Monastra (as trustee of the Giuseppe Monastra Family Trust) v Van Ratingen - [2003] WASC 194

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: MONASTRA (as trustee of the GIUSEPPE MONASTRA FAMILY TRUST) -v- VAN RATINGEN & ANOR [2003] WASC 194

CORAM: WHEELER J

HEARD: 18 & 19 SEPTEMBER 2003

DELIVERED : 14 OCTOBER 2003

FILE NO/S: CIV 1772 of 2003

BETWEEN: GIUSEPPE MONASTRA (as trustee of the GIUSEPPE MONASTRA FAMILY TRUST)
Plaintiff
AND
HENDRIKUS MARIA JACOBUS VAN RATINGEN
SYBILLA MARIA JOSEPHINA VAN RATINGEN
Defendants

Catchwords:

Contract - Turns on own facts

Legislation:

Property Law Act 1969 (WA), s 34(1)(a)

Result:

Claim dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr M E Herron
Defendants: Mrs P E Cahill

Solicitors:

Plaintiff: Frichot & Frichot
Defendants: Jackson McDonald

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

Freeman and Lockyer v Buckhurst Park Properties [1964] 2 QB 480
Petersen v Maloney (1951) 84 CLR 91

Case(s) also cited:

Clayton Robard Management Ltd & Anor v Siu (1988) 6 ACLC 57
Dillon v Nash [1950] VLR 293
Marist Brothers Community Inc v Shire of Harvey (1994) 14 WAR 69

WHEELER J: In this action the plaintiff brings a claim based on an alleged contract for the sale of land at 39 Carrington Street, Palmyra, from the two defendants who are husband and wife and own the property as joint tenants. The primary remedy sought is specific performance of that contract. The heart of the claim is to be found in pars 3 and 3A of the statement of claim, which I set out here:
"3.By an agreement in writing dated on or about 4 February 2003 made between the Plaintiff as trustee of the Trust and the Defendants, by the first named Defendant acting on his own behalf and on behalf of the second named Defendant, the Defendants agreed to sell and the Plaintiff agreed to buy the property for the sum of $445,000.00.
Particulars
The Plaintiff says that the first named Defendant acted with the actual authority of the second named Defendant, alternatively with the ostensible authority of the second named Defendant, alternatively the second named Defendant ratified the acts of the first named Defendant by purportedly signing a contractual document on or about 6 February 2003.
3A.Alternatively, by an agreement in writing dated on or about 4 February 2003 made between the Plaintiff as trustee of the Trust and the Defendants, by the first named Defendant acting on his own behalf and on behalf of the second named Defendant and further by Bernice Enid Goddard acting on behalf of both Defendants, the Defendants agreed to sell and the Plaintiff agreed to buy the property for the sum of $445,000.00.
Particulars
The Plaintiff says that Bernice Enid Goddard acted with the actual authority of both Defendants, alternatively with the ostensible authority of both Defendants, alternatively both Defendants ratified the acts of Bernice Enid Goddard by purportedly signing a contractual document on or about 6 February 2003."
A number of background facts are not in dispute. It appears that towards the end of 2002 the defendants decided that they wished to sell the property, which was an investment property which they had owned for many years. The first named defendant, Mr Van Ratingen, made enquiries with a number of agents with a view to ascertaining what the value of the property might be and what might be the best way of selling it. He discussed the results of those enquiries with his wife and they decided that they would sell the property. He selected three real estate agents, who he believed as a result of his earlier enquiries to be "prominent in the area", and asked them to put forward more specific proposals for the sale of the property.
It appears that in the course of ascertaining what might be the appropriate value of the property, the principal of one of those real estate agencies, Mrs Goddard, had discussed it with one of her employees, Mr Milio. Mr Milio seems to have been the person in her office who had dealings with a number of investors and developers operating within that area.
Mr Milio notified at least two persons that the property was likely to come on to the market. He may have gone further, and advised them that the property was in fact for sale and may have suggested that the agency for which he worked either had or was likely to obtain the listing of the property.
In any event, one of the persons with whom Mr Milio discussed the property was the plaintiff Mr Monastra. Mr Monastra advised Mr Milio that he did wish to purchase the property. At the particular time at which it was discussed, Mr Monastra was going away for a week, but he advised that on his return he would be putting in an offer. That offer was made on 17 January 2003 on the standard REIWA form of contract for sale of land by offer and acceptance. The purchase price was expressed to be $425,000, with a deposit within seven days of acceptance of the offer. It was also expressed to be subject to finance being obtained by 9 February, a period of approximately 23 days. At that stage, the defendants had not listed the property with Mrs Goddard. It appears that another person, acting on behalf of a company called GVC Hydraulic and Gas Pty Ltd (herein after "GVC"), also put in a written offer in the sum of $425,000. That offer was a cash offer. It appears to have been made on 21 January. Wishing to obtain the listing, Mrs Goddard advised the defendants that there were two interested purchasers who had made offers. That was one of the factors which caused the defendants to determine that they would list the property with Mrs Goddard.
It appears that Mr Monastra had some difficulty in ascertaining from Mr Milio what, if anything, was happening with the property and with the offer which he had written out. He said that he became frustrated with Mr Milio. He also came to believe that there was another person interested in purchasing the property, and was concerned that that other offer might be preferred to his. He took matters into his own hands on 27 January 2003, and wrote a letter, addressed "to whom it may concern" explaining that he had not heard anything about the offer, that he was still interested in the property, and that he was willing to negotiate directly with the owner or through another nominated agency. He further advised that he was prepared to increase the price to a price which he stipulated. That letter he delivered to one of the units on the property, where he had been advised that the son of the property's owners lived. The defendants' son accepted the letter and, it appears, faxed it off to his father the next day.
On 31 January, which was a Friday, Mr Van Ratingen attended at Mrs Goddard's office and signed a listing authority, to the terms of which I will return shortly. He also advised Mrs Goddard that the defendants wished to proceed to negotiate with the person who had made a cash offer. After discussion with Mrs Goddard, he watched while she crossed out the price which had been offered, and substituted a price of $445,000 by way of counter offer. He initialled that alteration. He took the agency agreement home for Mrs Van Ratingen to sign. It is common ground that she did sign it at some time during the following few days, although precisely when is not clear and does not appear to matter.
It appears that GVC did not wish to proceed at the price the subject of the counter offer. Mr and Mrs Van Ratingen then determined that they wished to negotiate with Mr Monastra.
It is at this point that significant differences in the accounts given by the various witnesses emerge. I deal first with the evidence of Mr Van Ratingen. I accept his evidence entirely in relation to the actions of himself and his wife concerning this offer. I do so for two reasons. First, it seemed to me that both he and Mrs Van Ratingen were entirely credible witnesses. He struck me as a careful and truthful witness. Mrs Van Ratingen had much more limited involvement in the various events, since her husband negotiated with third parties on behalf of them both. However, to the extent that her evidence bore on this issue, I accept her as an honest witness attempting to recall matters to the best of her ability, and unwilling to offer evidence when she was not completely certain of it. Importantly, however, there is contemporaneous documentary evidence which supports the account given by Mr Van Ratingen so far as he was concerned.
He said that he advised Mrs Goddard that he and his wife would like to pursue Mr Monastra's offer but at $445,000. He went to Mrs Goddard's office. His wife did not come, although they had discussed the matter beforehand. In the office, Mrs Goddard crossed out the figure of $425,000 offered by Mr Monastra, and inserted $445,000 and Mr Van Ratingen initialled that alteration. He said that at that stage he was "reasonably happy" with the date of 9 February for finance, since it was less than a week away and it seemed that they would be able to pursue the GVC offer if Mr Monastra's finance "fell over". He said that there was some brief discussion of the finance clause with Mrs Goddard; he did not purport to recall exactly what was said. However, he initialled the finance clause to show that he was happy with that date for finance. He said that he did so at the prompting of Mrs Goddard.
The next day, Mr Van Ratingen said, Mrs Goddard telephoned to say that the price had been accepted by Mr Monastra but that there was a counter offer as to the finance period. On the day following that, she advised that yet another offer had been received from GVC, in the sum of $440,000. After some discussion with his wife, Mr Van Ratingen invited Mrs Goddard to visit them to discuss both offers. There was some discussion at their home and Mrs Goddard advised them that, so far as she was aware, it would "not be a problem" for GVC to obtain the cash for their offer. There was some further discussion, but he could not recall its exact terms. The result was that Mr and Mrs Van Ratingen decided to accept the cash offer and both signed and initialled it. He wrote, and both initialled, the word "rejected" on Mr Monastra's offer. Mrs Goddard took both of them away.
Backtracking somewhat, Mr Van Ratingen's evidence was that when he attended at Mrs Goddard's office in relation to Mr Monastra's offer, she gave him a photocopy of the document which he had signed. He had a number of photocopy offer and acceptances in a file which he had kept relating to the sale of 39 Carrington Street. Amongst those papers, was a copy of an offer and acceptance document, showing Mr Monastra as offeror, the alteration of the price from $425,000 to $445,000 which Mr Van Ratingen had described, no alteration to the finance clause, and Mr Van Ratingen's initials next to the finance clause. The existence of that document, together with the impression which I have formed of Mr and Mrs Van Ratingen as witnesses, combine to lead me to the view that the transaction in Mrs Goddard's office was as he described it.
There is then a significant difference between the evidence of Mrs Goddard and Mr Monastra. It may be, as counsel for the defendants submitted, that it is not necessary for me to determine this factual conflict. However, it is desirable to record it and to make such findings as I can. Mr Monastra said that on 3 February, at work, he received a telephone call from Mrs Goddard, who advised him that the owners of 39 Carrington Street wished to negotiate with him at a price of $445,000 and that if he was interested he could come and sign the offer. His evidence was that she also said to him at that stage that he was running out of time for finance and that he was "entitled" to 28 days for finance. He said he was unable to attend at her office that day, and she suggested that he come the following day after 5 pm.
When he arrived at Mrs Goddard's office, it was Mr Monastra's evidence that the price had been changed to $445,000 and that the finance clause had been changed, so as to allow 28 days from acceptance of the offer. He initialled both alterations to show his acceptance of them, and dated the alterations. His evidence was that he believed Mr Van Ratingen had already initialled the altered finance clause. It is to be remembered that Mr Van Ratingen's initial was beside the finance clause. On the original of the completed offer and acceptance document, which was put in evidence, Mr Van Ratingen's initial appears to the right of the original date of 9 February 2003. To the right of that again, and on the same line, the words "28 days from acceptance" appear in what is accepted on all sides to be Mrs Goddard's handwriting. One can see how, if Mr Monastra's evidence is accepted, he could well have been under the impression that the alteration to the finance clause formed part of the counter offer by the vendors.
In passing, I note that a further reason for accepting Mr Van Ratingen's evidence in relation to the alteration to the finance period, is that Mr Van Ratingen struck me as a cautious vendor. He took some time to research the best method of selling the property. He was slow to list the property with Mrs Goddard's agency, even after she advised him that there were two offers which had been obtained by that agency. He appeared at each stage to be prepared to take time to consider whether he and his wife were getting the best possible bargain. It is most unlikely that a vendor of that kind would have been prepared to offer an extension of the finance period in circumstances where the prospective purchaser had given no indication that it would be required.
Mrs Goddard's evidence about the alteration to the finance clause was as follows. She said that on the evening of Monday 3 February Mr Van Ratingen came to her office and the counter offer of $445,000 was made as he described. She agreed that only the price was changed on that occasion and that it was her idea that Mr Van Ratingen initial the finance condition. She said she suggested that he do so for two reasons. The first was to acknowledge that he had read it. The second was that she was not sure whether the document would be faxed at any stage and, if the document was to be faxed, then printed on the face of the document itself was an advice that all parties should sign all pages. In relation to this latter reason, however, it is to be noted that Mr Van Ratingen had already initialled the alteration of the price which was on the same page as the finance clause. Mrs Goddard's evidence was, consistent with the evidence of Mr Van Ratingen, that he also initialled cls 8 to 11, which contained conditions not presently relevant, and signed the document. She photocopied the document he had signed and gave him a copy to take home.
Mrs Goddard's evidence was that she then rang Mr Monastra either that night or the next day and that he made an appointment to see her on the next day which was Tuesday 4 February. When he attended at her office, he was quick to accept the price and initialled and dated it. However, he said that because the agency had taken so long to present the offer, he would need more time for finance. Her evidence was that the question of finance was discussed for some 30 minutes, during the course of which he first said that he wanted 30 days to obtain finance and she advised that the vendors would be unlikely to accept such an offer. Her evidence was that she tried to suggest a 14 day period as being possibly acceptable but that he was adamant and so she wrote in the alteration to 28 days. She said that she then, in Mr Monastra's presence, wrote in an additional cl 12, which read: "Purchaser is aware some of the fittings belong to current tenants" and that he initialled that. She gave him a photocopy of the document he had signed.
There was a minor issue about whether Mrs Goddard had given Mr Monastra any additional documents or materials when he attended to sign the counter offer. Mr Monastra said he was given a copy of the certificate of title, and a document relating to the length of the current leases on the property. Mrs Goddard accepted that she had at one point sworn an affidavit in which she said she did not give him those documents but that the affidavit was in error and that she may well have done so. She did not have a specific recollection, but she knew that she had provided such documents to purchasers on previous occasions.
Mrs Goddard's account of her discussions with the Van Ratingens and their subsequent acceptance of the GVC offer is consistent with Mr Van Ratingen's evidence.
It is my view that it is not necessary to choose between the competing accounts of Mrs Goddard and Mr Monastra, for reasons to which I will shortly turn. However, in case I am wrong in that view, I observe that were it necessary to do so I would have preferred the evidence of Mr Monastra. There are difficulties with both accounts. Mr Monastra was, I think, on a couple of occasions inclined to exaggeration and embellishment of his evidence. For example, in cross‑examination when discussing the proposed 28 day finance period, he said that not only had Mrs Goddard suggested that a 28 day extension would be appropriate, but that the 28 days also came from Mr Milio and that he and Mr Milio had talked about it even before Mrs Goddard contacted him about the $445,000 offer. It is possible that on some earlier occasion Mr Monastra had spoken to Mr Milio about the desirability of presenting his offer to the vendors and the difficulty he might face if the finance period became too short. However, it seems to me most unlikely that at the relatively early stage at which Mr Monastra was dealing with Mr Milio, the prospect of anything so specific as a 28 day extension was considered. Also, in cross‑examination, he conceded that he was not aware who the vendors were precisely, although the name Mr Van Ratingen was mentioned a number of times. He conceded that he did not know if there was more than one owner. However, apparently realising that this would present a difficulty in the way of his accepting an offer signed only by Mr Van Ratingen, he promptly added that he did think that Mr Van Ratingen was the owner and that he had power to sell the property. The way in which this evidence was given was suggestive of afterthought.
There is also the inherent difficulty in accepting Mr Monastra's account, that it involves the proposition that a real estate agent who was aware, as Mrs Goddard must have been, that the vendors were not enthusiastic about a lengthy period for finance approval, nevertheless without the authority of the vendors altered the finance period, thereby putting a potential sale in jeopardy. As against this, however it might be suggested that an agent in Mrs Goddard's position, the GVC offer having at that stage apparently fallen through, and thinking as Mrs Goddard apparently did think that Mr Monastra might face difficulty in obtaining finance by 9 February, might have been tempted to extend the period in the hope of persuading the vendors to accept it. This consideration is therefore equivocal.
However, my reasons for preferring the evidence of Mr Monastra are broadly these. First, to the extent that differences between their evidence can be explained by difficulties of recollection, rather than deliberate inaccuracy, it was a transaction of much greater importance to Mr Monastra than to Mrs Goddard. It was clear that this was a property which he had very much wanted to purchase, and which he had made an effort over a period of time to purchase. To Mrs Goddard however it was, one would have thought, but one of many real estate transactions and was not a transaction of an unusual character (until the time at which it appeared that Mr Monastra was not prepared to accept that his offer had been rejected).
To the extent that the differences cannot be explained merely by difficulties of recollection, the following factors appear to me to be significant. Turning to Mrs Goddard's conduct first, I have already noted that she inserted cl 12 in the offer and acceptance at a time subsequent to the approval of that document and initialling of it by Mr Van Ratingen. It was of course a clause for the benefit of the vendors, so that it is hardly likely that he would have disapproved of it had he been asked. However, for reasons to which I will shortly come, it is obvious that she had no authority from Mr Van Ratingen to insert into the agreement fresh conditions without reference to him and to his wife, and that the clause was not required by Mr Monastra either. Her evidence was that she had simply overlooked the need for cl 12 at an earlier time and that she had "told" the Van Ratingens about it, but it is not clear when she did so, and it appears reasonably clear that she wrote the clause in before consulting them.

More importantly, she was prepared on more than one occasion to present to potential purchasers as a counter offer, acceptance of which would become binding, the documents which had been seen and initialled only by Mr Van Ratingen. It seems to have been the case that Mr Van Ratingen had at least some authority to act in these transactions on behalf of both himself and his wife. However, Mrs Goddard was not, it seems to me, in a position to know that. This is particularly so, in relation to the GVC contact. It seems clear enough on the evidence that the first occasion on which either Mr or Mrs Van Ratingen became aware of the full terms of the two competing offers, which at that stage were for $425,000, was when they were shown to Mr Van Ratingen in Mrs Goddard's office, and he selected the GVC one and initialled it. That counter offer was then taken by Mrs Goddard and presented to GVC, apparently without reference to and without obtaining the signature of Mrs Van Ratingen. In circumstances in which she was aware that there were two vendors as joint tenants, Mrs Goddard's conduct demonstrates a less than ideal level of attention to the scope of her authority.
So far as Mr Monastra is concerned, it is very clear that he was keen to purchase this property. He gave evidence that he had a good relationship with his bank, and that he had engaged in a variety of property developments and investments over the years, with the assistance of that bank. That evidence was corroborated by Mr Wortley, a business manager at Challenge Bank. Although the time for finance approval was tight, in those circumstances, and where he was seeking a loan of approximately 75 per cent of the purchase price of the property, it would appear that Mr Monastra could have been reasonably confident of obtaining finance approval either by 9 February or very shortly thereafter. It seems unlikely in those circumstances that if he had had any reason to suppose that the sale would have been lost thereby, he would have insisted on the insertion of a lengthy period for the obtaining of finance. Further, it is to be noted that the 28 days was somewhat longer than the finance approval period which he had initially sought when he made his offer on 17 January.
Finally, I should note that the document itself provides no assistance in resolving this dispute. A number of different pens have been used at different times to write on it. The alteration to the finance clause appears to be in the same pen as the alteration of the purchase price, and in the same pen as the insertion of cl 12. Since the alteration of the price and the insertion of cl 12 were done at different times on that day, it seems to me the only inference that can be drawn is that that particular pen happened to be the one in use in the office on that day, without being able to draw any conclusion as to the precise time at which the various matters, apparently using that pen, may have been inserted.
In any event, whichever version of the facts is preferred, it is my view that this claim must fail. Believing as I do the evidence of Mr Van Ratingen, I find that the counter offer which he signed on 3 February contained a variation only to the price and not to the finance clause. The counter offer purportedly accepted by Mr Monastra on 4 February did contain the altered finance clause. There was therefore no "agreement" made between Mr Monastra and the defendants which was made "by the first named defendant acting on his own behalf ... " as claimed by par 3 of the further amended statement of claim.
So far as par 3A of the further amended statement of claim is concerned, the critical issue here is whether Mrs Goddard had either actual or ostensible authority from the defendants to enter into a contract for the sale of their land. So far as actual authority is concerned, it is plain that she did not. If one turns to the selling agency agreement between Mrs Goddard and the defendants, which is in evidence, under the heading "Authority Period" it is stipulated that "the Vendor authorises the Agent to find a purchaser for the Property ... ". The printed terms which follow deal largely, as one would expect, with the agent's entitlement to a fee, and with marketing charges and the like. Clause 8 however, is headed "Agent's Authority". It stipulates that the agent may do the following things:
(a)engage other licensed real estate agents to find a purchaser;
(b)accept a deposit and hold it as stakeholder;
(c)give appropriate instructions to the conveyancers to aid settlement;
(d)remit the balance of the deposit to the vendor after deducting certain charges;
(e)in certain circumstances to obtain payment of the shortfall of the deposit out of the purchase moneys;
(f)sign the certificate of compulsory disclosure material for and on behalf of the vendor (strata properties only).
That is a clear indication of the very confined nature of the authority of the agent. There is in the evidence of this case nothing to suggest any additional agreement, written or oral, between Mrs Goddard and the Van Ratingens or either of them which would have permitted her either to make a contractually binding offer to sell the property, or to agree to any of the terms upon which it could be sold.
So far as ostensible authority is concerned, it is perhaps desirable before turning to this topic to refer to the position of real estate agents generally, both in law and as generally understood. In law, the term "agent" in the real estate context generally means something akin to an introduction agent; that is, as the agency agreement in this case suggests, one who will locate someone on behalf of the principal, who will then deal directly with the principal. (Petersen v Maloney (1951) 84 CLR 91.) Real estate agents are, as a practical matter, commonly employed by a majority of persons who engage in the buying and selling of real estate. The limitations of their authority are generally well understood.
Turning to Mr Monastra in particular, he was a person who had bought and sold real estate on a number of prior occasions, for the purposes of investment. As he conceded during the course of his evidence, he would not generally expect a real estate agent to be able to enter into an agreement on behalf of a vendor. Against that background, there would have to be some very unusual conduct on the part of the defendants, to give rise to any ostensible authority in Mrs Goddard.
It is enough, for the purposes of the present case, in considering the concept of ostensible authority, to refer to the well‑known observations of Diplock LJ in Freeman and Lockyer v Buckhurst Park Properties [1964] 2 QB 480 at 503, an apparent or ostensible authority is a legal relationship "between the principal and the contractor created by a representation, made by the principal to the contractor ... 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 ... ". It is essential therefore that one be able to find some sort of representation made by the defendants about the authority of Mrs Goddard, before any ostensible authority to enter into an agreement with Mr Monastra can be found. There was no direct contact between Mr Monastra and the Van Ratingens during the entire course of this transaction. There was nothing said or done by either of the defendants, to Mr Monastra, which could give rise to any view whatever about the authority of Mrs Goddard.
In the end the plaintiff was unable to point to anything which would be capable of constituting such a representation. Rather, when his evidence is analysed, it appears that his understanding, at the time at which he last initialled the offer and acceptance document, was that the presence of Mr Van Ratingen's initial next to the altered finance clause was a counter offer, not by Mrs Goddard, but by Mr Van Ratingen himself in relation to that clause. That belief, if it existed, was a mistaken belief. That altered finance clause was inserted either by Mrs Goddard in Mr Monastra's presence and at his insistence, on her account, or - in the only other alternative which is available consistently with my acceptance of Mr Van Ratingen's evidence - by Mrs Goddard in the absence of both parties. In neither case was there any representation by the defendants, so as to give rise to any ostensible authority in Mrs Goddard.
In my view, this claim must be dismissed.