Richards v Shaw

[2009] TASSC 19

[2009] TASSC 19

CITATION:            Richards v Shaw [2009] TASSC 19

PARTIES:  RICHARDS, Keith Murray
  v
  SHAW, Garry Bruce

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  376/2004
DELIVERED ON:  25 March 2009
DELIVERED AT:  Hobart
HEARING DATE:  19 March 2009
JUDGMENT OF:  Blow J

CATCHWORDS:

Contracts – General contractual principles – Consideration – Past consideration – Alleged promise to pay intermediary for bringing about a sale – Promise alleged to have been made after intermediary's work had been completed.

Roscorla v Thomas (1842) 3 QB 234; 114 ER 496, applied.
Aust Dig Contracts [88]

REPRESENTATION:

Counsel:
           Plaintiff:  R Grueber
           Defendant:  S P Estcourt QC
Solicitors:
           Plaintiff:  Ogilvie Jennings
           Defendant:  Dobson Mitchell & Allport

Judgment Number:  [2009] TASSC 19
Number of paragraphs:  10

Serial No 19/2009
File No 376/2004

KEITH MURRAY RICHARDS v GARRY BRUCE SHAW

REASONS FOR JUDGMENT  BLOW J

25 March 2009

1. In this action, the plaintiff is claiming remuneration in relation to a real estate transaction, for work done by him in connection with the introduction of a purchaser to the vendor and the bringing about of a sale.  There are some unusual features to his claim.  He is not a real estate agent.  The defendant is not the vendor, but an individual associated with a company that purchased the property in question.  That company was the trustee of the defendant's family trust.  Another unusual feature is that the plaintiff is not claiming a commission or a lump sum, but a right to be paid 20 cents for every tonne of coal mined on the property. 

1. The plaintiff's case, as pleaded, was that the defendant asked him to facilitate the purchase of the property, and that they made an oral contract whereby the plaintiff agreed to provide his services to the defendant to facilitate the purchase, and the defendant promised in return to pay 20 cents per tonne of all coal mined from the property subsequent to its purchase.

1. Surprisingly, no evidence was given at the trial of the making of such a contract, or of any promise by the plaintiff to provide services to the defendant or any entity that was a principal of the defendant. 

1. The vendor of the property was a company named G H Whelan Pty Ltd.  Its directors were a couple named Geoffrey and Nancy Whelan, and their son John Whelan.  The plaintiff and the Whelans shared an interest in horses. 

1. The plaintiff gave evidence to the following effect.  In 1994 Geoffrey Whelan had a conversation with him about the property.  He explained that it had been on the market for some time but had failed to sell. There was a deposit of coal on the property.  Mr Whelan was interested in selling either the property or the coal.  He asked the plaintiff to provide assistance in finding a purchaser.  The plaintiff arranged for a lot of people to look at the property.  In July 1996 a Mr Willans told him that the defendant might be interested.  Arrangements were made, and the plaintiff travelled with the defendant to the property.  They met the Whelans and inspected the property.  Geoffrey Whelan mentioned an asking price of $2.2 million or $2.4 million.  About a week later, the defendant told him of a suggestion that, instead of Mr Whelan paying the plaintiff for his assistance, the price of the property would be reduced, and the defendant would pay the plaintiff 20 cents per tonne of coal in respect of the coal mined from the property.

1. When asked whether he agreed to that arrangement, the plaintiff replied as follows:

"Yes, over a period it was agreed to, and then Mr Cameron Leslie who was doing the contract for Whelans said that he could not act for me, so Mr Shaw said that he would have a Mr Palermo draw mine up, and it sort of never eventuated from there."

1. Evidence was also given by Mr Willans, Mr John Whelan, and the defendant.  Nothing that they said could be regarded as strengthening the plaintiff's case on the critical question as to whether he entered into a contract with the defendant.

1. On the evidence before me, it is not possible to make a finding that a contract was made whereby the plaintiff gave consideration for a promise that he would be paid 20 cents per tonne in respect of coal mined on the property.  There is simply no evidence that he did, or promised to do, anything in return for such a payment.  He had provided services in the past, at least to the vendor, but past consideration is no consideration: Roscorla v Thomas (1842) 3 QB 234; 114 ER 496.

1. I do not think it could be said that the plaintiff gave consideration by releasing the vendor company or any of its directors from a liability to pay him money.  He did give evidence that he had incurred expenditure on phone calls, air fares, and the entertaining of prospective purchasers in the course of his attempts to assist in the sale of the property.  However he gave evidence that there was no arrangement as to what he would be paid, and that he was taking Geoffrey Whelan on trust.  I am satisfied that the plaintiff expected to be paid a reasonable sum if he brought about a sale, but I am also satisfied that he had no intention to enter into legal relations with the vendor company or any of its directors.  He was not a real estate agent but a friend who trusted Geoffrey Whelan to do the honourable thing.  It therefore cannot be said that the plaintiff gave consideration for a promise of 20 cents per tonne by waiving a right to payment by the vendor company or anyone associated with it.

1. There is no evidence that the parties made a legally binding contract.  The action must therefore be dismissed.