Luxury Boat Holdings Pty Ltd v Moore - [2019] WADC 108

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   LUXURY BOAT HOLDINGS PTY LTD -v- MOORE [2019] WADC 108
CORAM:   STAUDE DCJ
HEARD:   4 & 5 JUNE 2019
DELIVERED          :   9 AUGUST 2019
FILE NO/S:   CIV 576 of 2018
BETWEEN:   LUXURY BOAT HOLDINGS PTY LTD
Plaintiff
AND
BRADLEY COLIN MOORE
Defendant

Catchwords:

Contract - Claim for commission - Sale of motor vessel - Whether agent entitled to commission for introducing eventual purchaser during the term of the agency agreement - Whether agent was an effective cause of the sale

Legislation:

Nil

Result:

Judgment for the plaintiff

Representation:

Counsel:

Plaintiff	:	Mr D R Chandler
Defendant	:	Mr N D C Dillon

Solicitors:

Plaintiff	:	Lemonis & Tantiprasut Lawyers
Defendant	:	Chalmers Legal Studio Pty Ltd

Case(s) referred to in decision(s):

Allan v Leo Lines Ltd [1957] 1 Lloyd's Rep 127
Allianz Australia Insurance Ltd v General Cologne Re Australia Ltd [2004] NSWCA 433
Baker v Leonard Oades Pty Ltd [1979] NSWR 1745
Bennett & Co v Connors [1953] St R Qd 14
Berben v Hedditch [1982] ANZ ConvR 535
Berezovsky v Edmiston & Co Ltd [2010] EWHC 1883
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Burchell v Gowrie and Blockhouse Collieries Ltd [1910] AC 614
Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2009] NSWCA 190
Crerar v McCooke [1913] VLR 62
Foxtons Ltd v Pelkey Bicknell [2008] EWCA Civ 419
Harcourts Cox Coxon v Lunam [1997] ANZ ConvR 39
L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52
Millar, Son & Co v Radford (1903) 19 TLR 575
Missing Link Network Integration Pty Ltd v Olmate Pty Ltd [2005] NSWSC 430
Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2
Super Yacht Technologies Pty Ltd v Mackeddie Marine Pty Ltd [2012] QSC 401
Symonsv Cahill [1923] VR 49
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Wood (John D) and Co v Dantata [1987] 2 EGLR 23

STAUDE DCJ:

Introduction

The plaintiff's claim is for payment of an agent's commission upon the sale of the defendant's motor vessel. The plaintiff claims that during the term of an agency agreement it introduced the person who later bought the vessel. The defendant denies liability on the basis that the clauses on which the plaintiff relies were rendered inoperative because the agreement was for a fixed period, alternatively, on the basis that the plaintiff was not the effective cause of the sale.
At the trial the defendant sought leave to amend the defence to plead the implication as a matter of law or fact of a term of the agency agreement to the effect that to be entitled to a brokerage fee the plaintiff had to be the effective cause of the sale of the vessel. I reserved on the question of leave in the interest of progressing the trial. During the trial the parties came to grips fairly and squarely over the issue which had clearly been alive throughout. The question raised by the sought amendment having been fully canvassed in the evidence and submissions, without prejudice to the defendant, there is no reason not to grant leave to amend in the terms of the minute of amended defence handed up on 5 June 2019.

The facts

Le Bateau is a luxury motor vessel. Its construction was commissioned by the defendant and his wife through Horizon Motor Yachts Australia (Horizon) which carries on business at Sanctuary Cove in Queensland. It was acquired in 2014.
On 14 September 2016, Horizon was appointed as agent to sell the vessel under an authority to sell by central agency.
The plaintiff trades as One Brokerage. Its directors are Mr Evan Moore, who gave evidence at trial, and Mr Glen Moltoni.
In September 2016 Mr Evan Moore was informed by Mr Mark Western of Horizon that Le Bateau was listed for sale. Mr Western suggested that One Brokerage may be able to find a buyer of the vessel in Western Australia where the vessel was located.
Mr Evan Moore then made contact with Mr Bradley Moore by telephone and arranged to inspect the vessel at South of Perth Yacht Club. Mr Evan Moore suggested to Mr Bradley Moore that as a local marine brokerage One Brokerage may be able to find a potential purchaser of Le Bateau.
Mr Evan Moore's understanding at that time was that as there was already an agency agreement in place with Horizon, if One Brokerage introduced a buyer then the commission would be shared with Horizon.
Mr Evan Moore inspected Le Bateau on 12 October 2016. The following day he sent an email to Mr Bradley Moore (exhibit 1.3) confirming their discussions to the effect that One Brokerage would promote the vessel to a number of its customers, but would not advertise the vessel online at Mr Bradley Moore's request. The email indicated a brokerage fee on sale of 5.5%, including GST, and named a number of potential buyers.
Notwithstanding Mr Bradley Moore's request, One Brokerage did advertise the vessel online and, according to Mr Evan Moore, contacted the nominated potential buyers. During the period October 2016 – August 2017 there was no formal agency agreement made between Mr Bradley Moore and One Brokerage.
Then, on 18 August 2017, Mr Evan Moore was called by Mr Chris Woodward of CJW Marine, a marine management and maintenance business that provided services to a Mr Stephen Hobson.
Mr Woodward was described in the evidence as Mr Hobson's boatman. At that time he had been instructed by Mr Hobson to look at vessels for sale that were larger than the vessel Mr Hobson owned at that time. Mr Woodward contacted One Brokerage and another marine broker. He had known Mr Evan Moore for a number of years. Mr Evan Moore told Mr Woodward about Le Bateau and invited him to inspect it.
Mr Evan Moore then informed Mr Bradley Moore by email on 19 August 2017 that he had a potential buyer in Mr Hobson. He said 'I have put your boat to him and he would like to take a look'.
On 22 August 2017 Mr Evan Moore sent another email to Mr Bradley Moore proposing a non‑central agency agreement in a form that was annexed to the email (exhibit 1.7). It proposed a brokerage fee of 5.5% inclusive of GST and a list price of $5,950,000. The proposed agency agreement contained standard conditions, including cl 6.2 that provided, relevantly:
The seller appoints the broker as its agent to offer the vessel for sale either directly or through other brokers as the broker may choose to appoint from the date of this agreement referred to in Item A of the reference schedule. The seller is liable to pay the broker the brokerage fees if:
(a)a sale is completed and the buyer in the sale is introduced to the seller by the broker or other brokers appointed by the broker under this agreement; or
(b)the sale is terminated and the broker or other brokers appointed by the broker under this agreement procured the sale and the sale is not completed due to the buyer's default and the deposit, if any, paid by the buyer is forfeited to the seller.
The seller is not liable to pay the broker the brokerage fees if the buyer in the sale is found by the seller or introduced to the seller by a person other than the broker or other brokers appointed by the broker under this agreement. This non‑central agency will continue until determined in accordance with cl 14.
Clause 14 provided for the termination of the agency on 30 days' notice. Clause 14.2 provided that 'termination does not affect the right of the broker to claim any brokerage fees for introductions occurring during the term of this agreement'.
Mr Bradley Moore acknowledged the email and subsequently returned the form of agency agreement annotated with amendments, mainly to the reference schedule. Mr Bradley Moore marked the schedule so as to provide that the agency agreement be for a period from 22 August 2017 - 22 September 2017, that the brokerage fee be based on a percentage of the sale price, and that 75% of the fee would be paid to One Anchorage and 25% to Horizon as the central agent. The form was also amended by annotation to include in cl A and cl G of the reference schedule the termination date of 22 September 2017, corresponding with the specified term of the agreement (30 days).
The agency agreement form as amended by Mr Bradley Moore was signed by him on 22 August 2017 and by Mr Evan Moore on 23 August 2017 (exhibit 1.10). The list price of the vessel was $5.95 million.
Subsequently, on 25 August 2017, Mr Woodward on behalf of Mr Hobson inspected the vessel with Mr Evan Moore and Mr Bradley Moore. This inspection was thorough. Mr Woodward thought it was 'a beautiful, beautiful boat', but feared it was not of the size Mr Hobson was looking for (ts 146).
The following day Mr Evan Moore sent a number of photographs of the vessel to Mr Woodward by email (exhibit 1.14). He also offered to show him another vessel for sale, Mineral Water, moored at Hillarys.
By that time Mr Woodward had also located another vessel described as a Benetti 93 in Hong Kong. Mr Woodward had sent an email to the broker's local agent, Mr Ben Luker of Boutique Boats, on 24 August 2017 indicating that Mr Hobson was impressed by the vessel (exhibit 1.13). The email stated that Mr Hobson would not be able to inspect it for four weeks.
On 28 August 2017 Mr Woodward forwarded to Mr Hobson Mr Evan Moore's email annexing the bundle of photographs of Le Bateau. He reported his inspection to Mr Hobson, stating that he had spent three hours going over Le Bateau with the owner and found it to be well appointed and in good condition, but that he was not sure whether the layout would suit him. He wrote:
I'll talk to you more about her when we next speak but for 5.9 I don't think so, the boat doesn't blow your mind in appearance that's not to say at the right price it wouldn't be an option but would need to be considerably less and I got the feeling he won't budge too much [sic].
He said in the email that he was very keen to see the Benetti 93.
Mr Evan Moore emailed Mr Bradley Moore on 4 September 2017 (exhibit 1.18) informing him that Mr Hobson had gone to Europe for a few weeks, so he would not get any 'proper feedback' until he returned. Nothing further occurred in relation to the potential sale of Le Bateau to Mr Hobson before the agency agreement came to an end on 22 September 2017.
Mr Bradley Moore emailed Mr Evan Moore on 26 September to say 'for the sake of clarity you [sic] agency agreement has expired, thank you for your efforts' (exhibit 1.20). Mr Bradley Moore said that this email was sent to Horizon as well (ts 68). On the same day Mr Bradley Moore emailed Mr Western of Horizon (exhibit 1.21):
Mark, now Evan has no interest in our boat I need to get a local agent involved, Trevor Parkins [sic] is the obvious choice.
Meanwhile, Mr Hobson had continued to look around for a new boat. He went to London about 2 September 2017 and from there to the Cannes Boat Show and then to Hong Kong where he met Mr Woodward for an inspection of the Benetti 93. In October 2017 Mr Hobson went to Queensland to inspect another Horizon vessel, Black Legion.
In an email to Mr Woodward on 11 October 2017 Mr Hobson indicated that he was still considering the Benetti 93 and Black Legion. He had inspected each of those vessels as well as Mineral Water with Mr Woodward. Mr Hobson admitted in evidence that Mr Woodward performed the same role for him in relation to these vessels as he did in relation to Le Bateau. The nature of the collaboration between Mr Hobson and Mr Woodward is apparent from a number of email exchanges, in particular exhibit 1.17.
After inspecting Black Legion in Queensland, Mr Hobson looked at an advertisement for Le Bateau on the internet. Mr Trevor Parkins was named as the contact person. He knew Mr Parkins. Mr Parkins was employed by Yachts West Pty Ltd.
Yachts West Pty Ltd was appointed by Mr Bradley Moore as an agent to sell Le Bateau by virtue of an agency agreement dated 15 October 2017. This agreement (exhibit 1.25) incorporated an email by Mr Bradley Moore to Mr Parkins, Mr Western of Horizon and another Horizon addressee in which Mr Bradley Moore proposed that the commission on sale would be 1% to each broker, regardless of which sold the boat, 2% to the broker that sold the boat, and 1% payable directly to the sales representative who made the sale (all fees inclusive of GST).
Mr Hobson directed Mr Woodward to arrange an inspection. When Mr Hobson inspected Le Bateau on 27 October 2017 he was impressed. The asking price was $5.35 million by that stage. The following day he sent an email to Mr Parkins, copied to Mr Woodward, putting an offer to purchase the vessel for $4.9 million (exhibit 1.28). Mr Parkins suggested that he go to $5 million, as he did, and the deal was done the next day, 29 October 2017. The vessel passed the requisite mechanical and hull inspections and sea trials and the sale was duly completed.
All of the above facts are common ground. Yet, an issue did arise as to when and how Mr Hobson became aware of Le Bateau and that it was for sale.
Mr Evan Moore's evidence was that on 18 August 2017 Mr Woodward called him to say that he was looking for a vessel of 80 – 95 feet and that he knew that there was a Horizon boat for sale on the east coast. Mr Evan Moore said that he told Mr Woodward that Le Bateau was an identical vessel, was located in Western Australia, and was for sale (ts 20).
This evidence is consistent with that of Mr Woodward, who was called by the defence. Mr Woodward said that he was instructed by Mr Hobson to 'see what was around'. He said he called Mr Evan Moore to ask him whether he had anything available for sale and that Mr Evan Moore proposed a Horizon stock boat located in Queensland and Le Bateau. He then advised Mr Hobson that he was going to have a look at Le Bateau even though it was smaller than what he was looking for (ts 143).
During cross-examination Mr Woodward said he found out that Le Bateau was for sale by speaking with Mr Evan Moore (ts 151 - 152). He said that Mr Evan Moore persuaded him to inspect the vessel for his client. He said he then told Mr Hobson that Le Bateau was for sale and arranged to inspect the vessel.
Mr Hobson's evidence (ts 116) was that he became aware of Le Bateau being for sale on a website and that he instructed Mr Woodward to view it on his behalf as he was quite busy at the time. That evidence is at odds with the evidence of Mr Woodward.
In cross-examination, Mr Hobson appeared to have a poor memory of when he saw Le Bateau advertised. Significantly, he recalled that when he saw Le Bateau advertised on the BoatPoint website, Mr Trevor Parkins was named as the contact person. Mr Hobson knew Mr Parkins. At one point in his evidence he said that he looked at the website on three or four occasions and, at another, on five occasions (ts 132 - 133), but he could not recall anyone other than Mr Parkins being named as the contact person.
Mr Hobson accepted that he could not recall when he first saw on the internet that Le Bateau was for sale; he accepted that it was possible that he saw the advertisement after Mr Woodward's inspection (ts 133).
While I am sure Mr Hobson gave evidence honestly, his recollection of the circumstances in which he became aware of Le Bateau is unreliable. He had no reason to give any significance at the time to the occasions on which he saw Le Bateau advertised. I find that he did not see Le Bateau advertised on the internet before Mr Woodward inspected the vessel on 25 August 2017. That finding is consistent with Mr Woodward's evidence that he called Mr Evan Moore on Mr Hobson's behalf and was informed that Le Bateau was for sale (ts 151 – 152) before obtaining Mr Hobson's instructions to inspect it for him.
It is far more probable than not that Mr Woodward was told that Le Bateau was for sale by Mr Evan Moore as the evidence of each of them is consistent on that point, and it is more probable than not that Mr Hobson did not look at the advertisement for Le Bateau on the BoatPoint website until after Mr Woodward had reported to him on his inspection of the vessel, most likely sometime after 15 October 2017 when Yachts West was appointed as an agent.
I find also that Mr Hobson, having had the benefit of Mr Woodward's detailed inspection of the vessel and his report, kept the vessel in mind as a potential acquisition during the period of two months between 25 August 2017 when that inspection was made, and 27 October 2017 when he personally inspected the vessel before making an offer to buy it. He at no time dismissed it as a possibility. Mr Hobson was informed by Mr Woodward's email of 4 September 2017 (exhibit 1.20) in response to his of 3 September, in which Mr Woodward spoke of the need to 'consider all options as the decision needs to be made carefully', and suggested 'when we are home to look at the Horizon together with Evan'.
Mr Hobson's evidence was that at the time of the first inspection he was quite busy. He said he wanted Mr Woodward to look at the boat as he valued his opinion (ts 134). He had looked at the photos that were annexed to Mr Woodward's report. Mr Hobson accepted that Mr Woodward was introduced to Le Bateau by Mr Evan Moore and that Mr Woodward had dealt with One Brokerage on his behalf (ts 136).

Plaintiff's case

The plaintiff's claim is put plainly. Clause 6.2 of the agency agreement prescribes only two prerequisites to the plaintiff's entitlement to a brokerage fee. They are that a sale of the vessel was completed and that the buyer was introduced to the seller by the broker.
By virtue of cl 14.2 the termination of the agency agreement does not affect the plaintiff's right to claim the brokerage fee if the introduction was made during the term of the agreement.
It is the plaintiff's position that Mr Evan Moore introduced Mr Hobson to Le Bateau during the term of the agency agreement and that a sale of the vessel to Mr Hobson was subsequently completed. It is immaterial that the eventual sale was made by another agent.
The word 'introduce' is not defined in the agency agreement. In the plaintiff's submission it bears its ordinary and natural meaning: relevantly, to bring to another's notice or knowledge, or to bring forward for consideration (Macquarie Dictionary): see also Dal Pont, Law of Agency (3^rd ed) LexisNexis Butterworth Australia 2014 [15.39].

Defence case

The defence is less clearly expressed and, as pleaded, it must be said, difficult to comprehend. But, as I understand it, with the assistance of counsel's written and oral submissions, the defence as amended at trial can be summarised as follows:
1.Clause 6.2 and cl 14 are inoperative because they are inconsistent with an agency agreement for a fixed period. Accordingly, there is no contractual entitlement to brokerage (the inconsistency argument).
2.Alternatively, the plaintiff did not introduce the buyer during the fixed period of the agency agreement (the introduction argument).
3.In any event, the plaintiff is not entitled to brokerage fees pursuant to cl 6.2 because it was not the effective cause of the completed sale (the effective cause argument).

The inconsistency argument

Before descending into an analysis of this aspect of the defence, it is necessary to deal with the unnecessary and unhelpful pleading of the agency agreement as 'the defendant's counter-offer'. The distinction is pointless and was sensibly abandoned in the defendant's submissions.
The defendant submits that if one looks at the circumstances in which the agency agreement was made, it is clear that the parties' contractual intention was that a brokerage fee would only be payable if a sale to Mr Hobson was completed within the 30 day fixed term of the agreement.
Those circumstances may be shortly stated as follows. Mr Evan Moore, having become aware through Mr Woodward that Mr Hobson was a potential buyer, asked Mr Bradley Moore to enter into a formal non-central agency agreement (previously, there had been no agency agreement, even though the plaintiff had agreed to promote the sale of vessel in conjunction with Horizon). In his covering email Mr Evan Moore stated that the purpose of the agreement was 'to reward the broker who achieves the sale'. Mr Bradley Moore perused the proposed agency agreement and made a number of amendments to it that were accepted. From Mr Bradley Moore's point of view, the purpose of the fixed period agreement was to authorise the plaintiff to deal with Mr Hobson with a view to securing a sale of the vessel to him.

In the defendant's submission, the proposed form of agency agreement was amended to reflect that purpose, essentially by making it a fixed period agency. That amendment is said to render cl 6.2 and cl 14 inoperative because they are inconsistent with that change. As I understand the argument, it is that the agency agreement as a whole should be construed to mean that One Anchorage would only be entitled to a brokerage fee if the sale was completed within 30 days.
Reliance is placed on the following principles:
1.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 the surrounding circumstances known to the parties, and the purpose and object of the transaction: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 [40].
2.Where there is inconsistency between written clauses in the contract specifically in negotiated by the parties and printed clauses forming part of the standard form, the written or negotiated clauses will prevail: Allianz Australia Insurance Ltd v General Cologne Re Australia Ltd [2004] NSWCA 433. If a clause in a contract is followed by a later clause which destroys the effect of the first clause, the later clause should be rejected: Missing Link Network Integration Pty Ltd v Olmate Pty Ltd [2005] NSWSC 430 [68].
With those statements of principle no issue is taken.
The plaintiff's position is simply that the terms of the agency agreement do not exclude the operation of cl 6.2 or cl 14. The terms are clear and unequivocal with respect to the payment of brokerage fees. No redundancy, ambiguity or inconsistency arises with respect to those clauses by reason of the agreement being for a fixed period. They are the only clauses that define the circumstances in which a brokerage fee is payable. There is nothing in the agency agreement that could be construed as rendering those terms otiose.
The email of Mr Evan Moore of 22 August 2017 does not colour the proposed agency agreement which was for an indefinite period. In any event, it was countered by Mr Bradley Moore, the final agreement reflecting the amendments he proposed. Mr Bradley Moore is experienced in business and, in particular, transacting deals relating to boats. He needed a broker who would use its business network to find a buyer (ts 91). His annotated amendments reflect detailed and careful attention to the terms of the agency agreement for the purpose of ensuring that it reflected his wishes.
I accept the plaintiff's submission. In my view, there is no meaning to be given to any of the amended terms of the agency agreement that would have the effect of displacing cl 6.2 or cl 14.2. Nor is the meaning of those terms or their operation capable of being altered by virtue of the fact that the agency agreement was entered into in anticipation of the plaintiff securing a sale to Mr Hobson. That the agency agreement was for a fixed period does not mean that the obligations created by the agreement came to an end upon its expiry. The agency agreement in its terms, in particular cl 14.2, clearly contemplated a situation in which an introduction made during the term of the agreement resulted in a sale being completed after its expiry.
The purpose and object of a transaction may require consideration in order to determine what a reasonable person would have understood the contractual terms to mean: see Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [40]. But the subjective intention of a party is not relevant to issues of construction and it has not been shown that the cl 6.2 and cl 14 are at all inconsistent with what was otherwise agreed.

The introduction argument and the effective cause argument

These defences are conveniently considered together as they both involve the meaning of 'introduce'.
Paragraph 4.2.2 of the amended defence pleads that the plaintiff did not, during the term of the fixed period of the agency, present the vessel to a prospective buyer who in reliance on that presentation entered into an enforceable contract for the purchase of the vessel.
The defendant contends that the mere showing of the vessel to Mr Woodward, who did not recommend the vessel to Mr Hobson at that time, did not amount to an introduction of Mr Hobson to the defendant for the purpose of cl 6.2.
Paragraph 4.3 pleads that cl 6.2 should be construed to mean that to be entitled to a brokerage fee the broker must be 'the effective or efficient cause or, alternatively, the cause of the sale being completed', and alternatively, that such a term should be implied.
The defendant contends that as a matter of law an agency agreement that provides for payment of a commission on introducing or finding a purchaser for the property will be construed as meaning that the commission is only payable if the agent was the effective cause of the sale.
In the defendant's submission the plaintiff was not the effective cause of the sale of Le Bateau to Mr Hobson.
The plaintiff's position in relation to the first point is that the plaintiff through Mr Evan Moore clearly did, as a matter of fact, introduce Le Bateau to Mr Hobson. The facts relied upon are that:
1.Mr Woodward was instructed by Mr Hobson to look for a suitable vessel for him.
2.Mr Woodward knew Mr Evan Moore as a marine broker. He made an enquiry of Mr Evan Moore who made him aware that Le Bateau was for sale.
3.Mr Woodward then made a detailed inspection of the vessel following which Mr Evan Moore provided photographs of the vessel to Mr Woodward who then reported to Mr Hobson, forwarding the photographs to him.
4.After looking at other vessels Mr Hobson inspected Le Bateau himself and offered to buy it.
The plaintiff's position in relation to the second point is, firstly, that the authorities do not support the proposition that in that an agency agreement for the sale of a vessel, as opposed to the sale of real estate, the agent in order to be entitled to a commission must be the effective cause of the sale; secondly, that there is no legal or factual basis for the implication of a contractual term to that effect; and, thirdly, that the plaintiff, having introduced the vessel to Mr Hobson, was in fact an effective cause of the sale.

Legal analysis

There appears to be little doubt that in agency agreements for the sale of real estate, as a general principle, where it is agreed that the agent will be remunerated where it introduces the buyer of the property, the law will imply a term that to earn a commission the agent must be an effective cause of the eventual sale, unless a contrary intention is expressed: L J Hooker Ltdv W J Adams Estates Pty Ltd (1976) 138 CLR 52, 58, 67; Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2; see also Bowstead and Reynolds on Agency (20^th ed) Sweet & Maxwell, London, 2014 [321] and Dal Pont [16.4]. Whether this principle has application outside of real estate agency agreements is not clear: Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2009] NSWCA 190 [78] (Macfarlan JA, Allsop P & Hodgson JA agreeing).
In L J Hooker Ltdv W J Adams Estates Pty Ltd the appellant sued on an agency agreement that promised a commission upon the sale of land to a purchaser introduced by the appellant. The appellant introduced company A that made a number of unsuccessful offers. The owner meanwhile entered into negotiations to sell to company B. The land was eventually sold to a company formed by company B in which company A acquired a half interest. The High Court (Barwick CJ, Gibbs & Stephen JJ, Jacobs & Murphy JJ dissenting) held that the appellant had not introduced the purchaser and was not an effective cause of the sale.
Barwick CJ found that no effort or activity of the agent formed any part of the causation of the sale as the agent did not introduce the property to the actual purchaser and was not instrumental in or the cause of the formation of an agreement between the eventual purchaser and the vendor (58). The learned Chief Justice observed:
It is true that an agent to procure a purchaser of property in stated terms may earn the commission payable to him in various ways. But the commission is not fully earnt unless there is a sale which has resulted wholly or partially from the efforts of the agent. The most common way of performing the agent's task is to introduce to the principal a person who becomes the purchaser under a binding contract of sale. In terms of causation, the agent has thus been an effective cause of the sale. It is nothing to the point in such a case that person would have become the purchaser without the intervention of the agent: or that the principal's own efforts were also an effective cause of the sale.
Gibbs J held at (67) that appellant had to 'establish the necessary causal relationship between its actions and the sale, or in other words, that the sale was brought about through its agency', following Burchell v Gowrie and Blockhouse Collieries Ltd [1910] AC 614, 624. His Honour said at (68) that 'like all questions of causation, this is ultimately a question of fact'.
Jacobs J in discussing the authorities at (86), observed that in Burchell v Gowrie and Blockhouse Collieries Ltd, Lord Atkinson used the expressions 'an effective cause' and 'the effective cause' without distinction. His Honour stated:
The inquiry is whether the actions of the agent really brought about the relation of buyer and seller and it is seldom conclusive that there were other events which could each be described as a cause of the ensuing sale. The actual inquiry is whether a sale is really brought about by the act of the agent: Green v Bartlett (1863) 143 ER 613 at p 614, quoted in Burchell's case, at p 624.
L J Hooker Ltdv W J Adams Estates Pty Ltd was relied upon in Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2, another decision of the High Court involving a claim for a commission by a real estate agent. Again, the agency agreement entitled the agent to commission upon the introduction of a person who purchased the land. In Moneywood Pty Ltd v Salamon Nominees Pty Ltd the appellant agent introduced a developer who was interested in purchasing the land in question. The parties entered into a contract for the sale of land that was conditional upon shire approval for rezoning and that nominated the appellant as the agent. The shire decided to purchase part of the land as a koala habitat and to rezone the remainder. A further contract for the sale of land was entered into between the vendor and the purchaser for the rezoned land that did not nominate the appellant as the agent. The vendor refused to pay the agent any commission.
The High Court (Gleeson CJ, McHugh, Gummow, Kirby & Callinan JJ) held on the facts that the agent was the effective cause of the sale under the second contract (and also that the first contract served as evidence of the appointment of the agent). Gleeson CJ at [4] observed that the appellant agent had satisfied the trial judge and all members of the Court of Appeal (Qld) that the work it performed in its capacity as agent in relation to the first contract was an effective cause of the sale the subject of the second contract. His Honour found that the initial judgment turned upon an assessment of the causal relationship between the work done by the appellant agent pursuant to its engagement and the sale which was ultimately completed. His Honour noted that 'such an assessment is commonly required in disputes concerning an agent's commission'. At [15] his Honour observed:
The appellant introduced the buyer, BMD, which entered into the second transaction. There was thus combination of four circumstances: the terms of the appointment referred to in standard condition 30; the relationship between the parcels of land the subject of the respective contracts; the identity of the buyer; and the fact that the work done as agent was an effective cause of the relevant transaction.
McHugh J held at [27]:
In the absence of a contrary agreement, the law implies a term that the agent is not entitled to its commission merely because it has introduced the purchaser of property. If the agreement is that commission is payable on 'introducing' or 'finding' a purchaser for the property, the agreement will be construed as meaning that the commission is payable only when the agent has introduced or found a purchaser who is ready, willing and able to complete the purchase. Thus, unless the vendor's default was the reason for the contract not being completed, the agent is entitled to the commission only 'if the sale is completed'. Moreover, the agent must prove that the introduction was the effective cause of the sale.
His Honour went on at [28] – [30]:
The implied terms referred to in the previous paragraph may arise by necessary implication from the nature of the agency agreement rather than law. But, whether the jurisprudential basis of the terms is law or necessity, in the absence of a contrary agreement the agent is entitled to its commission when its conduct was the effective cause of the sale of the whole or part of the property.
…
[T]he agent will be the effective cause where the person introduced nominates another person to buy the property – at all events where the person introduced directs the property to be transferred into the name of the actual purchaser.
In holding that the agent must prove that the introduction was the effective cause of the sale, his Honour cited L J Hooker Ltdv W J Adams Estates Pty Ltd. It may be observed also that his Honour used the expressions 'the effective cause' and 'an effective cause' interchangeably.
On this point Kirby J explained at [121]:
Depending upon the approach taken, many events may be seen as having a relationship with other, earlier, events. In contests such as the present, legal analysis has therefore attempted to assist the decision maker in the task of classification by the use of verbal phrases designed to mark off the relevant causative considerations from those deemed to be irrelevant to the task in hand.
…
But, however helpful such expressions may be to identify the nature of the problem being addressed, they will only have a limited utility in solving it. Their purpose is to assist in the act of judgment required to distinguish the case where it is proper to regard the agent as entitled to commission because in a relevant way it caused the transaction in question from the case in which the agent did not cause the transaction.
In the nature of cases coming before courts, particularly appellate courts, the problem will usually be presented in a case where, although the agent initially introduced the purchaser to the vendor, events thereafter ensued which led to the alteration of the transaction ultimately completed from the one which was first contemplated.
The law in the United Kingdom in this area was reviewed by Lord Neuberger of Abbotsbury (with whom Rix & Waller LJJ agreed) in Foxtons Ltd v Pelkey Bicknell [2008] EWCA Civ 419, where the Court of Appeal reviewed a decision holding a land owner liable to pay a real estate commission because the eventual purchaser of the house had been first introduced as a potential purchaser during the period of the appellant's agency. The purchaser's husband viewed the property twice in that period and expressed some interest. His wife, however, 'unhesitatingly' rejected the house. The couple viewed the house again after the agency had been terminated. Three months later the subsequent real estate agent had a conversation with the purchaser's husband as a result of which a further inspection was made, and subsequently an offer to purchase.
As in this case, the agent's claim was put simply. The sole agency agreement provided that the agent would be entitled to commission if contracts were exchanged with the purchaser introduced by them. The agent argued that those facts were sufficient to entitle it to commission. Alternatively, it was argued that the agent was the effective cause of the sale.
The trial judge found in favour of the agent, holding that the terms of the agency expressly negated the introduction of an implied term that the agent had to be the effective cause of the sale and also that, in any event, the agent was the effective cause of the sale on the basis that there was no evaporation of her husband's interest in the house, merely 'a lull during the summer'.
Lord Neuberger cited with approval Wood (John D) and Co v Dantata [1987] 2 EGLR 23 which he said gave guidance to the meaning of 'introduced' and, more generally, established the following propositions:
First, the term identified in article 57 of Bowstead is 'very readily' implied, especially in a residential consumer context, unless the provisions of the particular contract or the facts of the particular case negative it. Secondly, the main reason for implying the term is to minimise the risk of a seller having to pay two commissions. Thirdly, it is not entirely clear whether the test is an 'effective cause' or 'the effective cause', a point also discussed in article 57 of Bowstead. Fourthly, whether an agent was the effective cause is a question whose resolution turns very much on the facts of the particular case. Fifthly, while two commissions are to be avoided, there will be cases where the terms of the relevant contracts and the facts compel such a result. Sixthly, where the term is implied, the burden is on the agent seeking the commission to establish that he was the effective cause. [20] (citations omitted)
His Lordship construed 'a purchaser introduced by us' to mean 'a person who becomes a purchaser as a result of our introduction' [23]. In his Lordship's view that interpretation accorded better with the main principles that could be extracted from the cases than the alternative meaning, being 'a person who at some time in the future becomes a purchaser'. On this basis his Lordship found that it was unnecessary to imply a requirement that the agent be the effective cause of the purchase. On the facts the agent had not shown that it had introduced the eventual purchaser. The decision is an example of an effective cause requirement arising as a matter of construction rather than implication.
The authors of Bowstead at 7-029 address the question of whether the agent has to be 'the' effective as opposed to 'an' effective cause, suggesting that recent authority favours the indefinite article. The authors also state that no precise definition of 'effective cause' has yet been given by an English court. They suggest also that the fact that one agent introduces a person who ultimately purchases after another introduction by another agent will not necessarily entitle the first agent to commission (the court having to determine which was the effective cause), but observe from the cases referred to that 'on the whole it may be said that the first agent has often succeeded'.
In the United Kingdom the general principle has been applied in marine brokerage cases. In Allan v Leo Lines Ltd [1957] 1 Lloyds Rep 127 Devlin J held that the plaintiff who was appointed as an agent to sell a ship was entitled to a commission on the sale because he was an effective cause of the introduction and his efforts were the effective cause of the sale (132). It is pertinent to this case that his Honour observed, in relation to the facts:
If a broker effects an introduction and is willing to go on with the usual business negotiation, it hardly lies in the mouth of an owner who takes it out of his hands to say that he has made no contribution.
Berezovsky v Edmiston & Co Ltd [2010] EWHC 1883 (Field J) involved a disputed liability to pay a brokerage fee upon the sale of a super yacht. The court held that entitlement to a commission dependent on the eventuation of a transaction had been subject to the 'effective cause' test since at least the decision of the Court of Appeal in Millar, Son & Co v Radford (1903) 19 TLR 575 and that whether the introduction of a broker was indeed the effective cause of the sale would depend upon the facts of the individual case. Field J did not accept that the broker was required to elicit an offer, observing that in Allan v Leo Lines Ltd the successful broker was found to have earned its fee by the introduction even though it was not involved in arranging an inspection or negotiating the sale agreement. Referring to that decision, his Honour commented as follows [53]:
I attach considerable significance to what Devlin J said as to the importance of the broker role in making an introduction. Whilst it is true that the number of potential purchasers of super yachts is relatively small and their identities relatively well known, these individuals tend to be surrounded by an entourage, as is common in the case of the super rich. Thus the challenge for the super yacht broker is to establish a network of contacts who have the ear of potential buyers, a process that takes time and involves considerable skill and expertise.

In Berezovsky v Edmiston & Co Ltd the broker was found to have made an introduction that was an effective cause of the sale, notwithstanding that the central broker was prevented by the vendor from having any ongoing role in the negotiations that resulted from the introduction.
In the present case the plaintiff contends that an 'effective cause' requirement should be not implied in the agency agreement, citing Challenger Group Holdings Ltd v Concept Equity Pty Ltd [2009] NSWCA 190 where the Court of Appeal (NSW), allowing the appeal, declared that the respondent was not entitled to a fee for introducing a party with whom the appellant could transact a merger or acquisition. The respondent claimed a fee for introducing a company that was later acquired by the appellant. The Court of Appeal (Macfarlan JA, Allsop P & Hodgson JA agreeing) found that the respondent was not entitled to the fee it claimed because on the proper construction of the relevant agreement, its fee entitlement arose only if the opportunity that it introduced was availed of or taken up. This did not occur. Macfarlan JA found at [77] as follows:
As is demonstrated by Moneywood v Salamon Nominees the implication in real estate agency agreements, at least those where the agent acts for the vendor, of a pre-requisite to fee entitlement that the agent be the 'effective cause' of the transaction is well established. The term is implied as a matter of law in the absence of a contrary intent appearing in the parties' contract. As pointed by Gummow J in Moneywood this process of implication differs from the implication of terms in particular contracts upon the basis of business efficacy (at [80]).
I do not consider that the law has reached the stage where an implication can been made outside the field of real estate agency contracts that 'an effective cause' term is, as a matter of law, part of the contract. Even if it had, I would find that the express terms of the present agreement in this case displaced the presumption.
His Honour went onto find that if there was no presumption that an effective cause term is to be implied as a matter of law, then the appellant would have to show that the implication of such a term was necessary to business efficacy of the agreement and to show that the criteria specified in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 [283] were met.
Those criteria were not satisfied. His Honour held that the implication of the term was not necessary to give business efficacy to the contract such that the contract was not effective without it, and that the term was not so obvious that it went without saying. He found that the parties' business arrangement obviated the need for proof of a strict causative relationship. With these obiter remarks Allsop P agreed. Hodgson JA said that it was unnecessary to express a view on whether an effective clause term would be implied.
On the basis of the authorities cited and others it is clear that in an agency agreement for the sale of real estate, either as a matter of contractual construction or implication, to be entitled to a commission the agent must be an effective cause of the sale. There is strong persuasive authority to the effect that that principle also applies in marine brokerage cases. Nevertheless, it is a principle that applies only where the terms of the agreement do not manifest a contrary intention. Dal Pont says the effective cause requirement is construed or implied where the terms of the contract and its context support the conclusion that the parties were unlikely to have intended that the agent would earn a commission simply by finding or locating a person who, independently of any further action by the agent, later agreed to buy the property (at [16.3]), and that the requirement will not be found where the express provisions of the contract reveal an intention that the agent will be remunerated whether or not it is the effective cause of the sale (at [16.7]).
The plaintiff submits that effective cause requirement should not be implied in an agency agreement for the sale of a luxury vessel, but does not point to any term of the agency agreement that manifests a contrary intention. Clause 2.1 provides that the seller appoints the broker as its agent to sell the vessel for the list price and or for such other price as directed or agreed to by the seller on such terms as the seller agrees in writing with the broker. Clause 6.2, as has been seen, provides the circumstances in which the seller is liable to pay the brokerage fee. The essential criterion is the introduction of the buyer by the broker.
The agency agreement does provide for the remuneration of Horizon in terms that would entitle it to a share of the brokerage, reflecting, it would seem, an arrangement made by Mr Bradley Moore and Mr Western in relation to Horizon's pre-existing central agency (exhibit 1.2, section F).
The concept of 'introduction' in marine cases is no different from in real estate cases: see Allan v Leo Lines Ltd; Berezovsky v Edmiston & Co Ltd. However, in Super Yacht Technologies Pty Ltd v Mackeddie Marine Pty Ltd [2012] QSC 401 Applegarth J, dealing with a central agency agreement for the sale of a vessel found that the terms of the agreement did not support the implication of an effective clause requirement.
Clause 4 of the agreement relevantly provided:
Upon completion of the sale of the yacht, or if it is otherwise transferred or conveyed during the terms of this agreement, or in the event that a buyer acquires a beneficial interest in the ownership of the yacht, the seller agrees to pay to the central agents' fee comprising:
• 10% of the gross sale price …
Clause 9(b) provided:
If this agreement is terminated and the yacht is transferred, sold or conveyed … within 12 calendar months thereafter to a buyer who was introduced to the yacht during the term of this agreement, then the full fee as set out in cl 4 shall be payable to the joint central agents.
The plaintiff was one of the joint central agents. The agreement commenced on 4 August 2008. On 15 October 2009 notice was given to the plaintiff terminating the agreement. The following year the vessel in question was sold. The plaintiff claimed its commission on the basis that the buyer was introduced to the vessel during the term of the agreement and the sale occurred within 12 months after termination of the agreement. The plaintiff was successful on the basis that the two requirements for payment of the commission were met, and that entitlement did not depend upon proof that the joint central agents were the effective cause of the sale. The court held that cl 9(b) ensured that the joint central agents would not be deprived of an entitlement to a fee if the sale occurred after the termination of the agreement.
The circumstances of that case are somewhat different from those of the case before this court. This case involves a non-central agency agreement. The distinction is salient. His Honour pointed at [62]:
The agreement is not an exclusive agency or a sole agency. Instead, it gives the joint central agents a central role in managing the sale process and, by its provisions relating to the payment of a fee to the joint central agents, might be said to discourage the seller from appointing additional agents during the term of the agreement and to encourage the seller to direct other agents to the joint central agents in order to negotiate a share of the fee.
The terms of cl 4 entitled the joint central agents to a fee whether or not the buyer was introduced by the joint central agents or by a sub-listed broker. In other words, the agreement provided for the payment of a commission to the central joint agents regardless of who sold the vessel.
In dealing with the first defendant's effective cause argument his Honour observed at [69]:
Cases involving the interpretation of different contracts in the context of real estate transactions serve to illustrate that, either by a process of construction or by way of implication, an effective cause requirement may exist because the terms of the contract and its context support the conclusion that the parties were unlikely to have intended that the agent would earn a commission simply by finding or locating a person who, independently of any further action by the agent, later agreed to effect the transaction in question with the principal.
The learned trial judge found that cl 9(b) operated to entitle the central joint agents to a fee when the buyer was introduced to the yacht by an outside agent. However, his Honour observed at [84]:
The position is different to one in which an agent claims a commission on a sale which effectively originated after its agency had ended. Clause 9(b) is concerned with a sale to buyer who was introduced to the yacht during the term of the central agency agreement. It permits payment of a fee in such a case, including circumstances in which the central agent played a role in progressing the sale, but where no entitlement to be paid pursuant to cl 4 exists because the sale was not effected or completed during the term of the agreement.
His Honour referred to Foxtons Ltd v Pelkey Bicknell, observing that, unlike the commission clause in that case, cl 9(b) entitled the joint central agents to a commission whether or not the buyer was introduced by any of them or their sub-listed brokers.
The plaintiff in this case did not have a central agency. It can be seen from the factual context of the agency agreement that the parties intended the agreement to authorise One Brokerage itself to market the vessel for a limited period.

Conclusion

Having surveyed the authorities cited and others, I consider that the general principle does apply to the agency agreement. The imposition of a requirement, whether as a matter of construction or implication, that the plaintiff in order to be entitled to a brokerage fee be an effective cause of the sale of the vessel would accord with the case law, particularly the UK cases in which the principle has been applied to marine brokerage disputes. The reasoning for construing the agency agreement in conformity with that principle is persuasively set out by Lord Neuberger in Foxton's case.
I am satisfied moreover that the requirement, however it arises, is not ousted by the express terms of the agency agreement. It makes sense that the parties intended that the plaintiff be paid upon effecting a sale to a party introduced during the period of the agency.
The real issue in this case is whether on the facts the plaintiff can be found to have been instrumental in the eventual sale, i.e., whether the sale was brought about by the plaintiff's efforts, such that the plaintiff can be said to have effectively caused the sale.
Dal Pont at [16.14] cites Bennett & Co v Connors [1953] St R Qd 4 and Symons v Cahill [1923] VR 49 as illustrative of the proposition stated by Madden J in Crerar v McCooke [1913] VLR 62, 66:
The law does not permit an agent who has done the work he has been employed to do to be deprived of his commission because the vendor and the purchaser prefer to complete the transaction through someone else'.
On the other hand Baker v Leonard Oades Pty Ltd [1979] NSWR 1745, the facts of which have some resemblance to those of the present case, was a decision in which the agent failed. The agent introduced prospective purchasers who were not prepared to purchase at the time. Seven months later the vendor advertised the property privately and the same persons subsequently purchased it. The agent failed because it was found that the purchasers were not motivated by the initial introduction, as evidenced by the fact that they had no idea that the property advertised was the one they had previously inspected with the agent. Brereton J found that 'it is a matter of pure speculation whether the yeast started by the agent was still working'.
In some of the cases the issue is whether the chain of causation between introduction and sale has been broken by the efforts of a second agent. In Berben v Hedditch [1982] ANZ ConvR 535 it was held that the first agent's introduction had ceased to have a causal effect in a situation where a second agent, in addition to arranging an inspection of the property, carried out the negotiations and arranged finance. These acts were held to have caused the sale.
Lapse of time between introduction and sale may be an important factor, but it is not determinative of causative effect: Harcourts Cox Coxon v Lunam [1997] ANZ ConvR 392, 395 (Gallen J).
The defendant contends in this case that the plaintiff was not instrumental in securing the sale having merely shown the vessel to Mr Woodward who reported the Mr Hobson that he did not think it would suit him and that the price was too high.
The defence argues that nothing was done by Mr Evan Moore after the termination date of the plaintiff's agency to progress any potential sale to Mr Hobson such that, when, some weeks later, Mr Hobson approached Mr Parkins to inspect the vessel, the plaintiff had ceased to have any causative role in the sale that eventuated.
On the other hand it is argued that Mr Parkins effectively brought about the sale by showing the vessel to Mr Hobson, as Mr Evan Moore had done to Mr Woodward, and negotiating the sale price. Counsel also pointed to the work done after the sale agreement had been made, but I do not consider that arranging inspections and sea trials after the agreement is reached can be said to be causative of the sale. Nor in my view is working out the deposit amount after a price had been agreed work that brings about the sale.
So, on the facts we have Mr Evan Moore informing Mr Woodward that Le Bateau is for sale and arranging a detailed inspection by him on behalf of Mr Hobson on 25 August 2017. We have Mr Woodward reporting to Mr Hobson on his inspection. We then have Mr Hobson travelling overseas, including to the Cannes Boat Show, and looking at other vessels in Hong Kong, Queensland and locally, before eventually coming back for, as it were, a second look at Le Bateau with Mr Woodward on 27 October 2017. Having done so, he promptly buys it with very little negotiation of the price or the terms. It was fortuitous that by that time Mr Parkins' employer was the appointed broker.
I find that Mr Evan Moore introduced Mr Hobson. He was able to do so through his network of boating contacts that included Mr Hobson's trusted boatman Mr Woodward. But for the termination of the agency agreement, Mr Hobson would have completed the sale through Mr Evan Moore.
Mr Parkins, with no disrespect, did nothing more to sell the vessel than show Mr Hobson over the vessel and deal with him by email with respect to his two offers. Mr Hobson was by that time keen to buy. He had eliminated the other vessels he had considered. He had been advised of the merits of Le Bateau by Mr Woodward whose opinion he valued. Mr Evan Moore's introduction had not ceased to have a causative effect either by the passage of time, or by reason of disinterest on the part of Mr Hobson, or by any actions by Mr Parkins that could be said to have broken the chain of causation.
Notwithstanding that Mr Parkins concluded it, Mr Evan Moore, on behalf of the plaintiff can be found in those circumstances to have effectively brought about the sale by his efforts.
I am satisfied that the entitlement of the plaintiff to the claimed brokerage has been established on the facts, the vessel having been sold and the plaintiff having introduced the purchaser and been the effective cause of the sale.
There should be judgment for 75% of the agreed brokerage fee of 5.5% (including GST) of the sale price of $5 million, being $206,250.00. Interest at 6% per annum from 6 November 2017, the date of settlement of the sale, to date (641 days) is $21,732.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
RR
Associate to Judge Staude
2 AUGUST 2019