Ray White Surfers Paradise v Abdul

[2011] QDC 47

[2011] QDC 47

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 361 of 2010

ORCHID AVENUE REALTY PTY LTD 
TRADING AS
RAY WHITE SURFERS PARADISE 

Plaintiff

and

NASEEM ABDUL

AND

THERESA ABDUL 

Defendants

SOUTHPORT

..DATE 11/04/2011

ORDER

CATCHWORDS

Uniform Civil Procedure Rules r 292, r 296

Summary judgement for commission awarded to plaintiff real estate agent which had an 'exclusive agency" entitling it to commission on a sale, although it may not have been the effective cause of the sale and allegedly acted contrary to the defendant clients' interests

HIS HONOUR:  This is an application by the plaintiff for summary judgement.  The Court has made an order in terms of the initialled draft which provides that the plaintiff be at liberty to enter judgment as against each defendant for the full amount of the claim being the sum of $51,956.50 plus interest in the sum of $2,270 and costs to be assessed on the standard basis if not agreed the judgment to be stayed for 30 days and the defendants having liberty to apply for an extension of that stay if within that time they have commenced a proceeding in the Supreme Court at Brisbane or the District Court at Southport against the plaintiff. 

The claim is for commission, which the plaintiff says is due under an appointment of it as the defendants' real estate agent to sell a house property.  Pertinent parts of that appointment are set out in the statement of claim and effectively accepted by the defence.  However, the Court has the comfort of Exhibit 1, which is a copy of the entire document.  The plaintiff Company was appointed with the benefit of an "exclusive agency" rather than a sole agency or open listing. 

In Part 5 of Form 22a under the Property Agents and Motor Dealers Act 2000, which has government imprimatur, there are boxes offered for a selection process, "exclusive agency" being selected by ticking and indeed initialled. The preceding information in the form clearly indicates to someone who reads it that in the case of an exclusive agency, if the client/vendor goes elsewhere and appoints another agent, then two commissions are going to be payable in the event of a sale.

The REIQ terms and conditions referred to in and attached as part of the Appointment and initialled to identify them state as follows:  

"2. ENTITLEMENT TO COMMISSION

2.1 The Client agrees to pay the Agent commission as specified in the Appointment if a Contract of Sale of the Property is entered into with a buyer, whether within the Term of after the Term, where the Relevant Person is the effective cause of the sale within the Term, provided that:

(1) the Contract of Sale of the Property is completed; or
(2) the Client defaults under the Contract of Sale and the Contract is terminated by reason of or following that default; or
(3) the Contract of Sale is not completed and the whole or part of the deposit paid is liable to be forfeited; or
(4) the Contract of Sale is terminated my mutual agreement of the Client and the buyer.

2.2 For the purposes of Clause 2.1 a Relevant Person is, where the Appointment is for:

(1) an Exclusive Agency, any person (including the Client); or
(2) a Sole Agency, any person other that the Client; or
(3) an Open Listing, the Agent only."   

In those circumstances however the sale may come about, the Agent with the benefit of an exclusive agency, is entitled to commission.  In my opinion, the condition is not fairly drafted from the point of view of altering someone who does not read it carefully to the extent of his or her liability to pay commission.  I think that most readers of 2.1 would assume the “Relevant Person” is a potential claimant for commission and that the Agent has to be the effective cause of a sale to earn commission.  Only by recourse to 2.2(1) deos one appreciate that “Relevant Person” means anyone in the world, and that the Agent gets commission in consequence of the Exclusive Agency, even if the Agent has done nothing to bring about a sale.

Mr and Mrs Abdul, the defendants who have appeared in person, haven't persuaded me there is any arguable defence.  They have raised complaints against the plaintiff/Agent, contending that it and its principal failed to carry out the duties of an Agent, not only doing little or nothing towards effecting a sale and introducing potential purchasers to the property, but worse than that, subverting the defendants' interest by marketing the property at a price which was too low or indicating to persons showing some interest in the property that its value was in the “low two millions” whereas the defendants' valuation has it about a million dollars higher. 

The defendants sought an adjournment today.  They tell the court that they came here on the understanding that they could get an adjournment for the asking, the application documents indicating that if they wished to defend the application they should attend today, which they have done: it may be a surprise to them to find that that is not enough.  I accept that they were ignorant of the obligations which Rule 296 places on respondents to an application for summary judgment under Rule 292, like the present one.  They are here without any material, seeking an adjournment of a month of so because the solicitor helping them as a favour indicates inability to do anything until after the impending holiday period. 

The defendants have proved elusive when the plaintiff sought to serve the proceeding on them and was served by substituted service on the solicitor who acted for them in the conveyancing. 

I have found it difficult to understand the basis on which the defendants would wish to contend, supported by material yet to be prepared, that they have a defence to this claim.  It has been said that the plaintiff didn't earn the commission - which is essentially beside the point given the terms of the "Exclusive Agency".  An affidavit of the plaintiff's principal, Sherida Smith, tends to indicate that she introduced a person of the same surname as the ultimate purchaser to the property.  The respondents would wish to contest that as I understand things.  They say that the plaintiff had nothing to do with the sale, indeed that the people Sherida Smith and her colleague showed through the property were not in the category of those likely to be interested in buying it.

The Agent did other things including conducting an auction, there's a schedule of anticipated marketing expenses in Exhibit 1, which produces a total of about $13,851, excluding GST as I understand it.  The arithmetic is not entirely clear, but the parties by the appointment agreed that advertising costs in that precise amount would be refunded by the Agent at settlement.  This aspect was looked into because of the court’s concern whether the defendants were being charged GST on both the “advertising” costs and the “scale” commission as provided for in Cluase 7.1 if the Appointment. 

The commission claimed is calculated on $2.375 million, with 10 per cent GST added and $13,851 which appears to be an agreed cost of marketing subtracted. 

Although the defendants are today suggesting the plaintiff did nothing, as events have turned out they engaged the Agent to effect the sale of the property and they have achieved a sale of their property.  Given the terms of the document they signed their contention that they were not to have to pay any more to the plaintiff than the marketing expenses which they have paid already, strikes me as unmeritorious, indeed untenable.  That doesn't mean that, if properly examined, there mightn't be something in the complaints they make about the plaintiff, which is why I have chosen to protect their interests for the period they indicated of about a month by a stay on today's judgment. 

In addition to that, liberty to apply has been reserved so that if so advised they can apply to the Court to have that stay extended. 

I make it clear that given the terms of the appointment and the facts which are established to have happened, there is no reasonable prospect of defending the claim and no point in having a trial about it.  Nor is there any point in acceding to the request for an adjournment one would not serve to help the defendants.

Order as per initialled draft. The claim for interest at 10% under the Supreme Court Act has been reduced by one half. The rate is one which the plaintiff could not obtain in the market. Interest was claimed from the date of a letter of demand some months before commencement of the claim, which is the usual starting date. Further, there was delay of some months in the bringing of the summary judgement application. That is not a reason for refusing judgement (as the defendants asserted) but it is a reason for not allowing the plaintiff to be enriched by interest accruing while it develops at a generous rate otherwise unobtainable.

Thank you. 

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