The Property Investors Alliance Pty Ltd v C88 Project Pty Ltd (in liq)

The Property Investors Alliance Pty Ltd, a real estate agency, pursued rectification and an equitable charge against C88 Project Pty Ltd, a property developer, in the Supreme Court of New South Wales. The dispute arose from agency agreements related to the sale of apartments in a development, where the agency claimed it was owed $3 million in commissions and sought security for these commissions. The agency sought rectification of the agreement to secure repayment of commissions earned prior to the agreement and an equitable charge over property to secure its commission.

The court had to determine whether the evidence was sufficient to prove a common intention that would warrant rectification of the agency agreement. The court also needed to decide if the clauses inserted by the agency into the agreement created an equitable charge. In addressing these issues, the court examined the evidence presented and found it insufficient to meet the standard of clear and convincing proof required for rectification. The court held that there was no common intention between the parties, and thus, the agency agreement could not be rectified.

Further, the court reviewed the principles and case law concerning equitable charges and found no objective, contractual intention to confer a proprietary interest to the agency. The court concluded that the clauses inserted by the agency did not create an equitable charge over the property. The court also noted that even though the agency agreement contravened section 49(1) of the Property and Stock Agents Act 2002 (NSW), which prohibits agents from obtaining a beneficial interest in property, the contravention did not render the agreement unenforceable. The client had consented to the contravention by way of the agency agreement, even though not in the approved form. Consequently, the agency agreement remained enforceable.

The court ordered that the application for rectification be dismissed and that the equitable charge claim be rejected.