Mcgees (SA) P/L v De Angelis No. DCCIV-95-1384 Judgment No. D3610

[1997] SADC 3610

Court

DISTRICT COURT OF SOUTH AUSTRALIA

Judgment of His Honour Judge Lowrie (ex tempore)

Hearing

15/05/97.

Catchwords

AGENT'S COMMISSION ON COMPLETED SALE Plaintiff alleged that the defendant owed commission under a sales agency contract on completed sale. Defendant had executed two contracts. The first for the purchase of a city development site, and the other for the sale of his unit/flat properties at Evanston to the vendor of the city property. Defendant himself inspected the city property in absence of agent and then executed agreement. Portion of city site encased in scaffolding with "Boral scaffolding" sign thereon.Defendant alleged agent should have disclosed liability for hire of scaffolding in section 90 statement and schedule to contract. Finding, no obligation on agent to disclose hire of scaffolding. Defendant's pleading alleged pre-contract misrepresentation. Finding no pre- or post-contract misrepresentation by agent. Agent entitled to commission. Judgment for the plaintiff in sum of $40,404.25 and interest of $7,329.05.

Representation

Plaintiff McGEES (SA) PTY LTD:
Counsel: MR M G EVANS - Solicitors: KELLY &; CO

Defendant AGOSTINO DE ANGELIS:
In Person

DCCIV-95-1384

Judgment No. D3610

15 May 1997

(Civil)

McGEES (SA) PTY LTD v DE ANGELIS

Civil

Judge Lowrie

The plaintiff is a land agent and commenced these proceedings for recovery of the balance commission which it claims is due under a contract which arose in regard to the acquisition by the plaintiff's principal of the defendant's flats at Evanston.

The brief background is that the plaintiff had a listing for sale of what is regarded as a derelict city property at the corner of Franklin and Bentham Streets, Adelaide. On the northern section the property was shored up, and, on the southern end, and on the corner of Franklin and Bentham Streets, there existed some scaffolding erected on the footpath enclosing that portion of the building. That was the situation when the defendant first inspected this development site.

Negotiations ensued. The upshot of those negotiations was that the defendant bought that property for a figure of $1.2 million, and, there was a coexisting contract where the vendor of the city property purchased the defendant's Evanston units for an eventual sum of $2,244,000.

The defendant, after the signing of the contracts, alleged that there was a substantive issue in regard to the scaffolding, in effect claiming it was part and parcel of his purchase. From what I was informed during this trial, proceedings for specific performance were commenced and eventually the defendant was directed to settle and settlement then occurred. However, the defendant refused to pay the commission allegedly due to the plaintiff on the sale of the Evanston units. The plaintiff commenced these proceedings for recovery of the balance commission it says is owing by the defendant.

Settlement occurred under those contracts.

The principal of the plaintiff company, Mr Lambert, gave evidence. He outlined the nature of his instructions, the agreement for the sale of the Evanston property, and the provision of that agreement that commission was to be paid at 2% of the gross purchase. He produced the two contracts, one for Bentham Street and one for the sale of the Evanston flats.

As mentioned, there ensued difficulties in two areas. It appears the Bentham Street property was encumbered by many charges many under the Building Act arising out of the nature of the building, and as well, the monthly cost of the hire of the scaffolding.

The defendant, in his defence, pleaded that there was a conversation allegedly between Mr Lambert and himself in regard to the property prior to the execution of the agreement.

I have no doubt, in accepting the evidence of Mr Lambert, that both the sales agency agreement and the contracts were signed prior to any inspection of the property by the defendant with Mr Lambert.

The defendant gave evidence. Indeed, he did not disagree with Mr Lambert's evidence that the inspection took place after all documents were signed. I accept that the defendant is an experienced developer. He said he looked at the Bentham Street property and give it much thought before making the offer as eventuated in the contracts.

I have no doubt that at the relevant time on the front of this building there was a sign on the scaffolding referring to the company, Boral. Mr Lambert outlined that it is common practice in buildings of this nature when scaffolding is involved, that the same is leased from the company who erected such scaffolding.

Clearly the allegation in the counterclaim are factually inaccurate and the evidence of Mr De Angelis was in agreement with the factual background as outlined by Mr Lambert. I am uncertain as to why it was so pleaded in the counterclaim. I accept that there were no representations made by Lambert about scaffolding before the contract was signed, or, for that matter, at any time.

However, an inspection of the building took place well after the actual contract was signed and at a time when the Boral sign about the scaffolding was evident.

What the defendant said in his evidence, and admitted, that in fact commission is payable in terms of the sales agency agreement and that settlement did occur, but, because the problems evolved particularly with the liability for the ongoing hire of the scaffolding, he felt the situation had been misrepresented by the agent in regard to the scaffolding, and consequently, if he had known it was on hire, he may well have altered his position in regard to the negotiations for the price of the building.

The defendant has, in effect, said that he believed the agent had an obligation to state this liability for scaffolding in the schedule to the contract, particularly under the items "F", credit chattels, and "G", excluded chattels. I doubt from the definitive clause in the contract, that there was an obligation on the agent to so state the hire of the scaffolding.

The same goes for the defendant's allegation in regard to the Section 90 Statement that there was an obligation on the agent to include the scaffolding details on page 3 of 6 where it specifies "lease, agreement for lease, tenancy agreement or licence (4)". In my view, scaffolding does not fall under that particular head and there was no obligation on the agent to disclose the same.

What the agent did in those contracts is all that was obligated by law. Consequently, there is no basis in the allegations raised in the defence, or, for that matter, in evidence this morning.

One would have thought that an experienced developer would be aware, as was the agent, that scaffolding is a hire item as apparent from the sign thereon. The fact is now admitted that the defendant entered into the contract before any inspection of the site with the agent. Mr Lambert admitted he said or intimated that all the debris therein passed, but I accept that this general statement could not have been seen as referring to scaffolding. There is no merit in the defence as filed or the evidence of the defendant.

Commission is payable by the defendant in terms of the sales agency contract.

I am obliged to enter judgment for the plaintiff for the balance amount of the commission, which is the sum of $40,404.25.

I am prepared to allow interest on that sum in accord with s.39 of the District Court Act. Those interest rates have varied. I would ask that the plaintiff forward to me a schedule of the calculations of that interest. If acceptable, I will then finally enter judgment for the amount that I have so found, and, the interest.

MR EVANS: I would ask that there be judgment for the defendant on the counterclaim.

HIS HONOUR: Yes, I am obliged to dismiss the counterclaim and order judgment for the plaintiff on the defendant's counterclaim.

Mr De Angelis, as soon as both you and I have that schedule of the calculation of interest, I will check it and then I will finally enter judgment.

Since delivering this judgment I have been advised that the relevant calculations on interest is as follows:

INTEREST CALCULATION

Amount Period Rate No of days Calculation

$45,404.25 23/5/95- 6/9/95 9.5% 106 $45,404.25 x (106ö365) x 9.5% = $1,252.66

$40,404.25 7/9/95- 30/11/95 9.5% 85 $40,404.25 x (85ö365) x 9.5% = $893.87

$40,404.25 1/12/95- 31/10/96 9.0% 336 $40,404.25 x (336ö366) x 9% = $3,338.32

$40,404.25 1/11/96- 15/5/97 8.5% 196 $40,404.25 x (196ö365) x 8.5% = $1,844.20

TOTAL$7,329.05

Consequently I enter judgment for the sum of $47,733.30.