Alanbert Pty Ltd v Bulevi Pty Ltd [2002] NSWSC 288

New South Wales Supreme Court

CITATION : Alanbert Pty Ltd v Bulevi Pty Ltd [2002] NSWSC 288 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 4528/97 HEARING DATE(S) : 8 April 2002 JUDGMENT DATE : 8 April 2002

Alanbert Pty Limited (P1) Bernoth Realty Pty Ltd (P2) PARTIES : Bertram Bernoth (P3) Bulevi Pty Ltd (D1) Davhand Pty Ltd (D2) JUDGMENT OF : Hamilton J

COUNSEL : A Fairbairn (P1-3) W Lawrence, a director, by leave (D1 & 2) SOLICITORS : John Saroff & Company (P1-3) W Lawrence, a director, by leave (D1 & 2) CATCHWORDS : CONTRACTS [120] - General contractual principles - Construction and interpretation of contracts - Other matters - Incorporation of words used in other document. CASES CITED : Alanbert Pty Ltd v Bulevi Pty Ltd [2001] NSWSC 785 DECISION : Disputes relating to amounts of payments, commissions and incentives determined.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

MONDAY, 8 APRIL 2002

4528/97 ALANBERT PTY LTD v BULEVI PTY LTD & ORS JUDGMENT 1 HIS HONOUR: Before me today for decision are eight contested items relating to what have been known in this case as the commissions and incentives payable by the defendants to the plaintiffs in respect of the sale of lots in the subject subdivision. The issues in contest I defined in a judgment delivered on 30 August 2001: Alanbert Pty Ltd v Bulevi Pty Ltd [2001] NSWSC 785 ("my judgment"). I summarised them in a consolidated schedule to my judgment. 2 Item [1] relates to the sale of lot 2 in the subdivision to Arnold by contract exchanged on 1 December 1996. The question here is whether the $8,200 in the "Paid" column of the schedule was ever received by the plaintiffs, or whether it was not. The only evidence concerning that is evidence which has been brought forward by Mr Lawrence, a director of the defendants, who appears by leave for those companies. He has tendered, as part of Exhibit 15, a letter dated 21 September 2001 to him from Mr Arvo Pikkat, and also a statutory declaration of Mr Pikkat of 22 November 2001. Mr Pikkat deposes in his statutory declaration that he is a director of Bernoth Realty Pty Ltd and also that he is the executor of the late Cecil Alan Bernoth, who has unfortunately died during the course of the proceedings. Mr Pikkat stated in his letter and then repeated in his statutory declaration that Bernoth Realty Pty Ltd received the sum of $5,240 in relation to lot 2 which was the sum of $8,200 less $2,960. The $2,960 was retained by Mr Pikkat who, the parties agree, was an estate agent who acted in conjunction with the Bernoth interests in relation to the sale of this particular lot. As I have said, this is really the only evidence one way or the other concerning it. Mr Fairbairn, of counsel for the plaintiffs, has objected in final address to the form of this documentary evidence and to the fact that Mr Pikkat was not available for cross examination. However, the documents were admitted into evidence without objection on the plaintiffs' part and, although there has been a break in the hearing of this part of this case, no request was made for Mr Pikkat to be produced for cross examination. The only matter that Mr Fairbairn was able to rely on was Annexure AP to Mr Bernoth's affidavit of 9 October 1998. That has a "payments" column in it, and the $8,200 is not included in the payments column. What is said concerning Annexure AP in the body of Mr Bernoth's affidavit is that it is a "Statement of Commissions and Incentive Monies Paid and Payable by Bulevi and Davhand to Bernoth Realty (BR) as at 7 November 1997" in relation to the subdivision land. He further states that the document was prepared by his legal advisers on his instructions. There is no specific statement in his affidavit that the statements in Annexure AP are true, or that the instructions that he gave to his legal advisers were true. 3 In any event, in the circumstances on the balance of probabilities I prefer the word of Mr Pikkat, who there is no reason to think did not at the relevant time have access to the records of Mr Bernoth and of Bernoth Realty Pty Ltd. I bear in mind Mr Pikkat's position as a director of Bernoth Realty Pty Ltd and as executor of Cecil Alan Bernoth. I contrast his positive assertion with the convoluted and imprecise statement in Mr Bernoth's affidavit. I see no reason why I should not accept Mr Pikkat's evidence. On that basis there will be a finding that that sum of $8,200 was in fact paid to the plaintiffs. 4 Item [2] refers to lot 3 in the subdivision and its sale to Salvador. The dispute is as to the amount of commission payable to the plaintiffs, which the defendants contend was $3,350 and the plaintiffs contend was $4,750. There is no dispute that originally the agreement as to commission ("the old regime") was that commission was payable at the rate of 3 per cent up to $830,000 and 5 per cent over $80,000. Equally there is no dispute that subsequently the agreement was varied and the new rate of commission ("the new regime") was 5 per cent on the whole of the sale price. The dispute is as to whether or not the commission in relation to this lot should be calculated according to the old regime or the new regime. This dispute, which also applies to other items, I shall call "the rates dispute." 5 I shall have to go into the date of commencement of the new regime in some detail in relation to some of the other items in dispute. However, as will appear from that discussion, it seems clear that the agreement for the new regime was entered into long after this sale was effected. The exchange of contracts took place on 13 April 1995. It was not till November/December 1996 that negotiations took place and the new regime as to rates was struck. Nor is there any evidence that the new regime was backdated in relation to lot 3 (there is some such contention as to lot 4). 6 The only argument that can be put on behalf of the plaintiffs in relation to lot 3 arises from a "letter" dated 29 November 1996 from Bernoth Realty Pty Ltd to Mr Lawrence, the principal of the defendants. That does refer to "Commission as agreed $4,750", which is calculated at the higher rate. However, I have described the document as being a "letter" because it is not complete on the face of it, having no conclusion and bearing no signature. I am far from convinced that that letter was ever sent. This case is full of draft and incomplete documents and it is often very hard to tell the finals from the drafts and to tell whether draft letters were ever sent. On the evidence, although this "letter" was during the litigation at one stage brought forward by Mr Lawrence, I am not prepared to find that it was sent or received at the time and, in any event, as I say, the agreement for the new regime came into effect long after the contract for this sale indicated by the date it bears and without there being any suggestion in the evidence that it was specifically discussed at the time of the negotiations for that agreement. 7 Furthermore, in paragraphs 80 and 81 of his affidavit of 9 October 1998 Mr Bernoth specifically stated that in respect of lots exchanged before 16 December 1996 it was his understanding that the old regime applied and that the lots regulated by the old regime included lot 3. In these circumstances I find that commission in respect of lot 3 was payable at the lower rate of $3,350. 8 The next three items, item [3], item [4] and item [5], all relate to the sale of lot 4, a sale to Baardwyk, the contracts for which were exchanged on 27 September 1996. 9 Item [3] relates to the amount paid to the plaintiffs, which is claimed by the plaintiffs to be $9,000 and by the defendants to be $5,100 only, leaving a difference of $3,900 in dispute. The defendants rely for proof of the payment of this sum of $3,900 on documents taken from the file of the solicitors who acted for the vendor on the sale, namely, Messrs Elliot Tuthill. It should be said at once that there is no dispute that the $5,100 has been paid. 10 The documents preparatory to the settlement leave no doubt that the vendor's solicitors required as one of the cheques to be handed over on settlement in payment of the balance of purchase moneys, a cheque, no doubt a bank cheque, in favour of Bernoth Realty Pty Ltd for $3,900. Furthermore, the documents on the solicitors' file seem to make it quite plain that the cheque for $3,900 was handed over - there is a tick on the copy of the settlement instructions which was apparently present when the settlement was effected that indicates that that was so. Thereafter, the presumption that all things have been done in due course might usually lead to the conclusion that that cheque was in fact forwarded or handed to Bernoth Realty Pty Ltd or otherwise to the plaintiffs. However, in a letter written by Elliot Tuthill to the defendants on 10 December 1996, among the deductions from the balance purchase monies accounted for to the defendants is the following item: "Bernoth Realty - balance due but held by us 3,900.00."