Zest for Realty Limited v Coumat Limited
[2015] NZHC 3130
•9 December 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2015-404-002066 [2015] NZHC 3130
BETWEEN ZEST FOR REALTY LIMITED
Plaintiff
AND
COUMAT LIMITED Defendant
Hearing: 4 December 2015 Appearances:
R M Dillon for the Plaintiff
S H Barter for the DefendantJudgment:
9 December 2015
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on
09.12.15 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
ZEST FOR REALTY LIMITED v COUMAT LIMITED [2015] NZHC 3130 [9 December 2015]
[1] The plaintiff, Zest For Realty Limited, applies for summary judgment upon its claim for unpaid agency commission following the sale of property (the property) at Whitford for $21M.
[2] The plaintiff relies upon an agency agreement in writing between it and Whitfield Property Developments Limited (WPDL). There is also an agreement for sale and purchase (the first agreement) wherein the purchaser (Whitford Village Holdings Limited) (VH) was introduced to WPDL by the plaintiff. The plaintiff relies also on a novation agreement by which it says the defendant assumed all of the rights and obligations of WPDL.
[3] The plaintiff says the defendant then entered into a contract with VH for the sale and purchase of the property on similar terms and whereby the deposit paid for the first agreement was applied to the second agreement. That second agreement contained no reference at all to the plaintiff.
[4] The plaintiff claims an agency agreement exists between it and the defendant; that once the defendant acknowledged the agency of the plaintiff in introducing the purchaser, it could not avoid liability for the commission.
[5] The plaintiff says it earned its commission before the second agreement was entered into; that once the purchaser was unconditionally bound to purchase, the commission was payable.
[6] The plaintiff was appointed by an agency agreement dated 23 May 2014. Mr Hayhow signed that agreement on behalf of WPDL, as did Mr Allen. The agency agreement was contained in standard printed form. It required commission to be paid at 1.85 per cent on the sale price.
[7] In the Further Terms of Sale at Clause 25.0 it states:
The Purchaser and Vendor agree and the stakeholder is hereby instructed to pay the agents Zest for Realty Ltd trading as RE/MAX Zest their commission owing out of the deposit funds held by the stakeholder prior to the disbursal of the deposit funds to the vendors or any other party.
[8] There was an express term that commission was payable immediately upon the contract for sale of the property becoming unconditional. It was an express term of the agency agreement that if the property or any part of it was sold by or through the instrumentality of the plaintiff or to anyone introduced through the agency of the plaintiff that WPDL agreed to pay the commission.
[9] In June 2014 the plaintiff’s Mr Hillem introduced WPDL to Mr Stevens, a director of VH. The first agreement, dated 11 June 2014 was signed shortly thereafter by Mr Hayhow on behalf of WPHL. It required a deposit of $1.5M. The first agreement was subject to conditions including that the vendor obtain by 19
December 2014 resource consent from the local authority to undertake a subdivision of the property.
[10] The first agreement acknowledged that the plaintiff’s commission was to be
paid from the deposit.
[11] On or about 12 August 2014 WPDL, VH and the defendant entered into a deed of novation whereby the rights and obligations under the first contract passed from WPDL as vendor, to the defendant as vendor. The deed of novation included an express term that the defendant would perform all of WPDL’s obligations under the first contract and there was a further express term that the defendant be substituted for WPDL under the original contract as if it had originally executed the original contract in place of WPDL.
[12] Mr Hayhow signed the deed of novation as director of WPDL and as director of the defendant.
[13] The second agreement contained no reference to the plaintiff or regarding any obligation for payment of real estate agency commission.
[14] On 5 September 2014 the defendant entered into an agreement for sale and purchase (the second agreement) of the property with VH but not on identical terms to the first agreement. The price was the same as the first agreement but the deposit
was $1.125M. Like the first agreement, the second was also subject to development resource consent.
[15] The judgments of two High Court Judges in other proceedings affecting these transactions have confirmed that the second agreement became unconditional on or about 4 February 2015.
[16] The plaintiff sues the defendant for the commission it says is payable in the circumstances because the obligation to pay a commission under the first agreement passed on to the defendant after the deed of novation and by the second agreement. The defendant’s position is it has no responsibility to pay any commission to the plaintiff.
[17] Mr Hayhow remains the common factor in the two sales. He was in control of WPDL and the defendant. He signed all relevant documentation, including the deed of novation on behalf of those entities.
[18] The plaintiff concedes there appears to have been sound reasons for the entry into the second agreement which completely replaced the first agreement. The plaintiff’s position is the second agreement was signed by Mr Hayhow on behalf of the defendant, he being the same person who signed the first agreement and on whose behalf he has, by the deed of novation, acknowledged responsibility for the debt due to the plaintiff.
[19] Mr Hayhow’s affidavit explains that WPDL was established for the purpose of a joint venture to purchase the land from its mortgagee bank. The joint venture agreement had been entered into with Mr Allen who along with Mr Hayhow signed the plaintiff’s agency agreement. Mr Hayhow said that because Mr Allen was unable to or chose not to carry out the commitments made to Mr Hayhow in the joint venture agreement, the tender agreement entered into on 16 April 2014 was cancelled on 23 July 2014.
[20] It is the plaintiff’s case that the defendant having acknowledged the agency
arrangement in the novation, the second agreement does not deprive the plaintiff of
its entitlement to commission. That with the novation the defendant assumed the obligations of WPDL by a second agreement which the plaintiff says became unconditional on 4 February 2015. Even though that second agreement subsequently failed because VH defaulted, the plaintiff says that should not deprive it from access to the deposit which the defendant has retained throughout in its solicitors trust account.
Summary judgment principles
[21] There is no dispute about these. An applicant must show there is no arguable defence; that a Court will not normally resolve material conflicts of evidence or assess credibility of deponents whilst not generally accepting any evidence that is apparently lacking in credibility. The Court should be robust where the facts warrant that approach.
[22] In this case Mr Dillon for the plaintiff submits there is no substantive dispute as to the facts.
[23] This case is not, he says, so much about factual differences between the parties but more about the parties’ respective positions concerning the legality and effectiveness of the plaintiff’s agency agreement, the two agreements for sale and purchase, and the novation agreement.
[24] It is in that regard Mr Barter for the defendant submits there are critical misconceptions on behalf of the plaintiff about those documents.
The agency agreement
[25] Mr Barter submits that had the first contract remained in force then the plaintiff would have had a right of action against WPDL because the agency contract was between those two parties and because the first agreement conferred a benefit. Mr Barter does not however concede that the plaintiff would have succeeded in that claim.
[26] Mr Barter submits that the plaintiff has with regard to the agency agreement failed to provide evidence of compliance of that agreement with Section 126(1)(c) of the Real Estate Agents Act 2008. As well as requiring agency work to have been performed that provision requires:
S126(1)(c) a copy of the agency agreement signed by or on behalf of the agent [to be] given by or on behalf of the agent to the client within 48 hours after the agreement was signed by or on behalf of the client.
[27] Section 126 also provides that unless a copy of the agency agreement was provided within 48 hours of it being signed then a Court may not make an order for recovery of commission unless the failure to give a copy of the agreement was beyond the control of the agent and provided the claim for commission or expenses is reasonable.
[28] Mr Barter also refers to regulation 10 of the Real Estate Agents Professional Conduct and Client Care Rules 2012 which provides inter alia for a licensee to have explained and to have set out in writing the conditions under which commission must be paid and how it was calculated; when the agency agreement ended; how the land was to be marketed and advertised; that additional expenses were not obliged to be paid; and how the client could obtain further information regarding agency agreements and contractual documents.
[29] Mr Barter also relies on regulation 4 of the Real Estate Agents (Duties of Licensees) Regulations 2009 which provides that an agency agreement must contain a statement by the agent relating to rebates, discounts and commission in the form provided by a schedule to those regulations.
[30] Mr Barter’s point is that a mere clause in an agreement for sale and purchase referring to calculation of commission payable alone is inadequate to found a claim to payment of commission; that such claim must rely on a properly executed contract compliant with Section 126; and it is the agency contract alone which Mr Barter submits, gives rise to the liability, not the words of clause 25 of the first agreement by which it was agreed the plaintiff’s commission would be paid out of the deposit and into the purchaser’s solicitors trust account.
[31] Mr Barter submits there was no agency agreement between the plaintiff and the defendant. He says the agency agreement was only with WPDL; that when the novated contract came to an end and the second agreement ensued, the agency agreement did not transfer to the defendant. Mr Barter submits the second contract did not acknowledge the defendant had been introduced by the plaintiff. He says the novation document did not acknowledge this. Nor was it as the plaintiff contends a deliberate confirmation on the part of the defendant to the agent that it is bound for that did not record nor bring into account the words of clause 25 of the first agreement.
[32] Mr Barter submits it is the plaintiff’s case that because Mr Hayhow was the director of both companies the defendant knew of the agency agreement that had been signed by WPDL; and therefore the defendant was bound to honor WPDL’s obligations to parties other than the party described in the first agreement as the purchaser. The fact is he says that the second agreement made no provision at all for the defendant to pay agency commission to the plaintiff.
[33] Mr Barter submits that at best the novated contract required the defendant to meet an obligation incurred by WPDL solely in terms of that first agreement; that it did not have the effect of creating an agency arrangement between the defendant and the plaintiff, or confirming one. At best he submits it required the defendant to meet a possible obligation that WPDL may have had to the plaintiff which obligation was solely expressed in clause 25 of the first agreement. Mr Barter submits that once the second agreement terminated the first agreement and the novation, that there was then no further obligation because the agency contract was one solely between WPDL and the plaintiff.
[34] He says the plaintiff relies upon the establishment of a relationship of principal and agent but that there was no express appointment by the defendant of the plaintiff. Nor, Mr Barter submits, was there any ratification by which any prior authority was later ratified and adopted. The plaintiff did not contact anyone other than WPDL and therefore any agency existed prior to any act of the defendant.
[35] Regarding the plaintiff’s claims that the novation amounted to an adoption of the ratification of the contract between WPDL and the plaintiff, Mr Barter submits that it provided no more than a ratification of the obligations of WPDL.
[36] Mr Barter submits that when the second agreement was signed the agency obligations ceased to exist and despite the novated contact did not make the defendant itself a principal to those obligations.
[37] Mr Barter submits that even if the novation established a new principal – agent relationship that was restricted only to any obligation arising out of the novated contract; that once the first agreement was replaced by the second agreement then there was no ongoing obligation because such would only have arisen if original obligations had not been fulfilled; that such obligations were replaced by the second agreement.
[38] Mr Barter submits that the provisions of the Real Estate Agents Act 2008 would not allow claims of agency to be implied by terms of a novation which did not refer to agency obligations. Also it is claimed that there are limitations affecting the plaintiff’s original appointment as agent; that agency required only the putting in front of the vendor the name of a person who may be a purchaser. This does not, it is submitted, yield a right to a commission. Further, in respect of novation claims Mr Barter submits that any agreement requiring a party to take over another’s liabilities clearly applies only to ‘the liability of the parties as between themselves’; that they do not apply to liabilities that may have occurred outside of the novation. Otherwise the new party would be held to take over whatever liabilities the retiring party had – of any sort. That is the reason counsel submits consent to assuming those responsibilities is essential for otherwise anyone could rid themselves of a debt by simply assigning it. That is why the assignee needs specifically to consent to assuming any such obligation.
[39] In this case Mr Barter submits there is no evidence that the defendant consented to the agency contract albeit that it consented to the novation; that in any event the novation was itself a new contract, and any rights of the plaintiff do not survive.
[40] Reliance is obtained from the High Court decision in National Trust Co v Mead1 wherein Wilson J maintained that because assent is the crux of novation in the absence of express agreement the Court should be loath to find novation unless the circumstances were really compelling. His Honour further emphasised that it was necessary to show that a new creditor had assumed the complete liability and having accepted that responsibility as a new debtor and as a principal debtor and not merely
as an agent or guarantor.
[41] Mr Barter submits that if novation occurred then it imposed a liability on the defendant by which WPDL was absolved and therefore that the debt was transferred and for which WPDL assumed no ongoing liability. But, it is submitted, the only invoice ever issued was directed at WPDL. That is some distance short, counsel submits of claims that the defendant as well as Mr Hayhow personally might be liable.
Was the plaintiff a ‘true’ agent?
[42] A backup position for the defendant is provided by the submission that the plaintiff had not done anything by way of an introduction before the defendant had purchased. There is, it is submitted, no record of any discussion with the defendant. Also, Mr Hayhow was never seen any invoice delivered to the defendant, or that there is any evidence of a formal demand upon the defendant.
[43] Mr Barter submits the plaintiff provided no service to the defendant of any sort nor has it delivered any invoice to the defendant for payment. Regardless, at best a real estate agency agreement is, he submits, an agreement to find a potential buyer and that in this case it is not possible to say that happened before the defendant took title.
[44] If the plaintiff had procured the first agreement and if that was adopted by novation then confirmation was required but none such was available because the agency was one of introduction and had no effect on the contract concluded by the
defendant and VH.
1 (1990) 7 DLR (4th) 488.
Whether the first agreement came to an end
[45] Clause 20.3 of the first agreement provided:
That the vendor would within 15 working days of the date of the agreement confirm details of the [waste water disposal easement] together with details of the proposed waste water solution. The purchaser will approve such details within a further 10 working days. In the event the purchaser does not do this the agreement will be at an end…
[46] Mr Barter submits it is not in question that neither party gave notice to the other and, because there was no waiver of that condition the agreement automatically came to an end. Therefore the first agreement never became unconditional and no basis exists for a claim of commission due. Mr Barter submits it was only as a result of the second agreement that a contract became unconditional and then in a completely different manner than had been provided in the first agreement.
[47] Whilst the first agreement was conditional also on the vendor obtaining resource consent by 19 December 2014 that did not occur because as Venning J found in a related proceeding brought by VH against the defendant the resource consent was not available by 19 December 2014.
[48] Mr Barter submits there is no evidence that any of the ways in which the first agreement may become unconditional did the first agreement became unconditional. By contrast he said an agreement only became unconditional as a result of the way the second agreement was structured.
Overview of defendant’s position
[49] Mr Barter submitted the Real Estate Agents Act 2008 introduced a series of significant changes to the way in which an agency contract was prefaced and signed; but that no Court authority has since provided any ruling regarding the adequacy of documentation required for proof of the existence of an agency contract.
[50] He submits no one is denying that an agent need only make the introduction and for the contract to reach a point where a commission is payable as a result of that introduction. It is the defendant’s position that under the first agreement no event
occurred which would have triggered a commission; that the event which triggered a commission was that which occurred under the second agreement which the defendant claims was structured in a substantially important way that was different from the first agreement. The defendant denies therefore that the plaintiff had earned its commission before the second agreement had been entered into. That, the defendant says, could not have occurred because it was only under the second agreement that the contract did become unconditional.
[51] Mr Barter submits that claims that Mr Hayhow was the directing mind of the vendor under both agreements is irrelevant. Mr Barter submits that any right of suit exists because of the terms of the contract by which an agent is able to sue, and nor, by inference, to any other contract or deed.
[52] Regarding the plaintiff’s position that Mr Hayhow was the directing mind of both vendor entities Mr Barter responds that those two entities were completely different and that there was good reason for use of the defendant in the second agreement.
[53] Mr Barter submits the doctrine of privity of contract applies generally and that exceptions to those rules are set out in the Contracts (Privity) Act 1982 at section
4 which provides, inter alia, that where a promise contained in a deed or contract confers, or purports to confer, a benefit on a person, designated by name and description who is not a party to a deed or contract the promissory shall be under an obligation enforceable at the suit of that person to perform that promise.
[54] Mr Barter submits the Contracts (Privity) Act intends to bind the promissory; that the defendant is not the promissory of any obligation to the plaintiff. Therefore it only becomes a promissory if the words in the novation agreement apply. Mr Barter submits they cannot because the document is an agreement and not a deed because the document exhibited in evidence is not formally witnessed. Therefore he submits there is no consideration to the defendant to take on an obligation to a party outside the novation. Also he says it was not contemplated or intended that the defendant should assume the responsibility for paying commission. Because there is
nothing in the wording of the novation indicating an intention for accountability to the plaintiff.
[55] The plaintiff’s claim is flawed the defendant says because it is unable to enforce a claim of a second and or derivative nature and not of the kind contemplated by the provisions of the Real Estate Agents Act 2008. However, even if liability did arise as a result of the first agreement and if that agreement did not end by virtue of clause 20.3 [requiring the vendor to confirm details of the water disposal easement], it was superseded entirely by the second agreement in respect of which there was no agency agreement with the defendant; that the liabilities taken over by the defendant in the novation are solely the liabilities of WPDL to the purchaser who was a party to the novation. Mr Barter submits the defendant did not as an incidence of the novation, acquire the liabilities which arose in the plaintiff’s agency contract with WPDL.
Considerations
[56] It is in that frame of factors identified by the submissions on behalf of the defendant that the Court accepts, as the plaintiff has submitted, that there appeared to be no relevant disputes of fact.
The first agreement
[57] Clause 6.1 provides that Mr Hayhow confirms that if he is not the sole owner of the property then he has the authority of all owners to sign the agreement on their behalf. Yet, Mr Hayhow deposes WPDL did not own the land at the time the agency agreement was entered into. It was he who went on to effect a sale in the name of the defendant also, and as Mr Hayhow has acknowledged by his affidavit:
It could never be sanely denied that the original introduction of VN was made by [the plaintiff] …
[58] The first agreement expressly acknowledged the agency of the plaintiff on the front page and on the last page and contains an express term that the vendor was to pay the agent’s charges for effecting the sale.
[59] On 12 August 2014 a deed of novation was entered into whereby the rights and obligations under the first agreement passed from WPDL as vendor, to the defendant as vendor. The novation included an express term that the defendant would perform all of WPDL’s obligations under the first agreement and there was a further express term that the defendant was substituted for WPDL under the original contract as if it had originally executed the original contract in place of WPDL.
[60] The question is whether thereby the defendant was substituted into the original contract and thereby the acknowledgements of agency in the first agreement became the acknowledgements of the defendant.
[61] Mr Hayhow signed the deed of novation as director of WPDL and as director of the defendant. Thereby the Court considers the defendant acknowledged the agency of the plaintiff in introducing it to the purchaser.
[62] Mr Hayhow directed the mind and will of both companies he having full knowledge of all relevant obligations including the authority to bind the owner of the property. The defendant accepted those obligations when it became the substituted purchaser and, as the plaintiff submits, that knowledge passed from WPDL to the defendant via Mr Hayhow, as did the benefit of the introduction effected by the plaintiff.
[63] It is correct that the second agreement completely replaced the first agreement but as the novation acknowledges the second contract is with the party introduced to the defendant by the plaintiff.
[64] There are some differences between the two agreements. In the first, the deposit was $1.5M and in the second it was $1.125M. Evidence for the plaintiff noted that VH paid a deposit of $1.25M into the Barter & Co trust account in June for the first agreement. That deposit has never been returned to VH. Therefore Mr Dillon submits, it having been paid as a deposit for the first agreement it remained in the solicitor’s trust account on account of the deposit payable under the second agreement – albeit in an amount which exceeds the deposit payable under the second agreement. The court already having determined the agreement became
unconditional on 4 February 2015 therefore it ought to be used to pay the plaintiff’s fees. The payment of commission was never conditional upon the agreement settling.
[65] It is the defendant’s position that Section 126 of the Real Estate Agents Act
2008 needs to be considered afresh without significant reliance upon its predecessor the Real Estate Agents Act 1976.
[66] However, it does not seem to this Court that there is significant difference in the requirements entitling suit to recover commission. Previously an entitlement to sue relied upon an appointment in writing by some person lawfully authorised to sign the appointment.
[67] Presently, it is specified that any written agency agreement needed to be signed by or on behalf of the client or the agent.
[68] In this case and given Mr Hayhow’s position and the knowledge he had, the Court accepts the plaintiff’s submission there would be no room for any allegation of equivocation in the terms of the acknowledgement which evidences the agency contract. Under the prior Act there needed to be an acknowledgement in writing of an entitlement to charge commission. Under the new provision there is the requirement of a written agency agreement the terms of which need to be read in conjunction with the Real Estate Agent’s Professional Conduct and Client Care Rules 2012 and the Real Estate Agent’s (Duties of Licencees) Regulations 2009 – both referred to earlier in this judgment.
[69] In this Court’s view there has been compliance with s 126 of the Real Estate Agents Act 2008. Mr Hayhow signed the first and second agreements in his capacity as the sole director of the named vendor. In that capacity also the signed an agency agreement. Also there is clear evidence of a commitment to pay commission at an agreed rate. Mr Hayhow has given no evidence of any misunderstanding or lack of knowledge regarding the commitment entered into by the agency agreement, much less suggesting that he may have misunderstood what those commitments were.
[70] Mr Barter submitted s 126(1) was not complied with because a copy of the agency agreement was not given to the client within 48 hours of it being signed. But Mr Hayhow gave no evidence of this suggested deficiency. Claims of defectiveness are raised for the first time by counsel’s submissions.
[71] The Court agrees with Mr Dillon’s submissions that the consumer protection requirements of the Real Estate Agents Act 2008 and of the associated regulations and rules have been met.
[72] The primary focus for the Court is upon the description of WPDL as the client in the agency contract. In his evidence Mr Hayhow says WPDL never became the owner of the property. If that is so then Mr Hayhow’s acknowledgement of acting on behalf of the actual owner must have been made on behalf of the defendant for the agency contract contains his acknowledgement of having signed that he has the authority of the owners.
[73] Then the defendant entered into the novation. In the result the Court accepts Mr Hayhow has bound the defendant on whose behalf he committed it and on whose behalf he earlier signed the agency agreement.
[74] There is no issue regarding the fact that it was the plaintiff who introduced VH the purchaser. Nor does it appear to be in question that but for issues affecting Mr Hayhow’s relationship with Mr Allen the first agreement, albeit subject to certain performance conditions, would have proceeded; that to allay those relationship concerns Mr Hayhow introduced a newly incorporated company in his control for the purpose of assuming control over the land sale process.
[75] The Court assumes the association of Mr Hayhow and Mr Allen ended around 23 July 2014 when the original joint venture mortgagee tender was cancelled. Whilst Mr Allen signed the original agency agreement along with Mr Hayhow, by the time the first agreement was signed it appears clear that Mr Hayhow was in control, for he was sole director of WPDL.
Conclusion
[76] The purchaser’s contract was declared unconditional on 4 February. It is a true construction of the agency agreement that at that point commission was payable.
[77] The plaintiff asserts the second agreement does not affect the defendant’s liability to pay commission. The Court agrees. The defendant has acknowledged that the plaintiff was its agent by the terms of the novation it having introduced the purchaser that entered into an agreement with the defendant and when that contract became unconditional.
[78] The deposit was paid for the first agreement. The terms of the novation indicate it was applied to the second agreement even though the deposit required on that agreement was less than that of the first agreement.
[79] The Court agrees with Mr Dillon’s assessment that the treatment of the deposit is clear evidence that the agency contract was signed by WPDL on behalf of the defendant.
[80] Novation is about two contracting parties agreeing that a third party shall stand in the place of one of them in relation to the other. A new contract is formed and the consent of all parties obtained. Such an outcome might be inferred from things done as well as by the written terms of the parties’ arrangement. In our present case the obligation to pay commission was expressly stated in the first agreement and the novation had the effect of confirming the effective agency of WPDL in signing the agency agreement with the plaintiff, on behalf of the defendant. Having adopted the rights and obligations as vendor and having confirmed the ability of WPDL to sign on its behalf the Court agrees with Mr Dillon that the second agreement does not vary or discharge the acknowledged obligation to pay the agent its commission – because the acknowledgement once made, remains binding and enforceable.
[81] In our case it is the defendant’s position that if there had been an
acknowledgement in the novation of the agency of the plaintiff that such an
acknowledgement has no effect. In the Court’s view and for reasons already identified, the inadequacy of or technical issues raised in connection with the form and execution of the agency agreement, are not accepted.
[82] The submissions of counsel for the defendant do not address all stated grounds of opposition in the notice of opposition filed in this proceeding. The Court has assumed therefore that those grounds not addressed by submissions do not require any further attention. In relation to those grounds that have been addressed by counsel’s submissions, the Court finds:
(a) The Contracts (Privity) Act 1982 does not apply to a novated contract and in that regard the Court agrees with Mr Dillon that if the original parties enter into a contract for the benefit of a third, a new contract between new parties to the same effect is equally of benefit to the third party, who must therefore be able to enforce it under the Act.
(b)Of the defendant’s claim that a novated contracted only extends to the liabilities of the parties to that contract the Court respectfully disagrees. In this case the deed of novation has committed itself to an acknowledgement of the role and entitlements of the plaintiff.
(c) The defendant submits the second agreement extinguished the first agreement. However that submission ignores the express terms of the novation which made the defendant the vendor under the first agreement “as if it had originally executed the agreement”. That factor is not changed by the defendant’s entry into the second agreement even though by that it was that the plaintiff became entitled to payment of the commission.
(d)That the deed of novation was not properly witnessed and therefore was not effective as a deed. Regarding this submission the Court agrees again with Mr Dillon that the obligations provided by the novation do not need to be in the form of a deed. It does not appear to be the case of the defendant that its terms are not ineffective. It
appears to be the defendant’s case that only benefits and not responsibilities are conferred. The Court does not agree. Also, there is no denying it was signed on behalf of the defendant.
[83] The Court accepts there was an agency agreement between the plaintiff and defendant arising from the defendant’s adoption and acknowledgement of that relationship by which the plaintiff effected a sale of the defendant’s property.
[84] In the Court’s view Mr Hayhow for the defendant had no misconception about or proper reason to avoid the agency relationship obligation that remained throughout that process even though he may have wanted to avoid that. Claims of privity of contract do not assist the defendant in the circumstances.
Judgment
[85] The Court grants the application for summary judgment and orders payment by the defendant in the sum of $446,775.00 together with interest from 4 February
2015 at the rate described pursuant to the Judicature Act 1908.
[86] The Court awards 2B costs and disbursements to the plaintiff which the
Court, upon application, will fix if the parties cannot agree on those.
Associate Judge Christiansen
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