Venuti and Venuti v Toop Real Estate Group Pty Ltd No. Scciv-03-1395

[2004] SASC 23

VENUTI and VENUTI  v  TOOP REAL ESTATE GROUP PTY LTD (TRADING AS TOOP & TOOP)
[2004] SASC 23

Magistrates Appeal

1. ANDERSON J      This is an appeal from a Magistrate regarding the conduct of one of the principals of the respondent company, Mr Anthony Toop, in conducting an auction on Sunday, 1 December 1996.

2. The appellants prior to the auction had instructed the respondent that the reserve price for the property was $235,000.  The property was situated at 22 Sprod Avenue, Toorak Gardens.  Mr Anthony Toop was the auctioneer.  He is an experienced auctioneer.

3. When the auction commenced the first bid came from a person later identified as a Mr Turner.  The bid was for $270,000, well above the reserve price.  Mr Toop, when the bid was made, queried the bidder as to whether effectively it was his intention to bid that amount.  There was some disagreement about the words that were actually used, but it does not matter much because clearly in some way or other Mr Toop did give the bidder effectively an opportunity to revise his bid.

4. After the bid was queried by Mr Toop, Mr Turner said that he was sorry and that he meant $170,000 and not $270,000.  Following that, the auction proceeded but there was no bid in excess of the reserve price and the auction failed.  Mr Turner made no further bids.

5. Prior to the auction two formal offers had been made, one for $232,000 which was rejected by the plaintiffs and another of $259,000 upon which the purchasers cooled off.  There had also been six open inspections and the property had been advertised with a price guide of $200,000 plus.

6. The property sold eventually some weeks after the auction for $215,000 to a person who was not at the auction.

7. Mr Toop gave evidence that when the bid for $270,000 was made he believed it was his duty to the vendor to clarify that the bidder had intended such a bid.  He was aware of the problems for a vendor when a successful bidder on the fall of the hammer then refused to sign a contract.

8. The appellants criticised Mr Toop for not having consulted them at the stage the bid was made rather than asking the bidder if indeed he intended to bid the sum of $270,000.

9. A considerable amount of the submission regarded the fact that Mr Turner was known to the auctioneer.  It was suggested that Mr Toop’s friendship with Mr Turner, as revealed in Mr Toop’s evidence, showed that he was attempting to conceal that friendship and that therefore these factors should be used against him in assessing his credibility.

10. The learned Magistrate had the advantage of seeing and hearing Mr Toop and found nothing to adversely affect Mr Toop’s credibility.  He found Mr Toop’s explanation plausible and logical, and so do I.

11. The appellant also suggested that the learned Magistrate did not resolve an apparent conflict in relation to evidence from a Mr Gaetjens as to why Mr Turner might have been a genuinely interested purchaser.

12. The learned Magistrate said that he had difficulty accepting various versions of the events that were given because the claim was filed just short of the six year limitation period.  The learned Magistrate rightly said that this placed all witnesses at a significant disadvantage in recalling details and made it difficult for him to assess those witnesses.

13. In particular the learned Magistrate said:

    “The plaintiffs had no particular reason to reflect on the events of 1 December 1996 in the precise way necessary to formulate and prosecute a civil claim in the courts until they had a conversation with Mr Gaetjens at a social function last year.  It was only after a discussion with him, some five years after the auction, that they decided to take this action.  The issues I have identified as relevant to the defendant’s witnesses apply to the plaintiffs and their witnesses.  Additionally, the plaintiffs are put in a position of giving evidence after they have discussed the events of the 1^st December 1996 with Mr Gaetjens who was also present at the auction.  The possibility of a reconstruction of the details of conversations and who was present at particular times in conversations is, in my view, significant.”

14. The learned Magistrate accepted Mr Turner’s evidence and therefore impliedly either rejected the evidence of Mr Gaetjens or as I think more likely, especially in view of his comments, found that he could not rely upon that evidence.

15. In my view, the learned Magistrate was quite entitled to do this and on my reading of the evidence I agree with his conclusion.

16. Clearly an auctioneer is under a duty to exercise proper skill and care in conducting the auction. The auctioneer, amongst other things, has a duty to secure a binding contract that has been entered into by the purchaser. Failure to secure a contract in writing as required by s 26 of the Law of Property Act 1936 would give rise to the potential liability.

17. In the end, it seems to me that there was ample evidence available to the learned Magistrate to enable him to make the finding that Mr Turner’s bid for $270,000 was a mistake.  The learned Magistrate said:

    “In querying the bid Mr Toop was satisfying the duty he owed the plaintiffs to ensure Mr Turner knew in the clearest terms that the bid was $270,000.  His knowledge of the prevailing property market and the property’s history was such as to alert him to the fact, which turned out to be the case, that the bid was mistaken.”

18. I think the learned Magistrate was right in coming to that conclusion.  In all of this I cannot see how Mr Toop acted negligently in questioning or clarifying the bid.  There was no breach of any contractual duty to the appellants.

19. It is clear from Mr Turner’s evidence that he would never have purchased the property for $270,000.  He in fact made no further bids after his first bid was corrected.  He said that he made the bid to get the auction going and if Mr Toop had not clarified the bid, he would have realised his mistake and withdrawn the bid.  He was not challenged on this statement in cross-examination.  The appellants were in a position where they were unable to prove that Mr Turner would have signed an enforceable contract.  His evidence was to the contrary and accepted by the learned Magistrate.  I agree that there was abundant evidence to show that Mr Turner was never going to buy the property for anything near the amount of his mistaken bid.

20. In my view there are no consequences that would flow in any event from any alleged breach.  The learned Magistrate rightly assessed any loss of a chance as zero.

21. When Mr Turner made his bid in terms of contract law he was making an offer.  As such, the offer could be withdrawn before acceptance; the acceptance in this case would have been on the fall of the hammer.

22. The bid was not accepted by the auctioneer because as has already been discussed he believed it was a mistake.  If the bid had been accepted, the offer from Mr Turner would have converted into an oral contract only.

23. Such a contract is not enforceable as a contract relating to the sale of land until there is a signed note or memorandum of the contract – see Law of Property Act 1936 s 26(1).

24. Also see generally for the discussion above Halsbury’s Law of Australia at [30-120], and the authorities referred to therein.

25. In my opinion therefore this appeal should be dismissed with an order that the appellants pay the respondent’s costs.