Matlock Pty Ltd v A & R Investments Pty Ltd - [2003] WADC 269

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: MATLOCK PTY LTD -v- A & R INVESTMENTS PTY LTD & ORS [2003] WADC 269

CORAM: COMMISSIONER GREAVES

HEARD: 15 SEPTEMBER 2003

DELIVERED : 2 DECEMBER 2003

FILE NO/S: CIV 3179 of 2002

BETWEEN: MATLOCK PTY LTD
Plaintiff
AND
A & R INVESTMENTS PTY LTD
KINGALUP PTY LTD
First Defendants
ANTONIO MARCHESE
Second Defendant

Catchwords:

Procedure - Appeal from Deputy Registrar - Application to strike out statement of claim - Turns on its own facts

Legislation:

Real Estate and Business Agents Act 1978

Real Estate and Business Agents Amendment Act 1998

Result:

Appeal allowed

Representation:

Counsel:

Plaintiff:     Mr I A Morison
First Defendants           :     Mr J A Thomson
Second Defendant         :     Mr J A Thomson

Solicitors:

Plaintiff:     Taylor Smart
First Defendants           :     Chris Martin & Associates
Second Defendant         :     Chris Martin & Associates

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

Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494

Case(s) also cited:

Nil

COMMISSIONER GREAVES: By its amended writ of 5 February 2003, the plaintiff claims damages for breach of contract and in the alternative for a lost opportunity arising from alleged misleading and deceptive conduct.
By its chamber summons of 19 February 2003, the defendants sought orders striking out the plaintiff's statement of claim in whole or in part. The learned Deputy Registrar ordered that pars 25, 26 and 28 to 34 inclusive of the amended statement of claim be struck out, and further that the plaintiff deliver a proposed minute of further amended statement of claim within 14 days. That minute is dated 24 July 2003.
In this appeal, the defendants renewed its application for orders that the amended statement of claim be struck out on the grounds stated in the chamber summons and in the supplementary submissions of counsel dated April 20003. In effect, therefore, there is before the Court an appeal and cross‑appeal from the decision of the learned Deputy Registrar in which the original application is to be heard afresh.
Counsel for the defendants submitted the plaintiff's claim for breach of contract cannot succeed as a matter of law. He advanced six propositions in support of that submission. His first proposition was the oral part of the alleged contract is directly inconsistent with the express term of the written part of the alleged contract. In par 9 of the amended statement of claim, it is pleaded the contract was partly oral and partly in writing. It is pleaded the oral part of the alleged contract comprised the discussions pleaded in pars 7 and 8 of the amended statement of claim as follows:
"7.On 2 December 1996 at a café named Villa Italia in Northbridge, Marchese stated to Trimboli words to the effect that:
In consideration of the Plaintiff agreeing to lobby the council of the City of Stirling to approve a sub‑division of the Defendants' land, the Plaintiff would be granted the sole agency for the sale of lots in a proposed sub‑division ('subdivision') of the First Defendants' land ('subdivided lots').
8.On 23 December 1996 at the Plaintiff's then office address at 173 William Street Northbridge:
a.Marchese said to Trimboli words to the effect that the Plaintiff would be remunerated by sales commission for the Plaintiff's work toward obtaining approvals for the sub‑division;
b.Trimboli said to Marchese words to the effect that the Plaintiff would charge commission in accordance with the scale of fees set out under the Real Estate and Business Agents Act.
Particular of Scale of Fees
i.On the first $10,000.00                6.75%
ii.On the next $40,000.00                4.25%
iii.On the next $50,000.00                3.00%
iv.On the next $50,000.00                2.50%
v.On the next $100,000.00              2.25%
vi.Thereafter  2.00%"
In par 9 of the amended statement of claim it is pleaded that the written part of the alleged contract was constituted by a one‑page document titled "Appointment of Agents" signed by the parties on 23 December 1996. Counsel for the defendants referred to the affidavit of the second defendant sworn 19 February 2003 and Annexure AM9. Counsel for the defendants referred to cl 8 of that document and the words "to be discussed with owner when sub‑division is completed by all relevant authorities". Counsel submitted there is an established principle that the terms of a written contract cannot be contradicted, varied, added to or subtracted from by directly inconsistent oral statements. In my opinion, the pleading is not inconsistent. Paragraph 7, 8 and 9 of the amended statement of claim in the context of the balance of the pleading state the basis upon which it is alleged the plaintiff would become entitled to the payment of commission pursuant to the alleged contract.
The second proposition counsel for the defendants relied on was that the alleged contract contained in the document entitled "Appointment of Agent" is uncertain. He submitted an express agreement to pay remuneration which leaves the basis and rate of remuneration entirely at the discretion of the principal is unenforceable on the grounds of uncertainty and moreover arguably constitutes illusory consideration for the promise of the agent to act on the principal's behalf. In my opinion, there is nothing uncertain about the pleading of the alleged contract. The plaintiff pleads that the parties agreed orally and in writing about the basis upon which the plaintiff would become entitled to the payment of commission in accordance with the scale of fees set out under the Real Estate and Business Agents Act. By par 11 of the amended statement of claim, the plaintiff further pleads it was an express term alternatively an implied term of the contract that the first defendants would discuss with the plaintiff the asking price of the subdivided lots upon the completion of the subdivision and granting of approvals by all relevant authorities.
The third proposition relied upon by counsel for the defendants was that any alleged contract did not remain valid and enforceable after s 60(2)(a)(iia) was introduced into the Real Estate and Business Agents Act 1978 by the Real Estate and Business Agents Amendment Act 1998. That section provides that an appointment to act as an agent is not valid unless it is contained in a document which clearly sets out the method by which the amount of any commission, reward or valuable consideration to be received for services is to be calculated. Counsel submitted the alleged contract does not satisfy that condition. In my opinion, this proposition largely repeats the second proposition and in my opinion the pleading alleges a contract which clearly sets out the method by which any commission payable is to be calculated.
The fourth proposition counsel for the defendants relied on was that the alleged contract does not clearly identify the property which was to be the subject of the services to be provided, again contrary to the requirement of a valid authority to act in s 60(2)(a)(ii) of the Real Estate and Business Agents Act 1978. Counsel submitted the property which was to be the subject of the services to be provided were the subdivided lots, which are identified in the schedule to the plaintiff's pleadings. He submitted the property mentioned in the alleged contract is the unsubdivided land. I do not accept that submission. The plaintiff pleads he was granted a sole agency for the sale of the subdivided lots and that the first defendants would discuss with the plaintiff the asking price of the subdivided lots upon the completion of the subdivision and granting of approvals by all relevant authorities.
The fifth proposition of counsel for the defendants was that the plaintiff has entirely failed to plead that any of the subdivided lots were sold during the alleged period of its sole agency. By par 12 of the amended statement of claim, it is alleged it was an express term of the contract that the appointment of the plaintiff as selling agent was for an initial term of six months from the issue of certificates of title to the subdivided lots. By par 24 of the amended statement of claim, it is alleged that at the date of this pleading the subdivided lots shown in the annexure as sold, had been sold at the prices shown in the annexure. In my opinion, the sale of the lots is sufficiently pleaded.
The sixth proposition of counsel for the defendants is that the plaintiff's alternative claim for damages for a lost opportunity arising from alleged misleading and deceptive conduct by the second defendant cannot succeed. It is this proposition that it appears the learned Deputy Registrar was persuaded to accept. At par 17 et seq of his reasons, the learned Deputy Registrar said:
"The last attack on the pleading relates to the claims under the Trade Practices Act and the Fair Trading Act. Those claims appear to draw upon the proposition that consideration the loss of opportunity would survive in the event that there is no contractual claim. In my opinion if there is no contractual claim then there would be no basis upon which to assert any sufficient relationship so as to justify recovery for such loss.
It follows that there is no basis presently pleaded under the legislation, which would allow for damages to be awarded.
The plaintiff conceded that the contractual claims at par 25 and par 26 would need to be re-drafted.
Accordingly the existing statutory claims and those paragraphs ought to be struck out."
Counsel for the plaintiff submitted the learned Deputy Registrar was wrong in concluding that the statutory claims depended upon the plaintiff proving that it was entitled in contract to receive commissions. He submitted the plaintiff's loss does however include a claim for the value of a lost opportunity. He said if the contract had been enforceable, and if the contract had been for the sale of subdivided lots, the plaintiff would have had the opportunity to earn commissions on the sale of all subdivided lots. He submitted the value of that lost opportunity is for the court to determine at trial. The court might find that the plaintiff's appointment would have been terminated immediately after the sole agency period in which case the value of the lost opportunity is the commission earned during that period, or the court might find that the plaintiff would have continued as agent after the sole agency period and would have remained sole agent and sold all lots. In that case the value of the lost opportunity is the commission payable on all the lots which is the figure of $207,340 mentioned in par 34. I accept that submission and counsel for the defendant did not seek to support the decision of the learned Deputy Registrar. Counsel for the defendant submitted the plaintiff's claim for misleading and deceptive conduct cannot succeed, as it is a claim for lost profits, not for actual loss or damage which has been suffered by the plaintiff by not pursuing an alternative opportunity, citing Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 514 [47] et seq. At [48] McHugh, Hayne and Callinan JJ said:
"A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrain from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted."
By pars 28 to 34 of the amended statement of claim the plaintiff pleads:
"28.In the alternative, the statement made by the Second Defendant pleaded in paragraph 7 (a) constituted a representation by the Second Defendant to the Plaintiff that if the Plaintiff agreed to lobby the council of the City of Stirling to approve a subdivision of the First Defendant's land the Plaintiff would be granted the sole agency of the sale of lots in a proposed subdivision of the First Defendant's land.
29.The said representation was made in trade and commerce.
30.The said representation was as to a future matter and the Plaintiff will rely upon section 51A of the Trade Practices Act (Cth) and section 9 of the Fair Trading Act (WA).
31.The representation was false and misleading in that the Second Defendant never intended that the Plaintiff would be paid commission on subdivided lots.
32.In the premises in paragraph 31 the Second Defendant engaged in misleading and deceptive conduct contrary to section 52 of the Trade Practices Act (Cth) and section 10 of the Fair Trading Act (WA).
33.Further and in the alternative to paragraph 32, and in the alternative to paragraphs 1 to 27;
a.On 23 December 1996 the Plaintiff and the First Defendant entered into a contract by which the Plaintiff was appointed selling agent for the sale of land which continued to be the subject of Certificate of Title Volume 1587 Folio 462, Volume 1605 Folio 692 and Volume 1605 Folio 693 ('Original Titles Contract').
Particulars
The written agreement pleaded in paragraph 9.
b.The Plaintiff was induced to enter into the Original Titles Contract relying upon the First Defendant's said representation and in the belief induced by that representation that the Original Titles Contract had the effect that the Plaintiff would be paid commission on the sale of the subdivided lots not merely upon the sale of the original titles.
c.The Second Defendant failed to correct the mistaken belief of the Plaintiff.
d.In the premises in this paragraph the Second Defendant in trade and commerce engaged in misleading and deceptive conduct contrary to section 52 of the Trade Practices Act (Cth) and section 10 of the Fair Trading Act (WA).
34.By the Second Defendant's misleading and deceptive conduct the Plaintiff suffered loss and damage which is the sum of $207,470.00, the commission on the sale of subdivided lots as set out in the Annexure, on the basis that;
a.If the Second Defendant had corrected the Plaintiff's mistaken belief induced by the Second Defendant's representation, the Plaintiff would have insisted upon the First Defendant entering into a contract appointing the Plaintiff agent for the sale of subdivided lots, and upon changes to the 23 December 1996 document to have that effect.
b.There is no credit given for the commission which would have been payable on the sale of the original titles, because those titles were never sold and the Second Defendant never intended that they would be sold."
I do not accept the submission of counsel for the defendants that the plaintiff's alternative claim is a claim for lost profits, not for actual loss or damage which has been suffered by the plaintiff by not pursuing an alternative opportunity. The plaintiff has pleaded a course of conduct which the plaintiff would have taken but for the alleged misrepresentation. In my opinion, it may become a matter for the trial Judge to determine whether that course would have been of greater benefit to the plaintiff than the course he in fact adopted. On the facts pleaded, I do not accept the submission of counsel for the defendants that the alternative claim "rises higher than the contractual claim".
In my opinion, therefore, pars 25, 26 and 28 to 34 should be restored to the amended statement of claim. Accordingly, the appeal will be allowed, the decision of the learned Deputy Registrar set aside in part and I shall hear counsel on the orders to be made.