Wilde & Wilde v Emilaw Pty Ltd
[2000] QDC 247
•18 August 2000
DISTRICT COURT OF QUEENSLAND
CITATION: Wilde & Wilde v. Emilaw Pty Ltd [2000] QDC 247 PARTIES: RUSSELL GEORGE WILDE and MARILYN MARGARET DOROTHY WILDE (Plaintiffs)
v.
EMILAW PTY LTD (Defendant)FILE NO/S: 5027 OF 1997 DIVISION: PROCEEDING: Trial ORIGINATING COURT: District Court Brisbane DELIVERED ON: 18 August 2000 DELIVERED AT: Brisbane HEARING DATE: 24, 25 and 26 July 2000 JUDGE: Samios DCJ ORDER: CATCHWORDS: AGENCY – real estate agent - breach of duties in law and equity – breach of fiduciary duty – assessment of damages
Hospital Products Limited v. United States Surgical Corporation (1984) 156 CLR 41 at 68
Kepler v. Wheeler & Anor (1927) 1 KB 577
How v. Carman & Anor (1931) SASR 413
Demagogue Pty Ltd v. Ramensky (1992) 39 FCR 31, 32
Maguire v. Makaronis (1997) 71 ALJR 781
Sellers v. Adelaide Petroleum NL (1994) 178 CLR 332COUNSEL: Mr Daubney for the plaintiffs
Mr Feely for the defendantSOLICITORS: Macgillivrays for the plaintiffs
Moray and Agnew for the defendant
The plaintiffs claim against the defendant in these proceedings damages for breach of contract, misrepresentation, breach of fiduciary obligations, contravention of s.52 and/or s.53A of the Trade Practices Act 1974 and negligence. The plaintiffs also claim against the defendant a sum of $5,450 for monies had and received by the defendant. Finally, the plaintiffs claim interest.
The plaintiffs were the owners of a property situated at 59 Carol-Anne Crescent, Narangba (the property).
The defendant was engaged in the business of an auctioneer and real estate agent under the name or style PRD Realty – Narangba. In that business the defendant employed one Stephen Camiolo as a real estate salesperson.
In about September 1995 the plaintiffs executed a form of Appointment to Act whereby:
(a) The plaintiffs engaged and appointed the defendant to act as the plaintiffs real estate agent for the purpose of selling the property;
(b) The plaintiffs instructed the defendant to sell the property by public auction, or if not sold at auction, by private treaty;
(c) The plaintiffs agreed to grant to the defendant the sole and exclusive selling rights over the property until the date of the auction;
(d) The plaintiffs agreed that, if the property did not sell at auction, the plaintiffs would grant the defendant the sole and exclusive selling rights over the property for a period of 30 days after the auction;
(e) The plaintiffs agreed to pay commission at the rate set out in the appointment;
(f) The defendant agreed to act as the plaintiffs agent in accordance with the terms of the appointment.
The plaintiffs engagement of the defendant as the plaintiffs real estate agent was subject to the following express or alternatively implied terms, namely:
(a) That the defendant would keep the plaintiffs informed and up to date with progress and feedback on comments made by purchasers during inspections;
(b) That the defendant would endeavour to obtain the plaintiffs the best possible price and the best terms and conditions for the sale of the property;
These terms are contained in a document entitled “Your Exclusive 14 Point Guarantee” executed for and on behalf of the defendant by Mr. Camiolo, and was part of the Appointment to Act.
The defendant admits that by delivery of the document entitled “Your Exclusive 14 Point Guarantee” to the plaintiffs the defendant represented to the plaintiffs:
(i) That the defendant would keep the plaintiffs informed and up to date with progress and feedback on comments made by purchasers during inspections;
(ii) That the defendant would at all times endeavour to obtain for the plaintiffs the best possible price and best terms and conditions of sale of the property.
Further, the defendant admitted that the plaintiffs were induced by these representations to engage the defendant as its agent for the sale of the property.
Further, by a letter dated 5 September 1995, the defendant by Mr. Camiolo, represented to the plaintiffs that the defendant was “totally committed to obtaining a successful sale” of the property.
The first named plaintiff, Mr. Wilde, said in evidence that while the property was being marketed by the defendant, the plaintiffs looked for another property to purchase. They found a property at Kenmore Hills. The plaintiffs entered into a contract to purchase the Kenmore Hills property on 15 September 1995. The due date for completion of the Kenmore Hills property contract was 15 December 1995. The Kenmore Hills property contract was subject to the sale of the property. Mr. Wilde said that Mr. Camiolo was made aware of the plaintiffs’ plans to buy another property and that they had entered into the contract to buy the Kenmore Hills property prior to the date of the auction for the property. The date for the auction was 17 October 1995.
During the period of approximately six weeks prior to the auction, the property was open for inspection on Saturday and Sunday of each weekend and the property was inspected by numerous persons.
Mr. Wilde said that Mr. Camiolo gave the plaintiff written reports a couple of days after the open days which basically set out the names of people who had inspected the property and some general comments. Two of these inspection reports dated 3 October 1995 and 10 October 1995 were tendered as evidence in these proceedings. There were more inspection reports, however those that had been in the possession of the plaintiffs had have disposed of. When copies of these inspection reports were requested from the defendant, the two reports that were tendered in evidence were the only copies of reports supplied by the defendant to the plaintiffs.
Mr. Wilde said he had conversations with Mr. Camiolo leading up to the auction. Mr. Wilde said that Mr. Camiolo told him that the response was strong and that there was interest and that he was confident he would achieve a sale. Further, that some people had said to Mr. Camiolo that there were some aspects of the house that did not suit those inspecting the property. Mr. Wilde said the price placed on the property was $260,000. This was a price determined after discussions with Mr. Camiolo. Mr. Wilde said that Mr. Camiolo had told him that a matter of weeks prior to the appointment of the defendant as the plaintiffs real estate agent, Mr. Camiolo had sold a property at the top of the street for about $250,000. Mr. Wilde said the price of $260,000 was set, bearing in mind that experience. Mr. Wilde said that during the campaign leading up to the auction, Mr. Camiolo did not say anything to the plaintiffs about that price or whether that remained a realistic price for the property. Mr. Wilde said Mr. Camiolo did not suggest the price should be reduced, and he remained confident that the property could be sold. Mr. Wilde also said that in the time leading up to the auction after these weekly open for inspections Mr. Camiolo never told the plaintiffs about any people who had expressed interest to the extent of proposing to make an offer on the property. Nor about anybody who had even spoke about the price at which the plaintiffs were marketing the property, nor about anybody who had discussed making an offer at a price lower than that which the plaintiffs were seeking.
Between about the middle of June 1995 and January 1996, the general manager of the defendant was a Mr. Hills. Mr. Wilde said that Mr. Hills inspected the property with a Mr. Pagliano who was to be the auctioneer prior to the auction.
The auction took place on 17 October 1995 at the RSL Club in Caboolture. It was held in the evening. Prior to the auction, Mr. Wilde discussed with Mr. Camiolo setting the reserve. The reserve was set at $240,000 Mr. Wilde said Mr. Camiolo suggested the bidding should start at $180,000. Although Mr. Wilde thought that was too low, he said Mr. Camiolo convinced the plaintiffs that was appropriate and that as a consequence of the auction process the price would rise and the plaintiffs would achieve an acceptable outcome. Mr. Wilde said when the auction took place, the only bid was from the second named plaintiff’s sister in law who had been asked by the defendant to arrange for someone to be present who could bid to a certain level and she obliged in that regard. Not having reached the reserve, the property was passed in. After the auction he spoke with both Mr. Camiolo and Mr. Hills. The plaintiffs were disappointed with the result of the auction. Mr. Wilde said that Mr. Hills told the plaintiffs that they should not be too concerned because another interested party had appeared that night.
Mr. Wilde said that the plaintiffs were committed to move to the Kenmore Hills property. They had placed their children in schools in the Indooroopilly area and they wanted to purchase the Kenmore Hills property very much. All these matters were discussed with Mr. Camiolo after the auction.
Mr.Wilde said after the auction the property was placed on the market through the defendant at a list price of $260,000. Further, the property was “open for inspection” every weekend. Mr. Camiolo requested the plaintiffs to agree to the inclusion of the property in a “Make an Offer” promotion conducted by the defendant in early November 1995. The plaintiffs paid $300 towards the advertising costs for that promotion and the plaintiffs agreed to allow the property to be advertised in terms which called for offers of $230,000 or more. Mr. Wilde said a weekend was specified as the weekend for the making of an offer for that promotion. Inspections were carried out of the property by interested persons. Mr. Wilde recalled seeing an inspection report after the “Make an Offer” weekend. The property did not sell at the “Make an Offer” weekend. After the “Make an Offer” weekend, there were occasional inspections of the property, sometimes at the weekend and some times during the week. Ultimately, the plaintiffs multi-listed the property in November. By early December Mr. Wilde said he was feeling fairly stressed because he was the driving force behind the move and the decision to build the house that had not worked out. He was keen to try and put matters right, and to move to the Kenmore Hills property. The plaintiffs were under pressure regarding the Kenmore Hills property because the vendor had readvertised the property for sale. Further, the vendor wanted the plaintiffs to make the contract unconditional which the plaintiffs were reluctant to do. Mr. Wilde told Mr. Camiolo about these developments. Mr. Wilde said he told Mr. Camiolo that they were keen to sell the property and would look at all sensible offers. Mr. Wilde said that a meeting was organised on the evening of 5 December because the extension on the contract for the Kenmore Hills property was about to expire and they were to meet that night to talk about a strategy. The meeting took place at the property. Mr. Wilde said that when Mr. Camiolo arrived he said that there had been some developments that afternoon and he had an offer to put in front of them. The offer was for $200,000. Mr. Camiolo told the plaintiffs that there was a beneficial interest and that in such situations the defendant was not entitled to commission, but in those situations took a service fee. However, the plaintiffs would still receive the same net amount had they sold it normally and paid the commission. Mr. Wilde said that Mr. Camiolo did not tell the plaintiffs that the purchaser was in fact Mr. Hill’s daughter. Mr. Wilde said that he rang his wife’s sister and her partner who run a property business in Brisbane. After discussing the matter with them, the plaintiffs made the decision to accept the offer. The plaintiffs then signed the contract that evening for the sale of the property. The purchaser described in this contract are Brenton Dale Hahn and Julie-Anne Hills. The price provided for in the contract is $194,550. At the time of executing the contract the plaintiffs also signed a form consenting as principals to the sale of the property to persons beneficially interested in the defendant. That document as the evidence shows was prepared by Mr. Camiolo. Omitting some parts the document reads:
“We Russ George Wilde and Marilyn Margaret Dorothy Wilde .. hereby consent to Julie-Anne Hills purchasing or being in any way concerned or beneficially interested in the purchase of 59 Carol-Anne Crescent … which has been placed by us in the hands of PRD Realty for sale.
I/we acknowledge that Julie-Anne Hills is a relative of an employee of PRD Realty. At the time of signing this form of consent I/we have not made any agreement relating to the sale of the property described above.”
Mr. Wilde said that at the same time Mr Camiolo gave the plaintiffs a letter. That letter was tendered in evidence. It is addressed to Mr and Mrs Wilde and dated 5 December 1995. The relevant part reads as follows:
“Re: Commission Breakdown
Service fee payable $ 5,450
Purchase price paid $194,550
Total: $200,000”
The letter is signed by Mr. Camiolo.
Mr. Wilde said that he made no connection between the names of the purchasers and the people that he had previously been introduced to from the defendant. Mr. Wilde went on to say that up to 5 December no offers had been communicated by Mr. Camiolo to the plaintiffs. Further, other than the inspection reports, the plaintiffs had been given no details of any people who had expressed interest in the property by Mr. Camiolo. Further, that Mr. Camiolo had not reported to the plaintiffs any follow-up work that he had done in relation to people who had inspected the property. The only offer that was communicated by Mr. Camiolo to the plaintiffs was the offer of 5 December which the plaintiffs accepted. Mr. Wilde said the pressing situation with the Kenmore Hills property was a significant factor relevant to the decision to accept the offer. The sale to Mr. Hahn and Ms. Hills was completed, as was the purchase by the plaintiffs of the Kenmore Hills property. In these proceedings the defendant denied that it was paid the sum of $5,450 or received any other consideration in respect of the sale of the property.
Mr. Wilde said that when Mr. Camiolo brought to them the offer on 5 December he made no recommendation to them, nor did he advise them to make a counter offer. Mr. Wilde said Mr. Camiolo told the plaintiffs there had been some developments that afternoon and there had been an offer. It was $200,000. There was a beneficial interest involved and in such circumstances the payment of commission did not apply, but in those circumstances a service fee was payable. Mr. Wilde said Mr. Camiolo did not discuss with the plaintiffs the prospect of negotiating further with this prospective purchaser.
Mr. Wilde said that at a later date he received information that one of the purchasers of the property was the daughter of Mr. Hills. Mr. Wilde said that had never been communicated to him by Mr. Camiolo.
Further, Mr. Wilde said that Mr. Camiolo in the course of discussions with him never mentioned persons by the name of Mr. Tasney, and Mrs Brenton (who is now known as Ms. Heulet). Mr. Wilde said that if he had been aware when the offer of $200,000 was put to the plaintiffs that other people were prepared to pay in the order of $230,000 or $240,000 for the property, or to sign a contract for $230,000 or $240,000 he would have seriously considered whether or not he would sign the contract for the property. With respect to people who expressed interest at about $230,000 or $240,000, Mr. Wilde said he would have wanted to enter into negotiations with them. He said information of that kind had never been communicated to him. Mr. Wilde was also asked about a situation of someone proposing or suggesting a cash and property swap proposal, would he have contemplated speaking with those people. He answered “During the months of October and November, very definitely, yes”. A property swap in the order of $250,000 was an option he would have considered. If an offer of the level of $230,000 to $240,000 had been made during the months of November and December, Mr. Wilde said the plaintiffs probably would have accepted it. Even an offer below $230,000 but more than $200,000 would have been considered and probably accepted according to Mr. Wilde.
Mr. Wilde accepted that to complete the purchase of the Kenmore Hills property without having sold the property at Narangba, he would have had to have sold other assets which he did not want to sell. Further, that before making the decision to sign the contract to sell the property he had sought advice from other persons whom Mr. Wilde acknowledged were involved and experienced in property. Mr. Wilde agreed the plaintiffs were very keen on the Kenmore Hills property.
It was suggested to Mr. Wilde during cross-examination that the circumstances surrounding the execution of the contract were quite different than what Mr. Wilde said in evidence in chief. It was suggested to Mr. Wilde that Mr. Camiolo made two visits to the plaintiffs. The first visit was on a Monday night, 4 December and that Mr. Camiolo had a signed contract with an offer for $190,000. Further, that Mr. Camiolo told Mr. Wilde that “the offer was from the daughter of an employee of PRD Realty”. Further, that the beneficial interest form was left with the contract on the night of 4 December. Further, that Mr. Camiolo told the plaintiffs there would be no commission payable in the circumstances. Further, that the plaintiffs said to Mr. Camiolo that they wanted to think about it and they wanted to talk to some relatives. Although Mr. Wilde agreed that he said he wanted to contact relatives, he said he did that on the same night, namely 5 December when the contract was executed. It was suggested to Mr. Wilde that Mr. Camiolo left and the next contact with the plaintiffs was the following day, 5 December. It was suggested that the next day, 5 December, Mr. Wilde contacted Mr. Camiolo and put a counter offer of $200,000. It was suggested to Mr. Wilde that he explained to Mr. Camiolo that he had been in touch with his relatives and that the plaintiffs had thought about it and the advice they had from their relatives was that there were no genuine offers on paper apart from this one, and they would not know when the next offer was going to come and they should accept the offer that had been made and cut their losses and get on with their lives, and that the plaintiffs had made the decision to go ahead. Mr. Wilde agreed that conversation took place, however he said it took place on the one night when the offer was presented with the documents. He denied that the process was that an offer of $190,000 was made on one day and that following some discussions on the second day, the matter was finally resolved for $194,550.
Regarding commission, it was suggested to Mr. Wilde in cross-examination that Mr. Camiolo had said that because the person proposing to purchase the property had connection with the agency, there was no commission payable. Mr. Wilde agreed with that suggestion. It was also suggested that Mr. Camiolo did not tell Mr. Wilde that there would be an service fee. Mr. Wilde did not agree with that suggestion. Then it was suggested that Mr. Camiolo presented this argument:
“What he gave you on the 5th after the – what he told you was that it was really the same thing at the end of the day because this couple, young couple who were purchasing the property could only – their finance was tight, they could only get to that sort of figure, the one that you signed up for, $194,500-odd, and that it was really the equivalent of selling it to someone else for $200,000 because with anyone else you’d have to pay the commission; isn’t that really it?-- He presented that argument, yes.”
Mr. Wilde said to a further question on this topic: “Except we would have to pay a service fee”. It is to be noted in the contract that a price of $190,000 is written and crossed out, as is a price for $200,000 written and crossed out, leaving a price of $194,550.
Mr. Wilde said that if he had been told that the female purchaser was the daughter of Mr. Hills, the person who inspected the property on a prior occasion and had spoken to Mr. Wilde on the night of the auction and was an employee of PRD Realty, the plaintiffs’ agent, when presented with the contract he said the relatives that the plaintiffs consulted would have counselled them to be very cautious. Further, he thought he would have been suspicious, however as he said in his evidence at an earlier stage, the plaintiffs did not draw any connection between the name Hills and Mr. Phillip Hills, who was the managing director of the defendant. Mr. Wilde said the nature of the connection was not explained to the plaintiffs. What the plaintiffs discovered after the sale of the property was that one of the purchasers was the daughter of the managing director of the defendant who was Mr. Camiolo’s immediate superior. Mr. Wilde said that he thought that the plaintiffs would have wanted more time if the information had been disclosed to them to consider the implications of that information. Mr. Wilde maintained that had he been informed of the connection to the managing director of the defendant, he contended it would have made a difference. He said one thing that would have been done is to have taken a little bit of time to have met with his relatives who were in the industry and to ask their advice. Mr. Wilde agreed that while that advice may have been to accept the offer, he said equally it might have been to be very careful in the circumstances. Mr. Wilde said if the time extension on the Kenmore Hills property had expired, the consequence would have been that they would not have gone on with the purchase of the Kenmore Hills property and the plaintiffs would still have the Narangba property. The consequence would have been that Mr. Wilde’s wife would have been required to transport the children to the school that had been arranged for them to commence the new school year. At no stage during his evidence did Mr. Wilde attempt to suggest that the Kenmore Hills property was not what he and his wife wanted. On the contrary, he openly accepted in answers to questions in cross-examination that the plaintiffs thought it was a very nice property and they were keen to purchase it.
I gave counsel for the plaintiffs leave to ask Mr. Wilde further questions. Mr. Wilde said that when it came to the offer being presented to the plaintiffs, Mr. Camiolo did not present any options but rather presented the offer. He gave no information about the background of the people who were making the offer. He gave no information about the background of the people behind the people who were making the offer. He gave no information about how tactically, for negotiation purposes, the plaintiff should approach dealing with these people. He gave no advice or insight into the prospect of making a counter offer. He told them nothing about Mr. Hills. He told them nothing to indicate that it was possible to negotiate a higher price than $200,000. Regarding the price of $194,550, Mr. Wilde said Mr. Camiolo presented the offer as an offer of $200,000 and then referred to the service fee. He explained nothing about whether or not the money was actually going to be paid. Mr. Camiolo did not express any opinion to the plaintiffs on that evening about the adequacy of the offer of $200,000.
Regarding the contract, Mr. Wilde said that his and his wife’s initials appear once next to the price. Further for each amendment in the contract, there is only one set of initials from each of the plaintiffs.
The plaintiffs called Mr. Tasney. He works in Strathpine and has lived in the Narangba area for about 15 years. He owns the property where he lives and owns other properties in adjacent areas. In late 1995 he inspected the property with his wife during an open house one weekend before the auction. Mr. and Mrs. Tasney had friends who lived two blocks down from the property. He said “We’d all admired the house just in passing previously”. They took the opportunity to inspect it. Mr. Tasney approached Mr. Camiolo while his wife inspected the property. He said he approached Mr. Camiolo with a very initial offer because Mr. and Mrs. Tasney’s house was not on the market at that stage, but they were so impressed with the house that they thought they might attempt to purchase it. He discussed briefly with Mr. Camiolo that Mr. and Mrs. Tasney had a property in the area which Mr. Tasney valued at $150,000 and he had a piece of land in the Sunshine Coast hinterland which was in the order of $50,000-$52,000 in value, and he would be prepared to make up the balance in cash. He asked Mr. Camiolo would the vendors be interested in discussing or accepting that offer. Mr. Tasney said Mr. Camiolo told him that the vendors would not be interested because the vendor wanted to move to Kenmore and Mr. Camiolo turned away and just left Mr. Tasney standing there. Mr. Tasney said that was the end of his offer to the property. He described Mr. Camiolo’s attitude as dismissive. Mr. Tasney felt a little bit chastened and a bit foolish. He thought that Mr. Camiolo was a bit abrupt and Mr. Tasney wanted to pursue the matter and discuss it a bit more, but Mr. Camiolo just had no interest at that stage. Mr. Tasney gave evidence of his resources. He said they were not contacted again in relation to the property. He did not follow the progress of the sale of the property because he had been discouraged from pursuing the property. Although Mr. Tasney could not recall the exact timing, he did sell the piece of land in the hinterland for $52,000 quite soon afterwards. He said therefore he would have been in a position to have more cash than at the time of his initial offer. He said if he had entered into negotiations on the day or soon afterwards, he probably would have put his house on the market as well. He also said that if he had been contacted in November of that year, and had been told the property was still on the market, and had not been sold at auction, and had been invited to enter into negotiations or pursue the property, he would have done so. He mentioned there were factors relevant to purchasing the property. They had friends in the area close by and they would still be in the same area as they had been living. He said after negotiating upon their own property they were serious enough to look at proceeding with the property if they had been given the opportunity. Mr. Tasney said that he and his wife had formed the view that the price range for this property was in the order of $240,000 to $250,000. When cross-examined, Mr. Tasney said that Mr. Camiolo said the vendors would not be interested in his offer because they wanted to move to Kenmore. Mr. Tasney again described Mr. Camiolo’s actions. He said:
“But it was the way that he turned away and walked off and left me sort of standing there, and that was the end of the matter”.
Mr. Tasney said that his $150,000 property could have been immediately put on the market if the vendor was satisfied to accept a contract subject to the sale of his property.
The plaintiffs also called Ms. Heulet. In 1995 Ms. Heulet and her husband we looking to move out of the Strathpine area and upgrade into a better property or an acreage property. They looked in Narangba. They inspected the property. She had family members living in the Narangba area. Her sister lived close by to the property. Ms. Heulet and her husband inspected it on the last weekend before the auction. She described it as follows:
“It was basically my dream place. It was everything I would hoped I would have at some stage of my life”.
After inspecting the property, Ms. Heulet was very interested in it. She and her husband spoke to Mr. Camiolo. She said Mr. Camiolo asked them were they interested and they applied in the affirmative. She said Mr. Camiolo said “What do you think the property is worth?”. Ms. Heulet said about $255,000 and she said “If I have that I might consider buying it”. Ms. Heulet then left. A couple of weeks later though she said Mr. Camiolo phoned and asked if they were still interested and Ms. Heulet had looked at their finances then and said no. They had not sold their property at Strathpine at that stage and she felt rushed and it was a bit too complicated. She said she would have been more comfortable acquiring the property around about $230,000. At that time though she thought that to acquire the property it would require about $255,000 to $260,000. Ms. Heulet said that it subsequently came to her attention that the property had not been sold and that it was still for sale. She said if Mr. Camiolo had contacted her and told her that the property could have been purchased for $230,000 or more, she said she probably would have taken some action by listing her property straight away and do what she needed to come up with the purchase price. She said she would have tried to buy the property. If she had been told in October and November that the property could be purchased from between $200,000 and $230,000, she would have been definitely interested because she would have considered that to be a bargain. She said that Mr. Camiolo never contacted her to discuss any of those matters with her. She did not go to the auction because she felt the price that the property would go for was something that she could not attain at that time, and therefore it would be a waste of time going. In cross-examination Ms. Heulet said when Mr. Camiolo contacted her again after the auction she had personal complications in her life that made her reluctant to show interest in the property. It was also suggested to Ms. Heulet that she had had agents go through her own house and had been given depressing estimates about the value of her house, and that she had told Mr. Camiolo these things. She denied those suggestions. Ms. Heulet agreed that she told Mr. Camiolo that $200,000 for the house was a more comfortable price for her. When asked whether in late November or early December she was in a position to purchase a property for $230,000 Ms. Heulet said that at that stage she had not sold her house and she was still married. She said if she thought the price was about $230,000 she would have tried to purchase the house because she would have considered that was basically a give away price for that house.
Mr. Walsh, a registered valuer, gave evidence and provided a report which is also in evidence. His opinion is that the property as at 1 September 1995 and as at 6 December 1995 had a market value of $245,000.
The defendant called Mr. Camiolo. He is now a Pizza Hut restaurant manager in Rockhampton. Mr. Camiolo said in evidence that no written formal offers had been received for the property prior to the auction. He said he spoke to Mr. Tasney at one of the open house inspections. He said Mr. Tasney told him he had two properties for sale and that he told Mr. Tasney that Mr. and Mrs Wilde were looking for a cash contract with a 10% deposit and that was why they were going to auction. Mr. Camiolo said he gave Mr. Tasney the phone number of the financial person who works for the defendant. He said he did not discuss values of the properties with Mr. Tasney. When asked whether Mr. Tasney offered those properties to him, or did he tell Mr. Camiolo about them, Mr. Camiolo said “Not in any way that I can remember, no.” Later in evidence he said that no offers of any kind had been made. Mr. Camiolo said that there had been a good response to the “Make an Offer” campaign. He said there had been a lot of inspections. Regarding Monday 4 December 1995, Mr. Camiolo said that Mr. Wilde rang him and said that their time was nearly up on the Kenmore Hills property and could he contact everyone and see if any offers could be received. Mr. Camiolo said that he went through his list again and phoned people who he felt still seemed interested in the property. By lunchtime no one was prepared to make any offers. He said he phoned Mr. Wilde about that. Mr. Camiolo said that later in the afternoon he had a phone call from Julie-Anne Hills who said that they would like to come and have a talk to Mr. Camiolo. He said Ms. Hills and her partner came to see him and asked if they could put an offer in and were prepared to pay a deposit. He said a contract was prepared and the first offer in it was $190,000. He took the $190,000 offer out to the plaintiffs. He said they met on the Monday night. He said that the first thing he told them was that the offer was from the daughter of an employee of PRD. He showed them the form relating to the beneficial interest and showed them the contract. He said:
“We discussed it. We felt – I knew that $190,000 wasn’t going to be accepted but that is the starting point. Mr. and Mrs. Wilde wanted, after a lengthy discussion about everything and explaining what it meant with the daughter buying it and all that sort of stuff”.
Mr. Camiolo said the plaintiffs wanted to talk to some relatives so he took everything away and he spoke to Julie-Anne Hills and her partner again and they increased the offer. He said that was because there was no commission or service fee being paid and that the offer would finally be at $194,550. He said he returned the following night as had been arranged on the Monday night. He said:
“So I, knowing that 190 wasn’t going to be accepted, spoke to the Hills and Brenton again and we did increase it”.
He was asked about the figure of $200,000 in the contract and he said:
“I tried to get the $200,000 which I knew wasn’t going to happen because they weren’t going to get that finance, that money for that. So then we went back to the $194,550 because there was no service fee paying so there was about $5,000 difference. So at 195 we were going to get this loan through.”
When asked where the $200,000 came from, he said:
I think that’s a feeling I got from what the Wilde’s would actually accept from discussions but I can’t be 100% sure on that.”
He said he went back to the plaintiffs with this figure of a bit over $194,000 on the Tuesday night. He said he gave them the contract again. He said that they were prepared to take the offer on the advice of their relatives. He said he then asked them several times whether they were sure that was what they wanted to do. He said he re-explained again the beneficial interest and told them there was no commission payable. His evidence about how the offer was made up was as follows:
“Well, how do you explain how the offer was made up?-- Okay.
What did you tell the Wilde's?-- We had a letter that said the price was 200,000.
Yes?-- If it was an ordinary purchaser, not a relative or anything, the service fee would be – just roughly figures - $5,000.
Yes?—Which would then make it 195. That’s where the $194,500 came in because that’s the difference between what the service fee was and 200,000. So what we’re saying is by not having to pay the service fee you’re actually getting 200,000.
Just by the way, generally speaking what do you call commissions? What were you calling commission-----?-- Service fee.
Right. Did you always-----?-- Yep. And when we listed the property they got a letter telling them what the service fee would be.”
Mr. Camiolo said that he tried to get everyone to put a formal offer in and he always had contracts for perusal at the open houses if anyone wanted to, plus the title deeds and everything like that.
When Mr. Camiolo was cross-examined, he agreed that according to him the sequence of events on 4 and 5 December 1995 was that he had a written offer from Mr. Hahn and Ms. Hills for $190,000. The contract had been signed by the purchasers at that stage. Further, it had been initialled in all the appropriate places by the purchasers before he took it to the plaintiffs. He presented this document to the plaintiffs on the evening of the 4th and there was some discussion. After the discussion the plaintiffs told him they wanted to think about it and have discussions with a relative. Then Mr. Camiolo took the documents away that evening. The next day Mr. Camiolo had further discussions with Mr. Hahn and Ms. Hills. In those discussions with Mr. Hahn and Ms. Hills he indicated that he thought that the plaintiffs might accept $200,000. Therefore, $200,000 was written on the contract. Then in further discussions with Mr. Hahn and Ms. Hills, they said they could not pay $200,000 so that was ruled through and $194,550 put on there. Further, that all through this time he had no further contact with the plaintiffs. Then on the evening of the 5th he went again to the plaintiffs, this time bearing a contract that had $190,000 ruled through, $200,000 ruled through and $194,550 on it that Mr. Camiolo claimed was the offer that the plaintiffs then accepted. This evidence given by Mr. Camiolo under cross-examination was contrary to what was put to Mr. Wilde by counsel for the defendant (see pp.66 and 67 of the transcript). Further questions and answers in the course of Mr. Camiolo’s cross-examination were as follows:
“MR. DAUBNEY: You would agree with me that it’s simply incorrect that Mr Wilde made a counter offer of $200,000 in response to the offer of $190,000. That’s not what happened, is it?-- I’m – say that again.
Mr Wilde did not make a counter offer of $200,000 to the Hahn and Hills offer of $190,000?-- No, that’s correct. We tried to get the price up.
He didn’t do that. And the sum of 194,000 – I’m sorry, just to make it clear, there was no such counter offer, was there?-- I tried to get the price up from 190 to 200. They weren’t prepared to do that. So we ruled it out and put the 194,550 which then equates to – if there was a service that had to be paid it then would have been 200,000.
HIS HONOUR: Who do you mean by we ruled it out?-- I ruled it out with the Hahns and Hills and got it signed by them.
What did you rule out?-- The 190 and then the 200 I wrote in. They wouldn’t accept the 200 so we crossed that out and put in 194,500, whatever it is.
MR DAUBNEY: When you say they wouldn’t accept the 200 you mean Hahn and Hills wouldn’t accept the 200?-- They wouldn’t pay that much, no.
So for somebody to suggest that Mr Wilde had made a counter offer of $200,000 is just wrong, isn’t it?—That was – yeah, that was-----
That’s just wrong?-- I was trying to get the price up for the Wilde's.
You were trying to get the price up?-- Yeah. Doing my job.
I see. Well, lets look at that a little closer shall we. You say you went there on the evening of 4 December bearing the glad tidings of a, what was your phrase that you kept on repeating, a formal written offer or a written formal offer?-- That’s correct.
You knew that. And so you took with you an offer of $190,000 you say to the Wilde's?-- That’s correct.
And you had discussions with them on that evening you say?—Yes.
And they didn’t give you a response that evening?-- No.
They didn’t respond to the offer that evening, did they?-- They needed time to think about it.
And you took the documents away with you?—Yes. We always take the documents back.
Without then having rejected the offer?-- That – it wasn’t signed, so it can’t be left there. Well, that’s how I was taught; so that’s what I always did.
I see. So there was no document left with them?—No.
On the evening of 4 December?-- Not that I recall, no.
Which they were capable of accepting; you knew that?-- What do you mean capable of accepting?
Well, they couldn’t sign the document; they couldn’t accept the offer?—No, because they asked me to get back to them the next night.
The only offer that you put to the Wilde's, I suggest, Mr. Camiolo, was an offer of $200,000 which was reduced to 194,550 to take account of commission or a service fee?-- It started at 190.
You never took an offer of 190,000 to them?-- We discussed it with the Hahns and Hills it started at 190, went to the 200, back to the 194,500.
Well, you may have started discussing 190,000 with the Hahn and Hills but you never told Mr – you never communicated that offer to Mr and Mrs Wilde, did you?-- It was on the contract.
You never showed them the contract with the $190,00 and nothing else on it, did you?-- The contract that they saw was what was been crossed out.”
Later in cross-examination Mr Camiolo agreed that the contract was initialled only once by the vendors and once by the purchasers where the purchase price appears. Further cross-examination of Mr. Camiolo was as follows
“No, the Wildes only initialled the contract once and they only signed the contract once?-- That’s right.
Mr. Camiolo, in fact Hill and Hahn only signed and initialled this contract once, didn’t they?-- I can’t recall, but I don’t think so.
Well, I put it to you that in fact they did only sign and initial the contract once?-- I – I don’t remember. I just know that’s how the negotiation went.
You don’t know?-- I can’t remember everything.
You were handling this sale, Mr. Camiolo?-- Yes, it was quite some years ago now.You know, don’t you, that Hill and Hahn’s only signed and initialled this contract once?-- No, as far as I can recall we did it twice.”
Mr. Camiolo said that he was not paid a commission nor did he receive anything for this transaction. In the course of cross-examination, Mr. Camiolo was shown a sales record card relating to the sale of the property being a document from the defendant’s records. On this document the words “commission (REIQ)” appears and there is an amount of $5,313.75 and just above that “$5,450”. Mr. Camiolo agreed a sum of $5,450 would represent the commission that would have been payable on a sale of $200,000. A copy of the manilla folder relating to the sale was also produced and shown to Mr. Camiolo. On the front of that document there is a calculation of commission of $5,450. Against Mr. Camiolo’s name appears the sum of $2,390.81. Mr. Camiolo agreed that is an amount that he would have been paid if he was paid. His attention was also drawn to the sales record card where there is a figure of $143.44 on that document. He agreed an amount of $143.45 would have represented the amount of superannuation due to him. Mr. Camiolo said in response to the question that that amount represented the superannuation contribution that was made on his behalf as a result of the sale, that it would have been if it was paid. Mr. Camiolo agreed that he put in a claim to be paid 100% of the net commission on the sale. Another document was produced and shown to him dated 5 December 1995. That is the same day as the contract was signed by the plaintiffs. He agreed this document related to that sale. He agreed it nominated that the commission was to be paid 100% to him. He also agreed that was a memorandum to the administrative people in the defendant’s office. He also agreed the document was to tell those people that the commission was to be allocated to him. His explanation was that that record was for the monthly sales board to show that even though commission was not paid, he had still been involved in a sale and that he would be credited with what was represented by the value of the sale. He said that was recorded that way so that he could claim the incentives in the office. Mr. Wilde’s version of what happened on 5 December 1995 was put to Mr. Camiolo and he denied that version. When asked regarding the beneficial interest document whether Mr. Camiolo thought it was relevant to tell the plaintiffs that it was his boss’s daughter that was making the offer on the property, he replied: “I didn’t feel it was a major issue.” I asked Mr. Camiolo to explain to me evidence he had given earlier to the effect that he had a “lengthy discussion” with Mr and Mrs. Wilde about what it meant that the daughter was buying. These were the questions and answers:
“What did you say?-- I just said it’s the daughter of the employee of PRD who’s purchasing the property. There’s no commission due or payable. The form was fairly self-explanatory.
You said there was a lengthy discussion?—Well, yeah.
Do you call that a lengthy discussion?-- Well, I explained it several times.
What did you explain?—Exactly that it was a beneficial interest.
What did you explain?-- I don’t know what else I could explain.
Can you help me to understand what you meant when you told me earlier this morning before lunch that you had a lengthy discussion?-- Well-----
You call that a lengthy discussion?-- Yeah, it was quite time – it took time.
And what you’ve told me is what you can tell me was the lengthy discussion?-- What I can remember, yes.
Thank you”.
Mr. Camiolo was also asked in cross-examination about who drafted the beneficial interest document. He said “We drafted it in the office”. When he was asked who precisely drafted it, he said that Mr. Hills and he put it together.
Further, during his cross-examination, Mr. Camiolo said he contacted Mr. Tasney after the auction and told him that the property had been passed in and negotiations were continuing. He also said he thought he would have told Mr. Tasney that it had been passed in at $238,000. He said “It would have been on the day after the auction”. He said “It would have been in the morning”. When pressed whether he did recall or he was just reconstructing, he said “No, well I – no. I sat in my office and did all the calls”. Finally, he accepted when pressed that he could not remember who he phoned.
Mr. Hills was also called by the defendant to give evidence He was at the relevant time the general manager of the defendant. When the property came up for auction he got involved in it. He accompanied the auctioneer when he did an inspection of the property prior to the auction. He also attended the auction. He also spoke to the plaintiffs after the auction. He told the plaintiffs that he was sorry the property had not been sold, but that he believed there might still be some interest in it. He said after the auction he had nothing further to do with the selling of the property. Regarding his daughter who ultimately did purchase the property, he said the lead up was that his daughter and her partner were looking generally in the Brisbane area to buy a house. They could borrow around $175,000. He said that in one of the visits he wanted to demonstrate to his daughter and her partner that they were trying to buy beyond their means and he had the opportunity to show them the property on a Sunday afternoon. He said that was the first time he got involved with his daughter and her partner. He said this happened after the auction. He said regarding this inspection: “I think that we all agreed that what they were aiming for was beyond their means and that they had to look at something more modest”. He said after that nothing further happened with respect to the property and his daughter and her partner. He said he played no role at all in the purchase by his daughter and her partner. He said he did not divulge to his daughter any details about what had happened with the property in the past and the efforts to sell it. He said Mr. Camiolo asked him whether his daughter and her partner were still looking for a house. He told him they were. He said Mr. Camiolo asked whether they would be interested in buying the property and he told Mr. Camiolo that he thought it was too dear for them. He was then asked this leading question and gave this answer: “And then later Mr. Camiolo went off and dealt with them, is that what happened?-- Yes, he did.” He claimed that no commission or service fee was paid whatsoever by anybody in relation to this sale.
When cross-examined Mr. Hills agreed that when he took his daughter to see the property, he was absolutely of the opinion that the property was beyond their price range namely $200,000. He said his opinion was that in the then market the property was worth well more than $200,000. He said he assisted Mr. Camiolo in the preparation of the contract documents when his daughter and her partner were proposing to make an offer on the property. He said the extent of that assistance was when Mr. Camiolo was preparing the contract he thought he told him that there were other obligations because it was his daughter and they had to prepare a form pursuant to the requirements of the Auctioneers and Agents Act. He said he had no other part to play in the negotiation process at all. He was shown the sales record card. Despite what was shown on the sales record card, he said that Mr. Camiolo was not paid. His explanation was that these records are produced and once the contract is completed the detail is put on them. Whether that goes to finalisation or not is another issue and he thought speculatively that this was just produced according to the clerk’s view of the proceedings at the time. He acknowledged there were alternations made on this record to recognise that the settlement date was extended. Further, that the card showed how the deposit was being dealt with as it was to be paid by instalments. Further, that there was a reference on this card that the purchasers were required to pay the commission. He said that never happened. When asked to explain why that was written there, he was unable to do so. He agreed it was a record of the defendant’s business. He could not recognise the handwriting. He agreed the balance of the entries on this document were correct. He said although all other aspects of the document were correct, what appeared to have happen did not happen. Notwithstanding, someone must have calculated the commission payable to Mr. Camiolo and the superannuation due to him, neither of those things happened. He was shown the copy of the manilla folder from the sales file of the defendant. Again, he was asked to note that on this document there had been an attribution of a sum of money to Mr. Camiolo. When asked if he knew how that came about, he was unable to do so. He said if money like that was paid, it had to go through the books of the office. He said to his knowledge these payments were not made. Mr. Hills was also shown a letter from Mr. Camiolo to his daughter and her partner. In this document reference is made to commission being payable by them. He said he was not aware of any such arrangement. This document was marked as Exhibit A for identification during Mr. Hills’ evidence.
The plaintiffs also called Mrs Taplin, a licensed real estate agent with about 15 years experience. She has had an office in Narangba for seven years, and before that she was in an adjacent area for seven years. She inspected the property and made a market appraisal of the property as at 9 January 1996. Her appraisal of the current market value of the property as at that date was between approximately $260,000and $270,000. In her appraisal she listed properties that recently sold in the area, including two properties in the same street as the property.
During cross-examination of Mrs. Taplin it was suggested to her that she bore something of a grudge against Mr. Camiolo. She denied the suggestion. No further particulars were offered to support the suggestion. The issue was not pursued while Mrs. Taplin was available for cross-examination.
Finally, the defendant called Mr. Hills’ daughter who has since married and is now Julie-Anne Hahn. She said the first time she looked at the property was in early December. She said they had a maximum of $200,000 and that was to include all of their costs. She said they had a look at the property once and it was out of their price range at that time. They then spoke to Mr. Camiolo. She said he asked them if they wanted to make an offer on the property, it might be considered. She said the offer they initially made was $190,000. She said that the vendors countered with an offer of about $200,000 and it was then negotiated back to approximately $194,000. She said she was happy with that. She said no commission or service fee or anything of any kind was paid to the defendant in respect of the purchase. Mrs Hahn said in cross-examination that when the $190,000 was put in the contract, she and her husband initialled the contract and signed it. She said Mr. Camiolo presented the contract to the vendors. She said he brought it back and $190,000 had been crossed out and $200,000 had been written on it. She said then she counter offered $194,450. She believed that every time the numbers changed the changes were initialled. When shown the contract she agreed that the purchase price had only been initialled once. She agreed that it looked like she only signed the contract once. Mrs. Hahn was unable to explain in the negotiation process of $190,000 being offered, a counter offer of $200,000 being made and a final price of $194,550 being settled upon why a figure of $194,550 rather than a round figure of $195,000 was agreed to. She said the figure of $194,550 would have left enough money for their legals and costs and so on which is what they were concerned about at the time. She said there were no discussions about service fees or commission being payable to the defendant. She was then shown Exhibit A for identification. She was asked by counsel: “It’s a letter to you and Mr. Hahn, isn’t it?” Her immediate response was “Yeah, but it’s not one I’ve ever received.” I considered at the time Mrs. Hahn gave that answer she was very quick to say that she had never received the document. It should be noted that Mr. Camiolo and Mr. Hills gave evidence on the second day of the trial and Mrs. Hahn gave evidence at the beginning of the third day of the trial. I was concerned at the speed with which Mrs. Hahn replied to counsel’s question to the effect that she had never received the letter. The letter had been shown to her father in the course of the trial the day before. She had a post office box and she cleared the box regularly. It was addressed to her at that box. She denied receiving the letter. That letter was then made Exhibit 26 in these proceedings.
I consider that Mr. Camiolo, Mr. Hills and Mrs Hahn were not honest and reliable witnesses.
With respect to Mr. Camiolo, the matters I have referred to that occurred during the course of the evidence demonstrated:-
(a) Instructions he must have given which were put to Mr. Wilde that Mr. Wilde counter-offered $200,000 and rejected the offer of $190,000 were contradicted by Mr. Camiolo when he gave his evidence;
(b) Mr. Camiolo said that he was contacted by Julie-Anne Hills on 4 December 1995 and claimed when she contacted him he did not know why or what for. However, Mr. Hills evidence was Mr. Camiolo had asked him whether his daughter and her partner were still looking for a house to which Mr. Hills said he replied in the affirmative. For Mr. Camiolo to say he did not know why or about what Ms Hills as she then was would want to come to speak to him I do not consider was a credible answer;
(c) Mr. Camiolo’s evidence that there were three offers in the negotiations is inconsistent with the evidence that there are only one set of initials from the vendors and purchaser in the contract for the sale of the property;
(d) When he was being cross-examined about the offer of $190,000 and counter-offer of $200,000, his answers were evasive;
(e) He claimed he had a “lengthy” discussion with the plaintiffs to explain to them what it meant that an employee’s daughter was buying, however, when asked to say what he explained, his answers were evasive and not credible;
(f) Mr. Camiolo tried to claim in evidence he did contact Mr. Tasney after the auction, however, when cross-examined about that evidence he often used in his answers “it would have …” and then accepted he could not recall if he contacted Mr. Tasney;
(g) Mr. Camiolo must also have been the source for the instructions put to Mrs Taplin she bore a grudge against him. That was not supported either in cross-examination or in evidence from Mr. Camiolo. He must also have been the source for the instructions put to Ms. Heulet that agents went to Ms. Heulet’s house to value it and gave her depressing information about the value of her house, which he denied happened. That also was not supported by Mr. Camiolo when he gave evidence. I consider this reflects adversely upon him;
(h) Generally, Mr. Camiolo’s demeanour was not impressive;
With respect to Mr. Hills:
(a) I consider he deliberately sought to minimise his involvement in the sale. For the general manager of the real estate agent for the plaintiff to claim after inspecting the property prior to the auction, being at the auction, speaking to the plaintiffs who were disappointed about the failure of the auction to tell them another buyer may be interested, to show his daughter the house to show her she and her partner were buying beyond their means, to believe the property was well worth more than $200,000 and to say when Mr. Camiolo contacted him to ask if his daughter would be interested in buying the property that he replied to Mr. Camiolo that he thought it was too dear for them, and that Mr. Camiolo went off to deal with them, is evidence I do not believe;
(b) The records of the defendant do not accurately represent the true circumstances according to Mr. Hills. However, the records in that regard have not been corrected. I consider that as general manager of the defendant that reflects adversely upon Mr. Hills, even though I find no commission or service fee in the sum of $5,450 was paid to Mr. Camiolo. The records of the defendant though were from time to time updated to show changes occurring with respect to progress of the sale of the property after the contract was entered into.
With respect to Mrs Hahn:
(a) To claim as she did in her evidence there was an offer by her and her partner of $190,000, a counter-offer of $200,000 by the plaintiffs and counter-offer of about $194,000, is not credible because that process was not even supported by Mr. Camiolo.
(b) This negotiation process also suffers in terms of being credible because Mrs. Hahn agreed there were only one set of initials next to the price in the contract. ;
(c) To suggest there was no discussion about commission or service fees is not credible when one has regard to Mr. Camiolo’s letter dated 8 December 1995 which I consider Mrs Hahn was too quick in the circumstances of this trial to claim she had not received it.
On the other hand I consider Mr. Wilde and the other witnesses called by the plaintiffs to be honest and reliable witnesses. I consider Mr. Wilde was open and honest to say that he and his wife wanted to move to Kenmore Hills, they were keen to complete that contract and they were under pressure following the failed auction and the failed “Make an Offer” campaign as the time to settle on the Kenmore Hills property was running out. Further, Mr. Wilde admitted seeking advice from his relatives and at no stage attempted to say, although the opportunity existed for him to say, that had he known one of the purchasers was Mr. Hill’s daughter he and his wife would not have gone on with the contract. I consider the responses he gave were not to that extent but were to the effect the information would have had was to receive advice to be cautious and he thought he would have been suspicious. Those responses I consider to be honest responses in the circumstances. In the context of this trial the contradiction by Mr. Camiolo of instructions I consider demonstrates Mr. Wilde’s honesty and reliability.
I also consider that Mr. Tasney and Ms. Heulet were frank and honest. I consider they gave their evidence without favour. When Mr. Tasney said he was offended, I consider that demonstrated his honesty and is not a reason I would consider that when giving his evidence he would favour the plaintiffs.
With respect to Ms. Heulet, it was suggested to her in cross-examination that she was disappointed in the valuation from agents who had gone through her property. That was suggested to her on instructions. Ms. Heulet I consider showed genuine surprise at the allegations and denied the allegations. Mr. Camiolo gave no evidence to support those allegations. This persuaded me that the source of the instructions is not reliable and demonstrates Ms. Heulet’s honesty and reliability.
As I have said before, when Mrs Taplin was cross-examined it was suggested to her that she bore a grudge against Mr. Camiolo. No particulars were offered and that matter was not pursued against Mrs. Taplin. I consider that again is a reason to consider that Mrs. Taplin was honest and reliable. Her appraisal was also supported by two sales in the street. The defendant did not contest Mr. Wilde’s evidence that the property was listed with the defendant for $260,000 after Mr. Camiolo said he had recently sold a property in the street for $250,000. The defendants in these proceedings called no evidence to demonstrate why the property may not have sold contrary to all that the defendant claimed had been done to find a buyer. That is, despite the auction campaign in respect of which the plaintiffs paid approximately $3,500 for advertising, a “Make an Offer” campaign in respect of which the plaintiffs paid $300 for advertising and the inspections by many people throughout the months of September, October, November and December and the desirability of the property supported by the evidence of Mr. Tasney and Ms. Heulet, the property was not sold except for $194,550 to purchasers, one of whom was the daughter of the general manager of the defendant.
There is no question that the defendant was a fiduciary to the plaintiff and as such owed a fiduciary duty to the plaintiffs (Hospital Products Limited v. United States Surgical Corporation (1984) 156 CLR 41 at 68). Further, the defendant’s duty was to obtain the best purchase price reasonably obtainable (Kepler v. Wheeler & Anor (1927) 1 KB 577). Further, the defendant owed the plaintiff a duty to see that an inadequate consideration was not accepted without advising as to values (How v. Carman & Anor (1931) SASR 413).
Further, by reason of the appointment to act, the defendant had agreed to keep the plaintiffs informed and up to date with progress and feedback on comments made by purchasers during inspections and would endeavour to obtain the plaintiff the best possible price and the best terms and conditions for the sale of the property. In these proceedings it was also accepted the defendant had represented to the plaintiffs through Mr. Camiolo that the defendant was “totally committed to obtaining a successful sale” of the property. Further, the defendant admits in these proceedings it owed the defendant duties to perform the agency with due care and skill and to advise the plaintiffs on the value of the property. These duties it was accepted arose out of the plaintiff’s engagement of the defendant or were to be implied terms of the defendant’s appointment, or duties which the defendant owed to the plaintiffs. Further, the defendant admitted for the purposes of these proceedings that it should not act in conflict to the interests of its principals.
I find the duties owed by the defendant both at law and in its capacity as a fiduciary have been breached in that:
(a) Mr. Tasney was not contacted nor followed up by Mr. Camiolo and certainly was not contacted or followed up by Mr. Camiolo after the auction and the “Make an Offer” weekend;
(b) Ms. Heulet was not contacted or followed up by Mr. Camiolo at the time of or after the “Make an Offer” weekend;
(c) The only offer which Mr. Camiolo presented to the plaintiffs was an offer of $200,000, which Mr. Camiolo then discounted to $194,550 to take account of what he represented to the plaintiffs was the service fee payable to the defendant;
(d) Mr. Camiolo did not tell the plaintiffs at any time prior to their executing the contract for the sale of the property that one of the proposed purchasers was the daughter of Mr. Hills, the general manager of the defendant whom the plaintiffs had met after the auction;
(e) Mr. Camiolo did not advise the plaintiffs as to the value of the property.
Further, in these proceedings it is admitted the defendant was a corporation within the meaning of the Trade Practices Act 1974. I find the defendant on the evidence at all material times was engaged in trade or commerce within the meaning of that expression as used in the Act. I find the defendant failed to make full disclosure of the relationship between the purchasers and the defendant. I find that this was not only a breach of the defendant’s fiduciary obligation owed to the plaintiffs, but also amounted to misleading and deceptive conduct, or conduct which was likely to mislead or deceive in breach of the Act. I find that as Mr. Camiolo and Mr. Hills knew the property had not been sold and Mr. Camiolo knew the plaintiffs were required to decide whether they would continue with the purchase of the Kenmore Hills Property and were looking for offers, silence about the relationship of the purchaser to the defendant amounted to conduct on the part of the defendant that was misleading or deceptive or likely to mislead or deceive (Demagogue Pty Ltd v. Ramensky (1992) 39 FCR 31, 32). That is because the plaintiffs had not been given by the defendant advice as to the value of the property and if the relationship had been disclosed I consider the plaintiffs could have appreciated the disadvantaged position they were in at the time in the negotiation process or that their best interests could be served by not selling the property to the purchasers for the price of $194,500 or at all.
I find the omission to mention the precise nature of the relationship to the plaintiffs was not inadvertent. I consider Mr. Camiolo and Mr. Hills drafted the beneficial interest form with the intention to make the relationship disclosed appear innocuous. I find that the conduct of the defendant comes within the provisions of the Trade Practices Act because on the facts as I find them to be, Mr. Camiolo and Mr. Hills deliberately refrained (otherwise than inadvertently) from making a proper disclosure in the circumstances.
I do accept the evidence of Mr. Camiolo, Mr. Hills and Mrs. Hahn that no commission or service fee in an amount of $5,450 was paid to the defendant. That does not mean I accept no money was paid to Camiolo by either Mr. Hills or Mrs Hahn to compensate him for his efforts in bringing about a sale of the property to Mr. Hills’ daughter and her partner. I consider that the non payment of commission or service fee in the sum of $5,450 despite the contents of the defendant’s records and the letter from the defendant to Mrs. Hahn dated 8 December 1995 reflects the favourable position Mrs. Hahn and her partner were able to enjoy due to the breaches of the duties owed by the defendant to the plaintiff. I am satisfied on the balance of probabilities that had the defendant through Mr. Camiolo properly performed its duties as the plaintiffs’ real estate agent it is more likely than not that the plaintiffs would have realised a sale price in the order of $255,000. In arriving at the figure of $255,000 I rely upon the valuation evidence of Mr. Walsh which was completely uncontroverted and the contemporaneous market appraisal by a long experienced local agent, Mrs. Taplin. I am satisfied a halfway point between the figure Mr. Walsh provided and the mid-point of the range provided by Ms. Taplin is appropriate. I am persuaded by the evidence of Mr. Tasney and Ms. Heulet that there was a high degree of probability that a sale of the property at such a value could have been obtained had it not been for the breaches of duty in law and in equity on the part of the defendant: (Sellers v. Adelaide Petroleum NL (1994) 179 CLR 332). My view in that respect is fortified by Mr. Hills’ evidence that the property was worth more than $200,000 when it was being shown to his daughter. I also consider my finding in this respect is fortified by the failure of Mr. Camiolo to give the plaintiffs any advice as to the value of the property and that the plaintiffs should make a counter-offer.
In my opinion, the failure on the part of the defendant to make the disclosure I consider ought to have been made in the circumstances was a material non-disclosure. However, it was submitted any breach of duty including any fiduciary duty on the part of the defendant did not cause the plaintiffs loss. It was submitted the plaintiffs would have in any event had to sell to Mrs. Hahn and her partner because the plaintiffs had placed themselves in that position by entering into the contract to purchase the Kenmore Hills property subject to the sale of their property and were very keen on the Kenmore Hills property and after the process they had been through, would not have held on to the property after that point in time. In Brickendon v. London Loan & Savings Co (1934) 3 DLR 465, the applicable rule where there has been a breach of fiduciary duty was expressed by Lord Thankerton at p.469 as follows:
“When a party, holding a fiduciary relationship, commits a breach of his duty by non-disclosure of material facts, which his constituent is entitled to know in connection with the transaction, he cannot be heard to maintain that disclosure would not have altered the decision to proceed with the transaction, because the constituent’s action would be solely determined by some other factor, such as the valuation by another party of the property proposed to be mortgaged. Once the court has determined that the non-disclosed facts were material, speculation as to what course the constituent, on disclosure, would have taken is not relevant.”
I consider that principle is applicable in the circumstances of this case (see Maguire v. Makaronis (1997) 71 ALJR 781).
In the circumstances by reason of the breaches of duty arising in law and in equity which I have found to have occurred, I find that it is more likely than not that the plaintiffs has suffered loss and damage in the sum of $53,625 calculated as follows:
The price the property would have realised $255,000
Less
Contract Price $194,550
Less
Commission the plaintiffs would have had to have paid
on the sum of $255,000 $ 6,825
I give judgment for the plaintiffs against the defendant for the sum of $53,625.
I also allow the plaintiffs interest on the sum of $53,625. I will hear the parties further on the rate of interest to be applied and any further submissions as to the date from which interest ought to be allowed.
I will also hear the parties on the question of costs.
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