Moneywood Pty Ltd v Salamon Nominees Pty Ltd

[2000] HCATrans 275

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 TUESDAY, 20 JUNE 2000, AT 2.36 PM

Copyright in the High Court of Australia

MR W. SOFRONOFF, QC:   May it please the Court, I appear with my learned friend, MS K. BUXTON, for the appellant.  Attending with us, your Honours, is my learned pupil, Dr Greinke.  (instructed by Russell and Company)

MR P.A. KEANE, QC:   May it please the Court, I appear with MR L.D. BOWDEN, for the respondent.  (instructed by Brown & Fowler)

GLEESON CJ:   Yes, Mr Sofronoff.

MR SOFRONOFF:   Your Honours, there are two questions in this appeal.  The first of them is whether a written acknowledgment of the appointment as agent of the appellant in clause 30 of the first contract was sufficient to constitute an appointment in writing under section 76 of the Auctioneers and Agents Act in respect of the sale of land which actually settled and by reason of the notice of contention the second issue is whether the findings below by each of their Honours in the Court of Appeal and by the primary judge that the appellant was an effective cause of the sale was correct or not.

KIRBY J:   That is a loaded weight on the second point.

MR SOFRONOFF:   It is, your Honour.

KIRBY J:   I think we know what you mean.

MR SOFRONOFF:   Could I turn your Honours to the first question and, in order to deal with it and in order also, conveniently, to cover some of the necessary factual ground which arises in respect of the second question, it will be necessary for me to go to some of the evidence.

The learned trial judge, your Honours, found and it is not contested, that there was an oral appointment of the appellant as agent.  That finding, your Honours, will see - it is not necessary to go to it but your Honours will see that at volume 4 page 806 and the trial judge refers to the relevant evidence supporting that finding at pages 791 and 793 in his reasons.

The respondent vendor sold his land to a company called BMD Pty Limited and, equally, there is no doubt that it was the appellant who introduced BMD to the vendor respondent.  That finding is at volume 4 page 808 and it is common ground that the introduction resulted in a contract of sale coming into being.

Could I take your Honours to that contract?  It is in volume 2 at page 394.  Your Honours will see – it may be a bad photocopy in the record but it is dated 31 March 1994.  The vendor’s agent is identified at the top of the page by its business name “L.J. Hooker Land Marketing”.  Nothing turns on that.  The vendor is identified below that in item C as “Salamon Nominees Pty Ltd”.  The purchaser is then identified “BMD Constructions Pty Ltd”.  Each of the terms, “Vendor’s Agent”, “Vendor” and “Purchaser” with a capital initial letter are defined at page 405.  I will need to take your Honours to that in a moment.  Towards the foot of the page the purchase price is identified, “$6,825,000.00” and a deposit of “$270,000.00” is provided for.  Would your Honours notice that in the item for “Default Interest” there is nothing stated.  The date for completion is almost illegible, your Honours, but it is ‑ ‑ ‑

GUMMOW J:   Could we be provided with a proper copy?  Why do we have to pore over this?

MR SOFRONOFF:   I will see that that is done, your Honour.

GUMMOW J:   A fortune has been expended in providing four volumes of appeal book and the vital document, we cannot read it.

MR SOFRONOFF:   I will see that that page is ‑ ‑ ‑

GUMMOW J:   I wonder what solicitors think they are doing half the time.

MR SOFRONOFF:   In any event, your Honours, the date for completion is “on or before the…..expiration of seven calendar months from the date” of the contract which makes it 31 October 1994.  As your Honours will see in a moment, that date was extended pursuant to a power to do that in the contract.

Over the page is clause 4 which is important because it provided that the contract was “conditional upon” the local council communicating its “conditions of approval for rezoning of the whole of the land” the subject of the sale.  Would your Honours note that the condition is not upon the rezoning of the land but upon the receipt from the Council of what are the conditions of approval for rezoning of the land.  Something in due course appears to turn on that.

GUMMOW J:   Where do we see those words?

MR SOFRONOFF:   The fourth and fifth line of clause 4 on page 395, your Honour, and just below halfway somebody has marked the line numbers on the left‑hand side, your Honours will see, so between lines 25 and 30 your Honours will see that there is an election given to the vendor “to extend the time for satisfaction of” that condition for a period of not in excess of “twelve (12) months” and in due course that was done so as to extend the contract by a year.

If your Honours then go over the page, your Honours will see in clause 5 in the second sentence of it the obligation to pay the costs of and “incidental” to the “subdivisional application” is placed upon the purchaser.  Equally in subclause (e), just above clause 5, the obligation to pay the costs “incidental to” the “rezoning” is upon the purchaser.  That becomes important in due course.

If your Honours go to page 399 your Honours will find clause 17 which provides that the deposit that was paid of $270,000 was money to which the vendor was to become absolutely entitled immediately upon “execution” of that.

Now, if your Honours would then go to page 409 your Honours will find the clause around which this case turns at the foot of the right‑hand column.  It is clause 30.  We would ask the Court to note that the word “Vendor” which appears there is with a capital letter “V”.  The words “Vendor’s Agent” are similarly expressed with capital letters and your Honours will find those two terms defined at page 405 of the appeal book which is the front page of “The Standard Conditions of Sale”.  Those terms, “Vendor” and “Vendor’s Agent” are defined by reference to what was filled in in the front of the contract that your Honours have seen.  That is in 1.1(y) and (z) of the definition.

But would your Honours also notice that the word “buyer” is used in clause 30, not “the Purchaser” which is, itself, a defined term.  The word “buyer” is not.  The use, in our submission, of the term “buyer” in contradistinction to the word “Purchaser” with a capital “P” is, in our submission, evidently deliberate, given the use of defined terms elsewhere in the clause and, in our submission, it evidences an intention not to create or confirm an appointment of this sale to this purchaser but to confirm a general agency to find a buyer, whoever that might be.

In its terms, in our submission, it is, in this case, confirmatory of the pre‑existing oral agreement that his Honour found which was in equally generally terms to find a buyer.

KIRBY J:   Would you not have to read clause 30 with the reference to “buyer” in the context in which it appears which is “The Standard Conditions of Sale” but presumably incorporated into the specific agreement between these particular parties?

MR SOFRONOFF:   No, your Honour.

KIRBY J:   Because you are picking up “Vendor” and “Vendor’s Agent” by reference to those persons as so named on 394.  That seems a little curious to say then that you interpret this highly specific arrangement between two particular parties as being an agreement for the whole world.

MR SOFRONOFF:   No, your Honour.  In our submission, what is to be noticed about clause 30 is that it is no part of an agreement between the vendor and purchaser.  It is merely a convenient place to find a unilateral acknowledgment by the vendor of an appointment of the agent to be the agent to find a buyer.  Hence, if one uses the language of Justice McPherson, the draftsperson may have had one eye on section 76 in formulating this clause and in formulating it, in our submission, in perfectly general terms rather than in the more specific terms that one sometimes sees in some of the cases.

KIRBY J:   That seems a very odd thing to do in a document riddled with references to vendor and purchaser.  Why not have some separate form?  I mean, you have to read the words in clause 30 in the context of the entire document and the entire document relates to the vendor and the purchaser nominated.

MR SOFRONOFF:   Your Honour, in our submission, the fact that it is contained in a document elsewhere, in clause 28.4, for example, just above it, the word “Purchaser” is used, is an express indication that what is contemplated by clause 30 is not merely confirmation of a specific appointment to appoint the agent to find this purchaser under this contract but is an opportunity taken to confirm the appointment, if one had not already been executed in writing by the vendor, to confirm the appointment of the “Vendor’s Agent” as agent generally to sell this property.

McHUGH J:   But your construction of clause 30 certainly does not seem to answer the criticisms that you make of the approach of the majority in the Court of Appeal.  Does it not follow that, even on your construction, the agent has no section 76 documentary evidence until the vendor decides to execute this contract with a specified purchaser, that is in relation to BDM, for example?

MR SOFRONOFF:   He does not have a written appointment until the vendor agrees to execute this contract.

McHUGH J:   Then suppose your client, having introduced BDM, the vendor now says, “I’m not going to sign that contract.  I’ll prepare another contract.”  Where are you then in terms of section 76?  You have no protection.

MR SOFRONOFF:   That is correct.

McHUGH J:   Yet you mount a number of arguments in criticism of the Court of Appeal decision on the basis that their view does not give you protection.  I do not know that even your construction gives you any greater protection than the Court of Appeal does.

MR SOFRONOFF:   No.  Your Honour, in our submission, what this clause does, and its purpose, is to ensure that if the vendor signs the contract and, indeed, in our submission, even before the purchaser signs the contract and, indeed, I will go further, even if the purchaser does not sign the contract, this clause 30 will constitute a written acknowledgment by the vendor of the appointment of the agent to find a buyer which would be operative even if this contract were never entered into by the purchaser, much less completed, because of its general terms, to satisfy the requirement of section 76 in the event that the vendor’s agent finds some other purchaser.

McHUGH J:   There is some problem about accepting everything that you put because it is by executing this contract.  It is not executing this document or signing this document.  It is executing this contract which assumes a vendor and a purchaser so you have to have a purchaser.

MR SOFRONOFF:   Your Honour, if I am wrong in the last of the propositions I have put, then I still submit I am correct in all the other propositions I have put because if the contract is executed by both parties then, upon signature by the vendor, the results that I have contended for would, in my submission, follow.

McHUGH J:   I do not think there could be any doubt about that.  I am only speaking for myself, but the question is, how much more can you get out of it?

MR SOFRONOFF:   Your Honour, I only need to get this out of it.  Clause 30 does not, like some of the other clauses in the cases referred to by both sides, specifically, that is to say, expressly refer to this contract as the one in respect of which the confirmation is given.  It speaks in general terms of an appointment “to introduce a buyer”, confirms the appointment of the agent “to introduce a buyer”.

McHUGH J:   But it is by executing this contract.

MR SOFRONOFF:   Yes.  By executing the contract the confirmation is effected but the confirmation is of an appointment in general terms.

McHUGH J:   Why cannot you read it quite naturally as saying the execution of this contract between this vendor and this purchaser confirms the appointment of the agent to introduce a buyer generally?  It is referring to the past but it is still specific to this particular contract.

MR SOFRONOFF:   Because, in fact, the clause does not say that, although it might have done.  One might have seen a clause like the clause in Anderson v Densley which is expressed in terms of the appointment being confirmed in respect of a limited agency to effect this sale.  But nothing in clause 30, hence our argument, nothing in clause 30 contains that limitation.

The only thing that is put against us in order to limit the scope of the operation of clause 30 beyond its general terms is that it is actually found in the contract.  We submit that it is true that in order to find the meaning of the word “Vendor”, the meaning of the word “Vendor’s Agent”, one needs to go to the definition clause that your Honours have seen and then to the front page of the contract and find something contained there but it does not follow, in our submission, that the necessity to incorporate a definition by reference in some fashion overcomes the, in our submission, deliberately general words of clause 30 so that it is limited in its effect to a confirmation of an appointment operating only for the introduction of this buyer for this contract.

Mind you, your Honour, in our submission, even if it was limited in that fashion, we ought to succeed because the contract that was later entered into was such a close sibling of this contract, regarded by the vendor/respondent as a mere substitute for this contract that, in our submission, clause 30 would operate anyway.

McHUGH J:   I know, but that means then you have to throw the whole weight of your argument on the doctrine of effective cause to overcome the problems of this, in effect, being a general authority.  And when you look at the mischief that section 76 is designed to overcome, ought one to construe clause 30 in that light?

I mean, what you say is, “If this contract goes off it doesn’t matter.  Clause 30 is my general authority to introduce a buyer and if I introduce some subsequent buyer, that’s sufficient to get me commission”.  There may be different terms, there may be other people competing, different prices.  You say that does not matter.  If there are any problems it is taken over by the doctrine of effective cause but that turns these issues of commission into evidentiary type ‑ ‑ ‑

MR SOFRONOFF:   No, your Honour.  The problems that your Honour has put to me are some of the problems raised by Justice Chesterman in his reasons.  Now, when your Honour puts to me, as Justice Chesterman put in his reasons, it would relate to any transaction containing any terms, only to terms acceptable to the vendor who must, of necessity, sign a contract and settle it before any claim for commission can arise, only within any time before the vendor elects to terminate the agency, which it could do at any time.

So the problems that are said to stem from an open‑ended agency are simply those that stem from any other open‑ended agency.  In our submission, clause 30 could very comfortably appear in a completely independent document.  One would need to define the term “Vendor”, “Vendor’s Agent” and “the land”, although that could be done, in our submission, by oral evidence because one does not need to have regard to the written evidence required by section 76 to find all the terms of the agency agreement.

So if one were to imagine clause 30 contained in its own document, in our submission, it would operate until revoked as a general authority to find a buyer which, if the vendor accepts that buyer and settles, would result, subject to the agent having been the effective cause, in a right to a commission.

KIRBY J:   But that is a very different thesis that you are propounding if it is in its own document and it is, as it were, signed generally as against the whole world, something along similar lines, then that is a different document to this which requires - it posits first of all that there is a vendor, that by executing this agreement and it is therefore referring back to this particular agreement with this particular named vendor and this particular contract.

It is an odd place, given also that by hypothesis there has been an agreement and the execution of contract which has gone off for some reason, to say then that in this context that represents an agreement for the whole world because once the contract has gone off, it has gone off for a reason, there may be other reasons why you would want to change the agency arrangement and you may want to reconsider your position.

MR SOFRONOFF:   That, your Honour, can arise equally and for the same reasons with an agency in precisely the same language contained in a separate document, that the parties are focused upon a particular transaction coming to fruition.  It fails for some reason and upon failure the vendor wishes to reassess the position.

Nothing that your Honour has put to me, with respect, affects the construction of clause 30 and if one is driven then to say it is only its place in the contract that limits its scope as evidence of an appointment to this very contract, then the question we put rhetorically is what, in its terms or anywhere else in the contract, operates so to limit it and, in our submission, not only is there nothing that limits it but the choice of language in the last four words of the clause “to introduce a buyer” rather than to introduce the vendor, in our submission ‑ ‑ ‑

KIRBY J:   That would be absurd, to introduce the vendor, because you already introduced him.

MR SOFRONOFF:   I am sorry, the purchaser.  I mean the purchaser.

KIRBY J:   It would be absurd to introduce the purchaser because, by hypothesis, you have executed this contract yet it has gone off for some reason.

MR SOFRONOFF:   No, I am sorry, your Honour.  What I meant was, assume no written authority until contract and assume the parties, or at least the vendor – the purchaser has nothing to do with it, of course – assume the vendor was willing to sign an authority but only in a form that limits the right to commission founded upon the written authority to this contract and this purchaser, then the language of the clause would have required the use, in our submission, of the words “to introduce the purchaser”.  Instead, in our submission, it is explicable only as a deliberate choice.  Those who drafted the contract have drafted clause 3 in general terms.

Now, if the vendor at the point of failure of this contract wishes to reassess the position, then one would revoke the authority, as one would with any authority, and the parties would move on from there.  Of course, that would not save the vendor being obliged to pay the commission if, in the events that had happened, the sale, if one takes place later, derives from this contract in the sense that the cases speak of it.

KIRBY J:   Is the word “buyer” used anywhere else in the agreement, or not?

MR SOFRONOFF:   Your Honour, I have not read The Standard Conditions cover to cover.

KIRBY J:   It certainly appears to be a deliberate use of a different word from the word “Purchaser”, with a capital “P” and a small “b” for “buyer”.

MR SOFRONOFF:   And we seek to derive great force from that for our contention.

CALLINAN J:   Mr Sofronoff, could I ask you another question?

MR SOFRONOFF:   Yes.

CALLINAN J:   Page 829 of Justice McPherson says at point 7:

The Council could, of course, have acquired its portion of the land by agreement or compulsory acquisition –

and so on:

The first alternative was chosen by BMD –

And it was a course that the defendant readily agreed to.

MR SOFRONOFF:   Yes.

CALLINAN J:   Now, was there any contest about those matters?

MR SOFRONOFF:   Your Honour, there was a great deal of evidence.  I would like to take the Court to some of that about the course that was chosen and why it was chosen.

CALLINAN J:   Did the trial judge make a finding in relation to those matters?

MR SOFRONOFF:   Yes, he did.

CALLINAN J:   In the terms that Justice McPherson put.

MR SOFRONOFF:   He made a finding that – sorry, I am not sure that he made a finding that the first alternative was chosen by BMD because it involved the reduction of its liability for stamp duty.  In the correspondence the respondent referred in letters to its solicitor upon the wish of BMD to save stamp duty and upon his own wish to ensure that BMD did not escape the existing contract.

CALLINAN J:   That is entirely probative of the matter that Justice McPherson found because it is an admission by the respondent as to the reasons why the arrangement that was adopted was, in fact, adopted.

MR SOFRONOFF:   And, indeed, your Honour, in our submission, the evidence is much stronger than that.  May I go there and return to the question of construction against its background because the evidence, in our submission, leaves one in no doubt.  The documentary evidence, I mean, generated by the vendor, the vendor’s solicitor and the purchaser, leaves one in no doubt that the vendor was scrupulous to ensure that the first contract was maintained in full force and effect to the very end and, indeed, beyond settlement of the second contract so that the vendor could, if necessary, enforce the first contract should that become necessary and he was astute in instructing the vendor’s solicitor who passed on those demands in instructing him to ensure that the terms were varied only in so far as it could be said that the second contract was, to use his language, in the spirit of the first contract.

Could I take your Honours to some of that in order to demonstrate the point?  If your Honours would go to volume 3 at page 511.  To get the time frame into perspective, your Honours, the first contract was March 1994.  It was due to settle no later than October 1994 but in October 1994 it was extended for a further 12 months.

At page 511 we find ourselves in May of the following year and in that letter which Mr Salamon of the vendor wrote to his solicitor, he first points out that the condition, condition 4 that relates to the conditions of approval of rezoning, are about to be met.  He refers to what was then a big issue between the parties that the Council wished to protect some of the land as a koala habitat.  I think it became about 11 hectares out of the 47‑odd that were sold and then, at the foot of the page that I have taken your Honours to, he asks his solicitor for:

advice as to the appropriate strategy…..to ensure –

that a number of things happen.  The first is that “payment” is received “in the shortest possible time” and that the vendor “maintains control”.  He sets out his preliminary thoughts and in the middle of page 512 just below line 15 handwritten in the left‑hand margin, he put to his solicitor that:

the following will need to be effected:

(a) An amendment to the contract –

to reduce the “price” and the “size of the land” and then in different print, evidently for emphasis, he puts:

Salamon Nominees would be extremely reluctant to allow any other amendments to the contract other than those referred to above, as we are anxious to ensure that the purchaser does not escape from any of its other existing obligations under the contract.

One of those, your Honours might recall, was that the burden of paying the costs of all this trouble in getting rezoning approvals was to lie upon the purchaser.

KIRBY J:   Is this an admissible procedure of construction of a contract to be looking at these ‑ ‑ ‑

MR SOFRONOFF:   It does not help us on clause 30, your Honour.  I am putting it to show, in due course, that it is correct, as their Honours below found, to conclude that the agent was the effective cause of the second land sale contract ‑ ‑ ‑

KIRBY J:   Is this on the second point, the notice of contention point?

MR SOFRONOFF:   It is on the second point.  Your Honour, it is also on this point, that if clause 30 is limited in its terms to the contract in which it is found, then the question arises what if the contract in which it is found is slightly varied?  The answer would be, a commission is still earned so long as the variation falls within what one would regard as legitimate bounds.  One would then raise the question, what if instead of varying the contract slightly, one substituted a fresh, identical document for it with that slight variation in it?  In our submission, the same result would ensue.  In our submission, what this train of correspondence shows is that the second contract, but for two important things, reduction in size of the land and commensurate reduction in price, it is the same contract.  It is the means that vendor and purchaser found to deal with the problem that arose with respect to rezoning.

KIRBY J:   There was a third variation, the deletion of your name as the agent for the vendor.

MR SOFRONOFF:   That is right.

KIRBY J:   Quite a significant deletion.

MR SOFRONOFF:   It is.

KIRBY J:   In due course I would like to know how that came about.  Not necessarily now.  You take your own course.

MR SOFRONOFF:   We make the submission that although Salamon Nominees sought to keep the second contract totally within the spirit of the first contract, our submission is they succeeded in doing that only with one exception, and that is the agent was excluded.  In that respect, it is not within the spirit of the first contract.

If you would then go to the advice that the vendor received which you will find beginning at page 515, a few pages over.

CALLINAN J:   How did these get into evidence,…..? 

MR SOFRONOFF: Evidently not, your Honour.

KIRBY J:   These were exhibits below?

MR SOFRONOFF:   Yes.  If your Honours would go to page 516.  At the top of the page, (a), the solicitor writes:

The settlement arrangement which you enter into with Council and BMD will be no doubt subject to the execution of contracts of sale upon satisfactory terms and conditions, and we would also expect that the rescission of the existing Contract with BMD would be subject to a similar condition –

then points out that another contract with the council would need to be entered into.  Clause (d) points out that some of the clauses relating to rezoning will not have to take effect because that has been dealt with by the agreement under which the council will buy a portion of the land and allow the rezoning otherwise.

If your Honours would go to page 519, the vendor at the time had two solicitors, Brown & Fowler, whose letter you have just seen, and Minter Ellison.  At page 519 Minter Ellison, in the second paragraph on that page raise the proposition that the original contract must be kept alive until both new contracts become unconditional.  Thereafter that proposition is continually maintained and life is continually breathed into it.  If your Honours go to page 527, Brown & Fowler writing to their client, the vendor, at the top of the page they are referring to a draft:

You will note that we have provided in Special Condition 15 that the original Contract of Sale remains on foot until completion of this Contract of Sale has been effected.  It occurs to us that you would not wish to lose the benefit of that Contract, even upon execution of this new Contract as there are still certain unlikely events which may take place to frustrate this later Contract -

Over at page 532 they begin the process of making the two contracts, the original and the new one, to BMD “conform”, so that they are each consistent with each other.  At page 532, paragraph 2, they speak about the necessity to recognise the application of the deposit monies, which were substantial under the old contract - $270,000, non-refundable.  If your Honours would go to the foot of the page, paragraph 4, and read that, your Honours will see that care was taken to ensure that although a standard form REIQ contract had changed in the interim period, it had changed in November 1994, the solicitor was advising the client that it was important to keep the first edition contract as the form of contract for the second one, so that the second contract remained as close to the original as possible.  That, as your Honours will see, in due course happened.

If your Honours go to page 534, paragraphs 10 and 11 again repeat the emphasis and use the terms that we rely upon in our contentions.  Your Honours will see in the second sentence in paragraph 10:

We feel that there needs to be a clear inter-relationship between the two contracts so that it cannot be contended that one contract is necessarily contradictory of the terms existing in the other.

Then he advises that it is important to ensure that the date for completion of contract No 2 is a month earlier than the date of completion under contract No 1, so that if something happens with contract No 2, there is still a month in which the vendor can consider enforcing contract No 1.

KIRBY J:   I am sorry, I am still troubled about how one uses this material to construe the agreement.

MR SOFRONOFF:   You cannot use it.  We do not contend you can use it.

KIRBY J:   All of this is on the notice of contention point?

MR SOFRONOFF:   And also the point that even if one were to construe clause 30 ‑ ‑ ‑

KIRBY J:   So you do use it to construe clause ‑ ‑ ‑

MR SOFRONOFF:   No, no, if one were to, for other reasons, construe clause 30 against us, and to conclude that clause 30 relates to confirmation of appointment of the contract under consideration.  This contract, the second contract, is so intertwined with the first contract that it amounts to the same thing.

GUMMOW J:   What do you mean by “the same thing” in legal terms, as a legal proposition?

MR SOFRONOFF:   As a legal proposition, your Honour, we would submit, as was held by Chief Justice McCawley in Canniffe v Howie:

that the transaction so arose out of and was so intimately connected with the agency appointment conferred or evidenced by –

the written document -

that that document constituted “in respect of such transaction” –

to use the statutory language –

an appointment in writing sufficient to satisfy the section.

GUMMOW J:   What is the page reference to Canniffe v Howie?

MR SOFRONOFF:   Page 124, in the middle of the page.  Your Honours, there is a wealth of further references to the interconnection that was sought, and in our submission, obtained, between contract No 1 and contract No 2.  Could I take your Honours, though, to page 573 in which Messrs Brown & Fowler are writing to the solicitor for the purchaser and in the course of dealing with the negotiation of the terms of the new contract, your Honours will see in paragraph 3 on page 573, in the second sentence, the use of the expression that I have mentioned before:

The Purchaser is required to enter into the new Contract in accordance with the spirit of the existing Contract.  Clause 4 of that existing Contract requires the Vendor to provide conditions of approval for re-zoning…..Conditions for re-zoning of the smaller parcel of land now being acquired by your client have been obtained, and we refer you to –

those things, and so on.  At page 577, in writing to his client, the vendor, Mr Brown, in paragraph 3, explains why the contract was extended when it was for a year, the original contract.  It says:

The reason that we have extended the termination date under the pre-existing contract until 28^th February, 1996 is in response to their request for the termination date of the substitute contract to be extended until 31^st December, 1995.  If the substitute contract is terminated, you wish to be in a position to resume your position under the prior contract.

Hence our submission that the two contracts are siblings, one with the other, regarded by the vendor itself as a mere substitution one for the other, and created out of the insistence of the vendor that no changes are to be made other than in accordance with what he called the “spirit” of the first contract.

KIRBY J:   I see the forensic force of all this.  You are laying a trail of the great injustice which the suggestion is made.  I just do not see how one can use these documents to construe two separate written instruments.

MR SOFRONOFF:   I agree, your Honour, with respect, that one cannot use them to construe the written documents, but one can use them to see that if it becomes necessary to consider whether the appellant was an effective cause of the second contract.  One can readily conclude that he was from the fact that the benefit of the first contract was regarded as the touchstone against which to measure ‑ ‑ ‑

KIRBY J:   But that was held in your favour, though, and by everyone, the primary judge, each judge in the Court of Appeal, so you are dealing in‑chief with ‑ ‑ ‑

MR SOFRONOFF:   The second reason, your Honour, is that if, on the construction that we have advanced, the Court is not prepared to go so far as we wish, that clause 30 is a perfectly general appointment, then our alternative position would be that, in any event, the second contract is merely a substitute or an amendment - the mechanism is a new contract, but nothing turns on that, in our submission – for the first contract.  Hence, the clause is operative, even in the limited terms in which the respondents contend to constitute evidence in writing.  Could I take your Honours to the new contract.

KIRBY J:   Is that where you are going to leave us?  Suspended there at page 577?  I mean, how was it that the name of the purchaser was deleted from the ‑ ‑ ‑

MR SOFRONOFF:   Well, your Honour, it was not deleted ‑ ‑ ‑

KIRBY J:   I am sorry, how the name of the vendor’s agent was deleted from the second contract.

MR SOFRONOFF:   It was omitted because, although the appellant kept in touch, as the evidence showed, from time to time, with Mr Salamon, he was not involved – not invited to be involved – and perhaps could not have been of any assistance, it was thought, in the negotiations between the parties that took place leading to the substituted contract.  Hence, if the vendor chose not to write in the vendor’s agent’s name on the front of the second contract, there was little that the appellant could have done about it, not knowing of it, and it was not a matter, one would think, of any interest to the purchaser.

Could I point out one matter that, in our submission, might explain its absence, but it is really the best we can do.  If one does the sums, one finds that the second pair of contracts result in Mr Salamon’s company getting $95,000 less than it would have under the first contract, and the commission is about $96,000.  So it is an equaliser, in that sense.  There is a contention ‑ ‑ ‑

KIRBY J:   Why was that?  Was that because the council would have paid the same price as the commercial price.

MR SOFRONOFF:   Correct.

KIRBY J:   So your theory of the matter is that they hit upon the solution in the vendor’s camp, “We can soon solve that, we will have the new contract, no provision for the agent, no commission, and we will write that off against the koala bears”.

MR SOFRONOFF:   The correspondence shows – I can take your Honour to the reference if necessary – that the council was not prepared to come up to the full price, which left the vendor about, I think it was about $300 or $400 short.  But when one did the division, the parties agreed to share that, about $100 each, and so the vendor’s share came to be, in the end, $95,000.  That happens, so it happens, is within $1,000 or so of the commission that would otherwise have been payable.  There is a contention raised in the ‑ ‑ ‑

KIRBY J:   So effectively you were left, the vendor’s agent was left to pay for the koala bear, or to contribute to it, unwillingly.

MR SOFRONOFF:   Yes.  There is a contention that your Honours will see in the respondent’s outline in paragraph 3(c) that the respondent was worse off by $630,000 and there is an exhibit that is mentioned.  It is accurately summarised in that paragraph of the outline.  The trouble with that ‑ ‑ ‑

GUMMOW J:   What paragraph is it?

MR SOFRONOFF:   Paragraph 3(c), your Honour, at the foot of page 2.  The trouble with that contention is - if I could summarise the effect of what we say and then take your Honours very quickly to the evidence – the trouble is the first contract contained a clause that default interest would be payable if the purchaser failed to pay any amount that was payable on the due date.  Default interest is a defined term on the front of the page, but contained no amount, no rate.  Hence, if one asked the question:  what was the default interest payable, one said nothing, nothing was provided for.

Clause 4, which provided for the costs to be – I am sorry, I should take your Honours to the passage; it is in volume 2 at page 395.  Clause 2 provided what would otherwise have been a very valuable benefit to the vendor, and it is this to which we understand the respondent’s contention to be directed.  At the foot of clause 4 proper, between lines 35 and 40, your Honours will see:

In the event that the period for satisfaction of this clause and the date of completion is extended hereunder, then the Purchaser shall pay interest at the default interest rate on the balance of purchase monies for the period of the extension only.

Hence, if there were a default interest rate provided, then that would have been a very valuable benefit.  There is no default interest provided on the front of the contract in item P, but if one goes to page 407, in order to see the matter completely, clause 11.1 provides that where the purchaser is in default, if the money is not paid then the default rate is payable but if no rate is stated at the contract rate, “contract rate” is a defined term, and there is a contract rate, but however one strings those clauses together they would not have assisted the vendor in trying to enforce clause 4, which is not a provision which regarded the purchaser as being in default under clause 11.1, but as a completely independent provision.  Hence, there is nothing in the respondent’s contention, in our submission.  So the true difference was $95,000 and your Honour Justice Kirby asks me what was the reason for it, all we can say is that we were not involved but one might infer something from that.  But otherwise, that is far as I can answer that question.

KIRBY J:   This is like those old compensation settlements where something was done to ensure that you did not have to pay the social security payment.  Unwillingly the social security used to contribute to the damages.

MR SOFRONOFF:   Yes.

KIRBY J:   That is your theory ‑ ‑ ‑

MR SOFRONOFF:   Well, your Honour, it is not anything one can grasp because one does not know.  If your Honours would go to the new contract, there were two, of course.  The one between Salamon Nominees and the Redland Shire Council is at page 613, at least it begins at page 612 and at page 613 the details are included.  That is in volume 3.  Your Honours will see at page 612 that it is the second edition that is used in that case.  The details are all filled in but nothing is included for the vendor’s agent – not that we complain about that because the Redland Shire Council was not somebody that the appellant introduced.  The sale from the vendor to BMD is a few pages over at page 618.  It is dated 14 June 1995 and it is in the old form.

KIRBY J:   What is the difference between the old and the new form?

MR SOFRONOFF:   There is an apparent difference in the layout of the item schedule that your Honours are looking at at page 618.  But in addition, the standard terms which come with the contract are incorporated by reference to it, are as far as the old terms concerned, found in exhibit 2, which is at volume 2, page 405 and following.  Your Honours went there when I took you to clause 30.  The new terms are in exhibit 4, which are in volume 3, at page 645 and following.  So there are some minor amendments, some important amendments, too, in the standard terms that have been developed by the Real Estate Institute of Queensland and the Queensland Law Society.

GLEESON CJ:   Where do we find the contract in respect of which commission is claimed?

MR SOFRONOFF:   You will find it, your Honour – the contract itself is at page 618 of volume 3 and following.

KIRBY J:   Your client had nothing to do with the drawing up of that document.

MR SOFRONOFF:   No, he did not.

KIRBY J:   It was between relevantly the same parties, but for a smaller consideration.  The commission that you seek is on the smaller consideration.

MR SOFRONOFF:   Yes.

KIRBY J:   And you do not seek any commission on the consideration in relation to the local authority.

MR SOFRONOFF:   No.  Consistently, with the dicta of Sir Garfield Barwick in Anderson v Densley in which his Honour said that if one ‑ ‑ ‑

McHUGH J:   It is not Anderson v Densley, it is L.J. Hooker v Adams.

MR SOFRONOFF:   I am sorry, L.J. Hooker v Adams, in which his Honour referred to the proposition that if a portion of the land is sold the subject of an agency agreement, then a rateable proportion of the commission is payable.

McHUGH J:   Is this the way you put your case:  you say that clause 30 so operated that, read with the particulars of land sold in paragraph H on page 394, it constituted a writing confirming that your client had been appointed to act as real estate agent in respect of the sale of that property, that is confirmation in writing for the purpose of section 76 of the Act, and that is the transaction, in accordance with that New Zealand case of Thorn, all you have to establish is a writing that confirms authority to act as agent and in respect of a specific property.

MR SOFRONOFF:   Yes.

McHUGH J:   The only other question then is whether or not the property subject to the second contract is the result, effectively, of the work you did in introducing the buyer in respect of that original property.

MR SOFRONOFF:   Yes.  Could I then move to some of the cases and deal with them.  Could I deal with the cases, first, briefly ‑ ‑ ‑

GUMMOW J:   Is there any point of construction of the Act we have to attend to, before we get to cases maybe on some other Act?  What about construing this Act?

MR SOFRONOFF:   I am sorry, your Honour, I should do that.  If your Honours go to section 76(1)(c) of the Act.

KIRBY J:   Has this been unaltered since its enactment?

MR SOFRONOFF:   Since 1971, your Honour, yes.  Some identities have been added to it.  I think “motor dealer” has been added, but nothing in no way that affects ‑ ‑ ‑

GUMMOW J:   We need the form in which it took at the time of the events in question?

MR SOFRONOFF:   I am sorry, your Honour, I did not hear.

GUMMOW J:   We need the form of the Act at the relevant time, not at some other time.

MR SOFRONOFF:   This is ‑ ‑ ‑

GUMMOW J:   Because it has to be set out in the judgment and it has to be accurate.

MR SOFRONOFF:   This is the form of the Act at the relevant time, your Honour.  In section 76(1), relevantly, the appellant could not sue for or recover or retain any fees, or commission in respect of any transaction as a real estate agent unless:

(c)  the engagement or appointment to act as auctioneer, real estate agent…..in respect of such transaction is in writing signed by the person to be charged with such…..commission ‑

Justice Chesterman concluded in a passage to which I want to take your Honours now, in volume 4 at page 855, in paragraphs 28 to 30 he construes the clause – I will come back to that in a moment; but what he says in paragraph 31 at page 856 is:

What is required to satisfy section 76, according to Lukin J and the High Court, is a document signed by the principal which evidences the existence of the relationship of principal and agent in respect of the transaction in question.  Condition 30 was inserted by those who drafted the standard form terms to meet that requirement.

Then he refers to  his construction of clause 30 as being transaction specific, as he termed it.  If your Honours would go to page 855, his Honour construes the clause.  In the second line of paragraph 28, he says:

Although general condition 30 is general in its terms –

as we advocate –

it is found in a contract for the sale of a particular parcel of land on particular terms and conditions.  Moreover, the clause operates only to supply a deficiency caused by the absence of specific appointment and it would seem odd that it should operate to constitute written evidence of an agent’s appointment with respect to any sale of any of the vendor’s land on any terms at any time.

McHUGH J:   His Honour seems to have missed the point of section 76 at that stage, has he not, because the big distinction between section 76 and the Statute of Frauds is that under the Statute of Frauds the writing must confirm the terms ‑ ‑ ‑

MR SOFRONOFF:   All the terms.

McHUGH J:   But this section and its New Zealand predecessor only requires you to show authority to act as agent and, two, to identify the specific property, and that is the transaction.  Strange as it may seem, you can prove the terms orally.  One might have thought that in a statute for consumer protection the writing would require the specification of the terms of the condition but you can come along orally and say, “Well, I was entitled to 20 per cent”.  If you are believed, you are believed.  But you do not have to have any writing, as long as you have your confirmation.  But his Honour’s approach there at 855 seems to use it against you, that clause 30 does not specify any particular terms.

MR SOFRONOFF:   I agree with everything that your Honour said, with respect, and history has led us there and it would take a big wrench, in our submission, to construe section 76 and its analogues differently now.

GLEESON CJ:   Section 76 does not profess to state the conditions on which an agent will be entitled to commission, does it?  It assumes the general law.

MR SOFRONOFF:   It assumes an appointment and an entitlement ‑ ‑ ‑

GLEESON CJ:   Yes, and against the background of the general law, it imposes two or three quite limited restrictions.  But if you look at the actual language of 76(1)(c), it assumes the engagement or appointment in respect of the transaction and requires that it be in writing.  If there is no engagement or appointment in respect of the transaction, there is no entitlement commission but not by reason of section 76.

MR SOFRONOFF:   But by the common law.

GLEESON CJ:   Yes.

MR SOFRONOFF:   But what his Honour said at page 854, if your Honours would go there, is that section 76 requires a reference to transactions in some form.  Your Honours will see that in paragraph  25:

An appointment may by its terms refer to a number of specified transactions or to transactions described in general terms or by reference to a defined category.  If there were a sale of property falling within the category or within the general terms then section 76 would be satisfied.

In our submission, your Honours, all that section 76 requires is a writing evidencing the appointment in respect of such transaction ‑ ‑ ‑

McHUGH J:   You would not quarrel with that sentence if the word “specific” was deleted, would you?  That is the sentence at 24.

MR SOFRONOFF:   Paragraph 24, your Honour?

McHUGH J:   Paragraph 24 on 854:

I think it is right that section 76 requires that there be a written appointment of agency in respect of ‑ ‑ ‑

MR SOFRONOFF:   No, I cannot quarrel with it if that word were deleted.

McHUGH J:   Yes.

GLEESON CJ:   In fact, I think “specific” there probably just means “particular”, does it not?

MR SOFRONOFF:   He means “particular”, yes.

KIRBY J:   But it is the addition of that word ‑ ‑ ‑

MR SOFRONOFF:   That causes us grief.

KIRBY J:   - - - which, in your submission, takes his Honour outside the terms of the Act.

MR SOFRONOFF:   Yes, because, as Justice McPherson put it, clause 30 is proleptic in terms, it is anticipatory in terms, and one would expect that an appointment may be perfectly general in the sense that it is, as this one we contend is, an appointment to find a buyer for the property.  Price is a matter for the vendor to satisfy itself of; terms is a matter for the vendor to satisfy itself of; and the commission will not have been earned until the vendor has accepted price and terms and the contract is carried out.

McHUGH J:   Your point is that there need not be any formalities about this.  You can get your writing at any time before verdict.  It might be a letter written by the vendor to his wife.

MR SOFRONOFF:   Yes.

McHUGH J:   If the letter complies with section 76 and you can get your hands on it, you are home and hosed.

MR SOFRONOFF:   Your Honour, could I then seize the opportunity to say, and it might be a general term inserted into a contract which is a form of draft prepared in part by the Real Estate Agents Association, hence our submissions that clause 30 is deliberate in its form in being general.

KIRBY J:   Now, the section says “in respect of such transactions”.  That “such” is a limiting word.  That, presumably, takes you back to the umbrella provision at the beginning of the section.  So, what is the “such” transaction that it is referring to?  For instance, this is self-fulfilling.  If you say such transaction is the second contract, then you are out, whereas if you say such transaction has a broader compass and involves just generally the sale of this particular block of land minus the koala reserve, then you are in.  But normally you would say such transaction is the identical transaction in respect of which the appointment was made, would you not?

MR SOFRONOFF:   No, your Honour.  Here, in our submission, the transaction in respect of which commission is claimed must be one which the agent was authorised to effect - nothing more than that.

GLEESON CJ:   You do not get to this problem at all, do you, unless at common law there is an entitlement to commission?

MR SOFRONOFF:   Yes.

GLEESON CJ:   If there is no entitlement to commission at common law you forget about section 76.

MR SOFRONOFF:   In which case there must be an appointment.

GLEESON CJ:   Exactly.  By hypothesis there is an appointment in respect of a relevant transaction and the only question you are asking yourself is whether the appointment is in writing.

MR SOFRONOFF:   Yes, whether sufficient of it is in writing, as required by 76.

GLEESON CJ:   Yes.

GUMMOW J:   That is what I have been wondering about.  I mean, are they the necessary findings in your favour that, apart from section 76, you would be able to recover?

MR SOFRONOFF:   Yes, your Honour.  There is a finding by the trial judge, not challenged, that the agent was appointed orally.  I have given your Honours the references at the beginning.  There is a finding challenged on appeal now that the agent was the effective cause.  The actual rate of commission was not even left to be implied – that was expressly agreed after some acrimony.  So, all that is left is 76.

CALLINAN J:   The whole Court of Appeal found on the other matters for you.

MR SOFRONOFF:   It did.

CALLINAN J:   Concurrent findings of fact.

GUMMOW J:   What is the mischief that 76 which is designed to deal with?

MR SOFRONOFF:   In one of the cases ‑ ‑ ‑

GUMMOW J:   All of the New Zealand cases suggest it cuts both ways.

MR SOFRONOFF:   That cuts both ways and it is to seek to deal with the mischief of perjury on one hand or the other, perjury as to the existence of the appointment evidently, because the precise terms can be the subject of parole evidence.

KIRBY J:   I am not familiar with the New Zealand case.  Is it important for us to look at it?

MR SOFRONOFF:   I will find it in just ‑ ‑ ‑

KIRBY J:   How did it come about?  Was it out of a Law Reform Report in New Zealand?

MR SOFRONOFF:   No, your Honour, the section in New Zealand dates from the early part of this century.

McHUGH J:   The leading case is Thornes’ Case (1915) NZLR, is it not?

MR SOFRONOFF:   It is, your Honour.  There is a more recent one that I want to give to your Honours ‑ ‑ ‑

McHUGH J:   That has been followed in numerous cases in New Zealand.

GUMMOW J:   The one Justice McHugh refers to is the one I have in mind, I think.

MR SOFRONOFF:   That your Honour had in mind?

GUMMOW J:   Yes.

MR SOFRONOFF:   There is a subsequent one in which the same point is made.  It has slipped my mind which one.

GUMMOW J:   Not at such length.

McHUGH J:   In Thornes, Chief Justice Cooper said there are only two matters to be proved:  one, appointment to act as agent; and, two, the specific property which you are authorised to sell.  The transaction is the authority to sell a particular property.

MR SOFRONOFF:   Could I take your Honours to some of those cases.

KIRBY J:   In a sense, giving it specificity and particularity is a protection to consumers against generalities of vague authorisations.  I know you say you have a finding in your favour on specific authorisations, particular land, but you would not want to give section 76(1) too broad an interpretation, otherwise authority for one transaction could be blown out to be authority for a whole range of other transactions and thereby to defeat the purpose of the statute which is, if you are an agent and you want your commission, you have to get written authority that supports that ‑ ‑ ‑

MR SOFRONOFF:   Your Honour, the practical problem that arises from a construction of section 76 of the kind that Justice Chesterman found attractive is that one would not normally have any particular transaction in mind other than a sale of the land.

McHUGH J:   Well, the section operates on more than real estate agents.

MR SOFRONOFF:   Yes, it does.

McHUGH J:   It might be cars or motor bikes, or it could be the renting of properties in a case of a commercial agency, or it could be rents.

MR SOFRONOFF:   One can quite easily see that in all those contexts what one envisages is an authority given to an agent to effect a transaction subject to the ultimate approval of the principle in general terms.  Although the authority is in general terms, the transaction in the end has to conform to those terms.

GLEESON CJ:   Most appointments of agent are made at a time when the identify of the purchaser and the amount of the purchase price is unknown.

MR SOFRONOFF:   And the other terms which may involve instalments and other conditions.

McHUGH J:   The transaction has no doubt to be identified with some precision but it certainly would not, one would think, include the terms, price and matters of that nature, but if you have an authority to sell the property, well, one is entitled to commission on renting the property.

MR SOFRONOFF:   Yes, and as Anderson v Densley show, if one has an authority to sell real estate, one does not have authority to sell real estate with chattels together not identified at the time of authorisation.  Could I take your Honours, against the background of those exchanges, quickly to Caniffe v Howie (1925) St R Qd 121. In Caniffe v Howie the vendor, Howie, gave the agent an authority, which your Honours will find quoted at page 123 in the middle of the page. The authority which I invite your Honours to read was limited to a period ending on 30 June 1924.

Negotiations commenced with a prospective purchaser but nothing happened before 30 June 1924.  When the authority on its face expired, negotiations continued after then but the agent took no part in them and then a contract was entered into and the agent claimed his commission.  If your Honours would go to page 124 at the top of the page, the sentence beginning there, the vendor made a similar argument to the vendor in this case:

But the appellant Howie contends that the sale on the 25th July was a separate transaction, in respect to which no engagement in writing existed, the document being, he contends, an appointment strictly limited to a particular sale at a specified price and within a specific time – an appointment which had expired before the separate transaction had eventuated.

Then his Honour goes on, and five lines from the top of the next paragraph:

Here it is established that the negotiations set on foot by the document were continuous and resulted in the sale on the 25th July, and that the time limit mentioned in the document had been verbally extended until the end of July.  It seems to me that there was evidence from which the Magistrate could reasonably conclude that the transaction completed on 25th July was a transaction in which the document was a material and substantial step; that the transaction so arose out of and was so intimately connected with the agency appointment conferred or evidenced by Exhibit 4 that that document constituted “in respect of such transaction” an appointment in writing sufficient to satisfy the section.

Then in the next paragraph, his Honour begins:

I may add that it is at least arguable that the document evidences a general appointment as agent for the sale of the property.

Then he goes on to analyse that.  I will not invite your Honours to read that now.  If your Honours go to page 127, Justice Lukin, after referring to a dictum of Lord Atkinson, addressing the limited effect of the section, then at the foot of the page says:

Similarly, in my opinion, any document signed by the principal at any time before action brought which evidences the essential fact, the existence of the relationship in respect of the transaction in question, is sufficient to comply with the statute.  Here, although intended to secure a binding option to the prospective buyer the document incidentally states “for you to sell on my behalf” the property in question, indicating in writing the existence of the relationship, in my opinion, sufficiently to comply with the section.

KIRBY J:   Was there any variation in the property in this case because that is what is, at least potentially, a bit of a problem here.  It is not exactly the same transaction.

MR SOFRONOFF:   There was no variation in the property in this case ‑ ‑ ‑

KIRBY J:   It is the same in Howie.

MR SOFRONOFF:   There was no variation of property in that case.  In Lord v Trippe (1977) 51 ALJR 574, a case on our list which I ask your Honours to look at, Mr Lord and his wife were the lessees of a pastoral property in the Northern Territory and they entered into a contract with Mudginberri Station Pty Ltd, to sell to that company the property. The sale was conditional upon the approval of the administrator of the Northern Territory giving his approval. After entering into that contract, the real estate agent obtained a written authority to act as agent securing its commission, which your Honours will find quoted at page 576, and the relevant parts of it for present purposes are, after the first two recitals which speak of the owners being the registered proprietors of the leasehold, in the third recital:

And Whereas the agents acting as the owners’ agents have arranged the sale of the said land cattle livestock –

and so on –

to Mudginberri Station……as trustee for a company to be formed –

The deed then witnesses – the second and third clauses can be overlooked for the present purpose, but in the first clause:

Upon settlement of the sale of the said station to the said Mudginberri…..or to its nominee or to the said company to be formed pursuant to the said trust, the owners will pay…..commission –

Now, a contract of sale to Mudginberri had been entered into.  The deed with the agent, which was the written authority, reflected the existence of that contract, but what happened was that the administrator refused consent to transfer the lease to Mudginberri, and so what the solicitors for Mudginberri, Allen, Allen & Hemsley in Sydney, thought of was that a company, Lord Pastoral, would be incorporated.  Mr and Mrs Lord would be directors and shareholders of that company.  They would sell the property, the leasehold to that company, of which they were the directors and shareholders.  Mudginberri would appoint a director, without whom there could be no quorum itself, which it did, and the purchase price would be paid by Lord Pastoral to Mr and Mrs Lord in due course, the money being provided by Mudginberri Station.

In the meantime, Mudginberri Station would enter into a management contract and would take an option to buy Mr and Mrs Lord’s shares.  So, by a convoluted method a construct was created in which Mudginberri would have actual control of the business conducted there for the necessary period until the administrator’s consent could be obtained.  The money was relevantly the same but the deal that was struck was, in a very complicated way, quite different.  So the vendor said the deed that I asked your Honours to look at does not cover that eventuality.

If your Honours go to page 577F, Sir Garfield Barwick, in the left‑hand column, after referring to the facts, noted that all of these plans had been initiated not by the agent but by those advising Mudginberri.  Then at letter G at the foot of the page he says this:

The appellants submit that the third recital of the deed, though merely referring to the sale of the station, its stock and chattels, in truth relates to the contract of sale of 1st February…..Consequently, it is said that the sale in cl. 1 of the deed means that contract of sale.  Therefore it is concluded that it was only upon the settlement of that particular contract of sale that the respondents became entitled to payment of the sum claimed in the action.  But, in my opinion, this submission is plainly not tenable.  Clause 1 clearly and in terms contemplates that the sale of the station may not be effected by settlement of a contract of sale under which Mudginberri was the purchaser.

Your Honours, that is a case construing a clause in another contract but it reflects the same difficulty that the appellant has posed here by the respondent, namely, that although a clause in a contract is expressed in general terms, it is sought to limit its scope to a particular contract then in existence.  In our submission, unless there is something in the words of clause 30 which would justify that limitation, then such a limitation ought not be entertained.

KIRBY J:   I notice that, though Chief Justice Barwick thought that the submission was plainly not tenable, Justice Aickin dissented.

MR SOFRONOFF:   He did.  Justice Mason though, for reasons of his own, agreed with the conclusion of the Chief Justice.  Could I give your Honours the reference at page 580.

KIRBY J:   That was not involving any construction of a statute similar to this one here.  It was the common law ‑ ‑ ‑

MR SOFRONOFF:   No.  It was a construction of the contract of appointment.  Then, could I ask your Honours, finally, to look at – could I mention Anderson v Densley (1953) 90 CLR 460 briefly. If your Honours would take up that case. The problem that the agent faced there was that the acknowledgment contained in the contract, as ours is contained in the contract, was very limited, and it appears at page 466, just above the middle of the page. The appointment is expressed and it is contained in one of two contracts that were entered into on that day; one for the sale of the land and one for the sale of the chattels and stock.

Only the contract for the sale of the land contained the acknowledgment of appointment and those sales were not carried into effect but instead a third contract was entered into comprising the land and the chattels.  Unfortunately, if your Honours go to page 467, your Honours will see, in about the tenth line from the top, the chattels and livestock the subject of the third contract were not identical with those sold under the original chattels contract in any event.

Hence, the problem for the agent, dealt with at page 469, namely, that the provisions of the first contract were at most an acknowledgment by the defendant of the appointment of the plaintiff to act as agent of the defendant to sell the land, not the whole of the defendant’s grazing assets.  Now, hence, the agent failed.  But could I ask your Honours to look at the argument at page 461.  At the foot of the page, eight lines from the foot, counsel for the vendor made this submission:

The first contract of sale evidences or is an acknowledgment that the agent was engaged to sell the lands owned by the appellant.  It is not an acknowledgment of the engagement or appointment of the agent for the purpose of selling the lands together with plant and stock.

So the trial judge, it was submitted, was wrong.  That submission was accepted.  There is not a suggestion in the case that the acknowledgment contained in the first contract would not have sufficed but for the problem of the nature of the second contract including as it did chattels not the subject of any written authority, and chattels not in existence at the time of the written authority.  Hence, in our submission, Anderson v Densley is not an authority for the proposition that a clause like clause 30 is not apt to serve as a written authority within the meaning of section 76.

The final case that I will take your Honours to is one referred to in Justice McPherson’s reasons that neither side has put on its list of authorities.  Could I hand up copies of it to your Honours.  It is Houlahan v Royal Oak Realty (1996) 3 NZLR 513, a New Zealand case. In that case the vendors declined to sign an independent general authority but signed a contract of sale of their property to the purchaser, and that contract contained what I will call the New Zealand equivalent of clause 30, which your Honours will see at page 521 at the foot, and it is clause 12.1, and it is in terms, in our submission, much more favourable to the respondents in this case than clause 30:

If the name of a licensed real estate agent is stated on the front page of this agreement it is acknowledged that the sale evidenced by this agreement has been made through that agent whom the vendor appoints as the vendor’s agent to effect the sale.

That first contract was a contract for the sale of the vendor’s principal residence and it was subject to a condition.  The condition was that the vendors found another property to purchase before the completion date.  They did not do so and the contract fell over.  Then, without the knowledge of the agent, the same parties entered into a fresh contract for the purchase of the same dwelling house, but this time without the condition, but the consideration was slightly greater.  It was $10,000 more, and the question arose whether clause 12.1 in the first contract could be construed so as to constitute written authority for the equivalent of the New Zealand provision which your Honours will find set out at page 516.

It is clause 62 of the Real Estate Agents Act 1976 of New Zealand.  If anything, it slightly favours the respondent in this case.  One cannot sue to recover commission unless the:

appointment to act as agent or perform that service or work is in writing signed –

et cetera.  Now, the majority, Justices Gault, Thomas and Keith, concluded that the clause was apt to cover the second sale, notwithstanding its presence in the first contract, and they make a point which we embrace, at page 522 at line 35:

As between vendors and agent a sale of a property through the agent would be understood to be the disposal of the property procured by the agent.  In common parlance the vendors have sold the property when a contract for sale is completed and a real estate agent has sold the property when the vendor has entered into such a contract.  That the contract for sale is conditional and so may not proceed does not mean the sale in that sense has not been effected within cl 12.  It would not have been contemplated that the agent could enforce the obligation to pay the fee before the agreement for sale became unconditional, but as between vendors and agent the sale has been effected in terms of the clause.  It is to be taken therefore that the contemplation of the vendors and agent must have been that the sale evidenced by the agreement effected by the agent is the disposal of the vendor’s property procured by the agent on the assumption that it will become unconditional.  It is understood that more is to happen.  It may be that conditions will be satisfied or waived, specific terms may be varied as between vendors and purchasers, all without reference to the agent, yet if the sale becomes unconditional it still is that effected through the agent and evidenced by the original agreement.

Now, your Honours, that is language that, in our submission, echoes the language of Sir Anthony Mason in Lord v Trippe because there his Honour referred to the possibility that a sale evidenced by a document like that before the court might take place through an entirely different mechanism and yet still be the sale that is referred to.  May I deal then briefly with the question of causation – the case is on causation.  I think I have dealt sufficiently with the facts in relation to that and ‑ ‑ ‑

KIRBY J:   Does it reveal what your client did when they discovered that their name was not on the contract and they were being denied their commission?  They went to court.

MR SOFRONOFF:   They went to court.  Whether there was some preliminary skirmishing I cannot tell your Honour.  There was evidence which the trial judge accepted that promises, for what they are worth, were continued to be made up till very late in 1995, but nothing turns on that because the point that is raised against us is absence of authority ‑ ‑ ‑

KIRBY J:   But it may be relevant to this question of whether you were the real cause of the sale.

MR SOFRONOFF:   That is true, your Honour.

KIRBY J:   If this was merely a belated denial ‑ ‑ ‑

MR SOFRONOFF:   Yes, I will find the passage in Judge Botting’s reasons.

KIRBY J:   Anyway it may be appropriate ‑ ‑ ‑

CALLINAN J:   You won on this, though, down below.

MR SOFRONOFF:   We did.

KIRBY J:   I think the course you were proposing was more appropriate. If we start with the principles and then we look at the facts.

MR SOFRONOFF:   Yes, your Honours, could I refer your Honours to the statements of principle in LJ Hooker v Adams (1977) CLR 52.

GLEESON CJ:   What issue are you addressing now?

MR SOFRONOFF:   Whether the agent was the effective cause of sale, your Honour.

McHUGH J:   That is the notice of contention.

GLEESON CJ:   That is the notice of contention point.

MR SOFRONOFF:   It is.

GLEESON CJ:   Would it not be more appropriate to deal with that in reply?

MR SOFRONOFF:   I will be happy to do it that way, your Honour.  Could I make then one brief point in relation to clause 30.  If your Honours look at it, one of the contentions raised against us is that our submission fails to comprehend the possibility that some other agent might be an effective cause of the subsequent sale.  In our submission, that is a proposition that is dealt with expressly by clause 30 which envisages the possibility that the action of the vendor’s agent in effecting the sale might be an action jointly with any other agent.  In our submission, that general provision of the possibility of another agent merely emphasises the construction of clause 30 that we advocate.  Those are our submissions, your Honours.

GLEESON CJ:   Thank you, Mr Sofronoff.  Mr Keane, for the benefit of the next cases in the list, how long do you think you will require?

MR KEANE:   Your Honour, I would think probably of the order of an hour, perhaps an hour and a half.

GLEESON CJ:   Very well.  Then we will say that the special leave applications in list No 1 will be not before 11.15 am.

MR KEANE:   Your Honours, what we would like to do at the moment ‑ I am not sure how long your Honours propose to sit ‑ ‑ ‑

GLEESON CJ:   We will adjourn at 4.15pm.

MR KEANE:    ‑ ‑ ‑is to simply mention a couple of things about some of the matters that have been put to your Honours in relation to the facts and then to just state briefly our view of clause 30 and its place in the scheme of things.

In relation to some of the factual matter that has been put to your Honours, it is suggested that, in a tantalising way, no doubt, that the $96,000 is the commission and somehow or other it is left floating with the suggestion that perhaps the second set of contracts were struck on the footing that the koalas could look after it – as your Honour Justice Kirby suggested.  That suggestion was never put to any of our witnesses.  It is not a proposition for which a finding of fact was sought and, importantly, returning to your Honour Justice Callinan in relation to the question your Honour agitated with my learned friend, there was never sought, nor obtained, a finding to the effect that the second set of contracts were in the way of a devise, the object of which was to put a colour on transactions which were intended to defeat the agent’s claim for commission.

In truth, the failure of the first contract to complete and the necessity for the second contracts was, as the majority in the Court of Appeal – indeed, all their Honours in the Court of Appeal – below held, a necessity which arose because of, and notwithstanding best efforts or appropriate level of efforts on the part of the parties to the contract, it was not possible to satisfy the conditions.  And his Honour Justice Chesterman found specifically that the litigation which had been put in train to try to get the conditions of re-zoning on which the first contract was conditional, could not have been completed by 31 October 1995 when that contract was due to complete, and in circumstances in which our side had no further right to extend the contract.

So that the situation is - true it is and we confess it - that our side laboured long and hard to keep BMD interested in the contract and to try to preserve the benefits that were obtainable under it.  True it is that they exercised themselves very much in that respect, but the original contract could not be completed, not because of any arrangement made to defeat the agent, or even with an eye to it, but simply because the 31 March 1994 contract that had been procured was a contract that could not be completed because the conditions to which it was subject were not able to be met, notwithstanding all the best endeavours.

CALLINAN J:   Was the purchaser prepared to waive those conditions?

MR KEANE:   No, your Honour.  And the purchaser had the right to waive and never did.

CALLINAN J:   Well, without going into the detail, was the second contract a conditional contract subject to re-zoning also?

MR KEANE:   Your Honour, the conditions were quite different.  They were conditions which required simply the Planning and Environment Court to sanction the conditions on which the parties had reached agreement, and that is condition 15 in the second contract which your Honours will find at page 618, clause 15.

CALLINAN J:   Is that a peculiar section of the Land and Environment Act, is it, that conditions have to be sanctioned by the court?

MR KEANE:   I think it was that the court had to approve them.  I am not quite sure whether that was because ‑ ‑ ‑

CALLINAN J:   Because the litigation had been commenced.

MR KEANE:   Yes, the litigation had been commenced.  It was on foot and that was the way they had to be disposed of and the sanction of the court obtained.

KIRBY J:   But that does not seem to be an answer to the two points that are made against you.  One, that there is a uniform finding of all the judges that the agent was the effective cause; and, two, that all that the statute requires is that the right be in respect of such a transaction – in respect of - very wide.  So the transaction, not the contract, not the particular contract.

MR KEANE:   Quite.  And, your Honour, with respect, to be fair to Justice Chesterman, his Honour appreciated that.  That his Honour appreciated ‑ ‑ ‑

KIRBY J:   You could slip a word in there, that they are specific, which is not in the statute.

MR KEANE:   Well, your Honour, he expressly in terms recognises that a general appointment may do.  He does that at page 854 paragraph 25:

An appointment may by its terms refer to a number of specified transactions or to transactions described in general terms or by reference to a defined category.

Your Honour, the crucial question and the question on which his Honour decided the case ‑ his Honour and the Chief Justice decided the case differently from Justice McPherson, although no doubt a view about what 76(1)(c) required may have coloured the thinking a little in terms of approach, but the crucial question was whether the agency, evidenced by clause 30 of the 31 March contract, is in respect of the transaction effected by that contract or by some other contract.

McHUGH J:   That cannot be the issue, can it?  Surely the issue is whether there is any writing engaging or appointing the appellant as agent to sell the vacant land which is described at page 618 of the appeal book.  That is the transaction in which the appellant claims commission.  And it points to clause 30 which, in general terms, would seem to authorise it to sell the vacant land described at 394.  The question is whether that writing in respect of that land described at 394 is writing engaging or appointing the appellant to sell part of that land.

MR KEANE:   Your Honour, that depends upon the construction of clause 30.  As to whether one reads it down, by reading it down by reference to the land, or whether one reads it down by reference to the transaction on the footing.

McHUGH J:   You do not worry about the transaction.  You start with the opening words “In the absence of any specific appointment”.

MR KEANE:   Quite.

McHUGH J:   So it looks at a general authority to sell and then it says:

the Vendor by executing this Contract hereby confirms the appointment of the Vendor's Agent…..as the agent of the Vendor to introduce a buyer.

A buyer of what?  That immediately takes you back to the land described at 394.

MR KEANE:   But, your Honour, that is reading it as if the appropriate exegesis is a buyer of what, the land; rather than a buyer under this contract.

McHUGH J:   Yes, but why should not introduce a buyer?  It is referring to an historical fact.

MR KEANE:   Quite, your Honour, exactly.  It is referring to the historical fact of this contract and it is confirming the agency.

McHUGH J:   No, a historical fact of an anterior agency.  It assumes an oral arrangement.

MR KEANE:   And, your Honour, it assumes as well, with the greatest respect, it assumes a sale just as in the paragraph in parenthesis where it speaks of:

jointly with any other agent in conjunction with whom the Vendor’s Agent has sold –

McHUGH J:   Yes.

MR KEANE:   It presupposes that there has been a sale and it does so in the context of, as both Justice McPherson and Justice Chesterman said, “an eye to section 76(1)(c) in circumstances where there is not another appointment”.  It is the end of the process.  It is not the beginning.  In terms of its context, it is the fail safe that is put in place to cover the agent at the end of the process of sale.  It is not, in our respectful submission, to be treated as a general authority to go forth and seek to sell.

McHUGH J:   No, it does not have to do that.  It only has to be evidence. That seems to be the difficulty in your argument.  This is not an authority to sell.  What 76 requires is evidence.  And a long series of decisions in Queensland and in the High Court accept that it is evidence.  It could be in a pleading.  It could be in a letter to his wife, as I said earlier.

MR KEANE:   Yes, your Honour, quite.  And what it is, and what it has to be under section 76(1)(c), is evidence of an appointment in respect of a transaction.  What is the transaction in respect of which this is evidence of an appointment?  On its proper construction, read in its context, and serving its commercial purpose, it is the fail safe that, at the end of the process of effecting a sale, recognises or confirms the agency and provides written evidence of the agency in respect of that transaction.

GLEESON CJ:   Is that a convenient time, Mr Keane?

MR KEANE:   It is, your Honour.

GLEESON CJ:   We will adjourn until 10.15 tomorrow morning.

AT 4.19 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 21 JUNE 2000