Sunshine Group Australia Pty Ltd v Trappando Pty Ltd

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SUPREME COURT OF QUEENSLAND

CITATION:

Sunshine Group Australia Pty Ltd v Trappando Pty Ltd [2023] QCA 214

PARTIES:

SUNSHINE GROUP AUSTRALIA PTY LTD
ACN 168 390 083
(appellant)
v
TRAPPANDO PTY LTD
ACN 112 828 958
(respondent)

FILE NO/S:

Appeal No 6461 of 2023
SC No 154 of 2022

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:


Supreme Court at Cairns – [2023] QSC 87 (Bowskill CJ)

DELIVERED ON:

3 November 2023

DELIVERED AT:

Brisbane

HEARING DATE:

25 September 2023

JUDGES:

Boddice JA and Burns and Ryan JJ

ORDERS:

1.   The appeal be dismissed.

2.   The appellant pay the respondent’s costs of the appeal, to be assessed on the standard basis.

CATCHWORDS:

CONVEYANCING – THE CONTRACT AND CONDITIONS OF SALE – AGENT’S COMMISSION – where the respondent was appointed as real estate agent for the sale of the appellant’s property by way of a Form 6 appointment – where the Form 6 indicated the appointment was for an “exclusive agency” that would continue as an “open listing” at the end of the exclusive agency period – where the sales manager of the respondent, the director of the appellant and a third party who claimed to have interested buyers also entered into a Deed of Agreement shortly prior to the relevant appointment in order for the third party to be rewarded for any introduction of the buyer to the property – where, pursuant to the Deed of Agreement, no commission was payable unless the contract actually proceeded to settlement – where a contract of sale was entered into, but later terminated for the buyer’s breach, and the deposit was forfeited – where the respondent was successful in recovering the agent’s commission, on the basis that it was the effective cause of the sale and was entitled to its commission despite the termination of the contract – whether the respondent was properly appointed by the appellant despite the relevant Form 6 not including a mandatory statement that the commission was to be worked out only on the ‘actual’ sale price – whether the Form 6 was to be read and construed jointly with the Deed of Agreement – whether the respondent was the effective cause of sale within the term of the appointment

Acts Interpretation Act 1954 (Qld), s 48A(2)
Property Occupations Act 2014 (Qld), s 89, s 105

Golden Mile Property Investments Pty Ltd (in liq) v Cudgegong Australia Pty Ltd (2016) 18 BPR 36,121; [2016] NSWCA 224, cited
JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd (No 2) [2020] WASCA 112, cited
Smith v Chadwick (1882) 20 Ch D 27; [1882] UKLawRpCh 73, considered

COUNSEL:

M A Jonsson KC for the appellant
S W Couper KC, with C J Ryall, for the respondent

SOLICITORS:

Preston Law for the appellant
O’Reilly Stevens Lawyers for the respondent

  1. BODDICE JA:  On 18 May 2023, the primary judge gave judgment for the respondent in its claim against the appellant for relief in relation to commission due and…

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Details
Case
[2023] QCA 214
Decision Date

CaseChat Overview and Summary

Sunshine Group Australia Pty Ltd (the appellant) sought to appeal against a decision of the Primary Judge who found that Trappando Pty Ltd (the respondent) was entitled to recover its agent’s commission despite the termination of a contract of sale. The respondent had been appointed as the real estate agent for the sale of the appellant’s property by way of a Form 6 appointment, which provided for an “exclusive agency” that would continue as an “open listing” at the end of the exclusive agency period. The sales manager of the respondent, the director of the appellant, and a third party who claimed to have interested buyers, also entered into a Deed of Agreement. The Deed of Agreement provided that no commission was payable unless the contract actually proceeded to settlement. The primary judge found that the respondent was the effective cause of sale and was entitled to its commission despite the termination of the contract. The appellant appealed the decision, arguing that the respondent was not properly appointed by the appellant and that the Form 6 was to be read and construed jointly with the Deed of Agreement.

The court considered the arguments of the appellant, including the contention that the respondent was not properly appointed by the appellant as the relevant Form 6 did not include a mandatory statement that the commission was to be worked out only on the actual sale price. However, the court found that the omission of the word “actual” did not matter as the plain meaning of the words in part 7 was that the commission for the service was worked out on the price for which the property was agreed to be sold, not, for example, an advertised or listed price. The court also found that the respondent was the effective cause of sale, not the sales manager in his personal capacity. The court concluded that the respondent was the appointed real estate agent for the sale of the property, by the relevant Form 6, and that the respondent was the effective cause of sale of the property “within the Term” of the appointment.

The court found that commission was payable in accordance with the terms of the 2019 appointment. The terms of the 2019 appointment were not to be read down and construed conjointly with the Deed of Agreement. The respondent was not a party to the Deed of Agreement which, insofar as it purported to record an appointment of Anderson personally with Soh as agents for the sale of the property, would be unenforceable for non-compliance with the Act in multiple respects. Further, the Form 6 appointment was an agreement between the respondent as real estate agent and the appellant as seller. Clause 15.1 of its essential terms and conditions specifically provided that it constituted the entire agreement of the parties with respect to the subject matter and superseded all prior negotiations or expressions of intent or understandings.

The appeal was dismissed and the appellant was ordered to pay the respondent’s costs of the appeal.

Orders

Orders of the court

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs of the appeal, to be assessed on the standard basis.

Background

Background to the litigation

The respondent carried on the business of a real estate agency, holding a real estate agent’s licence under the Property Occupations Act 2014 (Qld) (“the Act”). Grahame Anderson was its sales manager and his wife was the sole director of the respondent company.Facts In early 2018, the appellant appointed the respondent as its real estate agent for the sale of the property. The Form 6 appointment, dated 15 January 2018, provided that it was a “continuing appointment” commencing on that date for an “open listing”. The list price was $12,000,000. Commission was payable as follows:“4.4% OF THE SALE PRICE IF THE AGENT INTRODUCES THE BUYER TO THE PROPERTY2.2% OF THE SALE PRICE IF THE SELLER INTRODUCES THE BUYER TO THE PROPERTY…” No interest in the property at the nominated price was received at the time. In 2019, Anderson was approached by Victor Soh who said he had “international buyers” who would be interested in the property. Soh, who was not a real estate agent, wished to be rewarded for any introduction of the buyer to the property. On 13 May 2019, Soh, Anderson and the director of the appellant, entered into a Deed of Agreement. It referred to the property and stated:“The following sets out this agreement:1.You are interested in finding a buyer for the above mentioned property.2.The usual commitment fee of $6,000 is payable to Victor Soh and Grahame Anderson to secure a buyer, the commitment fee of $6,000 is payable to Andersons Real Estate Trust Account (The Stakeholder) on the signing of this agreement.(a)The full amount of $6,000 is refundable to Sunshine Group Australia Pty Ltd if a contract is not signed by 30th July 2019.(b)The full amount of $6,000 is payable to Victor Soh and Grahame Anderson within one (1) business day of the buyer signing a contract of sale.3.You agree to pay a success fee to Victor Soh and Grahame Anderson of $500,000 + GST, this is based on a contract price of $6.5 million + GST. The success fee is payable by you to us or to our nominated party on the settlement date of the property. (as per the attached Property Occupations Form 6 listing authority).4.You undertake to keep the identities of our parties private and confidential and not to disclose to anyone.5.You undertake to keep all discussions confidential, including discussions with our parties confidential. You undertake not to circumvent us or bypass us. You undertake to work with us and assist us. You agree that Victor Soh can assign this agreement to another party at anytime and with written notice to you.6.The payment obligations and clause 5 stated above survive the termination of this agreement. Any changes to this agreement must be in writing and by mutual consent only.7.If our party(s) is agreeable to put in their money based on mutually acceptable terms and conditions, and you then change your mind, there is a fee payable to us of 2% of the amount they are going to put in. This fee is payable by you upon issue of an invoice to you. This clause survives the termination of this agreement.8.If you have other projects you want to discuss with our party(s), you agree to discuss with us first and enter into similar agreement with us prior to approaching our party(s). If we can’t reach agreement, then you will not approach our party(s).”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The appellant also counterclaimed for recovery of the balance of the deposit.Primary decision Relevantly, the primary judge found that although s 105(2)(a) of the Act required that the appointment “state, in writing, that the commission for the service is worked out only on … the actual sale price” and part 7 of the signed Form 6 referred to the “sale price”, the omission of the word “actual” did not matter as the plain meaning of the words in part 7 was that the commission for the service was worked out on the price for which the property was agreed to be sold, not, for example, an advertised or listed price. Accordingly, the Form 6 appointment in May 2019 was valid and effective. The primary judge further found that the respondent was the effective cause of sale, not Anderson in his personal capacity. The email correspondence in relation to the sale of property were all signed off by Anderson, in his capacity as sales manager for the respondent’s real estate business and it was the respondent that was the appointed real estate agent for the sale of the property, by the relevant Form 6. The respondent was also nominated as the seller’s agent in both contracts of sale and the property was marketed by the respondent; it was the means by which the buyer found the property. The primary judge further found that the respondent was the effective cause of sale of the property “within the Term” of the appointment. Whilst part 4, section 2 provided for a single appointment for a particular service or services which started on 25 May 2019 and ended on 30 July 2019, part 6 provided that the appointment would continue as an open listing at the end of that period. Although “Term” was specifically defined in clause 1.10 of the essential terms and conditions by reference to part 4, section 2, the word “Term” was to be construed in the context of the agreement as a whole, which specifically provided for a continuation of the appointment as an open listing, after the expiry of the exclusive listing period. Finally, the primary judge found that commission was payable in accordance with the terms of the 2019 appointment. Its terms were not to be read down and construed conjointly with the Deed of Agreement. The respondent was not a party to the Deed of Agreement which, insofar as it purported to record an appointment of Anderson personally with Soh as agents for the sale of the property, would be unenforceable for non-compliance with the Act in multiple respects. Further, the Form 6 appointment was an agreement between the respondent as real estate agent and the appellant as seller. Clause 15.1 of its essential terms and conditions specifically provided that it constituted the entire agreement of the parties with respect to the subject matter and superseded all prior negotiations or expressions of intent or understandings.ConsiderationGround 1 The appellant submits that on a proper construction of s 105 of the Act, the respondent was not properly appointed under that Act by the appellant as the relevant Form 6 did not include a mandatory statement that the commission was to be worked out only on the actual sale price.

Ratio Decidendi

Legal Principle Established

Finally, the primary judge found that commission was payable in accordance with the terms of the 2019 appointment. Its terms were not to be read down and construed conjointly with the Deed of Agreement. The respondent was not a party to the Deed of Agreement which, insofar as it purported to record an appointment of Anderson personally with Soh as agents for the sale of the property, would be unenforceable for non-compliance with the Act in multiple respects. Further, the Form 6 appointment was an agreement between the respondent as real estate agent and the appellant as seller. Clause 15.1 of its essential terms and conditions specifically provided that it constituted the entire agreement of the parties with respect to the subject matter and superseded all prior negotiations or expressions of intent or understandings.ConsiderationGround 1 The appellant submits that on a proper construction of s 105 of the Act, the respondent was not properly appointed under that Act by the appellant as the relevant Form 6 did not include a mandatory statement that the commission was to be worked out only on the actual sale price. Section 105 of the Act provides:“105 Other requirements—commission(1)This section applies to an appointment of a property agent or resident letting agent for a service that is the sale or letting of property or the collecting of rents if commission is payable for the service and is expressed as a percentage of an estimated sale price or amount of rent to be paid or collected.(2)The appointment must state, in writing, that the commission for the service is worked out only on—(a)for the sale of property—the actual sale price; or(b)for the letting of property—the actual rental for the property; or(c)for the collecting of rents—the actual amount of rent collected.” Section 105(1) of the Act only has operation if the commission payable for the service “is expressed as a percentage of an estimated sale price…”. Only, in that event, is there a requirement that the appointment state, in writing, that the commission is worked out only on the actual sale price of the property. In the present case, the relevant Form 6 provided that commission was to be payable for the relevant service as follows:(1)For a sale price up to and including $6,300,000 plus GST, 4.4 per cent of the sale price;(2)For a sale price of over and including $6,300,001 plus GST, for money above $6,000,000 plus GST, to be paid to the agent plus GST. Having regard to the wording of that clause, it may be doubted that the commission was expressed as a percentage of an estimated sale price. However, as the respondent has not filed a notice of contention, it is unnecessary to determine that question. In any event, there was no error in the primary judge’s conclusion that the omission of the word “actual”, before “sale price”, rendered the relevant Form 6 of no legal effect. The words used in the Form 6 do not set out or express any formula or provision for the payment of commission to the respondent other than by reference to a particular sale price. The only proper construction of the words “sale price” in the relevant Form 6 was that it was referring to the price for which the property was agreed to be sold, which, for the purposes of the section, is the actual sale price.