R C Property Group Pty Ltd v Sheridian Property Group Pty Ltd
[2009] NSWDC 56
•2 June 2009
CITATION: R C Property Group Pty Ltd v Sheridian Property Group Pty Ltd [2009] NSWDC 56 HEARING DATE(S): 26 March - 1 April 2009
JUDGMENT DATE:
2 June 2009JURISDICTION: Civil JUDGMENT OF: Goldring DCJ DECISION: 1. Verdict for the first plaintiff against both defendants jointly and severally, in respect of compensation for loss or damage caused by misleading or deceptive conduct by those defendants in respect of the Mission Beach units, in the sum of $25,095.00 together with interest in accordance with paragraph 80.
2. Verdict for the first plaintiff against the second defendant in respect of commission on the Bargara units in the sum of $23,300 together with interest to be calculated in accordance with paragraph 80.
3. Verdict for the second plaintiff against the first defendant in respect of money due in lieu of wages and other remuneration in the sum of $36,648.00 together with interest to be calculated in accordance with paragraph 80; alternatively in respect of compensation for loss or damage caused by misleading or deceptive conduct against both defendants jointly and severally together with interest in accordance with paragraph 80.CATCHWORDS: ESTOPPEL - previous decision of another court - misleading and deceptive conduct - DAMAGES - measure of damages in claim for wages LEGISLATION CITED: Trade Practices Act 1974 (Cth)
Fair Trading Act 1987
Property, Stock and Business Agents Act 2002CASES CITED: Browne v Dunn (1893) 6 R 67
A & DR Iles Pty Ltd v Renton [2002] NSWCIMC 77
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Henville v Walker (2001) 206 CLR 459
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221PARTIES: R C Property Group Pty Limited (First Plaintiff)
Zlata Anne Rous (Second Plaintiff)
Sheridian Property Group Pty Limited (First Defendant)
Joe Tripodi (Second Defendant)FILE NUMBER(S): 5352 of 2006 COUNSEL: D W Rayment (First and Second Plaintiff)
R Tripodi (First and Second Defendant)SOLICITORS: Hardings Lawyers (First and Second Plaintiff)
JUDGMENT
Issues
1 The plaintiffs in this matter, the first plaintiff, RC Property Group Pty Ltd ("RC") and the second plaintiff, Ms Zlata Rous ("Ms Rous") seek to recover damages for breach of an alleged contract with the first defendant, Sheridian Property Group Pty Ltd ("SPG"), and compensation from both SPG and the second defendant, Mr Joe Tripodi, for loss and damage that they allege they suffered as a result of misleading or deceptive conduct in which both defendants, or either of them, engaged.
2 The issues I must decide are:
- a. Whether there was a contract between either plaintiff and SPG;
b. If so, what were the terms of the contract; and
c. Whether either of the defendants engaged in conduct that was misleading or deceptive, contrary to the Trade Practices Act, 1974 (Cth), s 52, or the Fair Trading Act 1987, s 44;
d. If so, what loss or damage was suffered by either plaintiff?
Factual background
3 Mr Joe Tripodi, in 2003, was a property developer. In that capacity he had a number of registered business names, and he also controlled a number of companies, one of which is the first defendant, SPG. SPG and Mr Tripodi had an office at Norton Street, Leichhardt. He also was a director of, and substantial shareholder in another company, Sheridian Property Group City West Pty Ltd ("City West"). City West operated out of an office at Ultimo. In the May 2003, the shareholders in City West were Mr Tripodi, Mr Ben Teoh, and Mr David Chen. This company apparently operated as a real estate agent, selling land and apartments in central Sydney. It appears that Mr Chen wanted to leave this business, and Mr Tripodi wished to cease being a director. City West therefore sought another equity investor. There is evidence that an advertisement was placed in a daily newspaper to that effect.
4 Ms Rous was a former schoolteacher who had developed an interest in property and investment. Her evidence was that she had completed a number of courses and was involved with an organisation of investors. She also had accumulated some savings. After a series of meetings with Mr Tripodi and Mr Teoh, and a discussion with the company's accountants, Ms Rous and her then partner, Mr Grant Copland, invested $60,000 in City West. They were supposed to receive one third of the shares, but this did not happen, and no transfer of shares was ever registered with ASIC. Mr Tripodi ceased to be a director of City West and Ms Rous was registered as a director. It appears that the books of this company were maintained by a firm of accountants. At the same time Mr Tripodi resigned as secretary, and Mr Copland became secretary. The plaintiffs alleged that Mr Tripodi, and possibly Mr Teoh, made some other representations which I shall consider later, if necessary.
5 Ms Rous began to work in the Ultimo office of City West. There is evidence that she brought about a significant number of sales. She obtained a provisional certificate as a property salesperson pursuant to the Property, Stock and Business Agents Act, 2002, s 10 and, after completing a course, a full certificate. Section 11 of the Act requires a registered salesperson to be employed and supervised by a licensee. The certificate issued to Ms Rous showed that Mr Teoh was the employer and supervisor, although there is a dispute as to whether in fact Ms Rous was ever employed by either Mr Teoh or City West.
6 Because she was not paid according to the agreement that she alleges, because she was not getting on with Mr Teoh, and because City West appears to have been in financial difficulty, at some time in 2004 Ms Rous ceased working at the Ultimo office of City West, and began to work from Mr Tripodi's office in Leichhardt. There is a dispute about when she stopped working at Ultimo. She says this was in May, but Mr Tripodi says it was later, probably August. It is clear that Ms Rous ceased to be a director of City West at the end of July or early August 2004. It appears that Mr Teoh ceased to be involved with that company. It became insolvent and ultimately was deregistered. Ms Rous and Mr Copland lost their investment and Ms Rous says that she worked for 10 or 11 months without being paid, or at least without being paid the amount to which she was entitled.
7 In the course of her work at Leichhardt, she arranged seminars and other activities at which various properties were introduced to prospective buyers.
8 City West is not a party to these proceedings. Although there was evidence about the relationship between the plaintiffs and City West, that is relevant to the claims here only in so far as it provides a context to the alleged formation of the arrangement under the terms of which Ms Rous would work at the Leichhardt office. City West no longer exists, and Ms Rous suffered financially as a result. Mr Tripodi, who was a shareholder and former officer of City West, had been instrumental in arranging for Ms Rous to work for the company, and was aware that she had lost her investment and had not been paid fully. The unchallenged evidence was that Ms Rous was instrumental in arranging a number of property sales while she was working for City West.
9 Mr Tripodi admitted that when he had his early meetings with Ms Rous, she had told him about her interest in investments and the list of contacts she had assembled, which she said she would bring to her new position. Mr Tripodi agreed that she did have contacts, although he said that the list was not as extensive as he had first been led to believe. What emerges from this evidence is that Ms Rous was effective in the real estate sales business. For whatever reason, on her evidence, which I accept, Mr Tripodi was keen to use her ability and resources to further the interests of SPG. When Ms Rous saw no further point in working for City West, a company in which she and her then partner had a one third interest, she alleges that Mr Tripodi knew that she was looking for employment and was prepared to offer her inducements to work for SPG.
Credit
10 Many of the matters at issue in these proceedings are in dispute. The evidence before me is largely that of Ms Rous and of Mr Tripodi. Some other affidavits have been filed and read. One is from Mr Peterson, an estate agent, with whom Mr Tripodi says he put Ms Rous in contact, when Ms Rous left the office of City West and came to work at Leichhardt. There is no dispute that Mr Peterson never assumed any supervisory or other role in relation to Ms Rous. At the time Ms Rous left City West, clearly Mr Teoh was no longer supervising her and she could not lawfully work as a property salesperson. Mr Tripodi's evidence is that he was reluctant to take on the supervisory role, although he was qualified to do so and, whatever I find were the terms on which Ms Rous worked after mid-2004, she was clearly involved in the promotion and marketing of parcels of land, apparently based in Queensland, and it would have been appropriate for her to work lawfully as a property salesperson. Ultimately, in January 2005, Mr Tripodi was certified by the Department of Fair Trading as the supervisor of his "employee", Ms Rous.
11 The other affidavits were from Mr Copland, Dr Langford-Smith and Dr Vu. They were all cross-examined.
12 Ms Rous was involved in the preparation of property seminars from early May 2004. Some of these, at least, were held at SPG's offices. At least one person who was introduced to SPG and its associates was Dr John Langford-Smith. Before he was ever in contact with SPG, he was a friend or acquaintance of Ms Rous. Dr Langford-Smith told his colleague, Dr Vu, who was also interested in property investment, about the seminars and, at Dr Langford-Smith's suggestion, Ms Rous sent an e-mail to Dr Vu in October 2004, Dr Vu did attend a seminar in SPG's offices. Later he, or companies controlled by him, purchased four units in a development at Mission Beach in Queensland, which had been developed by Mr Tripodi, using one of his business names, Prime Coastal Development. Dr Vu says that he dealt directly with Mr Tripodi and bought the properties from him (trading as Prime Coastal Development) without the intervention of any agent or other person. There is a dispute about whether either RC or Ms Rous is entitled to any commission on these sales.
13 The evidence of the witnesses other than Mr Tripodi and Ms Rous was adduced in order to corroborate the evidence of, respectively, the second plaintiff and the second defendant.
14 These disputes, like many others, can be resolved only if I accept the version of events given either by Ms Rous or by Mr Tripodi. Where there is a difference in the version of events given by these witnesses, in general, I prefer the evidence of Ms Rous. It was clear that, when he gave evidence, Mr Tripodi was suffering the aftermath of an illness, and that his financial situation was not good. Indeed, in the course of proceedings it became apparent that Mr Tripodi had unsuccessfully applied for an adjournment of the proceedings because he could no longer afford legal representation. Fortunately for him, his cousin, Mr Richard Tripodi, a barrister, agreed to appear for him, but was instructed only a few days before the hearing date. It is clear that until relatively recently, and at least until the end of 2008, Mr Joe Tripodi and SPG had been represented by a firm of solicitors who prepared the pleadings, the affidavits, and undertook discovery and inspection.
15 In evidence are a considerable number of documents produced by the parties. Many of them are copies of e-mails sent by Ms Rous, primarily to Mr Tripodi, but also to other people. There are also some documents that purport to be written agreements between one or more of the parties. While the documentary evidence may, up to a point, corroborate the affidavit evidence of either Ms Rous or Mr Tripodi, to a large extent it is of little probative value, and I place much more weight on the affidavits and oral evidence of the witnesses. I make little comment on any specific document, except where it is necessary for me to do so, but I should say that the copies of e-mails sent by Ms Rous to Mr Tripodi in respect of payments which she claims are due to her or to RC do, in general, add weight to her affidavit and oral evidence.
16 The personal difficulties faced by Mr Joe Tripodi do not explain the many inconsistencies in his evidence. On a number of occasions my attention was directed to Mr Tripodi's different accounts of the same events, given at different times, and to statements made in his affidavit and in oral evidence, which are inconsistent with previous statements made by him. There are many examples of such inconsistency, but the most obvious examples of this are the accounts given by Mr Tripodi of the contractual basis upon which he says Ms Rous and RC were involved in the sale of property in Queensland by him or by SPG. In the verified defence, the defence to the amended statement of claim, the defence to the second amended statement of claim and the defence to the third amended statement of claim, Mr Tripodi and SPG asserted a particular contractual arrangement. After this hearing commenced, the defendants sought leave to file an amended defence, which asserted significantly different contractual arrangements. I was prepared to allow the amendments so that the defendants could adduce evidence in support of their case, but I was not prepared to grant leave to amend the defence in a way that alleged that City West, rather than RC, was a party to those contractual arrangements. This possibility, to my knowledge, had not been raised until after the hearing of these proceedings had commenced. The suggestion that City West was a party to any arrangements with the plaintiffs after the end of July 2004 was totally inconsistent with the statements previously made by Mr Tripodi, on his own behalf and on behalf of SPG. The assertions by Mr Tripodi in his affidavits verifying earlier pleadings constitute admissions that any such contract was not made with City West, and he has not been given leave to withdraw those admissions. Even without the admissions, I could not accept that City West could have been a party to the arrangements.
17 Both Mr Tripodi and Ms Rous were cross-examined. In both cases the cross-examination lasted for more than a hearing day. Mr Tripodi appeared uncertain and evasive in answering most questions put to him. Rather than answering questions put to him by counsel for the plaintiff, he frequently replied by asking questions of counsel, or giving a narrative (at least until he was stopped) consistent with his own version of events. When confronted with documents, his response was often to assert that he knew nothing of those documents and could not acknowledge that they were his documents, even though there appeared to be significant evidence that they were prepared in his office on his instructions. On several occasions he denied that the document was his on the basis that he had not signed it. I was not satisfied that on many crucial issues, Mr Tripodi was doing his best to tell the truth. I could not regard Mr Tripodi as being a reliable witness.
18 On the other hand, although Ms Rous was at times reluctant to answer questions and was extremely cautious in dealing with matters put to her by counsel for the defendants, particularly those put to her to conform with the rule in Browne v Dunn, and she was unable to recollect certain matters clearly, on the whole I found that she did make an honest attempt to answer questions accurately and truthfully.
19 In general, therefore, I prefer the evidence of Ms Rous to that of Mr Tripodi, and where there is a conflict, I accept the version given by Ms Rous.
The claim for wages
20 Ms Rous says that from about 1 May 2004 until August 2005, she worked five days per week, based at the Leichhardt office, in relation to promoting and marketing properties that SPG were offering for sale. She says that under the arrangements with City West, she was to be paid at the award rate for real estate salespersons. She asserts that this arrangement was to continue when she started working at the Leichhardt office. In addition, she was to be paid commission on any sales that she brought about. There is a dispute as to whether the wages were to be paid under a contract of employment, or, as the plaintiffs assert, under a commercial contract for the provision of services entered into between SPG and RC.
21 Whether or not wages, or, indeed, any other amount, including commission, is payable to either plaintiff depends on a finding about the contractual arrangements between the plaintiffs, or either of them and the defendants, or either of them. I will consider the nature of these arrangements after I set out the facts relating to the particular claims for commission.
22 The plaintiffs claim, in the alternative, that if there are no relevant contractual arrangements to which they, or either of the them, are or is a party, they are entitled to claim an equivalent amount as loss or damage which they suffered by reason of the misleading or deceptive conduct of either or both defendants.
23 The defendants say that Ms Rous was never employed full-time by either of them. Although she says that when she was first working for City West, she was employed on a full-time basis, there are documents in evidence that suggest that her employment was reduced to one day per week. Ms Rous denies that this was the case, and asserts that she was never paid.
24 The defendants say also that Ms Rous did not attend the premises in Leichhardt, after that became her base, on any regular basis. She says that she was in the office most days, although on occasions she did work from home. She says also that she did have a furnishing business, but that this did not occupy a great deal of the time, and she did not work in that business to any major extent while she was working in the Leichhardt office.
25 The only evidence about this matter was given by Ms Rous for the plaintiffs and by Mr. Tripodi for the defendants, although it is clear that Mr Tripodi did engage a personal assistant, Ms Kim Woodland, who may have been able to give evidence about how often Ms Rous attended the Leichhardt office, but she was not called to give evidence. I infer that her evidence would not have assisted the defendants. Because I consider Ms Rous a more reliable witness than Mr Tripodi, I prefer her evidence on this issue and accept it.
The Anshun estoppel defence
26 The defendants plead that Ms Rous is estopped from claiming wages because this matter has already been litigated and dealt with in the Chief Industrial Magistrate's Court. It is certainly the case that proceedings were commenced in that court, originally by Ms Rous, and subsequently jointly by Ms Rous and RC, for wages due and commission. The applicant elected to use the statutory small claims procedure. The respondent in those proceedings was SPG. The claim alleged that $7,900 was due as commission on the sale of the Bargara properties (four units located in Queensland, which I shall describe in detail later) and that SPG owed unpaid wages to Ms Rous.
27 In the course of his reasons, while dealing with the claim for wages and the question of whether or not there was an employment contract between either applicant and SPG, at [11], the learned Chief Industrial Magistrate said, "the evidence before the court fails to clarify these matters sufficiently for the court to make any specific findings." His Honour went on to say "It is clear to the court however, that the applicant embarked on this enterprise with considerable naiveté and without obtaining formal legal advice and that the applicant and her $60,000 were soon parted." I agree wholeheartedly with the last comment. His Honour noted that, notwithstanding the applicant's experience with City West, she continued to trust Mr Tripodi, and entered into an arrangement with Mr Tripodi and SPG to market various building projects in Queensland.” [at 11]. His Honour went on to consider the nature of the arrangements between Ms Rous, Mr Tripodi, and SPG, to determine whether Ms Rous was an employee of SPG. His Honour referred to the various certificates and other material that has been introduced into evidence in these proceedings. His Honour, found [at 23-24] that he could not be satisfied on the evidence that the applicant, i.e. Ms Rous, was an employee of SPG. His Honour said,
"In circumstances where the applicant has failed to satisfy the court on the balance of probabilities that she was employed by the respondent the Court does not have the necessary jurisdiction to determine whether the respondent pays any commissions to the applicant in relation to the four specific transactions in Queensland which are the subject matter of the applicant’s claim if such moneys are owed, they are owed as a consequence of a commercial contract entered into between the applicant in the respondent or between the applicant and the companies in which Mr Tripodi has an involvement."
As to this, see also A & DR Iles Pty Ltd v Renton [2002] NSWCIMC 77 at p. 5. His Honour found that, as the claim for commission was not a claim for wages, he had no jurisdiction to deal with the claim, and therefore dismissed the applicants’ claim both in respect of wages and commission.
28 The defendants say that because of these proceedings and the dismissal of the claim, the plaintiffs are estopped from proceeding in this Court. They rely on Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. The relevant passage in that case comes from the judgment of Gibbs CJ, Mason and Aickin JJ, at [22]:
"The critical issue, then, is whether the case falls within the extended principle expressed by Sir James Wigram V.C. in Henderson v. Henderson (1843) 3 Hare, at p 115 (67 ER 319). The Vice-Chancellor expressed the principle in these terms:
‘[w]here a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought fo r ward, only because they have, from negligence, inadvertence, or even accident, omitted part of the case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.’ (at p 598 )”
At [24], their Honours expressed the fear that the application of the principle to cases of issue estoppel is to be treated with caution. They referred to a number of other cases.
29 The defendants contend that both the issue of wages payable to Ms Rous and the issue of commission were decided in the proceedings before the Chief Industrial Magistrate. The plaintiffs, however, point out that the learned Chief Industrial Magistrate had no jurisdiction to decide the issue of commission, and was not satisfied on the evidence before him that there was an employment relationship such as would entitle Ms Rous to wages. He did not decide conclusively that there was no such relationship, and he certainly did not decide that if the relationship between the parties was a commercial contract under which either Ms Rous or RC were to provide services for anyone else, Ms Rous or RC were not entitled to the remuneration claimed. In my view, the plaintiffs‘ contention is correct and no estoppel prevents the plaintiffs from proceeding, as they have done, in this Court on these issues.
Background - the Bargara commission claim
30 A Mr Cohen, or a company controlled by him, was developing some units at a place called Bargara, A company known as Carroll McKeddie Pty Ltd was appointed as sales agents for this development, and SPG was appointed sub-agent in NSW for the Bargara development.
31 On 1 June 2004, shortly after she moved to work at Leichhardt, Ms Rous sent an e-mail to Dr Langford-Smith and to a Mr Kotwal about a sales promotion meeting, which was to be held at SPG's office the following day. Ms Rous's evidence that she knew Dr Langford-Smith from her investment institute activities was not challenged, and it does not seem to be in dispute that she introduced both Dr Langford-Smith and Mr Kotwal to SPG. Dr Langford-Smith at one stage had some discussions with Mr Tripodi directly, and the same day (8 June 2004) Ms Rous e-mailed Mr Tripodi asking him not to poach her clients. The evidence is that at all relevant times she was jealous of the contacts she brought to the business. Dr Langford-Smith bought three units in the Bargara development and Mr Kotwal bought one. On 18 June 2004, SPG confirmed that Ms Rous had arranged sales of the four units and set out the purchase price of each. Ms Rous or RC (but certainly not City West) was eventually paid $7,500 in respect of these sales by either Mr Tripodi or SPG, but she says she is entitled to a much larger sum by way of commission. This happened before City West formally stopped operating, and while Ms Rous was still a director of that company. The sales of each of the four units were completed on 27 March 2006.
Background - the Mission Beach commission claim
32 Mr Tripodi, trading as Prime Coastal Developments, was the developer of a project at Mission Beach in Queensland. Sales of units in this project were apparently promoted at the seminars arranged by Ms Rous and held at the SPG office. During October 2004, although Mr Tripodi denied this, Dr Langford-Smith says that Mr Tripodi offered him a “spotter’s fee” of $1000 per unit for the Mission Beach development, but that Zlata, i.e. Ms Rous, would be paid her full commission on these sales. I accept Dr Langford-Smith’s evidence on this issue.
33 On or about 27 October 2004, Dr Langford-Smith told his friend, Dr Vu, about the presentation evenings organised by Ms Rous and asked him to attend one. On 4 November 2004 Ms Rous prepared an e-mail invitation to Dr Vu, addressing him by name and inviting him to a presentation seminar to be held the next evening. She sent this to Dr Langford-Smith by e-mail and it was forwarded to Dr Vu. Dr Vu replied to this. He attended the seminar, where he met Ms Rous, but had no other contact with her for some months. His evidence, and that of Mr Tripodi, is that after being introduced to the Mission Beach development, he dealt directly with Mr Tripodi. He said he did not deal with SPG. However, I find that Dr Vu attended the seminar as a result of the invitation extended to him by Ms Rous, and therefore that this action on her part led to the sale of the four units.
34 Dr Vu, or companies controlled by him, exchanged contracts for four units at Mission Beach in June 2005. Two of these purchases subsequently settled, but two still await completion. RC thereupon became entitled to commission of 1.25% of the sale price of each unit, and further commission when two sales were completed.
35 Ms Rous has repeatedly invoiced SPG for commission on the Mission Beach sales, but has been paid nothing.
Background - the “misleading or deceptive conduct” claim
36 RC and Ms Rous contend that I should find that either or both engaged in misleading or deceptive conduct in making representations to Ms Rous that she or RC would be paid wages, and also commission on any sales to persons she introduced to SPG or Mr Tripodi. The plaintiffs’ argument is that the representations made by Mr Tripodi, either on his own behalf or on behalf of SPG were intended to, or if unintentional, had the effect of leading her to believe that if she worked with Mr Tripodi, she would be paid wages and commission.
What, if any, were the contractual arrangements?
37 The defendants' submissions appear to proceed on the basis that neither RC nor Ms Rous could lawfully claim commissions, because, at the relevant times, Ms Rous did not have the necessary statutory qualification to act as a real estate salesperson. A defence along those lines was originally pleaded, but Mr Richard Tripodi, for the defendants, indicated on the first day of the hearing that this defence was not pressed, and the hearing proceeded on the basis that no point would be taken in relation to the illegality or otherwise of anything done by Ms Rous. In any event, the presumption would have to be that the New South Wales statute was limited in its territorial application to transactions relating to property in New South Wales, and it is clear that the property in respect of which commission is claimed was situated in Queensland. I proceed, therefore, on the basis that there is no legal bar to the recovery of commissions by RC in respect of introductions effected by Ms Rous.
A. Bargara
38 In respect of both the Bargara and Mission Beach developments, the defendants contend that the contractual arrangements they, or at least SPG, had with the plaintiffs in relation to payment of commission on sales, were reduced to writing. The plaintiffs deny that the written agreements represented the contractual arrangements, for a number of reasons. The most cogent argument, in my view, supporting the plaintiffs’ contentions, is that the transactions in respect of which the plaintiffs claim commission relating to both the Bargara and Mission Beach developments occurred long before any arrangements between the parties as to commission on either development were reduced to writing. Anything the plaintiffs did before the written agreements, if there were any contractual arrangements, could be based only on contractual arrangements that were oral, implied, or partly oral and partly implied, as the plaintiffs allege in the pleadings. The statements in the written documents that they purport to reflect "current" arrangements are certainly not determinative of that fact and, indeed, as the documents appear to have been prepared by Mr Tripodi, or at his direction, they may be regarded as little more than self-serving. In any event, because they were prepared after Ms Rous introduced buyers for the properties, those statements are irrelevant to any matter in issue in these proceedings. If the documents purporting to be written agreements are relevant at all, contrary to my findings, they may indicate what the parties believed to be the arrangements, but will not necessarily do so. In any event, in the absence of a provision to the contrary, they would not bind the parties as to things that happened prior to the signing of the documents.
39 I accept the plaintiffs’ arguments that the contractual arrangements they, or either of them, entered into with the defendants were primarily oral, but also implied to some extent.
40 In respect of the Bargara development and the wages claim, the plaintiffs claim that the arrangements were based largely on a conversation between Mr Tripodi and Ms Rous early in April 2004. After Ms Rous complained about not receiving wages for her work at Ultimo, she says Mr Tripodi said to her:
All I want you to do is to bring in the contacts and we will run some seminars and sell properties together. It will be money for jam.""Why don't you come to work with me at the Leichhardt office? I will pay you your wage and you can work with me. We can sell properties together. The commissions that are owing for the properties sold through the Ultimo office will be paid to you through the Leichhardt office.
41 Ms Rous says that she then said:
“I would like that because I cannot work without earning a wage. I need to make ends meet. I have learned my lesson with Ben Teoh and I should always be paid my wage. I need to earn a basic income as well as earn commissions.
To this, she says Mr Tripodi replied:
”I understand completely. Come and work with me and I will make sure that you get paid your wage and allowances and your commission. Your commission will be paid the same way that it was paid at Ultimo, that is, I want you to render the invoice in the name of your company, RC Property Pty Limited.”
Ms Rous replied, she says:
“That’s fine. How much will my commission be?”
She says Mr Tripodi said:
“Well, I have some very interesting opportunities coming up in Queensland. One of the developments is called ‘Bargara’. We have been retained to sell units in the development ‘off-the-plan’. I will share the commissions I earn on the development with you. Normally the minimum total gross commission for such sales is around 4%, but we are generally able to negotiate a 5% commission. I will pay you not less than 2.5% commission on sales that are from your leads. 50% of the commission will be payable on exchange and the other 50% on the settlement of the sale.”
Ms Rous replied:
“That sounds fine. But you will need to be my licensee.”
Mr Tripodi said,
“Your certificate of registration will be tied to me. I will take care of it.”
Mr Tripodi denies that he made any such statements or that such a conversation ever took place, but on the balance of probabilities, I find that the account given by Ms Rous is correct.
42 Shortly after this, still in April 2004, Ms Rous began to work at the Leichhardt office. Her work was to arrange investor seminars. She began work on this immediately. Mr Tripodi said to her “I only want your investors at the meetings”. Ms Rous made it clear that because they were her contacts, she would greet them. She asked Mr Tripodi not to give them his business cards. She also repeatedly asked for the arrangement about commission to be put in writing.
43 Following an investor meeting in early June, conducted by Mr Tripodi and Ms Rous jointly, Ms Rous introduced Mr Kotwal and Dr Langford-Smith to SPG. Mr Kotwal bought Unit 311 at the Bargara development, and Dr Langford-Smith bought units 312, 313 and 204. After these sales were effected, Ms Rous said that Mr Tripodi told her again that half of the commission would be paid on exchange and the other half on settlement.
44 Ms Rous asked Tripodi on several occasions to arrange the transfer of her certificate to him. In fact, the necessary form was not completed until November, and Ms Rous received a certificate stating that Mr Tripodi had become her supervising agent and employer in January 2005.
45 On 27 July 2004, both Ms Rous and Mr Tripodi signed a document concerning the sharing of commissions on the Bargara project. It purports to be between SPG and City West. This document purports to provide that both commissions and the cost of marketing are to be shared 50/50 between the two parties. There is no proviso that commissions were to be paid only when they were received by SPG, although Mr Tripodi gave evidence that it was his intention that there be such a provision. I do not accept Mr Tripodi’s evidence on this point, and find that it was never part of any agreement between the parties that commission was to be paid only when SPG received its commission.
46 The fact that the commission arrangements between SPG and the Bargara developer and its agent, Carroll McKeddie Pty Ltd, were on a different basis, and the unusual nature of such an arrangement do not affect my finding that the arrangement under which RC or Ms Rous were to receive commissions or that they were to be at the rate of 2.5%, payable as to 1.25% on exchange of contracts, and 1.25% on settlement, regardless of whether SPG had been paid its commission. However, as this purported written agreement was made after Ms Rous had introduced Mr Kotwal and Dr Langford-Smith to the Bargara properties, the written document does not affect the rights of either RC or Ms Rous in any way in respect of those sales. I have already rejected the contention that City West was a party to any arrangement of this type.
47 The introduction of City West as a party to this purported agreement was, according to Ms Rous, and not challenged by Mr Tripodi, inserted at Mr Tripodi’s insistence, notwithstanding that City West was virtually defunct at the time, and its Ultimo office closed within a week of 27 July. I do not accept that Ms Rous or RC ever intended City West to be a party, and that it was a measure of Ms Rous’s distraction as a result of losing her $60,000 investment in City West, and her desperate need for income, that she was persuaded by Mr Tripodi to sign the document.
48 Ms Rous, on behalf of RC, sent invoices to SPG for the commissions. She made repeated requests for payment. On one occasion, in October 2004, at Mr Tripodi’s request, Ms Rous, in her version of events, sent an amended invoice after Mr Tripodi told her to change the wording so that property numbers did not appear and the invoice purported to be for marketing and consultancy fees, rather than commission. Ms Rous questioned this request at the time, but was told “that’s how we do it here.” She later sent an invoice in the original, and I find, correct, form. I accept Ms Rous’s version of these events.
49 Mr Tripodi, and his assistant, Ms Woodland, according to Ms Rous, repeatedly told her that SPG could not pay the commissions on the Bargara sales because it had not received payment from the developer. Under the contractual arrangements that I have found, which do not include any “pay when paid” provision, that was not an excuse for SPG to fail to pay the commissions.
50 Subsequently SPG paid RC $7500 in part satisfaction of the claim for commission. I treat this as an acknowledgement or admission by SPG that the commissions were due and payable to RC. The evidence shows that SPG has received above $60,000 as commission on sales of the Bargara units.
51 Ms Rous alleges, and this was not challenged, that the total price of the Bargara units she was instrumental in selling was $1,120,000. 2.5% of that is $28,000, to which GST must be added, totalling $30,800. RC has been paid $7,500, leaving a balance of $23,300 outstanding.
52 I find that the contractual arrangements applicable to Bargara were a contract between SPG and RC. Both Mr Tripodi and Ms Rous gave evidence that Mr Tripodi advised Ms Rous that the commission should be paid to a company. His evidence was that he usually did business through a company, rather than personally.
53 It follows that the first plaintiff, RC, is entitled to a verdict for $23,300 plus interest against SPG in respect of the Bargara sales.
B. Mission Beach
54 Ms Rous claims commission on the sale of four units at Mission Beach, all to Dr Vu or companies controlled by him. In evidence there is a document dated 17 December 2004 purporting to be an agreement relating to commission on the sale of Mission Beach properties. Again, I find that this document is not the agreement pursuant to which Ms Rous would be entitled to commission, because she brought about the introduction of Dr Vu to SPG, and that she did so well before that date. The agreement in relation to commission on sales of Mission Beach units was partly oral and partly implied. The oral part of the agreement was a conversation between Ms Rous and Mr Tripodi in July 2004, as to which Ms Rous has deposed that Mr Tripodi said words to the following effect:
“I have a development that I am involved in at Mission Beach, which I want you to start selling. I will share commissions with you on the Mission Beach sales on the basis that the whole commission will be 4.4% of the selling price. 2.5% of the selling price will be paid to you and the balance, 1.9% will be kept by Sheridian Property Group. Again, though, I want you to invoice me in the name of your company, RC Property Group Pty Limited.”
It was on the basis of this offer that Ms Rous commenced her work in selling the Mission Beach properties. Her commencement of work constituted an acceptance of the offer made by SPG and Mr Tripodi.
55 I have set out at paragraphs 32 to 34 the circumstances in which the Mission Beach properties were sold to Dr Vu or his nominees.
56 The combined purchase price of the two Mission Beach properties, which have settled (units 19 and 20 of 22 Wongaling Beach Rd) is $516,000. 2.5% of that amount is $12,900. GST on that amount is $1,290. The total amount of commissions claimed on these two Mission Beach properties including GST is therefore $14,190.
57 The other two Mission Beach properties (2/62-66 Mariner Drive and Lot 7 Sabah Apartments) have exchanged contracts but not yet settled. Their total purchase price is $717,000. 1.25% of that amount is $8,962.50. GST on that amount is $896.25. The total amount of commissions claimed on these last two Mission Beach properties including GST is therefore $9,858.75.
58 The total amount of commissions claimed on the Mission Beach properties is $24,048.75.
59 SPG did not, in fact, receive any commission on the sale of any of these properties, so that there was nothing to be shared between SPG and RC. The contractual claim by RC and Ms Rous for commission on the Mission Beach properties must fail.
60 However, the claim based on misleading and deceptive conduct remains. I shall consider that later.
The claim for wages
61 The plaintiffs claim that when Ms Rous was a director of City West, the agreement was not that she would be paid wages, but rather that RC would be paid an amount equal to the award wage for a real estate salesperson as consideration for Ms Rous’s services. This is consistent with what was argued in the Chief Industrial Magistrate’s court. The plaintiffs allege that a similar arrangement existed between the defendant and RC after Ms Rous started work at Leichhardt.
62 The plaintiffs rely on the conversation set out at paragraphs 40 and 41 above, and on other conversations. Ms Rous says that, after she moved to the Leichhardt office, she repeatedly asked and e-mailed Mr Tripodi about when her wages were to be paid. The e-mails or some of them, at least, are in evidence without objection. She says that Mr Tripodi told her that he would start paying wages when the supervision of her certificate was transferred. Ms Rous says that she knew that she needed a supervising agent if she was to be paid legally for selling real estate. She also alleged that Mr Tripodi told her on several occasions that he would arrange to have the certificate transferred. He appeared reluctant and sought to involve Mr Christian Peterson, but this was not successful.
63 The defendants maintain that Ms Rous was never their employee. They never deducted PAYG taxation instalments and they did not arrange superannuation. This would be consistent with an arrangement where Ms Rous was not employed, but RC provided her services under a commercial arrangement for payment of a periodic sum equal to the wages of a real estate salesperson, as had been the case when she worked at Ultimo. However, I find that the inducements for Ms Rous to work at Leichhardt were made to her personally and directly, and there was no intention that RC be involved.
64 In November 2004, Ms Woodland, who acted as Mr Tripodi’s personal assistant, gave Ms Rous a Tax File Number Declaration form, which she completed and returned to Ms Woodland. A copy is in evidence, but Mr Tripodi denied ever seeing the form, let alone signing it and forwarding it to the Australian Taxation Office.
65 There is evidence that SPG did have some business cards printed bearing Ms Rous’s name and the name of that company. There are some e-mails in evidence which suggested that the automatic signature used by Ms Rous showed her to be a Director of SPG, but I find more probably than not that this was a result of the use of the same e-mail address as she had used while she was at City West, where she had been a director. She says that SPG did not provide her with a computer, and that she used her own computer at home. I accept this evidence. She never intended to represent that she was a Director of SPG. She was shown, with a photograph, on the SPG website, as a member of the SPG sales team. She said that she always introduced herself as Zlata Rous from SPG, and did so in the presence of Mr Tripodi, who did not object.
66 Ms Rous says she worked 5 days each week, if not more. She says her average hours were 44 per week. If she was not at the office, she worked from home, which she said she did about 5 hours each day, and kept in touch with the Leichhardt office by phone and e-mail. She said that Mr Tripodi told her she should come in each day, which she did most days. If she did not, she telephoned the office with her reasons. She used her own car, mobile phone and computer. She says that when she started working at Leichhardt, Mr Tripodi told her initially that she would have to work full-time, but a few weeks after she started working from Leichhardt, Mr Tripodi told her that he and SPG did not have enough money to pay her for more than 1 day each week, because when they made money, they made it all at once. I do not have to decide whether or not this was the case, as it does not affect the original contractual relationship, if any.
67 Ms Rous continued working from the Leichhardt office until August 2005, when she discovered that Mr Tripodi was not licensed to sell property in Queensland, and she became worried that she was acting unlawfully. One day in August 2005, she found that the locks on the office had been changed and she was locked out of the office.
68 Mr Tripodi denied that he used the words attributed to him by Ms Rous in many parts of her evidence, or words that had that effect. He denied that he or SPG ever employed Ms Rous, and said that, although the certificate issued in January 2005 shows Ms Rous as his employee, neither he nor SPG in fact employed her, and that he arranged the transfer of the licence because he felt sorry for Ms Rous.
69 For reasons I have already given, I prefer the evidence of Ms Rous to that of Mr Tripodi, and where there is a conflict, I accept the evidence of Ms Rous over that of Mr Tripodi.
70 I find on the balance of probabilities that Mr Tripodi, on behalf of SPG, orally offered to employ Ms Rous at a wage equal to the award wage for Real Estate salespeople, and did so for a period of 58 weeks to 5 August 2005, and that she accepted this offer by commencing work. There was, I find, a binding contract to this effect. The rate is inferred from the fact that this was the basis of her arrangements with City West for remuneration, although she was not employed by that company. The arrangement that Mr Tripodi offered her to work for SPG in return for payment of wages was not a commercial arrangement between Mr Tripodi or SPG on one hand, and RC on the other. It was an employment agreement by SPG with Ms Rous personally, entered into because she accepted this offer on the basis of the inducement that Mr Tripodi would ensure that she was paid a wage and commissions.
71 Accordingly Ms Rous is entitled to recover from SPG wages for 58 weeks ($29,121.80); holiday pay for 5 weeks ($2,240.14); award car and telephone allowance ($2,665.10) and superannuation ($2,620.96), a total of $36, 648.00.
Was there misleading or deceptive conduct - wages?
72 The plaintiffs also allege that the words, which Ms Rous says were used by Mr Tripodi, amounted to misleading or deceptive conduct in respect of the arrangement for payment of wages to her. Her case is that the offer by Mr Tripodi to pay to her an amount of money on a periodic basis, which was equal to the award wage for real estate salespeople, was conduct which had the effect of causing her to put her own personal effort into selling real estate on behalf of SPG, or in arranging promotional activities which would lead to sales of real property by SPG.
73 The fact that no PAYE tax or superannuation was ever provided for by SPG leads to an inference that supports the plaintiff's' contention that neither SPG nor Mr Tripodi ever intended to pay any amount of money to either plaintiff, but rather it intended that Ms Rous would make efforts on their behalf, to the end that SPG would obtain profit, without any remuneration to either plaintiff. I draw this inference.
74 The words and conduct attributed to Mr Tripodi, on behalf of SPG, constituted misleading or deceptive conduct in trade or commerce directed to Ms Rous. SPG has failed to discharge the evidentiary burden placed on it by s 51A to show that it had reasonable grounds for making the representation. She is therefore entitled to compensation for the loss and damage which she suffered by reason of the fact that she accepted the inducement and spent her time in efforts designed to create a profit for SPG.
75 Mr Tripodi as a director and officer of SPG, was knowingly involved in the misleading or deceptive conduct, and therefore is personally liable jointly with SPG to pay the compensation, in the sum calculated in respect of wages and related entitlements, i.e. $36, 648.00.
76 If there was an employment contract, then Ms Rous is entitled to payment of wages and associated remunerative benefits. If there was no employment contract, or if she chooses to pursue a remedy against SPG or Mr Tripodi personally, as she may, because Mr Tripodi has been knowingly involved in the contravention of the statutory provision by SPG, I find that the loss of wages and other benefits payable to an employee was "loss or damage" suffered by Ms Rous as a result of the contravention of the provision of the Act, namely SPG's engaging in misleading or deceptive conduct. The amount of damages or compensation payable is identical in either case. The wages and other benefits due represent an assessment of reasonable compensation for loss or damages in this case: see Henville v Walker (2001) 206 CLR 459, at [18]; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 and cases there cited.
Was there misleading or deceptive conduct - commission?
77 When Mr Tripodi, either on his own account or on behalf of SPG, entered into arrangements with Dr Vu for the sale of the four Mission Beach units, he did so in that fashion either intentionally to ensure that SPG was not entitled to receive commission on those sales, or in a way, possibly unintended, that had that effect. Therefore there would be no contractual obligation to pay commission to Ms Rous or RC, because a sale by or on behalf of SPG was a condition precedent to the obligation to pay commission. The obligation to pay commission arose only in the case of sales brought about jointly by Ms Rous and SPG. In my view this conduct on the part of Mr Tripodi or SPG, or both, in arranging for the sales to Dr Vu or his nominees without the involvement of SPG was misleading or deceptive and did, in fact, mislead Ms Rous into the understanding that she was entitled to commission on the sales to Dr Vu, who, I find, she introduced to the properties.
78 She has suffered loss or damage as A consequence of this conduct to the extent that she has not been paid the commission of 2.5% on the purchase price of the two properties where the sale has been completed, and 1.25% on the two properties where contracts have been exchanged but the sales have not been settled. She would be entitled to a further 1.25% of the purchase price on these two units when and if those sales are settled. However, as the damages to compensate her for the loss or damage she has suffered may take account of the loss of a chance, I propose to award her compensation of 1.25% of the contract price of each of those properties in addition, discounted by 20% to allow for the contingency that the sales may not be completed. This compensation is payable jointly and severally by Mr Tripodi and SPG, as both were parties to the misleading and deceptive conduct, or, alternatively, Mr Tripodi was a director of SPG knowingly concerned in the misleading or deceptive conduct. Both SPG and Mr Tripodi are liable to compensate RC in the sum of $25,095.
79 The defendants rely on the provision in the written agreements, which they say governed the relationship between themselves and the plaintiffs in relation to the payment of commission, that what the plaintiffs are entitled to, if anything, is not a "commission", but rather a "marketing fee". They contend that this arrangement was entered into because, if Ms Rous was not the holder of a proper authority, technically she was not legally entitled to be paid commission as a real estate salesperson would be. I draw the inference from the use of this language, even though I have found that the arrangements for payment of commission were not covered by the written documentation, either in the case of the Bargara units or the Mission Beach units, was used because Mr Tripodi was aware at of Ms Rous's situation, and adopted the terminology as part of a pattern of misleading and deceptive conduct.
Interest
80 The plaintiffs submit that commissions have been due from seven different dates in this dispute. As such, interest entitlements would accrue on seven different amounts from seven different dates as set out below:
DATE EVENT 01/08/04 Dr Langford-Smith’s exchange on Bargara units 204, 312 & 313 11/10/04 Mr Kotwal’s exchange on Bargara unit 311 30/06/05 Dr Vu’s exchanges on units 19 and 20 / 22 Wongaling Beach Rd and on 2 / 62 – 66 Mariner Drive 06/03/06 Mr Kotwal’s Bargara settlement on Bargara unit 311 24/03/06 Dr Langford-Smith’s settlements on Bargara units 204, 312 & 313 14/08/06 Dr Vu’s exchange on lot 7 Sabah 24/01/08 Dr Vu’s settlements on 19 and 20 / 22 Wongaling Beach Rd
This table is slightly complicated by the fact that 5 part payments were made against invoices, totalling $7,500 (or $6,818 exclusive of GST) over the period 15 October 2004 to 17 June 2005. Rather than going into the complex task of calculating the precise effect of these payments on the accrual of interest, having regard to the discretionary nature of the decision to award interest, the plaintiffs accept that those payments should be taken as having been made on 1 August 2004 for the purpose of interest calculation, so that the first above amount on which interest accrues is $4,244.50 (being the difference between $11,062.50 and $6,818). I accept that interest should accrue on the following amounts from the following dates to the date of any judgment at the applicable court rate:
DATE 01/08/04 11/10/04 30/06/05 06/03/06 24/03/06 14/08/06 24/01/08
Interest should run on the amount claimed for wages from the day that Ms Rous left the Leichhardt office which, more probably than not, was 8 August 2005. I accept the plaintiff’s submissions.
Orders
81 I make the following orders:
1. Verdict for the first plaintiff against both defendants jointly and severally, in respect of compensation for loss or damage caused by misleading or deceptive conduct by those defendants in respect of the Mission Beach units, in the sum of $25,095.00 together with interest in accordance with paragraph 80.
- 2. Verdict for first plaintiff against the second defendant in respect of commission on the Bargara units in the sum of $23,300 together with interest to be calculated in accordance with paragraph 80.
- 3. Verdict for the second plaintiff against the first defendant in respect of money due in lieu of wages and other remuneration in the sum of $36,648.00 together with interest to be calculated in accordance with paragraph 80; alternatively in respect of compensation for loss or damage caused by misleading or deceptive conduct against both defendants jointly and severally together with interest in accordance with paragraph 80.
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