Newman v Anserdoro Pty Ltd [2008] NSWSC 371

New South Wales Supreme Court

CITATION : Newman v Anserdoro Pty Ltd [2008] NSWSC 371

HEARING DATE(S) : 23 April 2008

JUDGMENT DATE : 28 April 2008

JUDGMENT OF : Malpass AsJ

DECISION : Appeal fails; Summons dismissed; plaintiff to pay the costs of the proceedings.

CATCHWORDS : COMMON LAW - appeal - claim for commission by real estate agent - alleged errors of law

LEGISLATION CITED : Property Stock & Business Agents Act 2002 Property Stock & Business Agents Regulation 2003

CATEGORY : Principal judgment

CASES CITED : Gordon v Lachlan Elders Realty P/L t/as LJ Hooker Mona Vale (Commercial) [2002] NSWCTTT 259

PARTIES : Lyndell Newman (Plaintiff) Anserdoro Pty Ltd (Defendant)

FILE NUMBER(S) : SC 15028/07

COUNSEL : D J Topp (Plaintiff) L Grindlay (Defendant)

SOLICITORS : Stacks Northern Rivers (Plaintiff) O'Reilly & Sochacki (Defendant)

LOWER COURT JURISDICTION : Local Court

LOWER COURT FILE NUMBER(S) : 66/06

LOWER COURT JUDICIAL OFFICER : Linden LCM

LOWER COURT DATE OF DECISION : 22 August 2007

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Associate Justice Malpass

Monday 28 April 2008

15028/07 Lyndell Newman v Anserdoro Pty Ltd

JUDGMENT 1 HIS HONOUR: The plaintiff was the owner of a property at Limpinwood ("the property"). Ms Flynn was a real estate agent. For presently relevant purposes, she was initially the proprietor of Ray White Pty Ltd. She later came to be an employee of the defendant (who carried on a business under the name of Elders Real Estate). The property came to be purchased by Dr Viliunas ("the purchaser"). She was assisted in such purchasing activities by Ruth Doherty. 2 Whilst Ms Flynn was carrying on business under the Ray White name, she was approached by Ruth Doherty on behalf of the purchaser concerning purchase of the property. After the commencement of her employment with the defendant an exclusive agency agreement ("the agreement") came into being on 31 March 2005 between the plaintiff and the defendant. 3 The agreement was for a period of two months. For present purposes, remuneration was payable following the expiration of the agreement where a principal enters into a contract for the sale of a property to a purchaser effectively introduced to the principal during the agency. 4 Upon the expiry of the prescribed term of two months, the relationship continued until 24 January 2006. 5 During the relationship, what took place has been described by Ms Flynn as one of, if not the most, difficult sales in her period as a real estate agent. It is unnecessary to be exhaustive as to what happened during that period. It suffices to say that there were extensive negotiations, the preparation of a number of contracts and the payment by the purchaser of a 10% deposit. 6 It appears that the relationship fell apart, inter alia, because of some problem concerning window coverings. On 24 January 2006, the plaintiff unilaterally withdrew the property from sale and terminated the agency. 7 In about early March 2006, the defendant entered into an agency agreement with Wheelers Real Estate. On 29 March 2006, the purchaser entered into a contract to purchase the property. It seems that the new agent smoothed out, inter alia, the problems concerning the window coverings. 8 The defendant claimed the commission pursuant to the agreement. The claim was disputed. Proceedings were brought in the Local Court at Murwillumbah. The plaintiff relied on an Amended Defence. The claim was heard and determined by Linden LCM. The Magistrate delivered a written judgment. He found in favour of the defendant. The judgment was in the order of $19,000.00. 9 The parties were legally represented. Ms Flynn was the only witness who was cross examined (as employee of the defendant). The Magistrate made a finding that Ms Flynn introduced the purchaser to the property during the course of the agency agreement. The judgment, inter alia, contained the following: "The defendant in answer to the claim relies on the amended defence dated 23rd October 2006. There is no issue raised in the defence about the agency agreement between the plaintiff and the defendant, indeed there is an admission that the agreement was in existence. In the defendants submissions the issue of the validity of the agreement is raised. The agreement is in exhibit one. It is the standard Real Estate Institute of NSW form, which I am satisfied, is correctly completed dated and signed. I am satisfied there is no issue about the validity of the agreement." 10 The Magistrate then considered what had been said in a decision made in the Consumer, Trader and Tenancy Tribunal (Gordon v Lachlan Elder Realty P/L t/as LJ Hooker Mona Vale (Commercial) [200] NSWCTT 259 (9 July 2002)). The judgment used the collocation of words "chain of causation of the sale". The Magistrate proceeded to find that he was satisfied that there was no break in such chain in this case. He also observed that: "Similarly in this case there is absolutely no evidence that any form of marketing by the second agent was the, or an effective cause of the sale." 11 He then further observed as follows: "I am satisfied that the introduction of the purchaser initially by the plaintiff to the defendant and the inordinate efforts put in by Ms Flynn to get the matter to exchange (and indeed the purchaser I am satisfied being ready willing and able to exchange) was both the and an effective cause of the sale." 12 The plaintiff has filed a Summons in this Court. It seeks to bring an appeal as of right from the decision of the Magistrate. In substance, it relies on four appeal grounds. I shall come to these grounds in due course. 13 An appeal as of right lies where there has been error in point of law. The mere identification of such an error does not necessarily lead to a disturbance of decision of the Magistrate. There must be materiality that justifies the disturbing of the decision. The onus rests with the plaintiff. 14 The first appeal ground is one of invalidity. It relies on provisions of the Property, Stock & Business Agents Act 2002 ("the Act") and the Property Stock & Business Agents Regulation ("the Regulation"). In substance, the argument is that the alleged commission was not payable by reason of non-compliance with provisions of the Act and Regulation. 15 The initial difficulty that confronts this alleged ground is that whilst the plaintiff's amended defence was a lengthy document (which pleaded the Act and provisions of the Regulation). It did not raise this matter as a defence and objection was taken by the defendant to it being argued before the Magistrate. The case litigated by the plaintiff was founded on an amendment of the agreement as pleaded and allegations of breach. 16 It is somewhat unclear as to what the Magistrate did in dealing with this matter. I have earlier quoted the relevant observations. On one view, they may be seen as being ambiguous. The best view may be that he rejected it on two grounds. One, because it had not been pleaded. Two, because it lacked substance in any event. 17 If that be the case, there was no error on the part of the Magistrate in rejecting the matter as an alleged defence. To the extent that he dealt with it as a defence, I am not persuaded that he reached an erroneous result. 18 Section 55 of the Act disentitles a licensee to commission where the agency agreement does not comply with the requirements of the Regulations. There are three schedules to the Regulations which are relevant for present purposes. Schedule 7 applies to all agency agreements. Schedule 8 applies to agency agreements for the sale of residential property. Schedule 10 applies to agency agreements for the sale of rural land. 19 The argument put by the plaintiff is that the property was rural land and that the agreement did not comply with all of the requirements of Schedule 10. 20 Section 3 of the Act provides a definition of "rural land". An insurmountable difficulty for the plaintiff is that there was a lack of evidence before the Magistrate to bring the property within the definition. 21 Section 3 also contains a definition of "residential property". It is defined to have the same meaning as that found in s 66Q of the Conveyancing Act 1919. This section provides that "residential property" does not include land or a lot that is used wholly for non residential purposes or land that is more than 2.5 hectares in area. In the present case, the property had an area larger than 2.5 hectares. 22 It may be that the content of s 66Q was not brought to the attention of the Magistrate. In any event, in this Court it was the subject of little argument. The effect of the provision thereof was not developed. Whilst, the provision may exclude certain land from the definition of "residential property", the question of how the property came to fall within the definition of "rural land" was left unexplored. Further assistance would be required to make out the plaintiff's contention. For present purposes, it is unnecessary to further consider this matter. In my view, it was not open to the plaintiff on the pleadings. 23 The second alleged ground contends that the Magistrate erred in not finding that there was a break in the chain of causation. This was a finding made by the Magistrate en route to his ultimate finding. If it be a relevant consideration, I am not satisfied that the Magistrate erred in making such a finding. If a different view were to be taken on that matter and he did err, I do not consider that it assists the plaintiff in this case. Any error was not an error in point of law. 24 The third alleged ground contends that there was error in finding that there was no evidence that any form of marketing by the second agent was the, or an effective, cause of the sale. This alleged ground can be disposed of in a manner similar to the alleged second ground. For the same reasons, it does not assist the plaintiff in this appeal. 25 The final alleged ground concerns the finding the Ms Flynn, as employee, introduced the purchaser during the course of the agreement. In some way, it is said that the defendant became disentitled to commission because an introduction took place prior to the agreement. It was further said that any entitlement to commission belonged only to Ms Flynn herself. 26 It seems to me that this contention overlooks the terms of the agreement and the cause of action relied on by the defendant. It relates to an introduction by the second defendant which is effective to bring about a contract. 27 It is erroneous to contend that there was no evidence to support the finding. There was an abundance of evidence. A contention that the evidence supported another finding does not assist the plaintiff. 28 I am not satisfied that the Magistrate erred in dealing with this matter. Further, I am not satisfied that there could be any error of law involved. 29 The appeal fails. The Summons is dismissed. The plaintiff is to pay the costs of the proceedings. *********