91 CLR 353 at 360)
The magnitude, the subject matter or the complexity of the transaction may in some cases indicate that any agreement was not intended to have legal effect until a further written contract was executed by the parties.
As McHugh J said, in GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd ((1986) 40 NSWLR 631 at 634):
However, the decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of surrounding circumstances: Godecke v Kirwan (1979) 129 CLR 629 at 638; Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 332-334, 337. If the terms of a document indicate that the parties intend to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction.
Even when a document recording the terms of the parties’ agreement specifically refers to the execution of a formal contract, the parties may immediately be bound. Upon the proper construction of the document, it may sufficiently appear that “the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms”: Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310 at 317.
In my opinion, and bearing in mind the possibility of an overlap in the categories described, this case is one which most closely falls into the first category identified in Masters v Cameron, above. The plaintiff and the defendants by their agent reached a final agreement as to the terms of their bargain. Each intended to be immediately bound to the performance of those terms, but at the same time proposed to have the terms restated in a form which would be fuller or more precise but not different in effect.
The facsimile (exhibit P6) sent on 22 July 2003 by the defendants’ agent, to Mr Rogers, acting on behalf of the plaintiff, confirming Mr Peluso’s earlier verbal advice that the defendants would accept $410,000 for the land, in my opinion, should be characterised either as itself an offer from the defendants to the plaintiff, or as evidence of confirmation of an oral offer already communicated by Mr Peluso to Mr Rogers. The letter from Mr Rogers to Mr Peluso, (exhibit P7) sent by facsimile shortly afterwards, is to be regarded as the confirmed acceptance of the offer by the plaintiff. While it is not determinative, that is how Mr Rogers understood it and that is the basis on which Mr Peluso appears to have proceeded.
The two documents, taken together, identify the land, the purchase price, the fact that a deposit is to be paid and that the contract is unconditional, and the time for settlement. The purchaser is identified. Mr Rogers’ evidence was that he had had discussions with Mr Peluso about the identity of the vendors and about payment of the deposit of 10% of the purchase price, and Mr Peluso’s subsequent letter to him bears that out. The subject land was vacant land and there is nothing to suggest that the transaction was a complex one.
Mr Rogers’ letter shows that it is clearly contemplated that a written contract would be signed. Having regard to the subject matter of the contract, the circumstances of negotiation leading up to the exchange of correspondence and to the correspondence itself, the necessary implication is that both parties contemplated that the acceptance of the offer would be followed by the execution of a written contract by both parties, in which the terms were to be restated in a form, fuller or more precise, but not different in effect.
The agreement is not expressed to be ‘subject to’ or ‘conditional upon’ the execution of a formal contract and there is no evidence relating either to the parties themselves or to any convention or practice as to a usual method of conveyancing, from which such a condition could be inferred, notwithstanding the absence of those precise words. (Masters v Cameron (1954) 91 CLR 353 at 362-363; Powell and Berry v Jones and Jones [1968] SASR 394 at 410; cp Allen v Carbone (1975) 132 CLR 528 at 532-533)
In this case, in my opinion, the documents exchanged on 22 July 2003 disclose a concluded agreement between the parties. To accept the contention put forward on behalf of the defendants that the letter sent by Mr Peluso at about 3.15 pm on 22 July 2003 was an invitation to the plaintiff - a request ‘to make offers or to engage in negotiations with a sale in mind’ (Carter and Harland Contract Law in Australia Butterworths, Australia, 4^th ed, 2002 at p 29) - which the plaintiff could accept or reject and which in no way bound the defendants, who remained free of any obligation, even if the plaintiff executed the contract and paid the deposit, is to ignore the previous exchange of correspondence and the discussions between Mr Rogers and Mr Peluso.
The correspondence and conversations immediately preceding the final letter of 22 July 2003 were cast in the language of offer and acceptance, and it is difficult to think that the parties did not conceive themselves as having entered into a legally binding obligation.
The parties’ subsequent correspondence may be referred to for the purpose of deciding if in fact a contract has been made. (Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68; Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647; referred to in B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147 (SC NSW-CA per Mahoney JA at 9155)
In my opinion, the facsimile (exhibit P9) sent by Mr Peluso at about 3.15pm on 22 July 2003 is to be understood in the circumstances as entirely consistent with a concluded agreement between the parties, i.e., the plaintiff having accepted the defendants’ offer to sell the land for the sum of $410,000 plus GST, with an unconditional contract to be executed, settlement in 30 days and a deposit of 10% or $41,000 to be paid. Mr Peluso’s letter assumes that it is understood that Mr Rogers will sign the attached contract on behalf of the plaintiff and that the deposit will be paid. Mr Peluso’s letter also in my opinion clearly shows that it was understood that the defendants would be signing the contract the next day, following which a copy of the ‘fully signed contract’ was to be faxed to Mr Rogers.
Alternatively, if I am wrong about that, the letter (exhibit P9) sent by Mr Peluso at the least was a formal offer advanced on behalf of the defendants after negotiations with Mr Rogers for the plaintiff. The offer was accepted by Mr Rogers on behalf of the plaintiff on the execution of the documents as requested by Mr Peluso and the payment of the deposit. The defendants were not then at liberty to deny a concluded agreement.
The correspondence demonstrates a clear intention on the part of the plaintiff and on the part of the defendants, as conveyed by the defendants’ agent, to be bound by the agreement reached between them, including agreement that the parties were to sign the Contract attached to Mr Peluso’s final letter of 22 June 2003.
The evidence of the negotiations and the terms of the correspondence are inconsistent with the parties continuing in negotiation, and in particular inconsistent with being nothing more than an invitation to the plaintiff to make an offer to the defendants. There is no indication that the parties, i.e. the plaintiff and the defendants, wished ‘to reserve to themselves a right to withdraw at any time until the formal document is signed.’ (Masters v Cameron at (1954) 91 CLR 353 at 361; and see Powell and Berry v Jones and Jones [1968] SASR 394 at 400)
As Bray CJ said:
This is not an unimportant consideration. “The problem for a court of construction must always be so to balance matters, that without violation of essential principle, the dealings of men may as far as possible be treated as effective and that the law may not incur the reproach of being the destroyer of bargains”: per Lord Tomlin in Hillas v Arcos Ltd. (1932) 147 LT 503, at p 512) ([1968] SASR 394 at 397)
(Powell and Berry v Jones and Jones, above at 397)
I find that the defendants reached agreement with the plaintiff for the sale and purchase of the land, on the terms agreed between them, as set out in the correspondence of 22 July 2003 and the accompanying documents. The defendants are bound by the agreement.
Is the agreement enforceable?
Pursuant to section 26(1) of the Law of Property Act 1936, no action may be brought on any contract for the sale of land unless an agreement on which the action is brought, or some memorandum or note of it is:
1.in writing, and
2.signed by the party to be charged or some person thereunto by him lawfully authorised.
There is no requirement in South Australia, as there is in Victoria, that an agent be authorised in writing. (Instruments Act 1958 (Vic) s 126)
Memorandum or Note in Writing
The memorandum or note need not be contained in one document.
It is well settled that any document signed by the party to be charged or by some person authorized by him which contains all the essential terms of the agreement is a sufficient memorandum. It is also well settled that the memorandum "need not be contained in one document; it may be made out from several documents if they can be connected together." They may be connected by reference one to the other; but further, "if you can spell out of the document a reference in it to some other transaction, you are at liberty to give evidence as to what that other transaction is, and, if that other transaction contains all the terms in writing, then you get a sufficient memorandum within the statute by reading the two together" (Stokes v. Whicher (1920) 1 Ch. 411, at p. 418).
(Harvey v Edwards Dunlop & Co Ltd (1927) 39 CLR 302 at 307, per Knox CJ, Gavan Duffy and StarkeJJ))
The written memorandum or note may be a signed letter containing the terms of the agreement or it may refer to another document that contains the terms. (Moore v Hart (1683) 1 Vern 110, 201; 23 ER 352, 412)
In this case, there is in my view a sufficient reference to one another to allow the following documents to be connected and read together:
·    the facsimile sent at about 10.20 am on 22 July 2003 from Mr Peluso to Mr Rogers (exhibit P6) identifying the land, the price, 30 day settlement, unconditional contract
·    the letter sent by facsimile and signed by Mr Rogers to Mr Peluso between about 2.30 and 2.50 pm EST on 22 July 2003 (exhibits P7 and P8), advising that he will proceed on ‘the figure you put forward earlier today being $410,000’ and asking for ‘advice on the paper work procedures for the contract and the payment of the deposit’
·    the facsimile and letter, signed by Mr Peluso, sent to Mr Rogers at about 3.20 pm CST on 22 July 2003 (exhibit P9) with instructions as to the execution of the attached Contract and other documents referred to in the letter and for the payment of the deposit.
There is a specific reference in each document referring to other documents in each case and, in the letter from Mr Peluso, a sufficient physical connection with the attached documents. (Lawrence v Fordham [1922] VLR 705 at 713-714 per Cussen J; Thomson v McInnes (1911) 12 CLR 562)
Alternatively, if the letter sent with the Contract and other documents (exhibit P9) is to be characterised as an offer by the defendants, accepted by the plaintiff by Mr Rogers’ executing the documents as requested, and paying the deposit, then those documents on their own constitute a memorandum of the contract between the parties for the sale of the land.
The documents all read together, or the final letter and attached Contract and other documents on their own, contain sufficient particulars to satisfy the section: the names of the parties, the subject matter and the terms of the agreement.
Signature
The fact of the name of the person, on whose signature is relied, is on the document, together with a proper basis for inferring the necessary intention to be bound, may be sufficient, regardless of where the name appears on the document.
In this case Mr Peluso’s name appears in handwriting on the cover sheets of the facsimiles sent to Mr Rogers and his signature is on the letter enclosing the Contract and other documents. Coincidentally, it also appears on the Contract and the Form 1 document as a witness. I infer only from that a confirmation of Mr Peluso’s expectation, stated in his letter, that the contract was to be signed by both parties. It is not disputed that the writing is in Mr Peluso’s hand. It is immaterial where the name appears. (Greig and Davis, The Law of Contract, The Law Book Co, Sydney, 1987 at pp 713-715; Ogilvie v Foljambe (1817) 3 Mer 53; 36 ER 21: Cohen v Roche [1927] 1 KB 169 at 175)
I find that a memorandum or note of the contract between the parties is signed by Mr Peluso, acting on behalf of the defendants, with their apparent authority to convey their intention to be bound by the agreement.
Authority of the Agent to Sign on Behalf of the Defendants
The remaining issue is whether or not Mr Peluso was a person lawfully authorised by the defendants to sign the memorandum or note of the concluded contract.
The defendants by their agent agreed to sell the land to the plaintiff. The agent had the ostensible authority of the defendants to conclude the bargain in their behalf. The plaintiff relied on the ostensible authority of the agent to contract on behalf of the defendants. Had the defendants denied the apparent authority of their agent to contract on their behalf they would have been estopped from doing so. The only issue taken by the defendants in relation to the contract itself is whether or not there is in fact a concluded agreement.
The purpose of the statutory provision requiring some note or memorandum of an agreement for the sale of land in writing and signed by the party to be charged or a person thereunto lawfully authorised by him has its origin in the Statute of Frauds 1677. (Thomson v McInnes (1911) 12 CLR 562)
In Gibson v Holland (LR 1 CP 1; 35 LJ CP 51), Erle CJ said:
The object of the Statute of Frauds was the prevention of perjury in the setting up of contracts by parol evidence, which is easily fabricated. With this view it requires the contract to be proved by the production of some note or memorandum in writing.
(referred to in Ryrie v Cruikshank (1896) 17 LR (NSW) 195)
The note or memorandum of the agreement is not the contract itself. It is evidence of it. Even a letter written to repudiate the bargain may be a sufficient note to establish the fact of an agreement. (Bailey v Sweeting (1861) 9 CB (NS) 843 at 856; 142 ER 332 at 337-338) The memorandum need not be a communication to the other party to the contract. (Gibson v Holland (1865) LR 1 CP 1 at 5; 35 LJ CP 51) If an agent has the power to sell property and actually performs that task, he generally has the power to sign a memorandum of his dealings with the other party. (Ryrie v Cruikshank (1896) 17 LR (NSW) 195 at 197)

While I was referred to no authority directly on point, in Rosenbaum v Belson ([1900] 2 Ch 267), real estate agents were instructed to sell the vendor’s houses, the vendor agreeing to pay commission on the ‘purchase price accepted’. After negotiations with a purchaser, the owner agreed to accept an offer put forward by the purchaser. The real estate agents signed a written memorandum of the agreement, as the vendor’s agent, and acknowledged receipt of the deposit paid by the purchaser. The vendor refused to complete the sale on the grounds that the agents had authority to act as his agents to conduct negotiations for a sale, but no authority to sign an agreement.
The facts distinguish the case from this one. In Rosenbaum v Belson, Buckley J, as he was then, found as a fact that the real estate agent had the verbal authority of the vendor to sign a contract. However, Buckley J did make some observations as to the general law (at 268-269):
The contract relied upon being here signed by an agent, the plaintiff must, no doubt, make out that the act done by the agent was within his authority as agent. The defendant’s counsel went so far as to contend that an agent for sale has not authority to sign a contract unless express authority to sign a contract, as distinguished from authority to sell, is proved. In my opinion, that is not the law. The authority in the present case is in the terms: “Please sell for me my houses, and I agree to pay you a commission on the purchase price accepted.” This is an authority to sell. A sale prima facie means a sale effectual in point of law, including the execution of a contract where the law requires a contract in writing.
In this case, the defendants admit that the Real Estate firm of Taarnby and Taarnby was appointed as their lawfully appointed agent for the purpose of effecting a sale of the land and that Taarnby and Taarnby was appointed as the defendants’ agent to effect a sale of the land in the manner and at the price specified in a sales agency agreement dated 1 July 2003 between Taarnby and Taarnby and the defendants.
There is a note or memorandum of the contract for the sale of the land in writing. The note or memorandum of the agreement is signed by Mr Peluso, the defendants’ agent. As their agent he had at the least ostensible authority to do so. There is no evidence that the contract is not a proper contract or that Mr Peluso acted outside the scope of his authority. It is the defendants’ case that Mr Peluso did not have their actual authority to sign a contract, or a note or memorandum of it, on their behalf.
In my opinion, while there is no evidence of actual authority given to Mr Peluso to sign a contract, or a memorandum or note of it, the defendants should not be permitted to deny the authority of their agent to sign a note or memorandum of the agreement he made on their behalf, an agreement to which the defendants are otherwise bound. The same principle of estoppel as applies to a denial of the authority of the agent to come to a concluded agreement on their behalf, should apply to a denial by the defendants of the authority of the agent to sign a memorandum or note of the agreement between the plaintiff and the defendants.
Where it has been established that an agreement for the sale and purchase of the land has been concluded by the agent of the defendants, with their apparent or ostensible authority, it does no injury to the purpose of the provisions of section 26(1) of the Law of Property Act 1936 for the defendants to be estopped from denying their agent’s apparent or ostensible authority to sign a memorandum or note of the agreement. (for example, Ford v Young (1882) 8 VLR 93 at 105, 107; Humphries v Humphries [1910] 2 KB 531)
The defendants are, in the circumstances as I have described them, in my opinion, estopped from denying the existence of a sufficient written memorandum or note of the agreement reached on their behalf by their agent, Mr Peluso. The act of the defendants’ agent in signing a memorandum or note of the agreement, which he had apparent authority to conclude on their behalf, is to be regarded as the act of the defendants.
Conclusion
In summary, I find that:
1.   The defendants’ agent, Mr Peluso, had apparent or ostensible authority to conclude an agreement with the plaintiff and to render the defendants liable to perform their obligations under the contract.
2.   There is a contract between the plaintiff and the defendants for the sale and purchase of the land in the terms set out in the correspondence and the Contract attached to the letter from Mr Peluso dated 22 July 2003.
3.   There is a memorandum or note of the agreement for the sale of the land in writing.
4.   The memorandum or note of the contract is signed by the defendant’s agent, Mr Peluso.
5.   The defendants are estopped from denying that Mr Peluso was a person lawfully authorised by the defendants to sign a memorandum or note of the agreement he reached with the plaintiff on their behalf.
The plaintiff is entitled to an order for specific performance of the agreement reached with the defendants, including an order that the defendants execute a contract for the sale and purchase of the land on the terms agreed by the parties, subject to any necessary amendment to allow for the passage of time since the agreement was made. (Niesmann v Collingridge (1921) 29 CLR 177)
I will hear the parties further as to the terms of the orders to be made, and as to costs.