Moneywood Pty Ltd v Salamon Nominees Pty Ltd

[2000] HCATrans 286

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B22 of 2000

B e t w e e n -

MONEYWOOD PTY LTD

Appellant

and

SALAMON NOMINEES PTY LTD

Respondent

GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 21 JUNE 2000, AT 10.18 AM

(Continued from 20/6/00)

Copyright in the High Court of Australia

GLEESON CJ:   Yes, Mr Keane.

MR KEANE:   Thank you, your Honours.  Your Honours, yesterday some concern was expressed as to quality of the photocopy of the contract which is at page 394 in volume 2 and we hand to the Court seven copies of the exhibit which are more legible.

GLEESON CJ:   Thank you.  Yes, Mr Keane.

MR KEANE:   Your Honours, at the conclusion of proceedings yesterday your Honour Justice Kirby had put to us the difficulty we face in dealing with the current findings of fact in relation to effective cause and I had not responded to your Honour’s question.  May we do that now?  As to what are said to be the concurrent findings of fact, they are based on somewhat different bases but what our submission, put broadly, is in relation to them is that they are based on a view of the fact of introduction of parties to the first contract as decisive of the issue of the effective cause of the second contract and that is, in our submission, an insufficient analysis in terms of the issue which is the true issue as a matter of law and that issue is whether the agent brought about the contract which was carried into execution and it is not simply a question of was there an introduction and did a contract between the parties ultimately settle.

CALLINAN J:   I did not think Justice McPherson analysed it in that way.  I thought he had regard to other facts.

MR KEANE:   Your Honour, his Honour, in our respectful submission, does that.  If your Honours look at page 834 of the record your Honours will see in paragraph 9 there is the reference to:

On appeal, the defendant challenged the finding at trial that the plaintiff was the effective cause of the sale to BMD under the second contract.  The submission stressed that the judge had found that there was always a “good possibility” that the original contract would not proceed to completion through no fault of the parties because of public interest in the koala habitat.  BMD was aware of the koala problem before it entered into the original contract –

and this is the important part, your Honours, in answer to your Honour Justice Callinan’s question –

It does not detract from the fact that the whole of the land was sold, and that the plaintiff was responsible for interesting BMD in buying from the defendant the portion of the land which it ultimately acquired.  Nor is the factual conclusion to that effect undermined by the circumstance that BMD dealt directly with the Council in relation to the second contract, or that it did so on its own re‑evaluation of the project.  The most that this goes to show is that the person whom the plaintiff introduced as purchaser was someone who was determined to acquire the land, or if necessary, only a part of it once it proved impossible to acquire the whole.

So that it is ‑ ‑ ‑

CALLINAN J:   No, but, Mr Keane, lower down on that page his Honour refers – this is what I had in mind – to the two later contracts being “entered into in substitution for the” earlier contract.

MR KEANE:   Well, that is actually – I am sorry, your Honour.  There his Honour is saying in the last two lines:

In the light of that circumstance –

that is to say that the person who was introduced was a person who really wanted to buy –

the fact that the plaintiff played no part in the negotiations leading to the two later contracts, which were entered into in substitution for the original contract, is not of such decisive significance as to compel a conclusion that the judge’s finding on that issue was wrong and should be set aside.

Your Honour, his Honour is, we would submit with the greatest respect, not saying that the subsequent contracts are the same transaction.  His Honour is recognising that they substitute for the original transaction and his Honour has concluded, in our respectful submission, that having introduced the parties to the original contract, cadit quaestio.

CALLINAN J:   I think, Mr Keane, that is really too narrow a reading of it.  I would also read that in conjunction with what his Honour said at page 829.

MR KEANE:   Page?

CALLINAN J:   Page 829 where he refers to the matter of stamp duties.

MR KEANE:   Quite.

CALLINAN J:   And the discussion that the vendor and the purchaser had and the discussion with the council.

MR KEANE:   Your Honour, as we said yesterday, there is no suggestion that the subsequent contracts came into existence because of a desire either to minimise stamp duty or to defeat the agent’s claim for commission.  They came into existence, as Justice Chesterman finds, the majority view finds, they came into existence because there was a need for a resolution of the impasse, but even in relation to the majority view, while the majority accepted that the first contract was abandoned – and that is the language of his Honour’s finding, to which the Chief Justice agreed – their Honours failed, in our respectful submission, to recognise the significance as a matter of principle that the rearrangement was necessitated because the rearrangement or substitution, whatever you want to call it, was necessitated because the purchaser had not waived, and was therefore not ready and willing to complete the first contract, without the rezoning conditions which, as Justice Chesterman concluded at page 850 paragraph 12, the litigation in relation to which was unlikely to be concluded by 31 October 1995.

As a result, their Honours failed to appreciate that the cases which, in our submission, are analogous to this in terms of the principle to be applied when a conditional contract – the cases we are referring to specifically are cases about finance – where a condition as to finance cannot be satisfied and the contract does not proceed, it goes off, and subsequently, through the agency of some person other than the agent who introduced the parties to the first contract, procures a bargain that is able to proceed to completion, it has been held in two cases – one in the Full Court and one in the Court of Appeal in Queensland – that the agent who introduced the parties to the first contract is not the effective cause of the second because he has failed to bring into existence the contract which is carried through to execution.

Now, this requires us to look at some of the observations in the authorities.  We propose to go to them but may we first take a moment, first of all, to say that, in our respectful submission, there is no good distinction such as the distinction that the majority drew in the last few paragraphs of Justice Chesterman’s judgment between a contract that goes off because the “subject to finance” clause cannot be met and a contract which is not completed because it is subject to rezoning conditions and a party is not willing to waive them.

If the relevant test of effective cause is the procuring of a contract which proceeds to execution or even the procuring of a binding contract with a ready, willing and able purchaser, in the case of finance clauses the purchaser is not able, in the case of these rezoning conditions he is not ready and willing and, in our respectful submission, it is no good distinction to draw in terms of principle between those situations. 

Can we, before we take your Honours to the cases, take your Honours, though, to the findings?  We will do that as briefly as we may, but it is necessary to answer in detail your Honour Justice Kirby’s question from yesterday and it is, after all, at the forefront of our case.  If we can take your Honours to the trial judge’s findings, first of all, to page 790 in volume 4.  Can we draw your Honours’ attention to the first full paragraph of text on the page.  The effect of it is that Mr Murphy:

“identified” the land as “being of some potential for redevelopment” in late 1991 or early 1992 –

and he spoke to Mr Salamon, who was cool about listing it.  Next is 792, which is his Honour’s actual findings of primary fact in relation to Mr Murphy’s contribution, 792, the first three paragraphs:

he continued to try to sell the land, and eventually arranged a meeting in Melbourne between Mr Alfred Salamon, Mr Steven Salamon and his brother in law, and Mr Brent Hailey who represented a company called BMD Constructions Pty Ltd (“BMD”), and a Mr Jim Varitimos…..

Mr Hailey, a director of BMD, gave evidence that he had in fact known of the land prior to Mr Murphy’s reawakening his interest in it.  Another salesman had introduced him to the land some time earlier, and BMD had made an offer ‑ ‑ ‑

GUMMOW J:   Well, are these findings or just a narration of the ‑ ‑ ‑

MR KEANE:   Well, your Honour, they are the primary facts which his Honour finds which the background of what his Honour finds is the necessary finding.  And then, “The parties continued to negotiate”.  Interestingly, there is no suggestion that Mr Murphy said he was involved in those negotiations.  He inquired as to the progress of the negotiation, rather like the good juniors who ask after the case, “How did it go?”  Next at page 808 ‑ and this is a passage which our learned friends drew to your Honours’ attention yesterday ‑ at line 5:

To my mind it is clear that the plaintiff introduced BMD to the land.

Then 817 ‑ ‑ ‑

KIRBY J:   Is that not a pretty important finding?

MR KEANE:   Quite, your Honour, but our complaint is – and, your Honour, we do not contest the finding that there was an introduction and we accept that in many cases, no doubt the vast majority of cases, where all that stands between a vendor and a sale is finding a purchaser, that in those cases the fact of finding the purchaser can be held to be the effective cause of the sale.

KIRBY J:   Say around about 90 per cent of cases.

MR KEANE:   Quite.

KIRBY J:   Well, 95 per cent, in fact.

MR KEANE:   Well, your Honour, we do not need to quibble about the percentages but we do say, with respect, that it is quite different and it is important, where the person who is introduced is not, indeed, ready, willing and able to carry the sale to conclusion, and that is the difference.  It is the difference which, unfortunately, does not rate a mention in the judgments of the primary judge or, with greatest respect, Justice McPherson and, in our respectful submission, the significance of it is not appreciated in the majority judgment.  The other findings we need to take your Honours to in the primary judge’s decision are at 817 lines 1 to 5:

In my view the plaintiff, in introducing BMD to the land, and in the initial work he did, pursuant to (as I have found) his appointment as agent for the defendant, enabled the defendant to enter into a contract on most favourable terms with BMD.  In my view, so much of the benefit of this work “flowed through” to the second contract with BMD that it can be fairly said that Mr Murphy’s work on behalf of the plaintiff can be said to be an effective cause of the defendant’s entering into the second BMD contract.

Now, the majority accepted, it seems to us, with respect, the force of the criticisms we made about an analysis which depends upon trying to identify the flowthrough of benefit, but we will come back to that in a moment. 

Finally, in relation to the primary judge’s findings, at 819 there is the finding in a passage which we have already take your Honours to in answer to your Honour Justice Callinan’s question.  At 819 at the top of the page lines 3 to 6 there is the reference to the:

possibility – almost a probability – that the original contract would not proceed to completion…..because of the public interest in the “Koala habitat”.

Now, we accept that he introduced the parties to the first contract.  On appeal, it is our submission that in the passage to which we have taken your Honours Mr Justice McPherson focuses on introduction and does not advert at all to the significance of what the majority described as the abandonment or which Mr Justice McPherson described as the substitution of the two later contracts for the original one, which was not one in respect of which the purchaser was ready and willing to complete.

In relation to the majority, can we take your Honours to the judgment of Justice Chesterman at 864 where his Honour deals with the trial judge’s findings commencing at paragraph 53.  His Honour sets out the findings which include those we have taken your Honours to.  His Honour records our criticism of the approach that the trial judge had taken on the basis that because on our side we wanted to get “the best bargain” we could and, therefore, attempted to retain such of the benefits of the first contract as we could retain, that is somehow indicative of whether or not the second contracts were procured by this agent:

It says nothing as to the means by which the appellant obtained those benefits.  The appellant, in essence, argues that the effective cause of the sale which resulted from the second contract was not the introduction of BMD to the appellant but the resolution of the difficulties encountered with the Council over rezoning.

Difficulties, which on the ‑ ‑ ‑

GLEESON CJ:   There is a slight difference in the wording of the finding of the trial judge and the wording there.  The trial judge found that the agent was an effective cause and the wording there is that the appellant says the effective cause.  Is that to negate the proposition that there may have been multiple causes?

MR KEANE:   No, your Honour, and we do not seek to say that it is a matter of negating multiple causes.  We accept that it is – no doubt his Honour is accurately paraphrasing our submission there, but the effect of it is to say that one can conclude properly that the effective cause of the sale which was carried through to execution was the resolution of the impasse in relation to the conditions as to rezoning.

GLEESON CJ:   The only effective cause?

MR KEANE:   And the only effective cause.

GUMMOW J:   Where does this expression “effective cause” come from in this area of discourse?  What does it mean?

MR KEANE:   Well, your Honour, in our submission – and we will take your Honours to the authorities on it – it means the person who really brings about the sale which is carried to execution.  Now, your Honour, once again, your Honour says that I have replaced one category of indeterminate reference with another.

GUMMOW J:   Yes.

MR KEANE:   It is though, with respect, a slightly more focused inquiry and to put it that way, as it is put in cases of high authority, is to focus more on the conclusion which is reached, bearing in mind that agents get their commission from the realisation, the proceeds of realisation, than just from a contract that cannot be performed, it is to focus more on the real question.

McHUGH J:   Is its source that case Burchell v Gowrie back in 1911, 1912 Appeal Cases?

MR KEANE:   Your Honour, I am not in a position to say that that is the first time it was used.

McHUGH J:   I used to do a lot of these cases many, many years ago and I just have a recollection that that is the source of it.

MR KEANE:   Certainly, your Honour – and I have to say I am not in a position to take your Honours back to the first time it was used, its origin, but in the English cases – and we have given your Honours one English case, a recent decision in the Court of Appeal, where Lord Justice Nourse is at pains to make the point that when speaks about an introduction in terms of asking the question, “What is the effective cause?”, one must focus on an introduction to a contract which is carried through or is capable of being carried through.

GUMMOW J:   What is the distinction between capacity to be completed and actual completion with production of proceeds out of which commission can be paid?

MR KEANE:   What is the difference?

GUMMOW J:   Yes.  Is capacity enough, even without consummation?

MR KEANE:   Your Honour, there does seem to have been a difference of views.  In L J Hooker v Adams 138 CLR 52 Sir Harry Gibbs expressed the view at page 67 –the passage in Sir Harry Gibbs’ judgment is at the bottom of 66. The relevant passage commences:

When an agent is employed to sell a property, or to find a buyer, he does not earn his commission simply by finding someone who is ready, willing and able to buy, or who offers to buy.

Now, I should pause there, your Honours, because in a moment I will take you back to the Chief Justice’s judgment in which it may be thought there is some tension between those views.

GUMMOW J:   Is that a proposition of law or fact?

McHUGH J:   It is fact, is it not, because certainly in New South Wales in the 1960s and 1970s there were many agency contracts with real estate agencies which enabled the agent to get commission simply upon finding a buyer who was ready, willing and able to sell and, in fact, I think there are one or two reported cases on it.

MR KEANE:   So that the entitlement to commission arises even if the sale is not concluded through no fault of the vendor.

McHUGH J:   Yes.

MR KEANE:   That would be a different position from that which obtains in England.

McHUGH J:   Well, it depends on the terms of the contract.

MR KEANE:   Quite, and no doubt the parties can bargain for a situation in which a particular event occurs and obviates the need for this inquiry.

McHUGH J:   Yes.  I think you will find at least one reported case on such a contract in New South Wales.  I think there may have been more from recollection.

MR KEANE:   To come back to your Honour Justice Gummow’s question, “Is it a question of fact or law?”, it is ‑ ‑ ‑

GUMMOW J:   It just seems to be some evidentiary assumption as to what ordinarily will be taken to be the meaning of what the parties do unless they explain something different.

MR KEANE:   Unless a specific event is nominated as a matter of contract, then if it is just a question of, “Is an agent who is appointed to sell entitled to his commission?”, the answer is – this is the answer, “Has he found someone who is ready, willing and able to buy or who offers to buy?”  Now, his Honour goes on to say that that is not really the view which has prevailed.  The view which has prevailed is rather stricter in terms of what is required of the agent’s performance.  On page 67 his Honour says:

In Victoria and New Zealand it has been held that it is enough in such a case that a binding contract has been entered into as a result of the agency, even though the purchaser subsequently proves unable to complete it.

There is reference to authority:

In Queensland, on the other hand, it has been held that the agent is not entitled to commission unless the purchaser who signed the contract was ready, willing and able to complete it.

And then there is reference to Anderson v Densley:

“Where an agent is employed on commission to sell a property (and non‑completion is not due to the default of the vendor) the commission only becomes payable if the sale is completed . . . If the plaintiff was the effective cause of that sale . . . he would at common law have earned his commission.”

The Court of Appeal of New South Wales has since followed and applied that statement.

Reference to authority:

As at present advised I see no reason to differ from the view expressed in Anderson v Densley, but it is unnecessary to consider that question more fully because in the present case the contract made was actually completed.

GLEESON CJ:   And the view of Anderson v Densley is that the commission is payable out of the proceeds of sale.

MR KEANE:   That is right and ‑ ‑ ‑

McHUGH J:   Scott v Willmore & Randell was the case I was thinking of.  My recollection is that is a judgment of Justice Fullagar when he was a judge in the Supreme Court of Victoria.

MR KEANE:   Yes, your Honours, and Justice McPherson I think in one of the cases to which we will be taking your Honours, expresses a view to the same effect as your Honour the Chief Justice has just put to us, that one looks to a completed sale because it is from the proceeds that the commission is expected to come.

GUMMOW J:   Is this some mercantile custom or what are we talking about?

MR KEANE:   Your Honour, it is a way of identifying what absent – absent a specific contract which makes commission payable on an identified event, if the agency is simply to procure a sale or to find a buyer, then the agent does not earn his commission by finding a buyer who enters into a contract that is subject to finance that he cannot complete because, as Justice McPherson says in Rasmussen & Russo v Gaviglio, buyers who have not got the money to complete are as of little use to vendors as no buyers at all.

It is a way of testing whether that has been done which earns the commission and it is put this way:  the relevant factual inquiry, absent some more specific term as put by Justice Jacobs in Hooker at page 86 in the long paragraph which has come over the page in about the last seven lines, effective cause – actually I do note that his Honour refers to Burchell v Gowrie to the use of the phrases by Lord Atkinson of “effective cause”.  So your Honour Justice McHugh may be right in terms of the providence of that expression:

“Effective cause” means more than simply “cause”.  The inquiry is whether the actions of the agent really brought about the relation of buyer and seller and it is seldom conclusive that there were other events which could each be described as a cause of the ensuing sale.  The factual inquiry is whether a sale is really brought about by the act of the agent.

GUMMOW J:   Well, that does not tell you anything, to my mind.

MR KEANE:   Well, your Honour, the adverbs are at least emphatic.

GUMMOW J:   Yes.

MR KEANE:   Of “really brought about by” and the focus is on the sale,  not simply an agreement which goes off.

GUMMOW J:   Yes.  What is the finding here as to the actual terms of the retainer?  Is there any?

MR KEANE:   There is.  At page 863, and this is in the judgment of the Court of Appeal in the judgment of Justice Chesterman at paragraph 50:

The trial judge found (at R1070‑1) that the appellant appointed the respondent (Mr Murphy in particular) as agent for the purpose of introducing a purchaser to its land.  The exact agreement found by his Honour was that the appellant promised to pay the respondent commission at the rate of two per cent of the purchase price upon the respondent introducing a purchaser who actually completed the transaction.

And the majority, as did the trial judge, proceeded on the footing indicated in the next paragraph:

It follows from this formulation of the respondent’s contractual obligation that, before it was entitled to be paid commission, the sale which in fact occurred was brought about as a result of its agency.

Now, we were taking your Honours ‑ ‑ ‑

GLEESON CJ:   And “sale” in that context is an expression that would normally, consistently with the statements you have just been referring us to in Hooker v Adams, refer to contract and completion of contract.

MR KEANE:   Yes, and at the least, at the least, a contract where the purchaser was ready, willing and able to complete.

GLEESON CJ:   Well, the transfer of land contemporaneously with the payment of the purchase price is referred to as the completion of the sale.

MR KEANE:   Yes.

GUMMOW J:   But once you admit the possibility of the necessity of a specific performance suit, you are getting into a more difficult area, are you not?

MR KEANE:   Yes, your Honour, but we would say here whether the agent must bring about a contract which completes or whether it is sufficient if he brings about a contract under which the purchaser is ready, willing and able to complete, on either view of those two views to which Justice Gibbs refers, on either ‑ ‑ ‑

GUMMOW J:   But ready, willing and able at what time?  Ready, willing but not in fact completing.

MR KEANE:   Yes.

GUMMOW J:   That is the problem I do not quite understand.

MR KEANE:   Well, not willing to complete the contract so as to create a sale, so is not willing to complete a sale.

GLEESON CJ:   Well, another aspect of the same question is, “When is the commission payable?”

MR KEANE:   Interestingly, our learned friends referred your Honours yesterday to that New Zealand decision in Houlahan v Royal Oak and I will not take your Honours to it now but can I just remind your Honours that in the passage to which our learned friends took your Honours, which is in page 522 lines 35 to 50 of the report, the majority in that case held that the commission is payable on the completion of the sale but it is earned when the contract is made.  Now that may, with respect, be rather a somewhat sophisticated view.

GLEESON CJ:   If the commission is payable on completion of the sale and the sale is never completed because, as things turn out, the purchaser is unable to complete it, then the agent does not get the commission.

MR KEANE:   Yes.  Unable or unwilling or not ready.

GLEESON CJ:   But that means then that the temporal aspect of the reference to ability is able to complete at the time required for completion.

MR KEANE:   It falls due, yes.  In accordance with the tenor of the contract.

GUMMOW J:   But time may not be of the essence.

MR KEANE:   It may not be, but at some stage the contract will fall for completion and in this case, happily, as with all standard form contracts in Queensland, time is of the essence.

GLEESON CJ:   But if the agent introduces a purchaser who, at the time of signing the contract is financially able to complete but is then overtaken by a financial disaster and does not complete, the agent does not get commission, does he?

MR KEANE:   That would be our submission because when the contract falls for completion he is not able.

GUMMOW J:   And if the agent wants to ensure a contrary result there has to be specific provision.

MR KEANE:   Yes.  Your Honours, can we just complete taking your Honours to the findings that were made in the judgment of the majority in the Full Court.  We will not delay on this any more than necessary.  We mentioned that his Honour Justice Chesterman accepted the force of the appellant’s criticism of the emphasis placed by the trial judge on the continuity of benefits.  As his Honour recognises, that was simply the result of a lot of work done in one’s ordinary self interest.

His Honour mentions, I might note, in the second dot point about the loss of “$630,000”.  That is taking into account the $570,000 interest that became payable under clause 4 of the first contract upon the extension of time from 31 October 1994 to 31 October 1995 and your Honours will recall our learned friend’s argument that that was not really a real loss because the contract could not have operated to have that result.

Our respectful submission is that the provision in relation to default rate clearly picks up clause 11 being the rate which applies when moneys which are not paid should be paid so that there was indeed an amount of interest, indeed, a major benefit, half a million dollars worth that was foregone in relation to the second contract.

The important point about it, of course, is that so far as the parties are concerned, that is the case but it does rather lie ill in the mouth of the agent who is putting himself forward as having procured this contract for us to point to the fact that substantial benefits under it were entirely unenforceable.

His Honour Justice Chesterman goes on to say at paragraph 55, second sentence, that:

The focus of the inquiry must be whether the relationship of buyer and seller which undoubtedly came into existence between the appellant and BMD was brought about by the respondent’s actions.  The trial judge was, though, right in having regard to the whole of the circumstances relating to both contracts to see whether the second was effectively the result of the agency.

His Honour attributes to us the wish:

to limit scrutiny to…..the second –

no doubt for the reason that that:

investigation reveals little activity by the respondent.  The wider inquiry favoured by the trial judge tends to show that the second contract had its origin not in the Council’s decision to acquire part of the land and the problems and solutions that decision threw up for the completion of the first contract, but in the decision of BMD to buy the whole parcel –

at which point we would interpolate, with emphasis, but not without rezoning conditions.  His Honour goes on to say:

The first contract was rescinded consensually to allow the Council to buy the land it required for its conservations purposes and BMD to acquire the balance with which it could undertake a profitable development.  The initial contract could not proceed because of the Council’s desire to preserve bushland.  The parties to the contract then made the best bargain they could after accommodating the Council’s concern.  What emerges is the persistence of BMD’s interest in acquiring the land and the appellant’s desire to maintain and bring to fruition a relationship of vendor and purchaser with BMD.

The case differs from those relied upon by the appellant, Rasmussen & Russo Pty Ltd v Gaviglio (1982) Qd R 571 and Bradley v Adams (supra).  Those, and cases like them, were instances where the person found by the agent was willing but not able to buy.  When subsequently, by the intervention of another agent, the purchaser’s inability to fund the purchase was overcome, it was held that the first agent was not the effective cause of the sale.  In Bradley, Thomas J said (at 264):

“[T]he factors which stand in the way of a successful claim by the agent are the failure of the initial contract, at which point the agent had failed to produce a ready, willing and able purchaser; the total failure of the agent to play any part in the subsequent negotiations and rearrangements; and the substantial difference between the eventual bargain, both in relation to mechanism and benefits of the respective parties when compared with that which the agent was retained to achieve.”

In this case the first contract did not fail because of the inability of the purchaser to complete.  It was abandoned as a part of a rearrangement allowing the purchaser to complete the amended bargain.

Now there we pause to say, no, it did not fail because of inability.  It failed because of unwillingness.

As Lord v Trippe (1977) 51 ALJR 574 at 579—80 shows, an agent’s work may be regarded as the effective cause of the sale even when significant changes occur between the initial contemplated transaction and that which finally results.

In my opinion, the trial judge was right in concluding that the respondent was the effective cause of the sale and/or that the respondent introduced to the appellant a purchaser who was ready, willing and able to buy its land.

Now, in our respectful submission, that simply fails to appreciate that, in this context, readiness and willingness is of the same relevance as ability.

Now, your Honours, the effect of the negotiations which occurred – we will not take your Honours to the detail of the evidence.  We have summarised it in paragraph 4 of our outline.  Can we just say a couple of things?  The effect of the contract with the Redland Shire Council, or of the arrangements that were made with it, were that in return for payment and in return for the land or a piece of the land, which had necessitated a reconfiguration of the parcels that were actually transferred, they would effectively provide the rezoning conditions to enable the sale.

Your Honours will find that letter – we do not need to take your Honours to it now, but we have not given your Honours reference in our outline.  Your Honours will find that letter of 19 May 1995 at page 539 and your Honours will see the negotiations which ensued and how far apart the parties were and the level of negotiations required to bring them together in the exhibits that are pages 518 to 556.  Your Honours will find a summary of the work that was done in relation to trying to get the impasse resolved in the bills of costs of the lawyers and the surveyors who were engaged in that in volume 4 at pages 730 to 757.

Now, can we say immediately, as I think we have mentioned, that in most cases the introduction of the buyer to a vendor will be an effective cause of the transaction, that is where each side is disposed to accept terms and only knowledge of the other side is lacking.  Here, the contract which followed the introduction was conditional, was not completed, notwithstanding findings that appropriate efforts were made to bring that about and certainly no suggestion of a view to the contrary.  Your Honours will find the relevant passage in the judgment of Justice Chesterman at page 849 in paragraph 7 and over to 850 paragraph 12 in which his Honour concludes:

It is doubtful whether the litigation –

which our side had commenced to try to get these rezoning conditions –

would have been concluded by 31 October, 1995 –

CALLINAN J:   Mr Keane, could I ask you to look at page 408 of volume 2 clause 21.1(e) of the standard conditions?

MR KEANE:   Yes.

CALLINAN J:   I take it there was not, at the date of the contract, a notice of intention to resume.

MR KEANE:   No, there was not.  There had been an indication by the Council.

CALLINAN J:   Was it a notice to treat, within the meaning of that clause?

MR KEANE:   No, we would not suggest that there was, your Honour.  What there had been was an intimation by the Council of its attitude which we have summarised in paragraph 4(b).

CALLINAN J:   But leaving aside that, your client could, no doubt, get out of the contract, as it were, because your client could not get the rezoning approval in respect of the whole of the land.

MR KEANE:   Completion was subject to its availability.  The other side could waive.  The purchaser could waive those conditions.

CALLINAN J:   Yes, quite.  Yes.  But the purchaser would not be able to get out of the contract simply because the Council might decide subsequently to resume the title to the land because, in order for that to happen, there would need to have been, at the date of the contract, a notice to treat or a notice of intention to resume by the local authority.  Is not that right?

MR KEANE:   That would be right but, of course, if the Council had proceeded as a matter of practical reality, if the Council had proceeded to resume, then there would have been no leverage to procure the rezoning conditions.

CALLINAN J:   The answer probably is that there could not be a rezoning of the whole of the land and that is the basis upon which your client ‑ ‑ ‑

MR KEANE:   Quite, and, your Honour, there certainly was not any notice of intention at the time of the contract because the only intimation that we refer your Honour to is in 4(b)(xii) which is at the bottom of page 4 of our submissions where the intimation was made towards the end of 1994 that they would resume if necessary.

CALLINAN J:   An intimation is not good enough for 21.1.

MR KEANE:   No.  Your Honours, if we can take your Honours, briefly, without labouring it, to Rasmussen & Russo v Gaviglio (1982) Qd R 571.

KIRBY J:   What point does this illustrate?

MR KEANE:   Your Honour, this is one of the cases where – and it is rather a strong one, we would submit, with respect, where parties enter into a contract subject to finance.  The purchaser cannot get the finance.  The contract goes off.  Within a couple of days a contract in the same terms is made by another agent who has access to a source of finance and it can complete and the effect of the judgment is that the first agent, who introduced the parties and who, ultimately, concluded the purchase of the same land at the same price made within days, was not an effective cause of the sale.

KIRBY J:   There, there was a second date.  In this case there is no second date.

MR KEANE:   No, there is not, but what there is, your Honour, and, to the extent that it matters, we would say the effective cause was the resolution of the impasse.  All the work in relation to that was our work, with some assistance from BMD, and our surveyors and solicitors.

KIRBY J:   You just completely ignore the introduction?

MR KEANE:   No, your Honour, it is not a matter of completely ignoring it.  It is a matter of accepting or recognising that the introduction has not effected a sale which has proceeded to conclusion.

McHUGH J:   But it is a powerful, and always the most powerful, consideration.  Take what used to be and, no doubt, is still a very common case.  The agent brings along a buyer.  The buyer is unable to complete because the buyer cannot arrange finance.  A month later, two months later, the buyer buys the property, perhaps at a reduced price and on terms, finance which may have even been given by the vendor.  Now, why is not the agent the effective cause of the sale in those circumstances?

MR KEANE:   Because he has not introduced the parties to a contract.  He has not procured a contract that is capable of completion in terms of that which he has done.

McHUGH J:   I think if you studied the cases you will find some reported cases to the effect that the buyer can succeed in those situations and certainly District Court judges in New South Wales used to have no trouble at all in those circumstances finding for the agent.

GLEESON CJ:   Suppose an owner of a parcel of land of 1,000 hectares places it with an agent for sale and the agent introduces a purchaser and the purchaser enters into a contract to buy the 1,000 hectares and then the purchaser is overtaken by some economic misfortune that produces the result that he cannot afford to buy the whole 1,000 hectares but buys 500 hectares for half the original price.  Is the agent entitled to commission?

MR KEANE:   Yes, we would accept that he is in that situation, your Honour.

GLEESON CJ:   What is the difference between that case and this one?

MR KEANE:   Because in that case there is actually the completion of a contract where one can say that – commission only on the half.

GLEESON CJ:   Quite, percentage of the purchase price.  That is the way commission is normally expressed.

MR KEANE:   One can accept that he has really brought about that which has occurred because the failure of the purchaser is partial, not total, and because the failure is partial there is also partial success and partial performance whereas here, we had a purchaser bound only to complete in events which it was entitled to waive and was not ready or willing to.  So, as the majority found, that contract was abandoned or, as Justice McPherson put it, others were substituted for it but what no one found is that it was in the language of Caniffe v Howie and Lord v Trippe and so forth, that really are the same transactions.  They plainly were not.

KIRBY J:   It was scarcely abandoned.  It was kept on foot until it was absolutely completely and utterly sure that the other contract would go ahead.

MR KEANE:   On the footing, your Honour ‑ ‑ ‑

KIRBY J:   I think that is quite a significant fact.

MR KEANE:   Your Honour, explicable by reference to one’s concern that if one has a bird in the hand, albeit rather an unattractive one and one that may not turn out to have much value to it, one does, as a matter of self interest, try to preserve it.

KIRBY J:   Of course.

MR KEANE:   But the fact that one has tried to keep the benefits, both in terms of keeping that contract on foot and negotiating as hard as one can to keep the commercial benefits that would have flowed if it had been completed, does not alter the fact that the transaction which is carried through to completion is truly different and that what enables that transaction to carry through to completion is a very different order of work because it has changed what was a contract which was not relevantly binding to one which was.

KIRBY J:   When your client presented the second form of contract did it say, or through its solicitors say, oh, and by the way because we did all the work on securing this settlement, we have omitted you from the vendor’s agent?

MR KEANE:   They had no contact with the agent.  Your Honour will recall at this stage ‑ ‑ ‑

KIRBY J:   They just went ahead and did it on their own.

MR KEANE:   They did it.  Mr Salamon was asked about it.  It is in volume 1 page 231 lines 1 to 10.  He was asked why the agent was not included in the contract signed in June 1995 and he said that was because they had nothing to do with it.

CALLINAN J:   Mr Keane, I think that is unreal, frankly, in the light of exhibit 14 at page 508, which was the document I was looking for referred to by Justice McPherson, and it seems to be the document in which, or refers to the choice which the vendor gave to the purchaser as to how the Council’s concerns were to be accommodated.  But it was a matter that was going to be left entirely to the purchaser and the purchaser could either have gone ahead and completed the purchase and then submitted to the notice of resumption or sold it to the Council or alternatively, the vendor might have submitted to the Council’s request.  It does make, it seemed to me, to be a transaction that is inescapably, closely tied up with the first contract.

MR KEANE:   Your Honour, in a sense that as a matter of history, everybody was where they were.  I mean, they could have been there whether or not they had signed the initial contract and, having this negotiation, they did know about each other but we accept that they were introduced and interest reawakened.  They had had earlier negotiations which had not gone anywhere.

Your Honour, while it might have been possible to proceed in one of two different ways and while the purchaser would have preferred to go this way, it itself – there is no suggestion anywhere the purchaser was minded to complete without getting the necessary rezoning and it was that problem that was resolved by the wisdom of Salamon, probably a very bad pun, but that is, in fact, what happened when the parcel was cut up, reconfigured and the Council took its 16‑odd hectares for the koala habitat.  However one did it, the rezoning problem had to be solved, because there is not the ghost of a suggestion that BMD were willing to settle without the rezoning conditions being provided.

To come back to your Honour Justice Kirby’s question and your Honour ‑ ‑ ‑

KIRBY J:   This might be a completely irrelevant consideration but I find it hard to get it out of my mind.  It is all sailing away and here is this second contract which, save for the reconfiguration, looks exactly the same, and then you have this just little difference made before action.

MR KEANE:   Your Honour, ordinarily, of course, in the ordinary course of the business, these standard REIQ form contracts are used by agents and the agent prepares it and submits it to the purchaser who signs and then to the vendor who signs and, of course, the situation is that invariably the agent looks after himself in that regard.

KIRBY J:   Yes.

MR KEANE:   Here, because the agent had nothing to do with these negotiations – now, I take your Honour’s point about he had something to do with it at some time before.

KIRBY J:   He certainly did.  He introduced the parties.

MR KEANE:   But, your Honour, at the least can we say this.  At the least, it is possible to have an honest view that, with all the work and expense that are reflected in the documents from pages 730 to 757, he really had nothing to do with what they were doing then.  He had introduced someone who was not willing to settle and in consequence of which the deal could not go ahead and it had to be, the majority say, abandoned.  Justice McPherson says there had to be other arrangements made in substitution for it.

To come back to your Honour Justice McHugh’s question, we wanted to give your Honours four cases, two in Queensland, one in New South Wales and one in England where the introducing agent does not, ipso facto, become entitled to commission on completion.

McHUGH J:   It depends upon the terms of the contract.

MR KEANE:   It does, your Honour, but if the inquiry is, is he the effective cause of the transaction which is carried into completion, then these cases are, in our respectful submission, good analogies and the majority erred in failing to appreciate that they do point to the correct conclusion.

We will do it as briefly as we may.  Rasmussen & Russo was a case where, as we said, within three days of rescinding the first the second is signed. Same land, same price but finance is not made available. The relevant passages that we take your Honours to are in the judgment of the senior puisne judge at page 576B to D and while we have your Honours at that page, at page 577 there is reference to what Justice Stephen said in Hooker.  We simply mention it because that is where his Honour says, well, agents can make a lot of money when they succeed and miss out when they do not, so one does not stretch things.

McHUGH J:   That is really a reference to what Lord Russell of Killowen said in Luxor ‑ ‑ ‑

MR KEANE:   Yes, your Honour, quite.  Then at page 578 where Justice Andrews is citing from an earlier Queensland case, just above the letter E:

The effective cause of the subsequent sale to Mr. Greatorex was, not the introduction, but the provision of finance by the defendant which enabled the sale to take place. 

The contract goes off.  What really brings about the sale is its introduction to a contract or to a source of finance which renders the condition irrelevant.  On page 580C there is Justice McPherson’s observation to the circumstances the:

purchasers without funds to complete the transaction are, although much more numerous and readily discoverable, of almost as little value to a vendor wishing to sell as are no purchasers at all.

Just as useless to a vendor is a purchaser who is obliged to complete only in certain conditions which cannot be achieved, notwithstanding best endeavours.

McHUGH J:   I think, recalling it a bit better, there are differences between the cases where the contract speaks of introducing the buyer and, in those circumstances, even though there may have been some problem about finance, nevertheless that may be sufficient to enable the agent to get home but ordinarily, you read the contract as requiring a willing purchaser and unless the purchaser was willing and able to buy as at the time of the introduction, then it may not be enough that the purchaser does later buy.

MR KEANE:   And your Honour, we think, with respect, rather on that point, or rather apropos of the point your Honour has made, the observation of Justice McPherson at 582 in the first full paragraph on that page at C:

Once it is accepted that the causal connexion with the agency agreement must be traceable not merely as far as the location of finding of the purchaser but also as far as the contract of sale entered into by that person, the respondent’s claim to have earned its commission in the present case encounters what are, in my opinion, insuperable difficulties.

Bradley and Adams (1989) 1 QR 256, your Honours, is the same sort of case: subject to finance, goes off, another contract is made. It is of particular use because at page 260, lines 5 to 10, Justice Connolly put the point shortly and, in our respectful submission, accurately, at line 5:

In my judgment it cannot be contended that the respondents here were an effective cause of the arrangement which was ultimately carried into execution and that is really sufficient to dispose of the appeal.

A couple of pages on, commencing at the bottom of the page, there is the passage from Justice Thomas, which Justice Chesterman referred to and it is, in our respectful submission, significant that his Honour there distinguishes the case before him from the case dealt with by Chief Justice Barwick in his observations to which our learned friends took the Court yesterday.

In New South Wales, not a   case of a contract which has gone off for want of finance, but a case where there was an introduction, but a contract only made when arrangements in relation to finance were proposed and accepted by the vendor.  It is Moran v Hull (1967) 1 NSWR 723, and if we can ask your Honours to read the passage in the judgment of Justice Asprey at page 726, commencing at about line 25:

Whilst it is true that the fact that a property is sold by its owner without reference to the agent and without the agent taking any part in the adjustment of the terms of the contract will not prevent the agent’s work in the appropriate circumstances from being the effective cause of the sale nevertheless, the agent must adduce evidence from which it can be inferred that his intervention brought about the sale in the sense that business men would understand it.

We invite your Honours to read the balance of that passage down to page 50.

GLEESON CJ:   In the passage from the judgment of Chief Justice Barwick in Lord v Trippe quoted in Bradley v Adams there is a proposition to the effect that the right to commission will not be lost because the parties to the contract of sale by mutual arrangement vary its terms.  Is that not precisely this case?

MR KEANE:   In our respectful submission, not, your Honour.  There is a difference between a consensual variation as to price – there is a difference between ‑ ‑ ‑

GLEESON CJ:   But all variations are consensual.  I mean, they may operate under a variety, and an almost infinite variety, of practical circumstances.

MR KEANE:   But this case is a case where there is not a consensual variation agreed ‑ ‑ ‑

GLEESON CJ:   Why not?

MR KEANE:   Well, your Honour, because what brings about the new contract ‑ ‑ ‑

GLEESON CJ:   Which is a consensual arrangement.

MR KEANE:    ‑ ‑ ‑ is the circumstance that the first one cannot be performed according to its terms.

GLEESON CJ:   Well, any number of circumstances might cause the parties to consent to a variation of the arrangement.  But that is what they did here.

MR KEANE:   In our respectful submission, this case is a case where there are inevitably two transactions.  One really should not strain to characterise one as being the same as or part of the other.  The transactions are different; they are different parties, different price and, most importantly, different conditions.

KIRBY J:   Well, you should not strain that way, but you should not strain the other way, and that is the whole point that Chief Justice Barwick was making in Trippe, that the mere fact that there is some variation is not fatal to the suggestion that the agent was the real cause.

MR KEANE:   In the sense that the majority in Houlahan v Royal Oak ‑ ‑ ‑

KIRBY J:   The fact that Justice Aickin dissented indicates that often these matters are at the cusp.  That is why it occurs to me that the primary judge might have been really in the best position to assess the whole thing.  You have to have a pretty good case to take it away from that matter of impression.

MR KEANE:   Yes, your Honour, but, with respect, once you start to try to determine the matter of impression by looking at benefits flowing through, it ceases to be an inquiry worth undertaking, in our respectful submission.

GLEESON CJ:   Why did you say in answer to my question in this case there were different parties?

MR KEANE:   Because, your Honour, the council was never introduced; it was not a party to the first contract.

GLEESON CJ:   I must have misunderstood something.  I thought the commission that was being sought was commission on the sale to BMD Constructions.

MR KEANE:   That is true. 

GLEESON CJ:   So what we are asking, to relate it to the proposition stated by Chief Justice Barwick, we are asking whether the contract that ultimately proceeded to completion involved a variation by mutual arrangement of the contract which was undoubtedly arranged by the agent.

MR KEANE:   What his Honour said was:

That right to commission, in default of some special arrangement, will not be lost because the parties to the contract of sale by mutual agreement vary its terms.

His Honour says that after he has earlier said:

Further, it is to be remembered that the agent’s commission may be regarded as earned when the vendor accepts a purchaser provided by the agent willing to sign a contract to the vendor’s satisfaction.

It is on the basis that the commission has been earned by reason of accepting a purchaser provided by the agent willing to sign a contract.

GLEESON CJ:   Earned, but not yet payable.

MR KEANE:   Well, your Honour, that seems to us, with respect, to be – to draw that distinction, as one does between debitum in praesenti solvendum in futuro, seems to be, with respect, meaningless here.

GLEESON CJ:   I am not sure about that, I would have thought it has earned a great deal in the not uncommon case where the purchaser, as I said, is overtaken by some financial disaster and for that reason cannot compete.  If the commission is a percentage of the purchase price that is paid by the purchaser to the vendor, then the distinction between what the agent has to do to earn the commission and the circumstances under which it is payable, might become significant.

MR KEANE:   It may be that the task is one of the kind - if we are not right in our proposition that one has either earned it or has not, and it does not come and go ‑ ‑ ‑

GLEESON CJ:   There is nothing more the agent has to do, but ‑ ‑ ‑

MR KEANE:   No.  The question is whether he has brought about an arrangement which proceeds to completion.  The task may be the kind of task that Chief Justice Barwick was talking about, on the assumption the commission had been earned, seems to be the kind of task that the majority in the Court of Appeal in Houlahan v Royal Oak were talking about. That is in (1996) 3 NZLR 513. At page 523 in the passage which followed, the passage our learned friends read to your Honours yesterday, at line 3:

It therefore becomes, in this case, a broad factual assessment as to whether the transaction eventually completed between vendors and purchasers was the sale effected through the agent as contemplated between vendors and agent in terms of clause 12.  Was it the sale procured for the vendors by the agent modified in such manner as can be taken to have been contemplated when the earlier agreement was signed, or was it a different sale?

Now, in our respectful submission, it really is stretching things to say that these two sales are different.  One should not stretch things in relation to the actual commercial transaction between vendor and purchaser.

KIRBY J:   You said you had an English case.  Are you saving up the best wine for last?

MR KEANE:   Well, your Honour, I saved it up because it is about this notion of introduction.  It is in a Court of Appeal, it is John D Wood & Co v Dantata (1987) 2 EGLR 23. It is a decision of the Court of Appeal and the relevant judgment is that of Lord Justice Nourse. Here was a case where there were two sets of agents involved in introducing vendor and purchaser. If we can ask your Honours to read the passage which commences halfway between J and K in the right-hand column. His Lordship has first of all accepted there may be two effective causes of a sale, but he says:

In truth I think that there is but a single question to be answered:  which of the two firms introduced the chief to the sale?

The “chief” being the purchaser.

Both language and authority established that that question must be answered by answering this further question:  which of the two firms was the effective cause of the sale?  Here I would gratefully adopt the following statement of the law in Bowstead on Agency 15^th ed, at p 230, to which the learned judge referred.

and his Lordship sets that out.  His Lordship then says:

The difficulties in clarifying the mind on this question are, I think, caused by the familiar meaning of the word “introduction” as the bringing together of two people who have not previously met.  Thus it is natural, when looking at the word in its present context, to attach significance to the first bringing together of the property and the person who ultimately purchases it.  But the full phrase is “the introduction of a purchaser” and I think that that can only mean the introduction of the person who ultimately purchases, not to the property, but to the purchase or, if you look at it from the vendor’s angle, to the sale –

and we emphasise this, of course –

in either case to the transaction which ultimately takes place.  And if you then apply the primary dictionary meaning of “introduction”, you find that what you are looking for is the leading or bringing in of the purchaser to that transaction.  That makes it clear that first acquaintance is not paramount and it explains why the test is expressed by reference to the effective cause of the transaction.

In summary then, it is our submission that the effective cause of the transaction, and the effective cause so as to exclude the introduction of the parties to the first contract, was the resolution of the impasse, and that Rasmussen and Gaviglio and Bradley v Adams are truly analogist to this case and point the way to the result.

In relation to the issue in respect of clause 30, may we state our position briefly.  Firstly, the commercial purpose of clause 30 is to ensure that an agent who has actually effected a sale is not defeated by the want of written appointment.  It is drawn with an eye to section 76(1)(c).  The contract in which clause 30 is found is the transaction in respect of which the commission is claimed and the confirmation in clause 30 is by the vendor under that contract.  That is to say the confirmation is of the appointment of the agent of the vendor.  The reference to the “vendor” means the vendor under the contract, and it means that nonetheless because

“vendor” is a defined term, because it is by reference to the status of the vendor as such under the contract.

The commercial purpose of the clause is met by reading the written confirmation as being with respect to the contract of which it forms part.  That satisfies section 76(1)(c) and it holds no future surprises for the consumer of the agent’s services, it being borne in mind that the onus is on the agent to ensure compliance with section 76(1)(c).  This confirmation is obtained as the end, not the beginning, of a process.  To treat it as applying to subsequent sales is to encourage uncertainty, particularly since it is evidence of an appointment, whether that appointment has expired in its terms if it be oral, or whether it be revoked if it be oral.  It is, in our respectful submission, confirmation of the agency to effect the sale and the later transactions cannot, in our respectful submission, be said to be identifiable as the sale.

The case is a long way away from Canniffe v Howie and Lord v Trippe, and Houlahan v Royal Oak, for that matter.  If one asks are the transactions which ultimately come out, can one say they were in the contemplation of the parties at the beginning?  It is not a case where a decision not to proceed with the contract on the basis of an absence of readiness and willingness leads to different bargains, albeit that as a matter of history, they had a particular starting point.

Your Honours, those are our submissions, unless your Honours have some questions for us.

GLEESON CJ:   Thank you, Mr Keane.  Yes, Mr Sofronoff.

MR SOFRONOFF:   Your Honour, Justice Gummow asked the question:  whence the phrase “an effective cause”.  The early English case of Burchell v Gowrie (1910) AC 614, that your Honour Justice McHugh referred to, contains a passage at the top of page 624 which refers to the expression but as one which emanates from three much earlier English cases, the earliest of which is 1863. The dicta in Burchell v Gowrie do not explain the reason why an agent has to establish that he or she was the effective cause.  But the question was posed and answered, to his own satisfaction, by Justice McPerson in Rasmussen & Russo v Gaviglio (1982) Qd.R. 571. His Honour, after having agreed with the Chief Justice’s conclusion that the agent was not the effective cause of the sale, rather than an effective cause ‑ ‑ ‑

GUMMOW J:   It is causa causans talk, that is what it is.

MR SOFRONOFF:   ---asked the question at 581 ‑ ‑ ‑

GUMMOW J:   I thought that was in general disfavour.

MR SOFRONOFF:   What is that?  Causa causans?

GUMMOW J:   Yes.

MR SOFRONOFF:   Well, your Honour, in  Burchell v Gowrie they use the expression “causa causans”, but in the same paragraph, their Lordships use the expression “real cause”, so they use both the modern accepted analysis and the more rigorous earlier one that is in disfavour.

KIRBY J:   More rigorous, or is it still the same idea but used in a foreign language?

MR SOFRONOFF:   Pardon?

KIRBY J:   Most people do not study Latin any more.

MR SOFRONOFF:   Could I avoid, having studied Latin, not very well, could I avoid that?

KIRBY J:   Yes, I think you can.

MR SOFRONOFF:   Your Honours, at page 581, Justice McPherson, at letter D posed the question to counsel for the respondent agent as to why one has to prove a causal connection.  He accepted the submission that was made to this effect:

When pressed for an explanation of this feature, Mr Jones of counsel for the respondent suggested that the source of the requirement may lie in the presence of the word “find” in the expression “find a purchaser” , or similar expressions, in agreements of this kind.

Upon reflection I consider this suggestion to be correct.  It can hardly be said to have been the intention of the parties to such an agency agreement that the agent should be regarded as having earned his commission simply by locating an individual who, in the event, and quite independently of any further action by the agent, at any time thereafter enters into and completes a contract of sale with the vendor.  What is expected is that at the very least the person found will be identified or referred by the agent to the vendor.

As happened here, of course.

This is sometimes expressed in the agreement by saying that the agent will “introduce” a purchaser or prospective purchaser to the vendor.  Where any such form of expression is used, whether it be “find” or “introduce” a purchaser, the tendency is strong for it to be given the meaning “find and introduce a purchaser able and willing to buy, with whom a binding contract is made”.

Your Honours, the term of the appointment that was found here, which my learned friend took you to at page 863 of volume 4 was, at paragraph 50:

The trial judge found that the appellant appointed the respondent as agent for the purpose of introducing a purchaser to its land.

Now, it is said against us that the reason why a commission is not payable is because the first contract that was entered into could not be performed.  In our submission, there are two reasons why that submission ought not be accepted.  The first is that, in a sense, the first contract is a red herring because what Mr Murphy was engaged to do was to introduce a purchaser who was willing to enter into a contract, and did enter into a contract and who did complete.  That the contract that was entered into which did complete happened to be the second in a series is beside the point, unless it could be demonstrated, or unless Mr Murphy fails to demonstrate, that the causative link between his action of introduction and the second contract is not made out.  In our submission, for the reasons I advanced earlier, yesterday, the appellant ought to succeed as it has done on that ground.

But, secondly, the submission that the first contract could not be completed is itself ill-founded because the contract, which was a very one‑sided document favouring the respondent, was one which obliged the purchaser to accept the current rezoning of the land and which obliged the purchaser to waive the usual protective clauses relating to resumption that Justice Callinan averted to.  If your Honours would go to volume 2, special conditions 3 and 4 at page 395, special condition 3 obliges the purchases to acknowledge:

that it has entered into this Contract…..and agrees to accept the subject land in its unrezoned state and condition as subsisting on the date hereof.  The Purchaser hereby waives any rights it may otherwise have under standard conditions 20 and 21 of this Contract.

Standard condition 21 contains the clause relating to notices of resumption.  Clause 4 then, that attention has been paid to before, your Honours will recall noticing that it provided for conditions of approval for rezoning of the whole of the land to be provided, not rezoning.  Those conditions are not required to be to the satisfaction of the purchaser, they merely have to be communicated.  There is no evidence in this case that the conditions of rezoning which might have been obtained under the first contract, might not have included a condition that would have preserved the koalas’ habitat.  Whether that was acceptable to the purchaser or not is beside the point under the terms of the contract.

Hence, that explains, perhaps, why the purchaser, who was a developer, was willing, and indeed it seems anxious, to purchase part of the land if it could, notwithstanding that the council wished to ‑ ‑ ‑

CALLINAN J:   Mr Sofronoff, there is an authority, is there not, that says it is bad faith for a council to resist a rezoning or a planning application because it wants to acquire land?

MR SOFRONOFF:   Your Honour, I cannot answer that.  Only if the rezoning were refused for an ulterior purpose ‑ ‑ ‑

CALLINAN J:   No, no, the purpose being to try to get the land for as cheap a price as possible on a resumption.  That is the ulterior purpose.

MR SOFRONOFF:   That would be so, your Honour.

CALLINAN J:   Land that, but for such a proposal, would be eminently rezonable, the rezoning cannot be resisted, and this council wants to get it cheaper.

MR SOFRONOFF:   In this case even that would not matter if it arose because the purchaser was stuck with the land in its unrezoned state.  As long as the conditions of rezoning were provided, however onerous they might have been, the purchaser was obliged to complete the contract.  Hence, the purchaser’s representative who gave evidence for our side of the trial, said – if I could give your Honour’s the references:  in volume 1 at pages 120 and 121, after the council’s desire to provide for the koala problem became known, he was asked:

Now did anybody from Salamon Nominees express a preference about which way they wanted the deal to be done, to you?

He said:

No I don’t – I don’t recall that.

Did you have a preference about which way you wanted the deal to be done?

He said:

Certainly.  Yes.

And what way was that?

That was for the Redlands Shire Council to purchase from Salamon Nominees and for us to purchase the balance of the land.

Hence, in our submission, the explanation for Justice Chesterman’s conclusion in his reasons that the contract came to an end because it was mutually rescinded at the end upon settlement of the second pair of contracts.  It was not a contract that was frustrated by anything that the council had done or proposed to be done.  Far less was it a contract which the purchaser was entitled to terminate by reason of anything that had happened.  The passage that I refer to is at paragraph 13 on page 850.

In our submission, the submissions of the respondent are tantamount to seeking to place the test as requiring an agent to prove that in this case it was “the” effective cause of the sale.  All that needs to be established is that it was “an” effective cause of the sale by the introduction of a purchaser, who was a developer, who was so willing to purchase the land that it was willing to purchase part of the land if that was all it could obtain.  The agent was “an” effective cause.  We do not suggest that the principal was not also “an” effective cause by reason of the trouble that was taken to negotiate a solution to what was a practical problem, not a legal problem.

In that connection, your Honours, we refer to the dicta of Chief Justice Barwick in Hooker v Adams (1976) 138 CLR 52 at pages 58 to 59, where his Honour emphasised that it is only necessary for the agent to demonstrate that the agent was partially responsible for the sale and it does not matter that the principal’s own efforts were also a cause of the sale or effectively contributed to it. At the top of page 59, five lines from the top, his Honour said, concluding:

But the essence of the reason for that conclusion is that the person introduced by the agent to the property becomes the purchaser, that is to say, is accepted by the vendor as such, albeit in ignorance of the agent’s relevant activity.  As the law stands, the intending vendor is not bound to accept as the purchaser the person whom the agent has introduced to the property or to that vendor.  Thus it is the acceptance of that person as the purchaser which creates the liability of that vendor to the agent.

If your Honours were to assume that no first contract had been entered into but the purchaser was introduced as one ready, willing and able to buy, but it transpired that a third of the land was to become unavailable for purchase, and in due course, after 12 months of negotiation – let us assume – between principal and vendor, the contract materialised that was ultimately settled. In our submission, it could not have been said that the agent was not “an”

effective cause of that transaction.  The fact that what preceded the transaction which settled was an abortive contract, mutually abandoned by the parties for practical reasons rather than legal ones is, in our submission, beside the point.

Finally, your Honours, the English case,  Wood v Dantata, that my learned friend referred to, and in particular the passage relied upon at page 25 in the right-hand column, contains either evidence of a different approach in England, or at least a different approach adopted in that case to that accepted in this country, in that what his Lordship considered the correct test to be was whether the agent was “the” effective cause of a purchase.  Faced with two agents, just below letter J on the right-hand ‑ ‑ ‑

GUMMOW J:   He got that from Bowstead on Agency.  It did not just come from nowhere.  We are at page 25, letter K, there is an extract from Bowstead.

MR SOFRONOFF:   I am just looking at that, your Honour.

GUMMOW J:   “The” effective cause.  That is where there is two competitors.

MR SOFRONOFF:   Yes, but even here, your Honour, as clause 30 happens to demonstrate, if there are two agents and both are “an” effective cause, then the commission will be payable to them jointly, to be shared between them.

GUMMOW J:   Yes, but that is where special provision has been made.  There was no special provision in this case.

MR SOFRONOFF:   I understand the point your Honour is putting to me.  But it follows then that that case dealing with a situation where it was necessary to demonstrate that one agent of two was “the” effective cause of the sale, is not helpful here.  Those are our submissions, your Honour.

GLEESON CJ:   Thank you, Mr Sofronoff.

MR KEANE:   Your Honours, I think I have a right of reply in relation to the notice of contention, which I can be very brief about.  In relation to the suggestion that BMD was willing to purchase, even a part of the land, the evidence in relation to that we have collected in paragraph 4(b)(xviii), at page 5, and the effect of that is that when it became clear it would only be able to purchase part, it actually reviewed the question of the feasibility of being able to do a development.  So that it was not willing until it did that feasibility.

GLEESON CJ:   Thank you.  We will reserve our decision in this matter and we will adjourn for a short time to reconstitute.

AT 11.49 AM THE MATTER WAS ADJOURNED