The Monopoly Company Pty Ltd v Diosta Pty Ltd [2004] NSWCA 369

New South Wales Court of Appeal

CITATION : The Monopoly Company Pty Ltd v Diosta Pty Ltd [2004] NSWCA 369 HEARING DATE(S) : 27 August 2004 JUDGMENT DATE : 8 November 2004

JUDGMENT OF : Sheller JA at 1; Giles JA at 2; Tobias JA at 77 DECISION : Appeal dismissed with costs.

CATCHWORDS : Agency agreement - for purchase of hotel - fee payable if principal procured another person to purchase - whether on construction of agreement procurement had to be the means by which the purchaser became the legal or beneficial owner - held no - whether on facts principal procured the other person to purchase - held yes. D CASES CITED : David Leahey (Aust) Pty Ltd v McPherson's Ltd (1991) 2 VR 367. PARTIES : The Monopoly Company - Appellant Diosta Pty Ltd - Respondent FILE NUMBER(S) : CA 41229/03 COUNSEL : R J H Darke SC & G B Carolan - Appellant N Cotman SC & G Thomas - Respondent SOLICITORS : Back Schwartz Vaughan - Appellant Ratner Chiu & Co - Respondent

LOWER COURT District Court JURISDICTION : LOWER COURT DC 6796/01 FILE NUMBER(S) : LOWER COURT Herron ADCJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 41229/03 DC 6796/01

SHELLER JA GILES JA TOBIAS JA

Monday 8 November 2004 THE MONOPOLY COMPANY PTY LTD v DIOSTA PTY LTD Judgment 1 SHELLER JA: I agree with Giles JA. 2 GILES JA: Diosta Pty Ltd ("Diosta") conducted a real estate agency in Sydney. Until late August 1999 it traded as L J Hooker Special Projects. Thereafter it traded as Raine & Horne Special Projects NSW. 3 Diosta was engaged on commission by The Monopoly Company Pty Ltd ("Monopoly") to find a hotel for Monopoly to buy. A Purchasing Agency Agreement ("the Agreement") was executed in July 1999. Diosta was entitled to its commission if it introduced to Monopoly a hotel vendor and, amongst other alternatives, Monopoly "procure[d] another person to enter into a contract for the purchase of the Property (whether by novation or otherwise)". 4 In August 1999 Diosta introduced to Monopoly the vendor of the Eastwood Hotel. In June 2000 the vendor accepted an offer for the purchase of the hotel by Monopoly. This did not mature into a sale to Monopoly. In early October 2000, in circumstances to be considered in some detail, Modern Motels Pty Ltd ("Modern") entered into a contract to purchase the hotel. The sale to Modern was completed at the beginning of December 2000. Modern was not a trustee for Monopoly, Monopoly had no shareholding in Modern, and it was accepted that Monopoly was not the legal or beneficial owner of the hotel. 5 Herron DCJ held that Monopoly had procured Modern to enter into the contract and that Diosta was entitled to its commission. There were two issues on appeal. The first was whether, on the proper construction of the Agreement, it was necessary that the procurement be a means by which Monopoly became the legal or beneficial owner of the hotel. The second, arising if it was not necessary, was whether Monopoly had procured Modern to enter into the contract within the meaning of the Agreement.