Moneta Finance Pty Ltd v Pakenham Racing Club Inc
[2019] VSC 207
•10 April 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
S ECI 2016 00071
| MONETA FINANCE PTY LTD (ACN 602 238 404) | Plaintiff |
| v | |
| PAKENHAM RACING CLUB INC. | Defendant |
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JUDGE: | ALMOND J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 20, 22, 23, 27 August 2018 |
DATE OF JUDGMENT: | 10 April 2019 |
CASE MAY BE CITED AS: | Moneta Finance Pty Ltd v Pakenham Racing Club Inc |
MEDIUM NEUTRAL CITATION: | [2019] VSC 207 |
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CONTRACT – Sale of properties – Real estate agent – Sale authorities – Estate Agents Act 1980 – Justice Legislation Miscellaneous Amendment Bill 2018 – No agreed commission or commission rate for price below threshold – Whether a Binding Offer or Sale – Whether individuals acting as agent’s representatives – Contracts subject to purchaser being acceptable to the vendor’s banker – Condition subsequent not satisfied – No admission of indebtedness – Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 – Estate Agents Act 1980 ss 47, 48A, 49A, 50, 104.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J A Ribbands | T F Grundy Lawyer |
| For the Defendant | Mr M I Borsky QC with Mr D C Morgan | King & Wood Mallesons |
HIS HONOUR:
The plaintiff, Moneta Finance Pty Ltd (‘Moneta’) claims it is entitled to commission due as a consequence of the sale of the Pakenham Racecourse owned by the defendant, the Pakenham Racing Club (‘PRC’).
Moneta claims as assignee of rights of Carrum Downs Real Estate (‘CDRE’) trading as Ray White Real Estate, which was engaged as the real estate agent to sell the land.
It is common ground that:
(a)a contract of sale was entered into;
(b)the sale did not proceed to completion; and
(c)the deposit which had been paid was fully refunded to the prospective purchaser.
The plaintiff claims, nevertheless, that it is entitled to commission based on the terms of the engagement of CDRE.
By the conclusion of the trial the following key facts were not in dispute.[1]
[1]The summary of facts is compiled substantially by reference to the defendant’s written closing submissions.
Facts
PRC owned approximately 26 hectares of land known as 61 Racecourse Road, Pakenham on four separate titles. On these titles, PRC operated a racecourse (‘Racecourse Properties’). It also owned two blocks of land adjacent to the Racecourse Properties on separate titles known as 33 and 34 King Street, Pakenham (‘King Street Properties’). The property at 33 King Street was used as an entranceway to a horse training area located on the Racecourse Properties (’33 King Street Property’).
In 2008, PRC acquired a property at Tynong for the purpose of building a new and larger racecourse. It borrowed funds from Westpac and mortgaged the Racecourse Properties as security for the loan.
In early 2010, a firm of consultants, MacroPlan, prepared for PRC a comprehensive development plan document proposing that the Racecourse Properties be divided into two redevelopment precincts. Real estate agent CB Richard Ellis Pty Ltd (‘CB Richard Ellis’) was engaged to seek expressions of interest for the Racecourse Properties and an Information Memorandum (‘Information Memorandum’) was prepared for this purpose. The King Street Properties are not referred to in the Information Memorandum.
On 7 October 2010, a planning scheme amendment was approved and gazetted. The effect of this amendment was to rezone the Racecourse Properties from ‘Special Use Zone (Recreational Purposes)’ to ‘Comprehensive Development’ land and to rezone the Tynong land which was intended to be used for the new Pakenham Racecourse from ‘Green Wedge Farmland’ to a ‘Special Use Zone’ to facilitate the construction and use of that land for a new racecourse.[2] This amendment did not affect the King Street Properties, which at all times were zoned ‘Residential’.
[2]CB 105 A–B, T297.26–T298.4.
The Information Memorandum contained a section on ‘Terms of Sale’ in which PRC set out what were described as ‘preferred sale terms’ as follows:
(a)10% deposit on signing of contract of sale;
(b)four equal payments commencing 30 June 2011 at six-monthly intervals, each of 25% of the balance of the price;
(c)transfer of title at the first payment by the purchaser on receipt by the Club of 32.5% of the price; and
(d)leaseback to the Club [under specified terms and conditions].[3]
[3]For present purposes, it is not necessary to set out these terms and conditions.
Mr Michael Hodge, CEO of PRC, gave evidence that the preferred sale terms were formulated to allow a period of approximately two years for PRC to build a new racecourse with a view to seamless relocation of the existing racecourse operation at Pakenham to the new racecourse site at Tynong.
In December 2010, Mr Hodge was approached by a Mr John Papadimitriou (‘Mr Papadimitriou’)[4] at his office at the racecourse. Mr Papadimitriou had not made an appointment. He introduced himself as someone from Search Pty Ltd[5] and advised Mr Hodge that he had a buyer for the Pakenham Racecourse who was willing to pay thirty seven million dollars for it.
[4]In some documents Mr Papadimitriou is referred to as Mr Pappas. It was common ground that where this occurs, it is a reference to Mr Papadimitriou.
[5]Or ‘Search Group Pty Ltd’. Mr Hodge was unsure whether it was Search or Search Group.
Mr Hodge gave him a copy of the Information Memorandum and two plans of proposed subdivision, each prepared by Reeds Consulting (‘plans of proposed subdivision’). One plan envisaged 402 lots, the other 426 lots.[6]
[6]CB 61, 61A.
At a subsequent meeting in December 2010, Mr Papadimitriou was accompanied by Mr Ayman Abdou (‘Mr Abdou’), who introduced himself as an employee or representative of Search Pty Ltd.[7]
[7]Or ‘Search Group Pty Ltd’.
At that meeting, Mr Papadimitriou advised Mr Hodge that he would want commission of $750,000 ‘if the sale were to execute’.[8] Mr Hodge responded to the effect that if there was to be a commission of $750,000, then the sale price would need to be $37 million plus the commission, or $37,750,000.
[8]T301.1–5.
Mr Papadimitriou suggested that PRC complete a sale authority with CDRE to authorise the sale of the Pakenham Racecourse so that he and Mr Abdou would be eligible to receive commission on any sale. Neither Search Pty Ltd, Mr Papadimitriou nor Mr Abdou were licensed real estate agents.
Mr Hodge was content with this suggestion and communicated by email with a Ms Stephanie Burgess, who was the assistant to CDRE’s director, Mr David Carroll, about the terms of a proposed exclusive sale authority. For present purposes, it is enough to say that Mr Hodge was prescriptive about the terms of the authority, noting that it would be necessary for the authority to state the payment terms as per the Information Memorandum,[9] and to include a condition that the purchaser must be acceptable to the vendor’s bank.
[9]Referred to in the email as ‘the EOI [(Expressions of Interest)] document’, CB 138.
On 22 December 2010, Mr Hodge signed an exclusive sale authority (‘first sale authority’) which gave an exclusive authority to CDRE for a period of 14 days.[10]
[10]CB 139.
Relevantly, the first sale authority specified a vendor’s authorised price of $37 million. Commission was specified as follows:
The agent is entitled to $750,000 if property is sold at $37,750,000. Anything above that, the agent is entitled to 50 per cent plus GST.
The first sale authority included terms of sale which were identical to those set out in the Information Memorandum. Ms Burgess typed these terms of sale.[11] It is likely that Ms Burgess typed these terms into the first sale authority directly from the Information Memorandum.
[11]CB 85; page 9 of the first sale authority, CB 147.
There was a further term that the sale was conditional ‘on the purchaser being accepted to (sic) the Vendors Bankers’.[12] After the first sale authority lapsed, further 14 day authorities were entered into on 13 January 2011, 2 February 2011 and 23 February 2011, all on substantially the same terms (collectively, ‘Authorities’).[13] The proposed purchaser was The Corcoris Group (‘TCG’) which made written offers to purchase the Racecourse Properties on 25 January 2011 (‘first TCG offer’),[14] 22 February 2011 (‘second TCG offer’)[15] and 18 March 2011 (‘third TCG offer’).[16] The third TCG offer was in the form of a draft contract of sale naming the purchaser as TCG Pakenham Pty Ltd as trustee of the TCG Pakenham Unit Trust (‘TCG Pakenham’), signed by its director Nicholas Corcoris. Mr Corcoris was the principal of TCG. On receipt of the proposed form of contract, Mr Hodge noticed there had been an amendment to the details of the land to be sold to include the ‘land described as 33 King Street, Pakenham’ within the general description of the ‘Land known as the Pakenham Racecourse’.[17] Mr Hodge immediately responded to TCG, advising to the effect that the King Street Properties did not form part of the land rezoned to Comprehensive Development Land and was not part of the land advertised by PRC for sale.[18]
[12]Term numbered 2 on page 9 of the first sale authority, CB 147.
[13]Exclusive sale authority dated 13 January 2011, CB 154; 2 February 2011, CB 200; 23 February 2011, CB 235.
[14]Letter from TCG to John Papadimitriou dated 25 January 2011, CB 198.
[15]Letter from TCG to John Papadimitriou dated 22 February 2011, CB 233.
[16]CB 429–478.
[17]CB 426, 434.
[18]CB 483A.
Mr Hodge forwarded the proposed form of contract to PRC’s solicitors and requested a comparative analysis of the original form of contract proposed by PRC and the proposed amended contract. The comparative analysis was performed by Ms Thackwray of PRC’s solicitors, who identified 21 unilateral amendments including the addition of the 33 King Street Property to the land to be purchased.[19]
[19]Email from Victoria Thackwray to Michael Hodge dated 21 March 2011, CB 494.
On the following day, 22 March 2011, Mr Hodge met Mr Corcoris to discuss the proposed amendments including the issue of the 33 King Street Property.
At the 22 March 2011 meeting the parties reached agreement on each of the 21 points including an agreement that the 33 King Street Property would be sold and that this sale would be by way of a separate contract.[20]
[20]CB 485.
On 25 March 2011, PRC and TCG Pakenham executed contracts for the sale of the Racecourse Properties for $37.25 million plus GST (‘Racecourse Properties contract’) and the 33 King Street Property for $750,000 plus GST (’33 King St Property contract’) (collectively, ‘TCG contracts’).[21]
[21]CB 497 and CB 551.
Each contract was conditional upon the approval of PRC’s banker as mortgagee, or if PRC refinanced, by the new financier.[22]
[22]CB 530 clause 16 of the Racecourse Properties contract; CB 578 clause 15 of the 33 King Street contract.
The date for approval in each case was to be 28 days from the contract date unless extended by agreement of the parties.[23]
[23]CB 504, CB 557.
By letter dated 30 March 2011, the purchaser TCG Pakenham advised PRC that it appeared very unlikely that PRC’s current mortgagee or an alternative financier would approve the contracts within the stated 28 day period and proposed an extension of the approval date in both contracts to 30 June 2011. PRC agreed to extend the approval date to 20 June 2011.[24]
[24]CB 605, CB 606.
On 19 April 2011, Westpac advised PRC that the risks associated with non-completion of the sale were outside the bank’s acceptable levels.[25]
[25]CB 607.
Alternative financing was sought from another bank but had not been approved by 29 June 2011. On 29 June 2011, TCG Pakenham advised PRC that it believed that it was unlikely that the relevant condition in the contracts would be satisfied ‘any time soon, if at all’. In those circumstances, TCG Pakenham advised that it was not inclined to extend the approval date beyond 30 June 2011.[26]
[26]CB 627.
On 28 July 2011, TCG Pakenham advised PRC that despite the efforts of all concerned the conditions subsequent in each contract were not satisfied by the approval date, that it was not willing to further extend the approval dates and that accordingly it regarded the contracts as at an end. It requested the immediate return of the deposits paid under the contracts.[27]
[27]CB 629-630.
On 28 July 2011, the solicitors for TCG wrote to the solicitors for PRC to the same effect requesting return of the deposits.
On 3 August 2011, the solicitors for PRC wrote to the solicitors for TCG Pakenham. In substance it was accepted that the contracts were at an end. PRC agreed to refund the deposits, and subsequently did so.
In May the following year PRC sold the Racecourse Properties and the 33 King Street Property to another purchaser introduced by another real estate agent and paid commission on those sales.[28]
[28]Contract of Sale – Pakenham Racecourse and North King Street Pakenham dated 16 May 2012, CB 650; Exclusive Sale Authority Gerard Collins Real Estate Pty Ltd dated 15 May 2012, CB 645.
Submissions
Moneta claims that it is entitled to commission under the Authorities on the ground that a ‘Binding Offer’ within the meaning of the Authorities was obtained from TCG, and that Binding Offer was ultimately accepted by PRC. Therefore, the plaintiff submits that even though the Racecourse Properties were subsequently sold to another party, commission is payable to the plaintiff in its capacity as the assignee of the right of CDRE to recover commission.
PRC denies it is liable to pay the plaintiff commission on the following grounds:
(1)The Authorities did not comply with the Estate Agents Act 1980 (Vic) (‘Estate Agents Act’) so that CDRE had no right to claim commission from PRC and therefore no right to assign to Moneta;
(2)The sale price of the Racecourse Properties ($37.25 million plus GST) was less than the minimum sale price at which commission was payable ($37.75 million plus GST);
(3)No ‘Binding Offer’ within the meaning of the Authorities was obtained and therefore there was no ‘Sale’ within the meaning of the Authorities.
(4)There was no ‘Sale’ to a person introduced to the Racecourse Properties by CDRE, either before or during any ‘Exclusive Authority Period’ within the meaning of Item 1 ‘Agent’s Entitlement to Commission’ in each of the Authorities.
(5)The exclusion in Item I ‘Agent’s Entitlement to Commission’ applied, because PRC incurred a liability to pay Agent’s Commission under an exclusive agency agreement signed by PRC with another agent.
(6)At no time did PRC acknowledge liability to pay commission to CDRE (despite an allegation to the contrary).
Did the Authorities comply with the Estate Agents Act?
The Estate Agents Act relevantly provides:
48A Agent must not retain any rebate
(1)An estate agent who is engaged or appointed to do any estate agency work for a person (the client) is not entitled to retain any amount the agent receives from another person as a rebate in respect of—
(a) any outgoings; or
(b)any prepayments made by the client in respect of any intended expenditure by the agent on the client's behalf; or
(c)any payments made by the client to another person in respect of the work.
(2)On receiving any amount of rebate referred to in subsection (1), the agent must immediately pay the amount to the client.
Penalty:60 penalty units.
(3)Despite subsection (2), the agent does not have to pay to the client an amount of rebate if the agent, in anticipation of receiving the rebate, has already given that amount to the client either directly or by reducing the amount charged for the outgoing or prepayment to which the rebate relates.
49A Offence not to give certain information about commission
(1)An estate agent must not obtain, or seek to obtain, any payment from a person in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent unless—
(a)the agent holds a written engagement or appointment that is signed by the person (or the person's representative); and
(b)before obtaining the person's signature to the engagement or appointment, the agent (or an agents' representative employed by the agent) informed the person (or the person's agent or representative) that the commission to be paid to the agent under the engagement or appointment and any money to be paid by the person in respect of outgoings were subject to negotiation; and
(c)the engagement or appointment contains—
(i)details of the commission and outgoings that have been agreed; and
(ii)if a fee is to be calculated on a percentage basis, a statement of that fee expressed as both a percentage and as the dollar amount that would be payable on the reserve price or any other relevant amount set out in the engagement or appointment; and
(iii)a rebate statement that complies with subsection (4); and
(iv)a statement in a form approved by the Director as to where a complaint concerning any commission or outgoings in the engagement or appointment can be made; and
(v) anything else required by the Director; and
(d)the agent (or an agent's representative employed by the agent) gave the person a copy of the signed engagement or appointment.
Penalty:100 penalty units.
(2) An estate agent or agent's representative must not destroy any document required by this section and must retain any such document for the prescribed period.
Penalty:100 penalty units.
(3)If an estate agent takes any money in respect of commission or outgoings from any money held in trust by the agent on behalf of a person, the agent must give the person written notice of the amount taken, and why it was taken, within 7 days of taking it.
Penalty:100 penalty units.
(4)A rebate statement complies with this subsection if it is in a form approved by the Director and it contains—
(a)a statement of whether or not the agent will be, or is likely to be, entitled to any rebate in respect of—
(i) any outgoings; or
(ii)any prepayments made by the person engaging or appointing the agent (the client) in respect of any intended expenditure by the agent on the client's behalf; or
(iii)any payments made by the client to another person in respect of the work; and
(b) if such an entitlement will, or is likely to, occur, details of—
(i) the goods or services to which the rebate relates; and
(ii) the name of the person providing the rebate; and
(iii)the amount of the rebate that will be attributable to the engagement or appointment, or if that amount is not known at the time the statement is made, an estimate (in dollars) of the amount; and
(c)a statement that the agent is not entitled to retain any rebate and must not charge the client an amount for any expenses that is more than the cost of those expenses; and
(d) any other statements or details required by the regulations.
(5) Section 48C also applies for the purposes of subsection (4)(b)(iii).
…
Section 50
Commission
(1)An estate agent is not entitled to sue for or recover or retain any commission or money in respect of any outgoings for or in respect of any transaction unless—
(a)at all material times in relation to the transaction he or she is the holder of an estate agent's licence; and
(b)the agent has complied with section 49A(1) with respect to the engagement or appointment to undertake the transaction and is not in breach of section 49A(2) with respect to the engagement or appointment; and
(c)the agent has complied with sections 48A and 48B with respect to the engagement, appointment or transaction.
…
(4)Any estate agent who demands or receives or retains from or pays out of any moneys held by him or her on behalf of another person any fee in respect of negotiating or procuring an advance under the Co-operative Housing Societies Act 1958 or any loan under the Housing Act 1983 and any estate agent who for or in respect of any service or transaction or any auctioneer who for or in respect of the sale by auction of any real estate demands receives or retains from any moneys received by him or her an amount by way of commission or otherwise which is in excess of the amount allowed by the agent's engagement or appointment to act shall be guilty of an offence against this Act; and the Court, in addition to imposing any penalty, may order the agent or auctioneer, to refund any excess or improper amount received or retained by him or her.
(5)Any covenant agreement or condition whereby any person agrees to waive or surrender any right or remedy which he or she may have in respect of the excess or improper amount received or retained by an estate agent or auctioneer, or in any event, any covenant agreement or condition whereby any person agrees to waive or surrender any right or remedy which he or she may have against any estate agent or auctioneer under this Act shall be absolutely void and of no effect whatsoever.
Section 49A of the Estate Agents Act prevents an estate agent from recovering commission unless the agent provides a rebate statement to the client that complies with s 49A(4)(c). The rebate statement must contain a statement that the agent is not entitled to charge the client an amount for any expenses that is more than the cost of those expenses.
In the present case there is no provision for advertising and other expenses and no evidence to suggest there were any advertising expenses or other expenses sought to be charged by CDRE.[29] There was nevertheless non-compliance with the Estate Agents Act. In Advisory Services Pty Ltd (t/a Ray White St Albans) v Augustin & Anor,[30] the Court of Appeal held that the statements in s 49A(4)(c) Estate Agents Act (as it then was) must be contained in the rebate statement required in s 49A(1) irrespective of whether the agent is entitled to any rebate or to charge any amount by way of expenses.[31]
[29]The section for marketing expenses has been deleted in each of the Authorities.
[30][2018] VSCA 95 (Santamaria, McLeish and Niall JJA).
[31]Ibid [49].
The Authorities each contain the following notice:
Rebate Statement – Section 48A-E of the Estate Agents Act
Important Notice for Vendors:
A rebate includes any discount, commission, or other benefit, and includes non-monetary benefits. It is illegal for an Agent to keep any rebate they receive for advertising or other outgoings purchased by the Agent on your behalf. Section 48A of the Estate Agents Act 1980 requires the agent to immediately pay you any rebate they receive in relation to the sale of your property.[32]
[32]The Rebate Statement is found on page 5 of each of the four Authorities: CB 143, CB 158, CB 204 and CB 239.
In this case it is apparent that the notice does not include a statement that the agent must not charge the client in an amount for any expense that is more than the cost of those expenses as required by s 49A(4)(c) of the Estate Agents Act.
Moneta admitted at trial that the Authorities did not comply with s 49A(4)(c) and accepted that unless the law changed prior to judgment being delivered, the agent, and therefore Moneta (as assignee of the agent’s rights) would be precluded from suing for, recovering or retaining commission in respect of the transaction pursuant to s 50 of the Estate Agents Act. However the Court was informed that there was a real prospect of imminent and material legislative amendment, as the Justice Legislation Miscellaneous Amendment Bill 2018 was then currently before parliament and if passed in its current form would amend s 49A of the Estate Agents Act with retrospective effect.
Indeed, this has now occurred. The Justice Legislation Miscellaneous Amendment Act 2018 has amended the Estate Agents Act in relation to rebate statements as follows.
Sections 49A(6) and 49A(7) of the Estate Agents Act (which were introduced by the amending legislation) provide:
(6)An estate agent whose rebate statement contained in an engagement or appointment is in a form approved by the Director does not fail to comply with subsection (4) merely because the rebate statement does not contain—
(a) the statement referred to in subsection (4)(a); or
(b) the statement referred to in subsection (4)(c).
(7)Subsection (6) applies only to a rebate statement contained in an engagement or appointment entered into before the day after the day on which the Justice Legislation Miscellaneous Amendment Act 2018 receives the Royal Assent.
Section 104 of the Estate Agents Act (which was also introduced by the amending legislation) provides:
104 Rebate statements
(1)Section 49A as amended by the Justice Legislation Miscellaneous Amendment Act 2018 applies to, and is taken to have always applied to, the engagement or appointment of an estate agent in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent.
(2)Despite subsection (1), the amendment of section 49A by the Justice Legislation Miscellaneous Amendment Act 2018 does not affect the rights of the parties in the proceeding known as Advisory Services Pty Ltd (trading as Ray White St Albans) v Augustin & Anor [2018] VSCA 95 in the Supreme Court.
(3)Despite section 14(2) of the Interpretation of Legislation Act 1984, subsection (1) applies to any other proceeding commenced before 9 June 2018 which concerns the validity of a rebate statement contained in an engagement or appointment of an estate agent because the rebate statement does not contain—
(a) the statement referred to in section 49A(4)(a); or
(b) the statement referred to in section 49A(4)(c).
The effect of s 104(1) of the Estate Agents Act is that s 49A (as amended) applies to and is taken to have always applied to the engagement or appointment of an estate agent in respect of work done by or on behalf of the agent. Pursuant to subsection 104(3), subsection (1) applies to this proceeding as it is a proceeding commenced before 9 June 2018.
It follows that, as the law currently stands, by reason of these amendments the estate agent has not failed to comply with subsection 49A of the Estate Agents Act merely because the rebate statement does not contain the statement referred to in subsection 4(c). It follows that the plaintiff’s claim to an entitlement to commission is not precluded by reason of non-compliance with the Estate Agents Act, that non-compliance being that the rebate statement did not contain a statement that the agent is not entitled to charge the client an amount for any expenses that is more than the cost of those expenses as required by s 49A(4)(c) of the Estate Agents Act.
Was the sale price of the Racecourse Properties less than the minimum sale price at which commission was payable?
Each Authority relevantly states:
Commission
The agent is entitled to $750,000 if property is sold at $37,750.000. Anything above that, the agent is entitled to 50% plus GST.[33]
[33]It is common ground that stated amounts under the section headed ‘Commission’ are exclusive of GST.
Dollar amount of estimated commission
$825,000 Including
GST of$75,000 If sold at a
price of$37,750,000
PRC submits that no commission was payable pursuant to any Authority unless the sale price was $37,750,000 or greater. As the sale price under the Racecourse Properties contract was for a lesser amount (i.e. $37,250,000 plus GST), no entitlement to commission arises.
Moneta submits that there is no dispute that TCG was introduced to the property as a result of the efforts of Messrs Abdou and Papadimitriou and that the sale of the Racecourse Properties with or without the King Street property is nonetheless a sale concluded as a consequence of the efforts of those individuals.
Moneta submits that in calculating the sale price one must aggregate the sale prices in the TCG contracts (being the Racecourse Properties contract and the 33 King Street Property contract), which together would exceed $37.75 million plus GST.
Alternatively, Moneta submits that whilst the terms of the Authorities did not specifically address the extent of any commission that would be payable for a sale at a price less than $37,750,000 plus GST it does not expressly exclude it; and that objectively construed commission is to be calculated:
(a)at a flat rate of $750,000 regardless of the price, coupled with the 50 per cent bonus for any amount above $37,750,000; or
(b)as a proportion of the flat rate to reflect the lower sale price, resulting in a commission of $741,275.00 on a sale price of $37,250,000.[34]
[34](Based on the proportion of $750,000 to $37,750,000 or 1.99%). Plaintiff’s closing submissions dated 23 August 2018 at [14(b)].
Moneta relies on Moneywood Pty Ltd v Salamon Nominees Pty Ltd[35] (‘Moneywood’). In Moneywood, a vendor authorised an agent to sell some land after the agent informed the vendor that he knew of a purchaser. A contract with a purchaser was entered into which nominated the agent as the vendor’s agent. Subsequently, a portion of the land subject to the contract of sale was compulsorily acquired by the council, and the vendor then entered into a second contract of sale for the remaining land with the same purchaser. In the subsequent contract, which had a lower sale price reflective of the smaller parcel of land sold, the agent was not named as the vendor’s agent and the vendor refused to pay commission. The High Court held that commission could be calculated pro rata by applying the commission rate agreed in the first contract to the smaller purchase price.
[35](2001) 202 CLR 351.
In a separate argument based on the identity of the land sold, Moneta submits that, objectively construed, the property described as 61 Racecourse Road, Pakenham in the Authorities includes the 33 King Street Property. This submission is based substantially on documents made available to Messrs Abdou and Papadimitriou at the time the first sale authority was executed, namely the plans of proposed subdivision and the Information Memorandum.
Moneta relies on the fact that PRC subsequently agreed to sell the Racecourse Properties and the 33 King Street Property to TCG. On 25 March 2011 PRC and TCG executed contracts for the sale of the Racecourse Properties (for $37.25 million plus GST) and the 33 King Street Property (for $750,000 plus GST). Moneta submits that the aggregate amount of $38 million plus GST exceeds the threshold of $37,750,000 plus GST and thus commission is payable.
Contrary to the plaintiff’s claims, PRC submits that on an objective analysis of the documents and the surrounding circumstances the description 61 Racecourse Road Pakenham includes only the Racecourse Properties and not the 33 King Street Property.
PRC submits there is no basis upon which the Court could pro rata commission in this case, based on the clearly expressed terms of the commission structure in the authority and the circumstances in which that structure came about. PRC refers to evidence that the fee structure had come about because Mr Papadimitriou had said in early discussions with Mr Hodge that he had a buyer for the Pakenham Racecourse who would pay $37 million, and that he would want a commission of $750,000 if the sale were to execute. Mr Hodge had responded that the price would need to be $37 million plus the commission or $37,750,000, and it was in that context that the sale authority came into existence in the form it did. PRC submits there was no discussion about paying commission on a sale with a purchase price of between $37 million and $37,750,000.
Further, PRC submits that unlike Moneywood, the whole of the Racecourse Properties were sold. PRC submits that in this case it was not just the price that fell below the terms set out in the Authorities, but the sales terms which were also set out in the Authorities were not satisfied. In these circumstances PRC submits that to pro rata the commission would involve rewriting the parties’ bargain.
Applicable principles
The general principles applicable to the interpretation of commercial contracts are conveniently set out in Electricity Generation Corporation v Woodside Energy Ltd:
The meaning of the terms of a commercial contract is to be determined by what a reasonable business person would have understood those terms to mean…[It] will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption ”that the parties…intended to produce a commercial result”. A commercial contract is to be construed so as to avoid it ”making commercial nonsense or working commercial inconvenience”.[36]
[36](2014) 251 CLR 640, 656–657 [35] (citations omitted).
Analysis
Whilst I am satisfied that Messrs Papadimitriou and Abdou introduced TCG as a prospective purchaser and that the contracts for the sale of the Racecourse Properties and the 33 King Street Property were concluded partly as a consequence of the efforts of those individuals, it does not follow in this case that commission is payable.
First, the sale price for the Racecourse Properties was below the threshold for entitlement to commission agreed by the parties. Each authority states that:
‘The agent is entitled to $750,000 if the property is sold at $37,750,000’ and for ‘anything above that, the agent is entitled to 50% plus GST’.
The parties made no provision to pay commission for a sale price below $37,750,000. A fixed amount of $750,000 was payable if the property was sold for $37,750,000, with commission at a rate of 50% specified for amounts in excess of that sum.
The worked example in each authority under the heading ‘Dollar Amount of Estimated Commission’ is $825,000 including GST of $75,000 if sold at a price of $37,750,000, reflecting the fixed amount of $750,000 plus GST of $75,000.
A question arises whether a term should be implied that commission is payable for a sale price below $37,750,000. Ordinarily, it would be an implied term of an agreement between a real estate agent and a vendor that if the agent is the effective cause of the sale, the agent is entitled to commission, even if the final contract is significantly different from that originally contemplated.[37] But this is no ordinary case.
[37]Moneywood (2001) 202 CLR 351, 360 [28] (McHugh J); L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52, 59 (Barwick CJ), 83 (Jacobs J); Lord and Another v Trippe and Another (1977) 14 ALR 129, 134–135 (Barwick CJ).
In this case, the commercial purpose and object of the transaction can only be properly understood by examining the genesis of the transaction between Messrs Papadimitriou and Abdou and PRC. At the time of the initial introduction of Mr Papadimitriou to Mr Hodge in December 2010, the Racecourse Properties had been on the market for many months, but PRC had been unable to find a purchaser, despite the best efforts of the appointed agent, CB Richard Ellis. Substantial marketing expenses had already been incurred which included the preparation of the Information Memorandum.
Mr Abdou gave evidence that in the meetings he attended with Mr Hodge, Mr Hodge was not very responsive, and he and Mr Papadimitriou had to visit him three or four times before they convinced him to give them an authority through the Carrum Downs agency of Ray White Real Estate Agents.
Mr Abdou gave evidence that he and Mr Papadimitriou approached PRC with ‘a set price of $37 mill, that jumped to $37.750’ and that an agreement was reached that if the property was sold for $37.75 mill they would receive a commission of $750,000 and if it was sold for a price above that, they would receive 50% of whatever amount exceeded $37.750.[38]
[38]T 148–149.2, T 221.23–.27.
There was no other discussion about commission and, in particular, no discussion about what the position would be in terms of the payment of commission if the property sold for less than $37.75 million.
Mr Papadimitriou did not give evidence for either party. Mr Hodge’s evidence was consistent with Mr Abdou’s. Mr Hodge gave evidence that he was quite cynical of the proposition being put that the racecourse was worth such a large amount, having thoroughly tested the market in the preceding months; and that when Mr Papadimitriou made it known that he would want a commission of $750,000 if the sale would ‘execute’, then Mr Hodge stated that the price would need to be $37,750,000 and this was accepted by Mr Papadimitriou.[39]
[39]T 301.1–.26, T 330.13–.18.
Though there is no significant conflict in the evidence I am satisfied with the veracity and accuracy of Mr Hodge’s evidence, in particular his evidence that Mr Papadimitriou initiated the first contact, arriving at Mr Hodge’s office without an appointment and without Mr Abdou being present.
Neither Mr Papadimitriou nor Mr Abdou introduced themselves to PRC as real estate agents, rather as employees or representatives of Search Pty Ltd. Each party understood it would be necessary to appoint a licensed real estate agent if any commission were to be paid.
PRC was therefore dealing with an unsolicited approach from unknown individuals who were not real estate agents, who were given an authority on the basis of their representation that they had a buyer who would pay an amount well in excess of the market price.
When the licensed real estate agent was about to be engaged, PRC insisted that the required conditions of sale be set out in the agent’s authority. These conditions had been derived from the Information Memorandum. In addition, PRC’s conditions included a term that the sale was conditional on the purchaser being acceptable to the vendor’s bankers.
In essence, it was necessary for PRC to ensure that any sale of the Pakenham Racecourse would occur within a timeframe that enabled it to maintain operations (hence the requirement for a leaseback), and transfer operations to the new site within a reasonable time and to minimise the risk of the purchaser not being financially robust enough to complete the transaction.
It is common ground that the parties did not have any discussions about the prospect of commission if the sale price was less than $37,750,000. It is unsurprising in this case as neither of the parties contemplated that prospect; the discussions had been premised on the basis that there was an existing buyer that would pay the amount discussed.
Relevantly, no commission rate was agreed, only a fixed amount if the price of $37,750,000 was obtained. A commission rate applied only if a higher purchase price was achieved.
In my view, the parties are stuck with their bargain. The Court should not speculate upon a fixed amount which might be thought to be appropriate in circumstances where a contract was entered into –
(a)for a lesser sum; and
(b)on terms which did not meet the terms specified in condition 1 on page 9 of the authority; and
(c)on terms which were not acceptable to the vendor’s banker as required by term 2 on page 9 of the authority.
The case is quite unlike Moneywood, where it was possible to apply the agreed commission rate to make allowance for the reduced land area sold. In this case, the sale price was less than the minimum sale price at which commission was payable, in line with what had been agreed.
Was there a Binding Offer and therefore a Sale within the meaning of the Authorities?
This ground can be determined by reference to the definition of ‘Binding Offer’ and ‘Sale’ in the Authorities.
Clause 1.4 of the General Conditions provides that a ‘Binding Offer’ is an offer on the terms set out in the Particulars of Appointment which, if obtained in compliance with the Appointment, would (or does) result in a contract enforceable against the Purchaser.
Clause 1.8 provides that ‘Sale’ is the result of obtaining a Binding Offer and ‘Sell’ and ‘Sold’ have corresponding meanings in the same situations. It follows from these definitions that there can be no Sale within the meaning of the Authorities unless a Binding Offer has been obtained.
In this case, the earliest point at which a Binding Offer may have been obtained was on 22 March 2011, when the parties reached agreement on each of the 21 suggested amendments, including an agreement that the 33 King Street Property would be sold and that this sale would be by way of a separate contract. Alternatively, a Binding Offer might have been obtained on 25 March 2011 when PRC and TCG executed contracts for the sale of the Racecourse Properties for $37.25 million plus GST, and the 33 King Street Property for $750,000 plus GST.
At or about those times, there must have been an offer which was capable of acceptance. For the purposes of the Authorities, a Binding Offer must be an offer on the terms set out in the Particulars of Appointment. In this case, the Particulars of Appointment specify the ‘Vendor’s Authorised Price’ as $37,000,000, payable as per page 9. Page 9, which was annexed to each of the Authorities,[40] states:
[40]CB 147, 162, 208, 242.
The terms of the sale will be:
1)
·Ten percent (10%) deposit on signing of Contract of Sale
·Four (4) equal payments commencing 30 June 2011 at six (6) monthly intervals, each of twenty-five percent (25%) of the balance of the price
·The transfer of Title at the first payment by the purchaser, on receipt by the Club of thirty-two point five percent (32.5%) of the price
·Leaseback to the Club under the following terms and conditions
Lease Term
Eighteen (18) months transfer of title
Lease Expiration
Upon receipt of the full purchase price
Rental
$1 per annum
Outgoings
Payable by the Club
2) The sale is conditional on the purchaser being accepted to [sic] the Vendors Bankers.[41]
[41]CB 147, 162, 208, 242.
The terms of the contract with TCG for the Racecourse Properties provided for a deposit of 7.5%, one third of which was to be paid on signing, one third six months later, and the final third 12 months later. A further 40% of the purchase price was payable 24 months after signing, and the balance was due three years and three months after signing. Clearly, these terms are significantly different to the payment terms in clause 1.[42] The Authorities contemplated a 10% deposit on signing of the contract.
[42]Contract of Sale Pakenham Racecourse dated 25 March 2011, CB 497.
Similarly, the payment of the balance of the purchase price was payable over three and a half years,[43] whereas the final instalment payment contemplated by the sale terms specified in the Authorities was to be made on 31 December 2012 (i.e. 18 months earlier).
[43]CB 497.
The difference in nett present value was a significant issue for PRC, as it amounted to a difference of more than $3 million on a nett present value basis.[44]
[44]CB 234.
Each authority included a term that stated ‘[t]he Sale is conditional on the purchaser being accepted to the Vendor’s Bankers’.[45] The Racecourse Properties contract contained a similar provision which provided that approval of the form of the contract, together with the transactions contemplated by the contract was to be given by the Vendor’s Mortgagee (which was Westpac Banking Corporation).[46] On 19 April 2011, Westpac informed PRC that the risks associated with non-completion of the Racecourse Properties contract were not acceptable to the Bank. Despite further financing attempts by TCG, these attempts proved unsuccessful.
[45]CB 147, 162, 208, 242.
[46]CB 530.
PRC submits that the condition in the Authorities that the purchaser be acceptable to PRC’s Bankers was for the benefit of PRC and was not waived by PRC. Despite the efforts of each party, the condition was never met. I accept this submission. The contemporaneous correspondence between the parties unequivocally shows that term 2 on page 9 of the Authorities was not satisfied.
It follows in the circumstances that there was no Binding Offer under clause 1.4 and therefore no Sale under 1.18. In the absence of a Sale, there is no entitlement to commission.
Was there a Sale to a person introduced to the Racecourse Properties by CDRE either before or during any Exclusive Authority Period?
This ground relates to sub-paragraphs (iii) and (iv) of Item 1, ‘Agent’s Entitlement to Commission’, in each Authority. The subparagraphs relevantly state:
The Agent will endeavour to sell the Property in consideration for which the Vendor agrees to pay the Agent’s Commission on the terms of this Authority if the Property is sold …
(iii)to a person introduced to the Property by the Agent before the Vendor signed this appointment; or
(iv)within 120 days after the expiration of the Exclusive Authority Period for the Price to a person introduced to the Property by the Agent within the Exclusive Authority Period and to whom as a result of the introduction the Property is sold.
…
The Agent’s entitlement to commission under Item 1(iii) and (iv) arises, among other things, if the Property is sold to a person introduced to the Property by the Agent. In this case, the unchallenged evidence of Mr Hodge was that Mr Papadimitriou introduced himself as someone from Search Pty Ltd and presented a business card that indicated that he worked for a company called Search Group Pty Ltd.[47]
[47]Mr Hodge was unsure whether the company name was Search or Search Group.
Mr Abdou gave evidence that he was the managing director of a company called Search Property Group for whom Mr Papadimitriou worked. Mr Abdou said that it was Mr Papadimitriou who had a relationship with the principal of TCG, Mr Corcoris. It is likely, in my view, that Mr Papadimitriou introduced Mr Corcoris to the Racecourse Properties at about the time Mr Papadimitriou met with Mr Hodge and advised that he had a buyer for the Pakenham Racecourse.
An agent’s representative is a statutory term regulated under the Estate Agents Act. An agent’s representative cannot perform any functions of an estate agent unless authorised to do so in writing.[48] There is no evidence that Mr Papadimitriou (or Mr Abdou) were ever so authorised. Accordingly, I cannot be satisfied that Mr Papadimitriou or Mr Abdou were agent’s representatives for the purposes of the Estate Agents Act.
[48]Section 47(1) Estate Agents Act.
Further, Mr Papadimitriou was not called to give evidence by Moneta. It follows there is no evidence that Mr Papadimitriou told Mr Corcoris that he was acting on behalf of CDRE at the time he introduced the Property to Mr Corcoris. Mr Corcoris was not called to give evidence on behalf of Moneta. Accordingly, there is no evidence from Mr Corcoris that, at the time he was introduced to the Property, Mr Papadimitriou was doing so on behalf of CDRE.
On the contrary, the evidence as a whole supports the conclusion that Mr Papadimitriou and Mr Abdou were acting on behalf of either Search Pty Ltd, Search Group or Search Property Group, and not on behalf of CDRE, when they introduced TCG to the Racecourse Properties.
Other than the first sale authority, the Authorities contained a ‘Notice of Commission Sharing’ which disclosed that the agent’s commission would be shared with someone ‘other than a licensed estate agent or an agent’s representative employed by the agent, or a licensed agent who is in partnership with the agent’. In each case the Notice discloses that commission was to be shared with Mr Abdou. In each case Mr Carroll of CDRE signed and dated the Notice of Commission Sharing. In the absence of any convincing evidence to the contrary, I accept that is an accurate characterisation of Mr Abdou’s role at the relevant time.
Mr Abdou conceded that he never had anything in writing from CDRE authorising him or any of his companies to represent Ray White or to perform any functions of a real estate agent on behalf of Ray White and that he did have a right to share agent’s commission by arrangement between himself and Mr Carroll, reflected in the Notice of Commission Sharing, in three out of the four Authorities.
For the foregoing reasons, I am not satisfied that there was any Sale to a person introduced to the Racecourse Properties by the agent, CDRE. Accordingly, there is no entitlement to commission arising pursuant to paragraphs (iii) or (iv) of Item 1 of each relevant authority.
Does the exclusion in Item 1, Agent’s Entitlement to Commission, apply?
Any entitlement to commission under Item 1(iii) or (iv) in each of the Authorities is negated where the exclusion in Item 1 applies. This can be dealt with briefly in light of the findings that Moneta has no entitlement to commission. Nevertheless, for completeness, the exclusion reads relevantly as follows:
Items … (iii) and (iv) shall not apply where the Vendor has incurred a liability to pay Agent’s Commission under any Exclusive Agency Agreement signed by the Vendor with another Agent after the expiration of the Exclusive Authority Period.[49]
[49]See, for example, exclusive sale authority dated 23 February 2011, Item 1, CB 237.
On the unchallenged evidence in this case, PRC incurred a liability to pay commission to another real estate agent with respect to the sale in May 2012 of the Racecourse Properties and the 33 King Street Property. Accordingly, PRC submits that if CDRE was entitled to commission (which PRC denies), the exclusion applies.
In my view, the exclusion engages where a vendor has incurred a liability to pay commission under an exclusive agency agreement signed by the vendor with the second agent after the expiration of the ‘Exclusive Authority Period’ with the first agent. The obvious purpose of the exclusion is to prevent a vendor from having to pay two amounts of commission in respect of the sale of the same land. Moneta submits that, properly construed, the Authority provides that a liability for commission may arise in the event of a Sale within 120 days after the conclusion of the agent’s Period of Exclusivity ‘unless within that time PRC incurs a liability under an Exclusive Authority with another Agent that was signed after the expiration of the Exclusive Period with the Agent’.
I do not accept this construction. The words of the exclusion do not contain the words within that time, nor should they be implied. There are two elements to the exclusion: (1) the Vendor must have incurred a liability to pay agent’s commission under an Exclusive Agency Agreement with another agent; and (2) that Exclusive Agency Agreement must have been signed after the expiration of the Exclusive Authority Period with the incumbent agent. There is no further requirement and, in particular, no other temporal restriction.
On the facts of this case, PRC incurred a liability to pay agent’s commission under an Exclusive Agency Agreement with Gerard Collins Real Estate Pty Ltd.[50] The Exclusive Agency Agreement with Gerard Collins Real Estate Pty Ltd was dated 15 May 2012. The fourth exclusive sale authority with CDRE expired 14 days from 23 February 2011, or on 9 March 2011. The Exclusive Agency Agreement signed by PRC with the other agent was signed more than 12 months after the expiration of the Exclusive Authority Period of CDRE. Had CDRE been entitled to commission under Item 1(iii), (iv), the exclusion would apply.
[50]CB 645.
Has PRC made any admission of indebtedness for commission?
Moneta alleges that PRC admitted it was liable to pay CDRE commission of at least $875,000 in respect of the sale transaction(s). Moneta relies on a purported acknowledgement by email exchange on 3 March 2011 following a telephone call between Mr Carroll of CDRE and Mr Hodge of PRC on that day.
Mr Hodge gave evidence that he sent a letter by facsimile transmission setting out a number of points of agreement and disagreement to proposed amendments to the sale transaction following a meeting of the board of the PRC which he advised he had met the previous evening and had resolved to agree or disagree to various proposed amendments. At point 5 of the communication, Mr Hodge wrote:
The commission payable (and terms) to the agent must be agreed, prior to the amended contract being provided. I will send a separate email on this matter to you. …[51]
[51]Facsimile transmission dated 1 March 2011 from Michael Hodge to ‘John’, CB 265.
Asked why he had written the paragraph about commission terms having to be agreed prior to an amended contract being provided, Mr Hodge said:
Because the terms of the sale had changed dramatically, and the value or the amount of money that the Pakenham Race Club was going to receive for the sale of the Pakenham Racecourse had reduced significantly, and therefore I considered that as a consequence of that it was different – very different to the terms that were in the authority, and therefore warranted and justified a renegotiation.
In response to that communication, Mr Hodge received an email from the email address of David Carroll of CDRE.[52] This email was from ‘John’. It emerged that Mr Papadimitriou was using Mr Carroll’s email address for correspondence. Mr Papadimitriou was clearly the author of the email. In this email, Mr Papadimitriou asserted that:
This finally concludes that all your conditions have been met and from our side all our obligations have been met also.
In question 5 Michael you state, Quote: The commission payable (and Terms) to the agent must be agreed, prior to the amended contract being provided. The commission was agreed back in January and we have an REIV sale authority agreement which states that fact. …[53]
[52]Email from David Carroll to Michael Hodge dated 1 March 2011, 12.41 pm, CB 269.
[53]Email from David Carroll (John Papadimitriou) to Michael Hodge dated 1 March 2011, 12.41 pm, CB 269.
Later that day in response, Mr Hodge sent an email to Mr Carroll and to Mr Papadimitriou in which Mr Hodge advised:
You have done a sensational job and congratulations on the result thus far. You have indeed met our revised terms but strictly speaking the terms of our agreement and sale authority were not met. In actual fact we are about $2mill short when you Net present value the difference. The $875,000 commission was on the basis of delivering the terms set out in the authority, and that reflects the fact that we would be getting $2mill more than we actually are in today’s money. It is the basis as to why we agreed to this size of commission. Given we are $2mill worse off on due to the revised terms, it would only naturally follow, that we should review the commission.
We should discuss further.[54]
[54]Email from Michael Hodge to David Carroll and John Papadimitriou dated 1 March 2011, 5.47 pm, CB 281A.
On 3 March 2011, Mr Carroll and Mr Hodge had a discussion by telephone on the subject of commission. Following the telephone call, Mr Hodge sent an email to Mr Carroll. Relevantly, the email states:
As discussed and agreed this morning, could I please have a signed authority or letter that confirms that Commission as follows.
$875,000 payable as follows.
60% on or before the contract date
20% on or before six months after the contract date
…
Payable to Malleson’s as per 4.1 of the Contract of sale,[55]
[55]Email from Michael Hodge to David Carroll dated 3 March 2011, 12.50 pm, CB 285.
On 3 March 2011, Mr Hodge received a letter dated 3 March 2011 from CDRE stating that CDRE agreed to the $875,000 amount and the proportions, but saying nothing about clause 4.1 of the Racecourse Properties contract. Mr Hodge gave the following evidence about this letter:
Well, it’s incomplete and it doesn’t represent the terms of the agreement or do what I asked to be done. … I regard it as unacceptable so in that instance I sent it to my solicitors Mallesons. … I instructed Mallesons to write to David Carroll and properly articulate and encapsulate what are all of the conditions applicable to the payment of the commission, if and when a commission becomes payable and due.
By letter dated 9 March 2011, Mallesons Stephen Jacques (‘Mallesons’) wrote to Mr Carroll and advised that an aggregate commission of $875,000 had been agreed and would be payable in instalments at various dates and on various conditions. These conditions included the contract ‘going unconditional’ according to its terms and conditions relating to payment by the purchaser of the instalment deposits, and the release of such deposit instalments in accordance with procedures set out in s 27 of the Sale of Land Act 1962 (Vic).[56]
[56]Letter from Mallesons Stephen Jacques to David Carroll dated 9 March 2011, CB 363.
Considering the correspondence as a whole, particularly having regard to the fact that the contract had yet to be signed, it is clear the parties were agreeing on how and when commission would be paid if commission became payable.
Mr Carroll confirmed that the letter from Mr Ericson of Mallesons to Mr Carroll dated 9 March 2011 reflected what had been agreed.[57]
[57]T 260.21–.31 – T 261.1–.9.
Payment of any commission was to be conditional on the Racecourse Properties contract ‘going unconditional in accordance with its terms’. The TCG contracts did not go unconditional according to their terms. They always remained subject to the condition subsequent requiring the approval of the Vendor’s banker, which reflected term 2 on page 9 of each of the Authorities, and which made the sale(s) conditional on the purchase being accepted by the Vendor’s bankers.[58] This condition was never satisfied.
[58]Racecourse Properties contract, clause 16.1, CB 530; 33 King St Property contract, clause 15.1, CB 578. Exclusive sale authority condition as per page 9, paragraph number [2], CB 242.
In the circumstances it is simply too far-fetched to contemplate that a reasonable business person in the position of PRC would have acknowledged liability for the payment of commission before any contract of sale had been executed and before its bankers had given approval. I do not accept that PRC acknowledged any liability to pay CDRE commission.
In my view, this ground has no merit.
Conclusion
For the foregoing reasons, I have concluded that PRC is not liable to pay commission to Moneta.
Accordingly, the proceeding must be dismissed.
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