Vameba Pty Ltd v William Simpson (No. 2)
[2007] NSWDC 128
•14 June 2007
CITATION: Vameba Pty Ltd v William Simpson (No. 2) [2007] NSWDC 128 HEARING DATE(S): 14 May 2007 - 16 May 2007
JUDGMENT DATE:
14 June 2007JURISDICTION: Civil JUDGMENT OF: Rolfe DCJ DECISION: Verdict and Judgment for the Defendants. CATCHWORDS: Claim for Commission by Real Estate Agent - Whether Conjunction Agreement entered into as a result of fraudulent misrepresentation - Termination of Conjunction Agreement - Consideration of whether agent was effective cause of sale LEGISLATION CITED: Trade Practices Act 1974 (Cth) s 52
Property, Stock & Business Agents Act 2002 s 55 (1) (b)
Property, Stock & Business Agent Regulation 2003 Clause 13CASES CITED: Sunbird Plaza Pty Limited v Maloney (1988) 166 CLR 245 at 262
Shepherd v Felt & Textiles of Australia Limited (1931) 45 CLR 359
L J Hooker Limited v W J Adams Estates Pty Limited (1977) 138 CLR 52 at 67-68
Emmons Mt Gambier Pty Limited v Specialist Solicitors Network Pty Limited (2005) NSW CA 117
Baker v Leonard Oades Pty Limited (1964-5) NSW R1745PARTIES: Vameba Pty Ltd (Plaintiff)
William Simpson (1st Defendant)
Gail Simpson (2nd Defendant)
Malouf Real Estate Pty Ltd (3rd DefendantFILE NUMBER(S): 367/06; 1821/07 COUNSEL: S B Docker (Plaintiff)
J J Loofs (Defendants)
JUDGMENT
INTRODUCTION
1 Proceedings 367/06 and 1821/07 were heard together. They arise out of the sale of 8 Fisher Avenue Vaucluse (“Property”), which was owned by Dr William Simpson and Mrs Gail Simpson (“Vendors”).
2 The Plaintiff is a real estate agent which entered into an agency agreement with the Vendors on 2 July 2005 concerning the sale of the Property (exhibit A, “Ray White Agency Agreement”).
3 On 12 October 2005 the Vendors entered into an agency agreement with Malouf Real Estate Pty Limited trading as L J Hooker Double Bay (“Defendant”) concerning the sale of the Property (exhibit B, “LJ Hooker Agency Agreement”).
4 On 21 October 2005 the Plaintiff and the Defendant entered into an agreement which I will refer to as the “Conjunction Agreement” (exhibit E).
5 On 6 November 2005 the Vendors and the Defendant entered into a second agency agreement concerning the sale of the Property (exhibit G, “Second L J Hooker Agency Agreement”).
6 On 7 November 2005 the Defendant purportedly terminated the Conjunction Agreement. The Plaintiff alleges that the Defendant’s purported termination of the Conjunction Agreement was of no effect.
7 On 25 November 2005 the Vendors exchanged contracts for the sale of the Property with the purchaser, Mrs Penklis.
8 The Plaintiff claims that it effectively introduced Mrs Penklis to the Property and to the Vendors. As a consequence, in proceedings 367 of 2006, the Plaintiff claims $92,950.00 from the Defendant, being the Plaintiff’s share of commission on the sale of the Property calculated in accordance with the Conjunction Agreement.
9 In the alternative, in proceedings 1821 of 2007, the Plaintiff claims $185,900, which the Plaintiff says the Vendors owe it as commission under the Ray White Agency Agreement.
FACTS
10 Between January 2003 and December 2005 Albert Sassoon was employed by the Plaintiff as a real estate agent selling residential properties in the eastern suburbs. At the time the Plaintiff entered into the Ray White Agency Agreement with the Vendors, Mr Sassoon had only had a little over three years experience as a real estate agent. In this respect, the Property was by far and away the most expensive property Mr Sassoon had marketed for sale.
11 On the instructions of the Vendors, the marketing campaign for the Property was a low key affair. The Vendors instructed Mr Sassoon to advertise the Property only on the Internet. He was instructed that interested buyers could inspect it and he was to accompany them. The Vendors wanted to establish the level of interest in the Property in the market before they committed to incurring substantial advertising costs and auction sale costs.
12 Mr Sassoon arranged open inspections of the Property on seven occasions between 23 July and 27 August 2005. He kept an inspection book for this purpose and arranged for a copy of the contract for sale to be made available at the inspections.
13 On 20 August 2005 Mr and Mrs Penklis inspected the Property.
14 On 22 August 2005 Mr Sassoon said he spoke to Mr Penklis and that Mr Penklis told him the property was worth between $7,000,000 to $7,500,000.
15 Mrs Penklis inspected the property again on 25 August 2005 and Mr Penklis inspected it again on 27 August 2005.
16 On 2 September 2005 Mr Sassoon spoke to Mr Penklis. This was shortly after a nearby property, known as 18 Fisher Avenue, had been sold for $7,600,000. Although Mr and Mrs Penklis had never been interested in purchasing 18 Fisher Avenue, they regarded it as the benchmark price for the Vendors’ Property. Consequently, Mr Penklis made an offer to Mr Sassoon to purchase the Property for $7,600,000.
17 The Vendors were not interested in the offer made by Mr Penklis at $7,600,000.
18 According to Mr Sassoon, when he spoke to Mr Penklis again, Mr Penklis asked Mr Sassoon if the Vendors would accept $8,000,000. Mr Penklis did not agree with this. His recollection was that it was Mr Sassoon who said that the offer would need to be $8,000,000 and that Mr Sassoon said he would take this amount back to the Vendors. For reasons given later, I prefer Mr Penklis’ evidence about what was said in this discussion.
19 Mr Sassoon spoke to the Vendors and told them that Mr Penklis had made a verbal offer of $8,000,000. Mr Sassoon said that Dr Simpson told him that although $8,000,000 was a good offer, it was not enough to convince the Vendors to sell the Property. At that stage the Vendors had undertaken very little marketing and the garden was not at its best. In addition, Mrs Simpson had been unwell.
20 Accordingly, the Vendors informed Mr Sassoon that they would probably get a full marketing campaign underway later on. In the meantime, if anyone was interested, Mr Sassoon could show them through the Property. In this respect, Mr Sassoon showed a few interested parties through the Property over the next few weeks.
21 In his evidence in chief (para 29, exhibit N), Mr Sassoon said it was Mrs Simpson who told him she “would like to achieve a purchase price of $8,500,000 plus”, but in cross-examination, he asserted that this figure had been mutually agreed between the Vendors. However, that was not set out in exhibit N and I am satisfied Mr Sassoon made it up. I am also satisfied that between September and early October 2005 the Vendors were not really interested in marketing the Property, at least insofar as the marketing would be done by the Plaintiff. Also, as between themselves, the Vendors were having trouble agreeing on what was to happen with the sale of the Property.
22 One morning, around about this time, Mr Sassoon ran into Mr Penklis at Bondi Beach while they were both exercising (Mr Sassoon ran and Mr Penklis walked). According to Mr Sassoon, he told Mr Penklis that if he was interested in purchasing the Property he would have to make an offer over $8,000,000, to which Mr Penklis responded that he was interested, but did not want to pay too much. He said he would rather wait until there was an auction to find out if anyone else was interested in buying the Property. Mr Sassoon maintained in his evidence that Mr Penklis was quite definite about wanting the Property and that he would pay over $8,000,000 “if he saw competition”.
23 Next, according to Mr Sassoon, Dr Simpson telephoned him on or about 6 October 2005 and said that he would like to involve another agent in the sale process. During his cross-examination, Mr Sassoon said he was the one who recommended Bill Malouf, the principal of the Defendant, whereas, in his evidence in chief in para 32 of exhibit N, it is clear that it was Dr Simpson who suggested either Mr Malouf or Raine & Horne Double Bay. I am satisfied that it was, in fact, Dr Simpson who made this suggestion.
24 On 12 October 2005 Dr Simpson told Mr Sassoon that he and Mrs Simpson had signed the L J Hooker Agency Agreement. According to Mr Sassoon, Dr Simpson said he had instructed Mr Malouf to offer Mr Sassoon and Raine & Horne a conjunction agreement in relation to any buyer who would be interested in purchasing the Property, including Mr Penklis. Dr Simpson told Mr Sassoon he had spoken to Mr Malouf who had no problems with a conjunction arrangement.
25 Mr Sassoon acknowledged in cross-examination that Mr Malouf had the choice as to whether or not the Defendant would enter into a conjunction arrangement, irrespective of what the Vendors may have wanted.
26 Immediately after this discussion, Mr Sassoon sent, unsolicited, a draft conjunction agreement to the Defendant, following which he received Mr Malouf’s letter dated 13 October 2005 (exhibit C), which stated as follows, omitting formal parts:
“I’m writing to inform you that L J Hooker Double Bay has been appointed the exclusive marketing agency for the abovementioned residence.
If you have any queries, please feel free to contact me on 0411 428 354.”If you have any purchaser of whom I’ve not previously dealt with, then I am happy to offer a 50% conjunction to you, in the event of a successful sale. All inspections and negotiations will be done through L J Hooker Double Bay.
27 With reference to the above, Mr Sassoon agreed he had spoken to Mr Malouf after receiving the letter, but denied that Mr Malouf had put it to him that he was proposing a conjunction arrangement on the basis that Mr Sassoon was representing Mr Penklis and that Mr Penklis wanted to deal with Mr Malouf through the Plaintiff. Mr Sassoon denied in cross-examination that he well knew he would have to give Mr Malouf a good reason for entering into a conjunction arrangement. I do not accept this denial. The real estate business is tough and it is obvious that Mr Malouf wanted a good reason from Mr Sassoon to offer a conjunction arrangement because he might then have had to share the commission on the sale with Mr Sassoon. Mr Sassoon also rejected the suggestion that Mr Malouf had asked him to confirm that he represented Mr and Mrs Penklis and that he gave the confirmation as well. In paragraph 49 of exhibit N Mr Sassoon said:
“At no time did I maintain to Mr Malouf or to Mr Penklis that I represented Mr Penklis. I introduced Mr and Mrs Penklis in writing to Mr Malouf and did not at any time have any conversations with him about Mr and Mrs Penklis.”
28 Just after this discussion, Mr Malouf and Mr Sassoon met to discuss the offer of a 50% conjunction. According to Mr Sassoon, Mr Malouf told him that he had met with the Vendors and they had discussed the Plaintiff and Defendant working together. Mr Malouf had told them that he would only do that if the commission was 3.3%, but if they chose to appoint Mr Malouf, he would work on a commission of 2.2%. According to Mr Sassoon, Mr Malouf said:
“So they decided to leave you out of the sale process and offer you a conjunction on any of your buyers.”
Mr Sassoon said he expressed his disappointment and Mr Malouf reiterated that it was a matter for the Vendors to decide.
29 On the same day as he had the meeting with Mr Malouf, Mr Sassoon arranged for the undated letter (exhibit D) to be delivered to Mr Malouf, in which he stated:
“As per my telephone conversation with William & Gail Simpson, I confirm that I’m introducing Christine & George Emanuel Penklis, with whom we were negotiating during our Exclusive agency agreement on 8 Fisher Avenue, Vaucluse on a conjunction basis as per your letter of 14 October 2005. (sic)
We confirm that Christine & George Penklis have informed us that they have had no prior dealings with your office in respect to this property.”I confirm that Christine & George Penklis have a Contract for Sale for the property provided by this office during our Agency period. However, we would appreciate an updated contract being delivered to your office at your earliest convenience.
30 The Conjunction Agreement was signed on 21 October 2005 and Mr Sassoon collected a copy of it from the Defendant’s office. He noted that Mr Malouf had written on it at the top:
“Please note; this conjunction agreement is only valid for Christine & George Penklis.”
31 Mr Sassoon did not complain to Mr Malouf about the handwritten words forming part of the Conjunction Agreement and I am satisfied that they were part of the Conjunction Agreement. In his evidence in chief (para 51, exhibit N), Mr Sassoon said that he phoned Mr Penklis around about 21 October 2005 and told him that Mr Malouf would be taking the Property to the market and that he had been offered a conjunction arrangement to introduce Mr Penklis to the property. Mr Penklis responded by saying he was upset and concerned he might miss out on the Property because of prior dealings he had had with Mr Malouf. He told Mr Sassoon that, whilst he was overseas on a previous occasion, Mr Malouf had sold a property at Dover Heights that he had been interested in. Mr Sassoon sympathised but told Mr Penklis that Mr Malouf was now handling the sale of the Property. Mr Sassoon also told Mr Penklis that he had introduced him as a buyer but all negotiations had to be done through Mr Malouf.
32 Mr Sassoon agreed in cross-examination that he did not tell Mr Penklis that he had wanted Mr Penklis to authorise him to represent Mr & Mrs Penklis on the sale of the Property.
33 On 7 November 2005 Mr Sassoon received Mr Malouf’s letter (exhibit H) which stated as follows, omitting formal parts:
“I am writing to inform that the conjunction agreement on the above mentioned property with George Penklis is hereby terminated.
The reason for this is that I was approached by George Penklis at the open for inspection on Saturday who informed me that he had not granted you permission to represent him on above mentioned property. He has informed us that he would be representing himself and would not recognise any introduction to the property from yourself or any person from Ray White Double Bay.
Please contact me on 0411 428 354 if you have any questions.”I am more than happy for you to confirm this information with George Penklis directly. I would like to also confirm that this letter is a termination of our conjunction agreement with George Penklis.
34 Following receipt of this letter Mr Sassoon said he spoke to Mr Penklis and told him that the Conjunction Agreement was between Mr Malouf and him and had no direct relation to Mr Penklis and it would not impact on Mr Penklis’ opportunity to purchase the Property. He said to Mr Penklis (exhibit N, para 55):
“I want to reassure you that if you feel you are being compromised in the purchase of 8 Fisher Avenue, I want you to know that I have a relationship with the vendor and they have promised me that they will not sell the home without speaking to me first.”
This was false. The Vendors had never said any such thing to Mr Sassoon, nor had they ever made a promise of that sort.
35 On 11 November 2005 Mr Sassoon sent an up to date version of the contract for sale to Mr Penklis and sought to reassure him that the Conjunction Agreement had “no direct relation to you”.
36 Next, Mr Sassoon received a letter dated 17 November 2005 (exhibit L) from Mr Malouf in the following terms, omitting formal parts:
“Further to your letter dated 7th November 2005, I have enclosed herewith a letter from George Penklis.
This letter is confirmation that, you acted without his consent and deceitfully introduced him to the above mentioned property.
If you have any further questions regarding this please feel free to contact me on the number listed below.”It is for this reason that I again inform you that I will not be accepting any claim of commission from Ray White Double Bay in the event that George Penklis proceeds with the purchase of 8 Fisher Ave, Vaucluse. This letter is (sic) also serves as a termination of our conjunction agreement.
37 Attached to the Defendant’s letter was a letter from Mr Penklis dated 17 November 2005 (attached to exhibit L) in the following terms, omitting formal parts:
“Further to your letter of 11 November 2005 I write to clarify my understanding of events.
You will recall that when you contacted me to advise that Bill Malouf was appointed to sell 8 Fisher Avenue you expressed the view that you wanted to represent me in the acquisition of the property. I rejected that offer and said that I did not believe it to be a good idea and you stated that it was too late as you had already sent a letter to that effect to Bill Malouf of L J Hooker Double Bay.
For the sake of clarity, at no time have I given you the right to represent me or to introduce me as a prospective purchaser to the above-named property. I acknowledge that you were present selling the home on behalf of the vendor when I attended the premises prior to the appointment of Bill Malouf.
If your understanding of the events differs to mine, please advise.”At the first inspection of the property by L J Hooker Double Bay and based on our telephone conversation I informed Bill Malouf that I was inspecting the property under my own arrangements.
38 Shortly after this Mr Sassoon showed Mr & Mrs Penklis through another property, but they were not interested in it. Shortly after that, Mr Sassoon ran across Mr Penklis again at Bondi Beach. Mr Sassoon said he was asked by Mr Penklis what a fair price for the Property was and Mr Sassoon said he told him between $8,000,000 and $8,250.000. According to Mr Sassoon, Mr Penklis asked if he would be paying too much if he offered $8,350,000.
39 On 25 November 2005 the Vendors sold the Property to Mrs Penklis for $8,450,000 and contracts were exchanged on that date.
40 Mr Malouf’s evidence in chief is contained in exhibit 2. Mr Malouf is a very experienced real estate agent who has operated his business in the eastern suburbs for 20 years.
41 Mr Malouf said that during 2005 he became aware that the Plaintiff had entered into the Ray White Agency Agreement with the Vendors in relation to the Property.
42 Julian Tobias was a licensed real estate agent employed by the Defendant. Mr Tobias knew Dr Simpson. In September 2005 Mr Tobias told Mr Malouf that he had spoken to Dr Simpson, who had informed him that the exclusive agency period under the Ray White Agency Agreement had expired. Accordingly, Mr Tobias told Dr Simpson that he and Mr Malouf would like to go through the Property and have the opportunity of speaking to Dr Simpson. Dr Simpson agreed.
43 Mr Malouf and Mr Tobias inspected the Property in early October 2005 and they then met with Dr Simpson in his dental surgery. The meeting took about two hours, during which time they discussed the market generally, the Property, comparable sales in the area and the differences between the Property and the recently sold, adjacent, property at 18 Fisher Avenue.
44 During the discussion with Dr Simpson, Mr Malouf was told that the Vendors were not satisfied with the offer of $8,000,000 which had been made some time ago and which the Plaintiff had wanted the Vendors to accept. Dr Simpson told Mr Malouf that Mr Sassoon had advised him that the Property was worth $9,000,000 plus.
45 Mr Malouf told Dr Simpson that $9,000,000 was not achievable, but a figure somewhere between $8,000,000 and $8,500,000 was closer to the mark. He advised Dr Simpson that it would be best to go to the public market place and create competitive bidding from potential purchasers to find out what the real market price of the Property was. He told Dr Simpson that if the Vendors were dissatisfied with the Plaintiff then they were welcome to come back and talk to the Defendant.
46 Shortly after this occurred, Mr Malouf and his personal assistant, Nicholas Moore, met with the Vendors at the Property. During the meeting, Dr Simpson asked Mr Malouf if he did conjunction arrangements and Mr Malouf replied (para 8, exhibit 2):
“I would jointly market a property with another agent, but would charge 3.3% commission. If I get an exclusive, I will only charge 2.2%. I am also happy to offer conjunctions to other agents if they have a buyer who I don’t know exists or a buyer I may know of, but the agent has convinced me he has established a relationship with the buyer and could influence him favourably to purchase the property, and the purchaser is happy to be represented by that agent. If such a buyer ended up purchasing, I would split my commission. Otherwise I would not agree to a conjunction. I am happy to offer that sort of conjunction to all of the major agents in Double Bay.”
47 Shortly after this, Dr Simpson called Mr Tobias and instructed him to prepare an exclusive agency agreement between the Vendors and the Defendant. As a result, there was a discussion between Mr Malouf and the Vendors on 12 October 2005 at the Property, during which Mr Malouf asked if there were any other agency agreements he should know about. Dr Simpson told Mr Malouf that the Ray White Agency Agreement was the only exclusive one the Vendors had entered into and this agreement had expired. Mr Malouf told Dr Simpson that it would be necessary to send a letter to the Plaintiff informing them of a new exclusive agency agreement between the Vendors and the Defendant and terminating any old agreements that were in place. Dr Simpson asked for a draft letter in this respect.
48 On 12 October 2005 the Vendors and the Defendant entered into the L J Hooker Agency Agreement.
49 On 13 October 2005 Dr Simpson gave Mr Malouf a copy of the Vendor’s letter to the Plaintiff dated 13 October 2005 (exhibit 2, annexure ‘A’), which stated, omitting formal parts:
“We write to inform you that we have appointed L J Hooker Double Bay as our exclusive agents in regards to the above property.
Thank you for all your help.”This letter also serves as termination of the non-exclusive selling rights and continuing agency period which was in accordance with our original agreement with you.
In cross-examination Mr Sassoon had claimed that the Plaintiff did not receive Dr Simpson’s letter.
50 Mr Malouf said he then sent to Mr Sassoon the letter dated 13 October 2005 (exhibit C), the contents of which are set out in paragraph 26 above. He sent a similar letter to Raine & Horne Double Bay.
51 Shortly after Mr Malouf sent exhibit C to Mr Sassoon he said that Mr Sassoon rang him. He put Mr Sassoon on speaker phone because his assistant, Mr Moore, was in the room at the time. Mr Malouf’s evidence about the conversation is set out in para 14 of exhibit 2 and is as follows:
“Sassoon: Bill, I’ve got your letter, I would like to introduce someone, his name is George Penklis, I have been dealing with him on that property as a prospective buyer for 3 months.”
Malouf: Are you representing George Penklis?
Sassoon: Yes.
Malouf: So you’re in control of him? You have his confidence?
Sassoon: Yes, he wants to deal with us.
Malouf: What level is he at?
Sassoon: He’s made an offer of $8 million or he’ll pay $8 million. (I am not sure which of these statements were made.)
Malouf: Okay, we’ll send you over a conjunction agreement.
Malouf: Fine. Bring George Penklis along to the open for inspection.”Sassoon: My client already has a contract but I’ll need an up to date contract for sale too.
52 Mr Malouf said that following this conversation he started working on the marketing campaign for the Property. Then, on 21 October 2005, he signed the Conjunction Agreement (exhibit E).
53 At the first “open for inspection” on 5 November 2005, Mr Malouf, Mr Tobias and Mr Moore attended. Mr Malouf and Mr Tobias waited at the front gate and Mr Moore was inside the residence.
54 Mr Malouf said that the first person to arrive was Mr Penklis and he had the following discussion with him (para 18, exhibit 2):
“Malouf: Name please?
Penklis: I am George Penklis.
Penklis: No, before I step foot on this property I want to make it clear that I am not being introduced by Ray White or by Albert Sassoon. I am inspecting this property only in response to your advertisement in the Wentworth Courier. I am telling you this because I do not want to jeopardise my position in relation to the purchase.”Malouf: George we have been expecting you, we understand you are dealing through Ray White.
55 Mr Malouf said that he had a further discussion with Mr Penklis in the following terms (para 20, exhibit 2):
“Penklis: What sort of money are you looking for?
Penklis: I never made an offer of $8 million, I only made a previous offer of $7.6 million.”Malouf: Mid-8’s, north of $8m. I believe you made an offer of $8m.
56 Mr Malouf said that at the end of the “open for inspection” Mr Penklis said to him (para 21, exhibit 2):
“Bill, you’ll get me at $8m.”
57 Mr Malouf then told Mrs Simpson that he intended cancelling the Conjunction Agreement because he had offered it to the Plaintiff on the basis of what had turned out to be a misleading representation by Mr Sassoon.
58 On 6 November 2005 Mr Malouf told the Vendors that Mr Penklis denied that he was being represented by the Plaintiff or that he wanted to deal through them. Mr Malouf asked for the Vendors’ instructions to terminate the Conjunction Agreement and to terminate the L J Hooker Agency Agreement and enter into a fresh one. The Vendors agreed with this course of action and Mr Malouf asked them for confirmation in writing.
59 On 6 November 2005 the Vendors provided this confirmation by the letter which is annexure J to exhibit 2. On the same date, the Vendors entered into the second L J Hooker Agency Agreement with the Defendant (exhibit G).
60 Shortly after these events, Mr Malouf said he saw Mr Sassoon in the car park behind the Defendant’s office at Double Bay and he said to Mr Sassoon (para 26, exhibit 2):
“I’ve been trying to contact you. I’m cancelling the conjunction agency agreement because you said you represented George Penklis, but he denies this and said he does not want to deal with or through Ray White or you. You misled me.”
61 Mr Malouf said he then sent the letter dated 7 November 2005 (exhibit H) to Mr Sassoon, the contents of which are set out in para 33 above.
62 Mr Malouf said that following the first “open for inspection” he conducted negotiations on behalf of the Vendors with Mark Maley. Mr Maley inspected the Property a second time and Mr Malouf told him there was interest in the Property at $8,000,000, but he would be able to purchase it for $8,500,000. Mr Maley subsequently made an offer to purchase the Property for $8,250,000.
63 Mr Malouf said that he told Mr Penklis that Mr Maley had offered $8,250,000 for the Property. Mr Penklis responded by offering to purchase the Property for $8,400,000. Mr Malouf told Mr Penklis that if he offered $8,500,000 that would secure a sale. Eventually, Mr Penklis offered $8,450,000 and the Vendors accepted.
64 Throughout his evidence, particularly in cross-examination, Mr Malouf maintained that he entered into the Conjunction Agreement because he always believed that the Plaintiff, through Mr Sassoon, was “in control of Mr Penklis” and that Mr Sassoon had told him that Mr Penklis only wanted to deal with the Property through the Plaintiff. It was for this reason that Mr Malouf agreed to enter into the Conjunction Agreement because he thought it was in the best interests of the Vendors and it was likely to achieve a better outcome for them.
65 Mr Malouf said that he did not check with Mr Penklis, whom he had known from the interest shown by Mr Penklis in the Dover Heights property, whether Mr Sassoon was “in control” of Mr Penklis because he believed Mr Sassoon when he told him that. He said immediately he found out from Mr Penklis that this was not the case, he took steps to terminate the Conjunction Agreement.
66 With regard to the letter which Mr Penklis sent to Mr Sassoon, the content of which is set out in para 37, Mr Malouf said he spoke to Mr Penklis and suggested he write the letter because there was a problem which had been created by the Plaintiff. Mr Malouf agreed that his office had provided Mr Penklis with a draft of the letter, but as Mr Penklis made clear in his evidence, he amended the draft to meet his needs.
67 Mr Tobias gave evidence that he is a real estate agent who worked for the Defendant for six years between 2000 to 2006. He said that the Vendors were family friends and so he contacted Dr Simpson in late September 2005 and asked if he and Mr Malouf could inspect the Property and then have a chat about it.
68 Mr Tobias said that after they had inspected the Property,he and Mr Malouf spoke to Dr Simpson at his surgery. Dr Simpson told them that the Vendors wanted $9,000,000. Mr Tobias said Mr Malouf advised Dr Simpson that he was not confident that the Property would fetch $9,000,000, but it would sell for between $8,000,000 to $8,500,000. The only way to squeeze the maximum value out of the Property was to put it in the market place and create competitive bidding.
69 Mr Tobias said that on 12 October 2005 he told Dr Simpson what to put in the Vendors’ letter of termination of the Ray White Agency Agreement.
70 Mr Tobias said that he was at the first “open for inspection” on 5 November 2005 and while he was standing at the front gate with Mr Malouf, the following conversation took place (para 10, exhibit 3):
“Penklis: I am entering this property in response to the ad placed in the Wentworth Courier. I am not represented by nor do I have any affiliations with any other agents.
Penklis: That is not the case at all. He asked for my permission to do so but I declined and told him I would make my own further enquiries in relation to the property with the agents who have it listed.”Malouf: We were told by Albert Sassoon that he was representing you in relation to this property.
71 Mr Tobias said in cross-examination that although Mr Malouf asked him what Mr Penklis had said at the first open for inspection on 5 November 2005, that Mr Malouf did not tell him what to put in paragraph 10 of exhibit 3 and the contents of that paragraph were what he remembered Mr Penklis saying on 5 November 2005.
72 Mr Moore gave evidence (exhibit 4) that he is a sales executive who was employed between 2002 to 2005 by the Defendant, both as Mr Malouf’s personal assistant and as a junior sales executive.
73 In October 2005 Mr Moore went with Mr Malouf to the Property where the L J Hooker Agency Agreement was signed by the Vendors.
74 Mr Moore said he was present in Mr Malouf’s office when Mr Sassoon rang and Mr Malouf put the call on speaker phone. Mr Moore said the following conversation took place (para 7, exhibit 4):
“Sassoon: Look, about your letter, I’ve got a buyer who I’m representing called George Penklis and his wife Christine.
Malouf: I know George Penklis but I am not dealing with him on this particular property, so long as you’re in control of that particular buyer I’m happy to offer you a conjunction.
Malouf: Ok.”Sassoon: Yes I am. He wants to deal through us.
75 Mr Moore said that he attended the first “open for inspection” and he heard Mr Malouf say to Mrs Simpson, just before she left the Property, that Mr Penklis had just told him that he was not represented by Mr Sassoon.
76 Mr Moore said that he relied on his memory to provide instructions for the contents of his affidavit and apart from the Defendant’s solicitor, he did not discuss the contents of the affidavit with anyone else. In this respect, he was adamant that during the telephone conversation between Mr Malouf and Mr Sassoon, set out in para 74 above, that Mr Sassoon stated that he was representing Mr & Mrs Penklis.
77 Dr Simpson gave evidence (exhibit 5) that when he appointed Mr Sassoon as the agent to market the Property in July 2005, it was not the Vendors’ intention to heavily advertise the Property, particularly because number 18 Fisher Avenue was on the market. The marketing for the Property therefore was done on a very low key basis.
78 In early September 2005 Mr Sassoon told Dr Simpson that he had an offer to purchase the Property for $7,600,000. Dr Simpson said that after speaking to Mrs Simpson the Vendors rejected the offer and told Mr Sassoon that the price should be closer to $9,000,000. Dr Simpson said he did not hear anything further about any other offer from this buyer.
79 In September 2005 Mr Tobias approached him, asking if the Property had been sold. Dr Simpson said that it had not and that the Vendors were not satisfied with the offer that had been made through Mr Sassoon. Mr Tobias then convinced him to let Mr Malouf and himself inspect the Property and talk to him.
80 Dr Simpson said the discussion took place in his surgery and it was along the lines both Mr Malouf and Mr Tobias gave evidence about.
81 As a result, Dr Simpson instructed Mr Tobias to prepare the L J Hooker Agency Agreement. Before signing it, the Vendors had a conversation with Mr Malouf on 12 October 2005 in the following terms (para 15, exhibit 5):
“Malouf: Willie, what other agency agreements do I need to know about?
Dr Simpson: I only had an exclusive with Ray White (referring to the Plaintiff), but it has expired.
Malouf: You need to send a letter to them about our new exclusive agency agreement and terminate the old agreement you had with them.
Malouf: That’s fine. I always send letters to the best local agent’s advising them that I will consider conjunctions.”Dr Simpson: Bill I want you to work with other agents if they can bring a buyer you otherwise wouldn’t be able to deal with.
82 Dr Simpson recalled that before the first open for inspection Mr Malouf telephoned him and told him that the Plaintiff had nominated a buyer and so the Defendant had entered into the Conjunction Agreement.
83 Dr Simpson said at the first open for inspection on 5 November 2005 Mrs Simpson told that Mr Malouf was going to cancel the Conjunction Agreement because Mr Sassoon had made a misleading representation. He then asked Mr Malouf what was misleading and Mr Malouf told him that Mr Sassoon had represented that Mr Penklis wished to deal only through the Plaintiff, and that was false.
84 Dr Simpson said that after speaking to either Mr Malouf or Mr Tobias he and his wife terminated the L J Hooker Agency Agreement and entered into the second L J Hooker Agency Agreement with the Defendant.
85 In cross-examination Dr Simpson confirmed that the marketing campaign for the Property, whilst it was in the hands of the Plaintiff, was very much a low key affair. He said that with regard to the offer of $7,600,000, which Mr Sassoon had passed on to the Vendors, that this was not close to what they wanted and they were not interested in it, so much so that Dr Simpson was not certain that he even knew Mr Penklis’ name at the time. In this respect, Dr Simpson said he did not recall Mr Penklis making an offer of $8,000,000 or discussing such an offer with Mr Sassoon.
86 Dr Simpson said that, in effect, he had put the notion of selling the Property to bed until Mr Tobias approached him and asked for the opportunity for he and Mr Malouf to inspect it and to talk to Dr Simpson. At that point in time, there had never been a firm offer of $8,000,000. Dr Simpson said if a firm offer had been made it would have got his attention and he would have instructed Mr Sassoon to work the figure up.
87 Dr Simpson gave his evidence in a very open and straightforward way. In this respect, he said it did not even occur to him that there could be a possibility of double commission. He said had that been pointed out, he would have insisted that the matter proceed on the basis of a sole agency in favour of the Defendant.
88 With regard to the Vendors’ letter to the Plaintiff dated 13 October 2005, the content of which is set out in para 49, Dr Simpson’s evidence was that he dictated the letter to his receptionist, who typed it and mailed it most likely after Mrs Simpson had signed it. Mrs Simpson often attended the surgery to deal with the paperwork.
89 Generally, letters are left at the front desk of the surgery after they are signed and posted that night or first thing next morning by a staff member.
90 Dr Simpson’s first recollection of Mr Penklis was of being told after the first “open for inspection” that a Mr Penklis had inspected the Property and that some sort of a misrepresentation had been made to Mr Malouf about him. Dr Simpson was vague about this because he said he did not care at the time, he simply wanted a favourable result from the proposed auction. This evidence made perfect sense to me.
91 Looking at Dr Simpson’s evidence as a whole, as I said, he gave it in a very straightforward, open way and I accept him as a truthful, honest witness who had a reasonably good recollection of the events in question.
92 Dr Simpson’s practice manager at his surgery, Yan Zhao, gave evidence (exhibit 6) that her duties included mailing Dr Simpson’s correspondence, both to patients and in relation to his personal affairs. Ms Zhao recalled seeing the letter dated 13 October 2005, but she could not be precise about it. She said that having checked the day sheets at the surgery it was clear she was at work on 13 and 14 October 2005. Had she been asked by Dr Simpson to photocopy and mail a letter, she would have done so herself or given it to another member of staff to mail prior to 6 o’clock in the evening.
93 Although there was no mail book kept at the surgery, I am satisfied on the basis of the evidence of usual procedure at the surgery given by both Dr Simpson and Ms Zhao, that in fact the letter dated 13 October 2005 was sent by the Vendors through the mail to the Plaintiff. Although the Plaintiff’s witnesses said the letter was not received, the inference I draw in the circumstances is that whilst the letter may possibly have been destroyed by the Plaintiff, most likely it was simply misplaced and that is why Mr Sassoon claimed not to have seen it.
94 George Penklis gave evidence that he is a director of a private equity fund and that he had not met Mr Malouf prior to the first open for inspection, although he had spoken to him by phone prior to that date concerning his interest in a property at Dover Heights. Mr Penklis said he had lost the opportunity to purchase that property and although he was disappointed with Mr Malouf at the time, the effect of his evidence was that he recognised that Mr Malouf was a shrewd agent who would do the best to achieve the maximum outcome on a sale. This therefore concerned Mr Penklis when he found out that Mr Malouf had been given the exclusive agency for the Property, because it meant he would have to deal directly with Mr Malouf.
95 Mr Penklis said that he and Mrs Penklis first saw the Property on the Internet in July 2005. They both liked it from the start. He said initially his approach was a commercial one, but eventually “it became an emotional decision”. Mr Penklis said the Property grew more on Mrs Penklis than it did on him!
96 Mr Penklis said he offered to purchase the Property for $7,600,000 on 2 September 2005, after 18 Fisher Avenue had been sold for that figure. The offer was made to Mr Sassoon. Mr Sassoon responded by telling Mr Penklis that the offer would have to be $8,000,000 to take it back to the Vendors.
97 Mr Penklis was quite clear about the fact that he did not offer to purchase the Property for more than $7,600,000 whilst he was discussing the matter with Mr Sassoon in August 2005. He remembered that Mr Sassoon was keen to get him up to $8,000,000, but he did not because he thought $7,600,000 was the right price in view of the amount for which 18 Fisher Avenue had sold. At most, Mr Penklis said that he would give $8,000,000 some thought, but he was emphatic that he did not go above $7,600,000.
98 Mr Penklis said he ran into Mr Sassoon at Bondi Beach in either late September or early October 2005, after Mr Malouf had been appointed to sell the Property. He recalled Mr Sassoon phoning him and telling him that Mr Malouf had been appointed, but Mr Sassoon made no mention to Mr Penklis of having been offered a conjunction arrangement to introduce Mr Penklis to the Property. Mr Penklis said that a conjunction arrangement did not come up in the conversation, but he recalled Mr Sassoon trying to convince him to let him represent him and Mrs Penklis with regard to the purchase. In that context, Mr Penklis remembered expressing a concern about Mr Malouf and missing out on purchasing the Property because of what had happened to him in dealing with Mr Malouf at Dover Heights. Being quite candid about it whilst giving evidence, Mr Penklis said:
“I was much happier at dealing with Mr Sassoon for $7,600,000 than what Bill might do to me!”
99 It was for this reason Mr Penklis was quite clear in his evidence about telling Mr Sassoon that he would not let Mr Sassoon represent him on the purchase. Mr Penklis told Mr Sassoon the he would deal with Mr Malouf himself. It was at this point that Mr Sassoon told Mr Penklis that he had already sent a letter to Mr Malouf, informing Mr Malouf that he was representing Mr Penklis. Mr Penklis said that Mr Sassoon then, rather abruptly, put the phone down.
100 Mr Penklis said that he always wanted to deal directly with Mr Malouf to ensure he could achieve the best outcome for himself and his family. Moreover, Mr Penklis said he did not need any help negotiating directly with a real estate agent. In this respect, he said he had the conversation with Mr Malouf at the first open for inspection because he was concerned about what Mr Sassoon had said and wanted to clear that issue up with Mr Malouf. Having done so, he said he did not need to do anything further regarding Mr Sassoon.
101 Subsequently, Mr Penklis saw Mr Sassoon at Bondi Beach and each time Mr Sassoon tried to tell him to revise the offer of $7,600,000 that he had made earlier, but Mr Penklis refused to do that.
102 When asked why he did not complain to the directors of the Plaintiff about Mr Sassoon’s behaviour, Mr Penklis rather kindly put it this way:
“I chose not to write to Ray White because I didn’t want him to incur the wrath of his bosses.”
103 It must be said that this was a very considerate attitude to adopt, particularly given the fact that Mr Sassoon had taken it upon himself to misrepresent the situation as far as his true relationship with Mr & Mrs Penklis was concerned, when he spoke to Mr Malouf.
104 At the first open for inspection Mr Penklis said that he spoke to Mr Malouf to make it clear that Mr Malouf would be dealing directly with him in relation to the Property. Mr Penklis said he did not know what was in the letter that Mr Sassoon had sent to Mr Malouf and he therefore wanted to make it clear that he was not being represented by anyone. He had a commercial concern that Mr Malouf might not get his full commission and that would not assist him in purchasing the Property. This makes perfect sense.
105 For his part, Mr Malouf told Mr Penklis he had understood that Mr Penklis was being represented by the Plaintiff and Mr Penklis made it clear that that was not the case and so Mr Malouf told him to tell the Plaintiff.
106 Mr Penklis said he told Mr Malouf he was interested in purchasing the Property, that he had previously offered $7,600,000, but that Mr Malouf told him he would not obtain the Property for that price. Consequently, a short time after, Mr Penklis offered $8,000,000 on condition that Mr Malouf would withdraw the Property from sale. Mr Penklis said, with a wry smile on his face, that although Mr Malouf took the offer to the Vendors, nevertheless, he did not withdraw the Property from sale.
107 Mr Penklis said that a couple of weeks later he made his final offer. In between, he had a couple of phone discussions with Mr Malouf and they met in person. He was told there was another purchaser and Mr Malouf told him not to bid and counter bid, but to put a firm, strong bid to the Vendors. This is what occurred.
108 Mr Penklis also said he wrote the letter set out in paragraph 37 because it was appropriate to do so. He said Mr Sassoon had sent him a copy of a contract which he had not asked for and he wanted to clarify his own position, particularly as Mr Sassoon had told him at the time of delivering the draft contract that all he had to say was that Mr Sassoon “was there” when Mr Penklis first looked at the Property.
109 Mr Penklis was a very impressive witness who was careful and considered with the answers that he gave to questions in the witness box both in chief and in cross-examination. The evidence was given in a very straightforward way. My assessment was that Mr Penklis had an extremely good recollection of the events in question, he was very believable and I consider his evidence to be both truthful and extremely reliable. To the extent of there being any conflict between him and Mr Sassoon, I prefer Mr Penklis’ evidence without hesitation.
Claim Under Conjunction Agreement
110 As I read the Plaintiff’s outline of submissions dated 16 May 2007, the plaintiff’s primary claim arises out of the Conjunction Agreement.
111 The Plaintiff submits that exhibit C and exhibit D constitute an offer and acceptance and, together with the Conjunction Agreement, form part of the contract between the Plaintiff and the Defendant.
112 I reject the Plaintiff’s submission. Exhibits C and D were nothing more than part of the pre-contractual discussions which took place between Mr Malouf and Mr Sassoon, during the course of which Mr Sassoon told Mr Penklis he was representing Mr Penklis and that Mr Penklis wanted to deal with Mr Malouf through Mr Sassoon and the Plaintiff. (Mr Malouf also sent a similar letter to exhibit C to Raine & Horne Double Bay).
113 The Defendant contends that it terminated the Conjunction Agreement. Alternatively, the Defendant submits that it entered into the Conjunction Agreement as a consequence of misleading and deceptive conduct on the part of Mr Sassoon, such that the damages suffered by the Defendant would be commensurate with the amount otherwise due from the Defendant to the Plaintiff under the Conjunction Agreement if it remained on foot. The Defendant also submitted that the circumstances in which the Conjunction Agreement was entered into were so unconscionable as to give rise to a claim for equitable compensation commensurate with the amount which the Defendant would otherwise have to pay the Plaintiff under the Conjunction Agreement if it remained on foot.
114 As I said earlier, Mr Malouf needed a very good reason to offer a conjunction arrangement to another agent such as Mr Sassoon. Dr Simpson did no more than recommend Mr Sassoon to Mr Malouf, but it was entirely a matter for Mr Malouf as to whether he entered into the Conjunction Agreement. Paragraph 17 of the L J Hooker Agreement did not require the Defendant to accept an instruction by the Vendors to enter into a conjunction arrangement; rather, it gave the Defendant an entitlement to do this even if the Vendors had instructed otherwise.
115 Dr Simpson was not concerned about the matter and the possibility of double commission did not occur to him. He just wanted the Property sold. From his point of view, Mr Malouf wanted to sell the Property for the Defendant. If there was another agent who potentially could be the effective cause of sale, then Mr Malouf was prepared to enter into a conjunction arrangement with that agent. In my assessment, this is why Mr Malouf decided to enter into the Conjunction Agreement with Mr Sassoon and the Plaintiff. I am satisfied that the conversation which Mr Malouf said he had with Mr Sassoon over the speaker phone took place. I accept Mr Malouf’s version of the discussion, especially since Mr Moore gave evidence to similar effect and I regard both of them as truthful and honest witnesses.
116 There was no reason why Mr Penklis wanted Mr Sassoon to represent him. To the contrary, he wanted to deal directly with Mr Malouf to ensure his interests were protected. He had already missed out on a property at Dover Heights and he wanted to ensure he had the best chance to acquire the Property. Mr Penklis’ assessment was that he was the best person to bring this result about.
117 As far as Mr Sassoon is concerned, I regard him as an untruthful witness. In my assessment, he was carried away with the prospect of achieving a large commission from the sale of the Property and this infected him with a desire to achieve that result come what may. His evidence was untrue in very many respects. For example, Mr Sassoon told the Vendors that Mr Penklis had made a verbal offer of $8,000,000 when that was false. It was also untrue that Mr Penklis told him at Bondi Beach that he would pay over $8,000,000 if he saw competition. The truth was that Mr Penklis was keeping his powder dry and waiting to see what happened at the auction before making another offer.
118 Mr Sassoon also behaved deceitfully when he did not tell Mr Penklis that he wanted Mr Penklis to authorise him to represent Mr and Mrs Penklis regarding the Property. Mr Sassoon took it upon himself to tell Mr Malouf he was authorised by Mr Penklis to represent him before he had even spoken to Mr Penklis.
119 In addition, contrary to his evidence, the Vendors had never promised Mr Sassoon that they would speak to him first before selling the Property.
120 The contemporaneous events support the Defendant’s case. For example, Mr Malouf immediately confronted Mr Sassoon in the car park behind the L J Hooker office at Double Bay after he found out from Mr Penklis that Mr Penklis had never authorised Mr Sassoon to represent him on the sale. Mr Malouf immediately told Mr Sasson that Mr Sassoon had misled him. Similarly, Mr Tobias overhead Mr Penklis being emphatic with Mr Malouf about Mr Sassoon not being authorised to represent him.
121 Accordingly, taking these matters into account, I am comfortably satisfied that Mr Sassoon represented to Mr Malouf, before the Defendant entered into the Conjunction Agreement with the Plaintiff, that Mr Sassoon represented Mr Penklis, that he was in control of Penklis and had his confidence and that Mr Penklis wanted to deal through the Plaintiff. None of these matters was true and if Mr Malouf had known the truth, there is no way he would have arranged for the Defendant to enter into the Conjunction Agreement with the Plaintiff. He had no commercial reason to do so. Accordingly, the statements made by Mr Sassoon were made with the deliberate intention of inducing Mr Malouf to give the Plaintiff a Conjunction arrangement. I am satisfied Mr Malouf relied on the representations made by Mr Sassoon in this respect.
122 In the circumstances, I am satisfied that what occurred was a breach of s 52 of the Trade Practices Act 1974 (Cth), with the consequence that the damages suffered by the Defendant are equivalent to the amount it would otherwise have had to pay the Plaintiff under the Conjunction Agreement. I am also satisfied that the Plaintiff’s behaviour, through Mr Sassoon, was so unconscionable as to give rise to an award of equitable compensation to the Defendant in the same amount so as to defeat the Plaintiff’s claim under the Conjunction Agreement.
123 However, as a separate matter, I am satisfied that the Defendant terminated the Conjunction Agreement. I accept the Defendant’s submission that in a case of this sort it is sufficient to justify a termination with reference to a ground that was valid at the time of termination even if it was not relied on at the time: Sunbird Plaza Pty Limited v Maloney (1988) 166 CLR 245 at 262 citing Shepherd v Felt & Textiles of Australia Limited (1931) 45 CLR 359.
124 In the present case, there was a very good reason which justified the Defendant’s termination of the Agreement, namely, the Plaintiff’s fraudulent misrepresentation, through Mr Sassoon, of the true nature of the Plaintiff’s relationship with Mr Penklis.
125 In any event, clause 2 of the Conjunction Agreement provided for it to be terminated on the instructions of the Vendor and on termination of the L J Hooker Agency Agreement. In this respect I am satisfied that by entering into the second L J Hooker Agency Agreement with the Defendant the Vendors were authorising the Defendant to terminate the Conjunction Agreement and further, I am satisfied that the L J Hooker Agency Agreement was terminated by the Vendors.
126 As a consequence of these findings, the Plaintiff’s claim under the Conjunction Agreement fails.
Claim under the Ray White Agency Agreement
127 Leaving everything else to one side, for the Plaintiff to succeed under the Ray White Agency Agreement it would have to establish that it “effectively introduced” Mrs Penklis to the Property or to the Vendors. The provisions of clause 5 of the Ray White Agency Agreement are very similar to other terms which have been the subject of decided cases.
128 In L J Hooker Limited v W J Adams Estates Pty Limited (1977) 138 CLR 52 at 67-68 Gibbs J held that it was necessary for the agent to show that it was the cause of the ultimate sale.
129 The evidence establishes that at the time the exclusive period of agency under the Ray White Agency Agreement expired, Mr Penklis had only made one offer at $7,600,000 for the Property. He was not prepared to move beyond this figure until he was satisfied there was competition. The competition was not generated until Mr Malouf got involved. Until then, the problem of getting Mr Penklis to increase his initial offer of $7,600,000 to a figure satisfactory to the Vendors remained to be solved. The position is very similar to that in Emmons Mt Gambier Pty Limited v Specialist Solicitors Network Pty Limited (2005) NSW CA 117. In that case at para 45 the Court said:
“It is simply insufficient to rely on the introduction alone and the verbal offer of 25 million. Given the impediment of price, it was Mr Wheeler who bridged the gap. To my mind, it cannot be inferred from the evidence that Mr Wheeler’s efforts flowed through to Mr Wan when he made the ultimate offer of 29.7 million which was accepted by the Vendor. It cannot be inferred that Mr Wheeler’s efforts continued to influence Mr Wan to buy the property. To use the words of Brereton J in Baker v Leonard Oades Pty Limited (1964-5) NSW R1745, ‘the yeast to Mr Wheeler was no longer working’.”
130 In the present case, Mr Sassoon’s efforts did not influence Mr Penklis, on behalf of his wife, to purchase the Property. There was nothing done by Mr Sassoon which would inevitably result in the purchase by Mrs Penklis of the Property. In truth, it was Mr Malouf who was the effective cause of the sale of the Property. This is the inevitable conclusion, accepting Mr Penklis’ evidence on its own, but the conclusion is supported by the evidence of the other witnesses which I have preferred to that of Mr Sassoon. In summary, it was Mr Malouf who got Mr Penklis to go up to $8,450,000 and he persuaded the Vendors to accept that amount.
131 It follows that the Plaintiff’s claim under the Ray White Agency Agreement fails.
132 The Defendant advanced two further bases to support its contention that the Plaintiff’s claim under the Ray White Agency Agreement ought fail. First, it contended that the Plaintiff had failed to comply with s 55 (1) (b) of the Property, Stock & Business Agents Act 2002 and Clause 13 of the Property, Stock & Business Agent Regulation 2003. The issue is not straightforward and in the circumstances, it is not necessary to decide the case on this point.
133 Secondly, the Defendant contended that there was a novation effected by the entry into the Conjunction Agreement dated 21 October 2005. In this regard, I am satisfied that the Vendors’ letter to the Plaintiff set out in para 49 was sent and received.
134 The submissions in support of the novation point are are set out in paragraphs 18-24 of counsel’s written submissions dated 16 May 2007. I accept those submissions and am satisfied there was a novation. It follows that the Plaintiff’s claim under the Ray White Agency Agreement fails for this reason as well.
Result
135 In the result, in both cases there will be a Verdict and Judgment for the Defendants.
136 In view of the conclusions I have reached on the alternate bases with regard to the Cross-Claim, it is not necessary to make any further order with regard to the Cross-Claim. The Cross-Claimant is entitled to its costs with regard to the Cross-Claim.
137 Costs should follow the event on the ordinary basis in both proceedings, but I will hear the parties if either of them wishes to make submissions on the matter.
138 I direct that the exhibits be returned.
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