existence-Trustees-Contract to make a contract-Quaere, concluded contract Refusal by vendor to complete-Vendor's agent-Right to commission- Effect SYDNEY, May 4, 5.

P., who was employed by S. as her agent for commission to " effect the MELBOURNE,

sale of her business " " obtained from A. and J. a written offer. This offer was made by them as " the trustees on behalf of a company to be formed but not then in existence, to purchase the business on certain terms. These terms provided (inter alia) that the vendor would have the right to take up shares in the company, and would grant a lease and assign certain tenancies, to the company. Clause 6 of the offer was as follows :- " The usual agreement for sale and purchase to be entered into by you and the company containing the usual terms of sale and these terms in a form to be satisfactory to you and to the company." This offer was accepted by S. but she refused to com- plete the sale. The contemplated company was not formed. In an action by P. to recover commission from S.,

Held that the documents did not constitute a contract between S. and A. and J. which effected a sale of the business and further that even if the documents, apart from clause 6, were sufficient to constitute a contract, that clause was SO uncertain in its terms as to prevent the arrangement amounting to a binding contract.

Kelner v. Baxter, (1866) L.R. 2 C.P. 174, referred to. Decision of the Supreme Court of New South Wales (Full Court): Parker V. Summergreene, (1949) 50 S.R. (N.S.W.) 5; 67 W.N. 8, reversed.

80 CLR 305

APPEAL from the Supreme Court of New South Wales.

An action was brought in the Supreme Court of New South Wales by Guy Herwald Parker, a real estate agent carrying on business under the firm name of G. H. Parker &Co. at Burwood, near Sydney, against Dora Isabelle Summergreene for commission in the sum of £500 for effecting the sale of the defendant's business carried on by her under the name of "The Dyeing King."

The first count in the declaration was based on the money counts. By the second count it was alleged that in consideration that the plaintiff would effect the sale of the defendant's business the defendant promised the plaintiff that she would carry the sale SO effected into completion and would pay him £500, and although he had effected a binding executory contract of sale between the defendant and two persons jointly ready willing and able to complete the purchase of the business and all conditions were performed and all things happened and all times elapsed necessary to entitle the plaintiff to receive payment of the sum SO promised to him yet the defendant refused to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Summergreene v Parker

Details

AGLC: Summergreene v Parker [1950] HCA 13
Case: [1950] HCA 13
Decision Date: 1 June 1950

CaseChat Overview and Summary

The case of *Summergreene v Parker* involved an appeal to the High Court of Australia concerning a real estate agent's claim for commission. The plaintiff, Mr. Parker, sought to recover £500 from the defendant, Mrs. Summergreene, alleging he had effected the sale of her business. The dispute centred on whether the correspondence exchanged between the parties constituted a binding contract for the sale of the business, thereby entitling the agent to his commission.

The legal issues before the court were whether the documents exchanged between the vendor and the prospective purchasers created a concluded contract for the sale of the business, and if so, whether the agent had successfully "effected a sale" as required to earn his commission. Specifically, the court had to determine if the offer to purchase, made by trustees on behalf of a company to be formed, and the vendor's acceptance, created a legally binding agreement, particularly in light of a clause stipulating that a "usual agreement for sale and purchase" was to be entered into.

The High Court, overturning the decision of the Supreme Court of New South Wales, held that the documents did not constitute a concluded contract for the sale of the business. The Court reasoned that clause 6 of the offer, which stipulated that a "usual agreement for sale and purchase" was to be entered into containing terms satisfactory to both parties and the proposed company, introduced such uncertainty as to prevent the arrangement from amounting to a binding contract. The Court found that essential terms were left to be determined by future agreement, and without evidence of what constituted "usual terms," the agreement remained incomplete. Furthermore, the Court considered the principle established in *Kelner v Baxter*, which allows for the personal liability of agents contracting on behalf of non-existent principals, but found it inapplicable here due to the fundamental uncertainty in the terms and the impossibility of substituting the agents for the proposed company in relation to all stipulated conditions, such as shareholding.

Consequently, the High Court concluded that no sale had been effected, either to the proposed company or to the individuals acting as trustees. Therefore, the plaintiff had not earned his commission. The appeal was allowed, and the judgment entered for the plaintiff by the Full Court of the Supreme Court was set aside.

Orders