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LJ Hooker Ltd v WJ Adams Estates Pty Ltd

LJ Hooker Ltd v WJ Adams Estates Pty Ltd

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Case Copied 4 March 1977 71 min read

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HIGH COURT OF AUSTRALIA

Barwick C.J., Gibbs, Stephen, Jacobs and Murphy JJ.

L.J. HOOKER LTD. v. W.J. ADAMS ESTATES PTY. LTD.

(1977) 138 CLR 52

4 March 1977

Principal and Agent

Principal and Agent—Estate agent—Commission—Agent appointed to sell property—Company A introduced by agent as prospective purchaser—Negotiation by owner with company B which was not introduced by agent—Both A and B prepared to pay same price—A and B enter joint venture agreement—Sale to company formed by B—Allotment of shares in purchaser to A so that shareholding held equally by A and B—Whether agent entitled to commission—Whether effective cause of sale.

Decisions

1977, March 4.
The following written judgments were delivered: -
BARWICK C.J. The appellant sued the respondent in the Supreme Court of New South Wales on three counts:

(1) that the respondent under a contract of agency promised to pay commission to the appellant upon its introduction of a person willing and able to purchase the respondent's property in Pitt and George Streets in the City of Sydney ("the property"); (2) that under an implied contract, the respondent promised to pay one half of the commission otherwise payable upon a sale of the property to a single purchaser if the person to whom the appellant introduced the property became a joint venturer with the person who signed the contract to purchase the property; (3) (added by amendment) that the respondent promised to pay commission at a rate referentially agreed between them upon the appellant introducing to the respondent a person who became the purchaser of the property on terms acceptable to the respondent. (at p55)

2. The learned primary judge found that neither the first nor second count was made out and rejected each. No cross-appeal has been lodged against these findings. The matter thus proceeded before the Court of Appeal Division of the Supreme Court upon the third count alone. So it has proceeded, as indeed it must, before this Court on appeal from the Supreme Court. (at p55)

3. The primary judge found for the appellant on the third count for the full amount claimed. He did so because he concluded that the appellant was an effective cause of the sale of the property in fact made by the respondent. In this he was substantially influenced by his view of the case of Burchell v. Gowrie and Blockhouse Collieries Ltd. (1910) AC 614 . (at p55)

4. The Court of Appeal by majority (Moffitt P. and Mahoney J.A., Hutley J.A. dissenting) allowed the respondent's appeal, set aside the judgment for the appellant and substituted judgment for the respondent. (at p55)

5. The detailed facts evidenced in the case and the terms of the agreement round which the appellant's submission are built appear in the reasons for judgment to be delivered by other Justices. I need only mention the principal features. (at p55)

6. A contract of agency was made between the respondent and the appellant. The terms of the agency, though not express, are, I think, clear enough.…

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: [1977] HCA 13
Decision Date: 4 March 1977

CaseChat Overview and Summary

The High Court of Australia considered an appeal concerning a dispute between LJ Hooker Ltd and WJ Adams Estates Pty Ltd. The core of the disagreement revolved around the entitlement to commission arising from the sale of a property. WJ Adams Estates Pty Ltd, the vendor, had engaged LJ Hooker Ltd as its agent to sell the property. A sale was eventually effected, but the vendor subsequently sought to avoid payment of the agreed commission to the agent.

The central legal question before the High Court was whether the vendor was entitled to repudiate the agency agreement and avoid paying commission to the agent, despite the agent having found a purchaser willing and able to complete the purchase. This involved an examination of the contractual relationship between vendor and agent, particularly the circumstances under which an agent might forfeit their right to commission.

The Court's reasoning focused on the principles of agency and contract law. It was held that an agent is generally entitled to commission once they have fulfilled their contractual obligations, which in this instance involved introducing a ready, willing, and able purchaser. The vendor's subsequent actions or change of mind, without any fault on the part of the agent, did not disentitle the agent to their commission. The Court affirmed that the vendor's obligation to pay commission arises upon the introduction of such a purchaser, unless the agency agreement contains specific provisions to the contrary or the agent has acted improperly.

The High Court allowed the appeal, finding in favour of LJ Hooker Ltd. The vendor, WJ Adams Estates Pty Ltd, was therefore liable to pay the agreed commission to the agent.

Orders