Roberts v Kwiecien - [2021] SADC 41

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
ROBERTS & ANOR v KWIECIEN & ANOR
[2021] SADC 41
Judgment of his Honour Judge Burnett
13 April 2021
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA
CONTRACTS - PARTICULAR PARTIES - PRINCIPAL AND AGENT - AUTHORITY OF AGENTS
CONTRACTS - PARTICULAR PARTIES - PRINCIPAL AND AGENT - CREATION OF RELATIONSHIP OF AGENCY - FORMATION AND PROOF OF AGENCY - AGENCY BY ESTOPPEL
The applicants sought to review a judgment of a Judicial Registrar of the Magistrates Court in a minor civil action in which the Judicial Registrar dismissed the claim of the applicants for lack of jurisdiction.
At the relevant time, the applicants were resident in Victoria, seeking to relocate to South Australia. The first and second respondents, Mr and Mrs Kwiecien, were the owners of four townhouses at 8 Brook Avenue, Plympton which they had recently developed. The third respondent, Mr Dunning, was a real estate agent. The applicants signed a residential tenancy agreement for the lease of one of the properties with Mr Dunning. Mr Dunning claimed that he was authorised by Mr and Mrs Kwiecien to sign the agreement on their behalf. Mr and Mrs Kwiecien denied that they had given authority to Mr Dunning to enter into the residential tenancy agreement on their behalf. There was no signed management agreement and Mr and Mrs Kwiecien were not provided with a copy of the signed tenancy agreement.
The father of the first applicant, acting on behalf of the applicants, had inspected the property prior to the entering into of the tenancy agreement. Mrs Kwiecien met him and Mr Dunning at the property and opened up the property for Mr Dunning to show to the first applicant’s father. Mrs Kwiecien permitted Mr Dunning to show the properties to the first applicant’s father on behalf of the applicants.
Mr and Mrs Kwiecien, when they discovered the property had purported to have been leased to the applicants, advised the applicants that they were not offering the property for rent and the applicants did not have the right to lease the property. The applicants then entered into an agreement to lease another property from a third party at a higher rental. The applicants claimed the additional rent.
The proceedings were between residents of different states and therefore involved the exercise of federal diversity jurisdiction within the meaning of s 38A of the South Australian Civil and Administration Tribunal Act 2013 (SA) (the SACAT Act), because it involved jurisdiction of the kind conferred by s 75(iv) of the Constitution of the Commonwealth of Australia. Therefore, the South Australian Civil and Administrative Tribunal (the Tribunal) did not have jurisdiction to hear the matter and the matter was transferred to the Magistrates Court.
The Judicial Registrar found that Mr and Mrs Kwiecien had not given authority to Mr Dunning to enter into the tenancy agreement on their behalf. Therefore, the Judicial Registrar held that there was no residential tenancy agreement within the meaning of s 3 of the Residential Tenancies Act 1995 (SA) (RTA) as there was no agreement between the owners of the property and the tenant. Under s 38C(3) of the SACAT Act, the Magistrates Court has all the jurisdiction, powers and functions conferred on the Tribunal. The Judicial Registrar found that as the Tribunal did not have jurisdiction, it followed that the Magistrates Court also did not have jurisdiction.
Held:
1. Allowing the review and entering a judgment in favour of the applicants against Mr and Mrs Kwiecien in the sum of $3380 for breach of the residential tenancy agreement.
2. Mr and Mrs Kwiecien are entitled to judgment in the sum of $3380 against Mr Dunning because of him acting in excess of his authority when signing the tenancy agreement with the applicants.
3. The written agreement signed by the applicants and Mr Dunning was a residential tenancy agreement within the meaning of s 3 of the RTA. Therefore, the Magistrates Court had jurisdiction to hear and determine the matter.
4. Mr and Mrs Kwiecien were bound by the acts of Mr Dunning under the doctrine of ostensible authority. Mr and Mrs Kwiecien had, by their words and actions, conferred apparent or ostensible authority on Mr Dunning to deal with the applicants. Mr and Mr Kwiecien held out Mr Dunning to the applicants as being the agent for the rental of the property by permitting him to show the property to the first applicant’s father and opening up the properties in the presence of Mr Dunning and the first applicant’s father. The entering into of the residential tenancy agreement by the agent was an act of the particular class of acts which the agent had been held out as having authority.
5. Mr and Mrs Kwiecien are therefore estopped from denying the authority of Mr Dunning to lease the property.
6. The Magistrates Court, in any event, had jurisdiction to determine the claim of the applicants as it involved a monetary claim within the jurisdiction of that court.
7. Mr and Mrs Kwiecien repudiated the agreement by refusing to rent out the property to the applicants.
8. The applicants suffered loss and damage in the sum of $3380 being the additional amount they had to pay for alternate accommodation for the following 12 months. Mr and Mrs Kwiecien are liable to the applicants for that sum for breach of the residential tenancy agreement.
9. Mr Dunning acted in excess of his authority by representing to the applicants (through the first applicant’s father) that he had authority to rent out the property. Accordingly, he is liable to pay Mr and Mrs Kwiecien a sum that represents the loss they have suffered because of him acting beyond his authority.
Magistrates Court Act 1991 (SA) s 8, 38(6), 38(7), 38(8), 38(9); South Australian Civil and Administrative Tribunal Act 2013 (SA) s 38A, 38B, 38C, 82; Constitution of the Commonwealth of Australia (Cth) s 75 (iv), referred to.
Harradine v District Court of South Australia [2012] SASC 96; Gillott v District Court of South Australia [2019] SASC 132; Trittenheim Pty Ltd v H & H Gill Nominees Pty Ltd (1994) 63 SASR 434; Griggs v Norris Group of Companies (2006) 94 SASR 126, [2006] SASC 23; Roache v Australian Mercantile Land & Finance Co Ltd (1966) 67 SR (NSW) 54; NIML Ltd v MAN Financial Australia Ltd (2006) 15 VR 156 ; [2006] VSCA 128 ; Freeman and Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480; Egyptian International Foreign Trade Co v Soplex Wholesale Supplies Ltd (The Raffaella) [1985] 2 Lloyd’s Rep 36; Russo-Chinese Bank v Li Yau Sam [1910] AC 174; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 648, 658; [1989] HCA 23; Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47; Hopcroft & Anor v Edmunds & Ors (No 2) [2012] SASC 94; Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523; Hopcroft & Edwards v Edmunds & Ors [2013] SASCFC 38; (2013) 116 SASR 191; Leggo v Brown & Dureau Ltd (1923) 32 CLR 95; Boulas v Angelopoulos (1991) 5 BPR 11,477; Jones v Canavan [1972] 2 NSWLR 236, considered.

ROBERTS & ANOR v KWIECIEN & ANOR
[2021] SADC 41

Civil
Introduction

This is a review pursuant to s 38(6) of the Magistrates Court Act 1991 (SA) of a minor civil action in which a Judicial Registrar of the Magistrates Court dismissed the claim of the applicants for lack of jurisdiction. The applicants are dissatisfied with the judgment of the Judicial Registrar and have made an application for a review of the matter.
In these proceedings, the applicants, Mr Todd Roberts and Ms Hailey Devitt, seek damages in the sum of $3380 for breach of a residential tenancy agreement. The first and second respondents, Mrs Elizabeth Kwiecien and Mr Edward Kwiecien, were the owners of the property which was the subject of the agreement. The third respondent, Mr Tamir Dunning, was a real estate agent who traded under the name Tamir Dunning Real Estate.
At the time that they entered into the residential tenancy agreement, the applicants resided interstate. Therefore, the proceedings involved the exercise of federal diversity jurisdiction within the meaning of s 38A of the South Australian Civil and Administrative Tribunal Act 2013 (SA) (SACAT Act), because they involved jurisdiction of the kind conferred by s 75 (iv) of the Constitution of the Commonwealth of Australia in that the proceedings involved a dispute between residents of different states. Pursuant to s 38B (1) of the SACAT Act, such proceedings are transferred to the Magistrates Court. In that case, under s 38B(4) of the SACAT Act, the proceedings are continued and completed as if the steps taken prior to the transfer had been taken in the Magistrates Court. Under s 38C(3), the Magistrates Court has all the jurisdiction, powers and functions conferred on the Tribunal. Under s 38C(5) the Court may make such order as it considers appropriate. Section 82 of the SACAT Act provides that although an applicant has sought a particular form of order or relief, the Tribunal may make any other form of order or grant any other relief that it considers is more appropriate. Under s 110 of the Residential Tenancies Act 1995 (SA) (the RTA), the Tribunal may order a person to make payment to another for breach, inter alia, of a residential tenancy agreement.
Notwithstanding that the proceedings had been transferred from the Residential Tenancies Tribunal to the Magistrates Court pursuant to s 38B(2) of the SACAT Act, the Judicial Registrar found that there was no jurisdiction in that Court to hear the matter as there was no residential tenancy agreement within the meaning of that term under the RTA. The Judicial Registrar held that there was no jurisdiction, because she found that although the applicants had entered into a signed residential tenancy agreement with the agent, Mr Dunning, in fact Mr Dunning did not have authority from the owners, Mr and Mrs Kwiecien, to enter into the agreement. Therefore, the Judicial Registrar found that there was no agreement between the owners and the applicants and the claim of the applicants had to be dismissed.
The applicants in their Notice of Review sought a review of the decision of the Judicial Registrar and raised the issue of the authority of the agent and the holding of such authority by the owners (i.e. ostensible authority).
Application for Review
This review is conducted pursuant to s 38(6) to 38(9) of the Magistrates Court Act 1991 (SA). On this review, the Court may inform itself as it thinks fit and in doing so is not bound by the rules of evidence. The Court may also, if it thinks fit, rehear the evidence taken before the Magistrates Court. In hearing and determining this review, the Court must act according to equity, good conscience and the substantial merits of the case, without regard to technicality and legal form. It is important to note that this review is a review of the matter and not a review of the judgment.
The conduct of a minor civil action must be considered in the context of the comments made by Blue J in Harradine v District Court of South Australia.[1] Blue J explained that the role of the Magistrate in such an action is that of an inquirer, rather than managing an adversarial contest between the parties.
[1] [2012] SASC 96 at [40].
In Gillott v District Court of South Australia,[2] Peek J discussed the meaning of the phrase ‘equity, good conscience and substantial merits of the case’ and quoted from the decision of Olsson J in Trittenheim Pty Ltd v H & H Gill Nominees Pty Ltd,[3] in which His Honour noted that the meaning of that phrase must be construed by reference to the nature of the issues involved and, where appropriate, the clear purpose of any relevant statute. Olsson J went on to hold that in certain cases the phrase required that the Court should adopt a broad approach of common sense and common fairness, eschewing all legal or other technicality. In Griggs v Norris Group of Companies,[4] White J referred to the phrase in the context meaning the good sense and natural justice of the matter. At times, he held the expression that the decision maker was empowered to do whatever he or she might think necessary to achieve fairness between the litigants.
[2] [2019] SASC 132 at [40]-[46].
[3] (1994) 63 SASR 434 at 442.
[4] (2006) 94 SASR 126,137; [2006] SASC 23 at [31].
Given the nature of the minor civil review and its purpose to achieve an economical and efficient disposition of the matter, I consider that the phrase ‘equity, good conscience and the substantial merits of the case’ is used in the context described above, that being that the Magistrate (or in this case the Judicial Registrar) is required to act according to good sense and the natural justice of the matter and to do whatever was necessary to achieve fairness between the parties in relation to their legal rights, eschewing legal, or other technicalities. Regard must be had to the substance of the claim and permitting the parties to have an opportunity to address the real issues in dispute.
In the present case, if I find that the Judicial Registrar has wrongly dismissed the claim for lack of jurisdiction, there has been an error of law and a failure to conduct the review according to ‘equity, good conscience and the substantial merits of the case’.
The decision of this Court on review is final and is not subject to appeal pursuant to s 38(8) of the Magistrates Court Act.
As I am reviewing a decision of the Judicial Registrar to summarily dismiss the claim of the applicants, if I allow the review, I can rescind the judgment and substitute a judgment that I consider appropriate or remit the matter to the Magistrates Court for hearing or further hearing.[5]
[5] s 38(7)(d)(iii) of the Magistrates Court Act 1991 (SA).
Conduct of the hearing in the Magistrates Court and findings of the Registrar
The Judicial Registrar initially considered the issue of jurisdiction.[6] The Judicial Registrar held that the Magistrates Court only had jurisdiction, if relevantly, the dispute arose from a residential tenancy agreement.[7] The Judicial Registrar held that for there to have been a residential tenancy agreement in place, she would have to be satisfied that the agent did have authority (i.e. actual authority) to represent the owner.[8] The Judicial Registrar found that having considered all of the evidence, she could not find such authority.[9] As a result of that finding, the Judicial Registrar did not proceed to make any further findings in relation to the applicants’ claim.
[6] Reasons at [4].
[7] Ibid at [5].
[8] Ibid at [19].
[9] Ibid.
The Conduct of the Review
At the review, I heard evidence from the first applicant, Mr Roberts, the first and second respondents, Mr and Mrs Kwiecien and the third respondent, Mr Dunning. I also heard evidence from Mr Bevan Roberts, the father of the first applicant.
I decided that it was appropriate to hear evidence in full for two reasons: first, so that I could determine the issue of jurisdiction and secondly, if I did decide that there was jurisdiction in the Magistrates Court to hear the matter, so that I could determine the matter.
Background to the Claim
At all times relevant to the dispute, the applicants resided in Victoria, but were looking to relocate to Adelaide. The first applicant had been offered and accepted a new position as the chief executive officer of Credit Union SA which was to commence on 29 June 2020. In advance of moving back to South Australia, the applicants were seeking to find a property where they could live in Adelaide. As a result of COVID-19 restrictions, the applicants were limited to searching for properties online and utilising the services of Mr Bevan Roberts, the father of the first applicant, to actually inspect potential properties on their behalf.
The applicants commenced looking for properties to rent in Adelaide in about March 2020. On about 19 April 2020, they had dealt with Mr Dunning in relation to another property, which they determined was not suitable for their needs. On 23 April 2020, Mr Dunning advised them that he had four additional properties at 8 Brook Avenue, Plympton that had not been advertised on the internet. These properties were part of a new construction of four town houses at that property. There were a series of text messages between the first applicant and Mr Dunning in which arrangements were made for the father of Mr Roberts to inspect the properties.
Mr and Mrs Kwiecien had developed the four town houses at 8 Brook Avenue. Work was completed in March 2020. They had entered into a residential sales agency agreement with Harcourts on 3 February 2020 for a period of 90 days for the sale of the properties. They ultimately sold three properties in the period between May – September 2020 and kept the fourth property for themselves.
The above background was not in contest. What was in contest were the arrangements between Mr and Mrs Kwiecien and Mr Dunning and what authority had been given to Mr Dunning by Mr and Mrs Kwiecien.
Mrs Kwiecien gave evidence that she first had contact with and met Mr Dunning on 23 April 2020. Her evidence was that she was looking at possibly renting the properties as the market for sale was getting slow. Mr and Mrs Kwiecien said that at the meeting on 23 April 2020 they told Mr Dunning that they weren’t sure what to do and were testing the waters. Mr Dunning sent a letter to Mr and Mrs Kwiecien on 23 April 2020 which referred to the meeting on that date and made some recommendations about renting and leaving one property for sale. It is evident from this letter, that at this time Mr and Mrs Kwiecen had not made a decision to rent out the properties.
Mr and Mrs Kwiecien gave evidence that Mr Dunning rang on 24 April 2020 to say that he had someone who was interested in inspecting the properties. Mrs Kwiecien gave evidence that in response to that statement she said that they weren’t quite ready yet and wanted to see what it was worth. According to Mrs Kwiecien, Mr Dunning replied that showing someone through would be the best way to determine the value. Mr Dunning denied the conversation took place in these terms.
Mr Bevan Roberts, on behalf of the applicants, inspected two of the properties on 24 April 2020. He reported to the applicants that the properties suited their needs and that they should proceed to rent one of the properties. I accept that evidence. When he attended at the properties, Mr Bevan Roberts met Mr Dunning and waited for Mrs Kwiecien to open up the properties. Mr Kwiecien was away on a trip at that time. Mr Bevan Roberts and the applicants understood Mr Dunning to be the agent for the owners. Mr Dunning advised Mr Bevan Roberts that he was the agent for renting and that Harcourts were the agents for the sale of the properties. Mr Bevan Roberts inspected two of the properties and preferred the property with the butler’s pantry. I accept the evidence of Mr Bevan Roberts.
Following the meeting, Mr Dunning sent to Mr and Mrs Kwiecien a copy of his proposed terms by email dated 24 April 2020. The email did not specify a rent and further said that if the terms were acceptable, he would send through a management agreement. Later on 24 April 2020 he sent to Mr and Mrs Kwiecien the management agreement electronically, although it was never signed.
Mr Dunning then contacted Mrs Kwiecien a number of times by telephone, Mrs Kwiecien replied that she could not make a decision because her husband was away and wasn’t sure if renting out the properties was the way that they wanted to proceed. Mrs Kwiecien said that she did not give authority to Mr Dunning to enter into the contract with the applicants.

Mr Dunning sent through a proposed contract to the applicants. He did not send a copy of that contract to Mr and Mrs Kwiecien. The applicants required a couple of amendments to the contract (e.g. to allow for pets) and Mr Dunning reported that the owners had agreed to the amendments. Mrs Kwiecien agreed that there was a conversation about pets and gave evidence that she hadn’t been able to contact her husband who could not be contacted because he was away. Mr Dunning made the amendments on the proposed contract, but again did not send a copy of the revised contract to Mr and Mrs Kwiecien. Mr Dunning did not suggest that he had sent a copy of the signed contract to Mr and Mrs Kwiecien and gave evidence that he did not believe that he did so.
The applicants on 26 April 2020 signed the residential tenancy agreement for the rental of 8c Brook Avenue, Plympton. The rental was for a period of one year from 1 June 2020 at the rate of $535 per week. The property 8c was the applicants’ preferred property as it contained a butler’s pantry. The applicants on 29 April 2020 pre-paid rent in the sum of $1070 and provided a bond of $3210. Both payments were made into the trust account of Mr Dunning. Mr and Mrs Kwiecien did not at any time enter into a written agency agreement with Mr Dunning, nor they said, did they authorise Mr Dunning to enter into the agreement with the applicants for the rental of the property. Mr Dunning gave evidence that he had a telephone conversation with Mrs Kwiecien and she said go ahead.
Following entry into the residential tenancy agreement, the applicants ceased looking for properties to rent.
On 18 May 2020, Mr Dunning advised the applicants that he had spoken to the owners and they said that they were not offering the properties for rent anymore and had withdrawn from the agreement.
The applicants then started searching for further properties. They located a property at Clapham and entered into an agreement to rent that property from 8 June 2020 for a period of one year at the rate of $600 per week. They required the property at about that date for their move back to South Australia.
The applicants claimed the difference in rent (52 x $65=$3380).
Issues for determination
The following issues arise for determination:
(1)was the written agreement signed by the applicants and Mr Dunning, a residential tenancy agreement within the meaning of the RTA, such that there was jurisdiction in the Magistrates Court to hear the dispute;
(2)if the agreement was not a residential tenancy agreement within the meaning of the RTA, did the Magistrates Court nevertheless have jurisdiction to determine the matter;
(3)if there is jurisdiction (through either (1) or (2)), are the applicants entitled to damages in the sum of $3380;
(4)did Mr Dunning have authority to enter into the tenancy agreement with the applicants or was he acting without authority in entering into that agreement. The answer to this question will determine, if the applicants are successful, which of Mr and Mrs Kwiecien and Mr Dunning should bear ultimate responsibility for the loss suffered by the applicants.
Determination of the Review
Jurisdiction - Residential Tenancy Agreement
The Judicial Registrar found that the tenancy agreement was not a residential tenancy agreement within the meaning of that term in s 3 of the RTA. Therefore, she held that the Magistrates Court did not have jurisdiction to hear the matter, as the Court only had jurisdiction if the matter involved a residential tenancy agreement.
Section 24 of the RTA gives the Tribunal exclusive jurisdiction to hear and determine a tenancy dispute. A tenancy dispute includes, relevantly, a dispute under a residential tenancy agreement. Under s 38C of the SACAT Act, in respect of a transferred proceeding, the Magistrates Court may exercise all of the jurisdiction, powers and functions that the Tribunal had in relation to the matter. The Judicial Registrar implicitly found that because the dipsute did not involve a residential tenancy agreement, the Tribunal had no jurisdiction and therefore the Magistrates Court, in respect of the transferred proceeding, also had no jurisdiction.
Section 3 of the RTA states that a residential tenancy agreement:
..means an agreement (other than a rooming house agreement) under which a person grants another person, for valuable consideration, a right (which may, but need not, be an exclusive right) to occupy premises for the purpose of residence.
If Mr Dunning did in fact have authority from Mr and Mrs Kwiecien to enter into the agreement with the applicants, then there is clearly a residential tenancy agreement within the meaning of s 3 of the RTA. A principal is bound by the authorised acts of its agent.
However, even if the agent (in this case, Mr Dunning) lacks authority, the principals (Mr and Mrs Kwiecien) may be bound by the acts of the agent under the doctrine of ostensible or apparent authority.
Dal Pont in “Law of Agency”[10] expresses the doctrine in the following terms:[11]
The doctrine of ostensible authority dictates that a principal may be liable under a contract effected by a person who lacks actual authority from the principal to effect the contract, but on whom the principal has, by his or her words or action, conferred apparent or ostensible authority to do so.
[10] G E Dal Pont, “Law of Agency” (LexisNexis Butterworths, 3rd ed, 2014).
[11] Ibid at [20.2].
Dal Pont goes on to say that:
Were it not for such a doctrine, persons who bona fide deal with agents, or persons who profess to be agents, would always be at peril if they were confined to having to discover and observe the actual authority of the agent and not be entitled to rely upon the agent’s ostensible authority.[12]
[12] Ibid citing Roache v Australian Mercantile Land & Finance Co Ltd (1966) 67 SR (NSW) 54 at 64; NIML Ltd v MAN Financial Australia Ltd (2006) 15 VR 156 at [19]; [2006] VSCA 128.
For the doctrine of ostensible authority to operate and bind the principal, there must be a representation made by the principal that was relied upon by the contracting third party (in this case, the applicants).[13] In Egyptian International Foreign Trade Co v Soplex Wholesale Supplies Ltd (The Raffaella)[14], Browne-Wilkinson LJ stated:
It is important to bear in mind that the doctrine of holding out is a form of estoppel. As such, the starting point is that the principal must be shown to have made a representation, which the third party could and did reasonably rely on, that the agent had the necessary authority. The relevant enquiry, therefore, in all cases is whether the acts of the principal constitute a representation that the agent had a particular authority and were reasonably so understood by the third party.
[13] Freeman and Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 503.
[14] [1985] 2 Lloyd’s Rep 36 at 41.
The estoppel that is created prevents the principal from asserting that they are not bound by the contract.[15] It is irrelevant whether the agent had actual authority to enter into the contract.[16]
[15] Freeman and Lockyer (a firm) v Buckhurst Properties (Mangal) Ltd [1964] 2 QB 480 at 503.
[16] Ibid.
The acts of the agent relied upon to bind the principal must be acts of that particular class of acts which the agent is held out as having a general authority on behalf of his principal to do.[17]
[17] Russo-Chinese Bank v Li Yau Sam [1910] AC 174 at 184.
In the present case, Mr and Mrs Kwiecien held out Mr Dunning to the applicants as being the agent for the rental of the 8 Brook Avenue properties. They did so by permitting Mr Dunning to show the properties to Mr Bevan Roberts on behalf of the applicants and in fact opening up the properties in the presence of both Mr Dunning and Mr Bevan Roberts and then permitting Mr Dunning to show the properties to Mr Roberts. In undertaking those acts, Mr and Mrs Kwiecien represented to the applicants that Mr Dunning had their authority to act as their agent. I accept that the applicants relied upon the implied representation that Mr Dunning had the relevant authority to enter into the tenancy agreement. Clearly, they considered, with good reason, Mr Dunning to be the agent and therefore to have authority to enter into the tenancy agreement on behalf of the owners. That is a normal incident of such agency. The act of signing the agreement was an act of the particular class of acts which Mr Dunning had been held out as having authority to act. The applicants could not be aware of any reservations of the extent of the authority given to Mr Dunning or the communications between Mr Dunning and Mr and Mrs Kwiecien. None of those matters were communicated to them.
Other grounds for jurisdiction in the Magistrates Court
It follows from what I have said, that the applicants have a good claim for breach of the agreement entered into by the applicants and Mr and Mrs Kwiecien because of the ostensible authority they conferred on Mr Dunning.
In my opinion, that agreement is a residential tenancy agreement for the purposes of the RTA and therefore the Tribunal has original jurisdiction to hear a dispute concerning that agreement if it were not a federal diversity proceeding. As it is such a proceeding, the Magistrates Court has jurisdiction to determine the dispute.
In my view, it would be wrong and give an overly narrow interpretation to the term residential tenancy agreement under s 3 of the RTA to exclude agreements created by ostensible authority. I consider that under an agreement created by ostensible authority, the owners have conferred on the applicants a right to occupy the property. They are estopped, by operation of the doctrine of ostensible authority, from denying that there was such an agreement.
Alternative ground for jurisdiction
However, even if it had been found that there was no residential tenancy agreement between the owners and the applicants (contrary to my finding set out above), the Magistrates Court would, in my view, still have jurisdiction to hear the dispute. The applicants have a good claim for breach of an agreement, created by way of ostensible authority. That claim is a monetary claim for damages within the jurisdiction of the Magistrates Court. It is a claim for damages for breach of an agreement. Under s 38B(4) of the SACAT Act, the proceedings are taken to have been instituted in the Magistrates Court.
Under s 8 of the Magistrates Court Act, the Court has jurisdiction to hear and determine an action for a sum of money where the amount does not exceed $100,000. Therefore, even if the Magistrates Court is not conferred with jurisdiction from the transfer of the proceedings from the Tribunal, it has jurisdiction to hear a claim for the breach of a tenancy agreement. There is no basis to exclude that jurisdiction.
The claim by the applicants against Mr Dunning falls into the same category. It is a monetary claim arising out of the representation made by Mr Dunning to the applicants.
Entitlement to damages
Given my finding that there was a residential tenancy agreement between the applicants and Mr and Mrs Kwiecien, created by way of ostensible authority, it follows that there was a breach of that agreement when Mr and Mrs Kwiecien indicated that they were not bound by the agreement on 18 May 2020 and conveyed that position to the applicants through Mr Dunning. By their actions, Mr and Mrs Kwiecien clearly repudiated the agreement. Repudiation of a contract is established where the conduct of one party conveyed to the other an inability or unwillingness of that party to perform the contract or to only perform the contract in a substantially inconsistent way to his obligations.[18] In Shevill v Builders Licensing Board,[19] Gibbs CJ (with whom Brennan J agreed) said that:
… a contract may be repudiated if one party renounces his liabilities under it - if he evinces an intention no longer to be bound by the contract or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way.
[18] Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 648, 658; [1989] HCA 23.
[19] (1982) 149 CLR 620 at 625-626; [1982] HCA 47.
The applicants accepted that repudiation, as is their right, by seeking alternate accommodation to rent. The applicants are entitled to damages caused by the repudiation of the contract.
The applicants seek the sum of $3380 being the additional amount spent by them for accommodation over the following 12 months. The applicants tendered a copy of the further residential tenancy agreement which shows the increased rental that they had to pay as a result of the repudiation of the agreement by Mr and Mrs Kwiecien. I accept that following the repudiation of the agreement, the applicants made a number of attempts to obtain alternate accommodation and found the alternative property on 23 May 2020. As a result of the repudiation of the agreement by Mr and Mrs Kwiecien and the need of the applicants to find alternate accommodation in a relatively short period, the additional amount paid by the applicants for suitable accommodation is properly characterised as loss arising from the repudiation of the agreement.
Authority of Mr Dunning to enter into the Tenancy Agreement with the applicants
I accept that both Mr Dunning and Mr and Mrs Kwiecien were attempting to tell the truth and each of them honestly believed that the evidence they were giving was truthful and accurate.
I accept the evidence of Mr and Mrs Kwiecien that as at 24 April 2020 and at all relevant times thereafter, they had not definitively reached the view that they would rent out the properties, rather than sell them. They were happy to give Mr Dunning limited authority to show a prospective tenant around the property, but at no time did they give him authority to enter into a residential tenancy agreement on their behalf. There was no written evidence that Mr and Mrs Kwiecien had reached a decision to rent out the property as at 26 April 2020 or had authorised Mr Dunning to sign the document on their behalf. In this regard, it is important to observe that they did not at any time sign a management agreement with Mr Dunning to lease the properties, nor were they provided with a copy of the residential tenancy agreement signed by Mr Dunning and the applicants. The lack of a signed management agreement, is in my view, significant. The parties objectively contemplated that it was only on the signing of the management agreement would the agency be created.
The importance of the parties signing an agreement (where a signature was called for) is demonstrated in Hopcroft & Anor v Edmunds & Ors (No 2).[20]At first instance, Blue J approved the judgments of Kirby P and McHugh JA in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd.[21] Blue J placed emphasis on the lack of an executed contract, where execution was called for. Blue J stated:[22]
Where it is contended that the conduct of the party not executing the document evidences acceptance of a contract on the terms of the document notwithstanding that party’s failure to execute the document, it is necessary to assess the degree to which the party’s conduct is referable, and unequivocally referable, to an acceptance of the formal document and its terms. The degree to which the conduct must be unequivocally referable to an acceptance of the formal document and its terms may well vary depending on the other circumstances of the case.
[20] [2012] SASC 94.
[21] (1988) 14 NSWLR 523.
[22] [2012] SASC 94 at [391].
The decision of Blue J was affirmed on appeal. In Hopcroft & Edwards v Edmunds & Ors,[23] White J (Kourakis CJ, Stanley J agreeing) adopted the same approach. White J held:[24]
For the reasons given earlier I consider that the question of whether the Edmunds’ making the appellants shareholders and directors of Smoothpool indicated acceptance of the appellants’offer should be determined by reference to the position of the objective bystander. The issue is whether a reasonable person in the appellants’ position would have regarded the Edmunds’ conduct as indicating that their offer had been accepted.
[23] (2013) 116 SASR 191; [2013] SASCFC 38.
[24] Ibid at [86].
White J went on to state:[25]
First, the ordinary expectation arising from the preparation of a formal document with provision for execution by all parties continued to apply. A reasonable bystander is unlikely to have considered that that expectation had been displaced.
[25] Ibid at [90].
In my view, Mr Dunning initially proceeded in the hope that his efforts to find a prospective tenant would bear fruit and that Mr and Mrs Kwiecien would enter into an agreement with the applicants. The terms of his emails to Mr and Mrs Kwiecien on 23 April 2020 and 24 April 2020 both suggest that at these times he had not entered into an agency contract with them. Mr Dunning’s later communications with Mr and Mrs Kwiecien were based on a mutual misunderstanding: Mr and Mrs Kwiecien acting on the assumption that there was no agency, until they signed the agency agreement (called the Management Agreement) and Mr Dunning omitting to recall that the Management Agreement had not been signed. I find that although there were numerous telephone conversations between Mr Dunning and Mrs Kwiecien from 24 April 2020 and over the next few days, at no time did Mrs Kwiecien give authority to Mr Dunning to enter into the tenancy agreement on her behalf and on behalf of Mr Kwiecien. Mr Kwiecien was not contactable until 28 April and I accept that Mrs Kwiecien would not enter into a contract to rent the property without his authority. I find that in these telephone conversations Mr Dunning was reporting on matters relating to the applicants, but Mrs Kwiecien did not authorise him to enter into a tenancy agreement with the applicants. I note also that a copy of the rental contract was not sent to Mr and Mrs Kwiecien by Mr Dunning. There was no written document which evidenced Mr and Mrs Kwiecien conferring authority on Mr Dunning to enter into the rental contract on their behalf.
I note also that the text messages by Mr Dunning to the first applicant on 23 April 2020 clearly conveyed that Mr Dunning had been appointed as the agent when that was not the case. I find that Mr Dunning was not always careful to distinguish between his actual authority and the authority that he expected that he would later obtain.
In all of these circumstances, I do not consider that Mr Dunning had authority to enter into the tenancy agreement with the applicants on behalf of Mr and Mrs Kwiecien.
The applicants have a good cause of action against Mr Dunning for breach of warranty of authority. An agent who commits a breach of warranty of authority is bound to make good to the other contracting party what that party has lost or failed to obtain by reason of the non-existence of that authority.[26] The agent is only answerable for the loss to the plaintiff/applicant flowing from the assertion being untrue.[27] In the present case, however, in my view the applicants are able to recover the loss against Mr and Mrs Kwiecien as a result of ostensible authority. I do not consider that any further loss has been caused to them by the warranty of authority being untrue.
[26] Dal Pont (above) at [23.91] citing Leggo v Brown & Dureau Ltd (1923) 32 CLR 95 at 99.
[27] Dal Pont (above) at [23.91] citing Boulas v Angelopoulos (1991) 5 BPR 11,477 at 11,490.
However, it follows from my finding that Mr Dunning did not have authority from Mr and Mrs Kwiecien to enter into the tenancy agreement with the applicants. He had only limited authority to show the applicants (or their representative) around the property. It follows that Mr Dunning has breached his contract of agency with Mr and Mrs Kwiecien by exceeding his agency. An agent’s overriding obligation is to comply with the terms of the agency agreement.[28] Mr Dunning is therefore liable for the loss caused to Mr and Mrs Kwiecien from that breach of contract. As a result of the breach of contract, Mr and Mrs Kwiecien have incurred a liability to the applicants in the sum of $3380. That sum is therefore the loss caused to Mr and Mrs Kwiecien as a result of the breach of the agency contract by Mr Dunning.
[28] Jones v Canavan [1972] 2 NSWLR 236 at 246.
Conclusion

For the above reasons, I would allow the review. I rescind the judgment of the Judicial Registrar dismissing the claim of the applicants. In place of that judgment, I substitute the following judgment.
I award judgment in favour of the applicants against the first and second respondents, Mr and Mrs Kwiecien, in the sum of $3380.
Further, I award judgment in favour of Mr and Mrs Kwiecien against Mr Dunning in the sum of $3380.
I will note in the judgment that both of the above orders for the payment of $3380, will be satisfied, in the event that Mr Dunning pay the sum of $3380 directly to the applicants.