Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Chalhoub v Astro Real Estate Holding Pty Ltd [2018] NSWCATAP 217 Hearing dates: 5 September 2018 Date of orders: 18 September 2018 Decision date: 18 September 2018 Jurisdiction: Appeal Panel Before: The Hon F Marks Principal Member L Wilson Senior Member Decision: Appeal dismissed Catchwords: Appeal- Whether real estate agent commission payable- Held no appealable error- Appeal dismissed Legislation Cited: Civil and Administrative Tribunal Act 2013 Category: Principal judgment Parties: Antoun Chalhoub, appellant Astro Real Estate Holding Pty Ltd, respondent Representation: Appellant, Self Represented Solicitors: P Doherty, Respondent File Number(s): AP18/30187 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 19 June 2018 Before: S Smith General Member File Number(s): GEN 17/45779 REASONS FOR DECISION Background 1. The appellant in these proceedings, Antoun Chalhoub filed an application in the Consumer and Commercial Division of this Tribunal on 26 October 2017 in which he sought an order to the effect that he was not required to pay the sum of $16,720 to the respondent Astro Real Estate Holding Pty Ltd being commission claimed by the respondent for having effected the sale of a property which the appellant jointly owned with his wife. 2. On 19 June 2018 a Member of this Tribunal dismissed the application and ordered that the appellant pay the respondent the sum of $16,720. In dismissing the application the Member noted that in the course of cross examination the appellant had "proved a querulous and uncooperative witness", had refused to answer questions put to him and had vacated the witness box. The Member had informed the appellant that if he refused to answer questions he was empowered to dismiss the proceedings because his conduct "was causing definite prejudice to the respondent." The Member then proceeded to dismiss the proceedings and noted that the Tribunal was thereby empowered to order the appellant "to pay the amount in issue to the respondent." 3. The audio recording of the proceedings before the Member has been made available to us, and we have listened to it. It is clear that the respondent's solicitor had embarked upon a careful and meticulous and detailed cross examination of the applicant. It was also clear that the appellant was becoming increasingly frustrated by the process, although the Member did endeavour to explain to the appellant the necessity for him to give evidence. Towards the end of the hearing the appellant told the Member that he was feeling unwell and that he was unable to proceed. The appellant applied for an adjournment which was opposed by the respondent. The Member determined to proceed, and dismissed the appellant's application, relying on the provisions of clause 10 of Schedule 4 to the Civil and Administrative Tribunal Act ("the Act"). In effect, the Member found that the failure of the appellant to answer questions in cross examination unreasonably disadvantaged the respondent enabling him to dismiss the application. Factual matters 1. There are a number of background facts which are not in issue and which can be stated briefly. 1. The relevant property was owned jointly by the appellant and his estranged wife, Josephine who at all relevant times were in the course of endeavouring to negotiate a financial settlement within Family Court proceedings which were then current. 2. Both the appellant and his wife signed an exclusive agency agreement dated 13 March 2017 appointing the respondent exclusive agent to sell the property. Entitlement to commission would arise if the property was sold during the exclusive agency by the agent, any other agent or by the owners. 3. On 18 July 2017 the appellant forwarded an email communication to the respondent stating that the exclusive agency agreement had expired on 15 May 2017 and that the services of the respondent were no longer required. 4. On 29 July 2017 the appellant's wife forwarded an email to the respondent noting that the "contract" had expired and asking the respondent to "re-enlist" the property on the market as an urgent sale was required. The appellant said that this was done without his knowledge or authority 5. On 31 July 2017 Mr Singh, the principal of the respondent forwarded an email to the appellant confirming agreement for the property to be placed on the market, and stating that he was "seeing one of the buyers after work today". 6. On 2 August 2017 Mr Michael O'Doherty, solicitor acting for both vendors, forwarded a contract to the respondent which did not contain the name of any purchaser. 7. Between May and July 2017 there is correspondence between solicitors acting for the appellant and his wife indicating that there were negotiations between them to endeavour to reach agreement about the sale of what may be assumed to be the matrimonial home and the disposition of the net proceeds of sale. There were indications of some urgency because of apparent threats by the mortgagee to affect a forced sale because of arrears in debt servicing payments. 1. There are additional facts contained in a statement of the appellant dated 22 April 2018 which was before the Member. These are; 1. Sometime in the period May to July 2017 Mr and Mrs Rahme came to see the property, the appellant having met them through his local church. On about 10 July 2017 the appellant told Mr Rahme that he had been unsuccessful in his negotiations to buy his interest in the property from his wife and he was giving him an opportunity to buy the property. Shortly thereafter they agreed on a purchase price of $762,500. As they were both members of the same church, they confirmed the contract by shaking hands in front of the local Priest at the church. These buyers had not been introduced in any way through the services of the respondent. 2. In late July or early August 2017 Mr Singh came to see the appellant and said that he had a buyer whom he named as Mr and Mrs Alsawafi and asked him to sign an "extension" of his agency agreement. The appellant said that he responded by saying that he had his own buyer through the church and was negotiating with him and that he required a building inspection. However because he was being pressed by his bank, the appellant told Mr Singh that if he could get Mr Alsawafi to pay "a good price" that he would sell to him. Mr Singh said that he could get $770,000. On this basis he signed a handwritten notation on the expired exclusive real estate sales agreement on which Mr Singh had written the words "extended to 30.0 8.2017". 3. After the building inspection Mr and Mrs Rahme said they wanted to renegotiate the price. 4. In early August 2017 Mr Singh came to the appellant's house with a sale contract, saying that his buyer was "ready to go" and asked him to sign the contract. The name of the purchaser was blank. The appellant assumed it was a purchaser located by the respondent. When no exchange had taken place within a few days the appellant spoke to Mr Singh who informed him that that sale was not proceeding but that he had another "Iraqi buyer." 5. On 11 August 2017 Mr Singh came to the appellant's house asking him to sign a special condition for a development application and to sign the contract. The name of the purchaser was still blank. At no stage was the appellant directly informed by Mr Singh that the ultimate purchasers would be Mr and Mrs Rahme, the persons whom he had introduced to the property. However the names of the purchasers were known to the appellant's solicitor acting on the conveyance prior to the exchange of the contract of sale. The appeal 1. The appellant has sought leave to appeal and to appeal from this decision. The grounds of appeal include the following; 1. The Tribunal was in error in purporting to dismiss the application on the basis of the appellant's lack of cooperation 2. The Tribunal had no power to make an order for the payment of money in all the circumstances 3. The Tribunal failed to afford the appellant natural justice by failing to take into account that he was disadvantaged in terms of his language ability and that he was clearly suffering a panic attack at the time that he indicated that he did not wish to continue to give evidence 4. The Tribunal failed to give adequate reasons for its decision Was the respondent entitled to commission on the sale to Mr and Mrs Rahme ? 1. This Is the burning question which is at the heart of these proceedings. Whether or not the Member was in error in dismissing the proceedings is an issue subsidiary to the only matter which really concerns the appellant and the respondent, namely entitlement to the commission on the sale of the jointly owned property to a Mr and Mrs Rahme. We conducted the appeal proceedings on this basis. 2. Initially, we were concerned about whether there was in fact entitlement to commission by reference to a number of matters including; 1. it is clear on the evidence that the appellant had previously met Mr and Mrs Rahme through his local Church association, and had entered into preliminary negotiations with them for the sale of the property. 2. at the time that Mr Singh induced the appellant to sign what he considered to be an extension of the exclusive agency agreement the appellant was under the impression that Mr Singh had prospective buyers whom he nominated as being of Iraqi origin. The appellant never contemplated that Mr Singh would be entitled to commission on any sale which he negotiated to Mr and Mrs Rahme. 3. the extension of the exclusive agency agreement was created when Mr Singh wrote the words "extended to 30.8 .2017" on the exclusive agency agreement form next to that part of the agreement which referred to the agency. The appellant signed this handwritten amendment. 4. Mr Singh did not disclose to the appellant that the final negotiated sale had been effected to Mr and Mrs Rahme. When Mr Singh arranged for him to sign the contract for sale as one of the vendors, the name of the purchasers was not filled in and the appellant assumed the Mr Singh was trying to hide this fact from him. 5. Mr Singh knew that the appellant had been negotiating for the sale of the property with Mr and Mrs Rahme, and it would have been unconscionable for him to have purported to rely on an exclusive agency agreement if he had negotiated a sale to these persons as purchasers. 1. If all of these matters had been determined in a manner favourable to the circumstances of the appellant, we would have had grave doubts about the entitlement of the respondent to claim commission for the sale of the property to Mr and Mrs Rahme. However, during the course of the proceedings we questioned the appellant and the solicitor for the respondent closely to ascertain the true factual position. Despite the assertion made by the appellant during the course of the hearing that he had indeed disclosed the name of Mr and Mrs Rahme to Mr Singh as persons with whom he was negotiating privately to sell the property before the extension to the exclusive sales agreement, the appellant had signed a statement prepared by solicitors then acting for him which he had filed in the original proceedings in which he said that he had not informed Mr Singh of their name. Given that clear statement, which was signed by the appellant on 22 April 2018 and which was before the Member we are not prepared to accept the contrary version of what happened now put forward by the appellant. Furthermore, even though the appellant said that Mr Singh never disclosed to him the names of Mr and Mrs Rahme as purchasers before contracts were exchanged there is in existence correspondence between solicitors acting for the appellant and his wife as vendors and solicitors acting for Mr and Mrs Rahme as named purchasers which predates the exchange of contracts. The knowledge of his solicitor was his knowledge. It follows that prior to exchange of contracts the appellant is deemed to have known of the identity of the purchasers. The contract as exchanged clearly shows the respondent as the selling real estate agent. 2. While the appellant may have concerns that in some way Mr Singh tricked him into signing an exclusive sales agency agreement entitling the respondent to claim commission for a sale to persons he had initially introduced to the property, there is nothing in the circumstances as they eventuated which would preclude the respondent's entitlement to that commission. There is no proof that at the time that Mr Singh persuaded the appellant to sign the extension to the exclusive sales agreement, his wife already having agreed to do so, that Mr Singh was intent on selling the property to Mr and Mrs Rahme being aware that they had already seen the property and had been negotiating to purchase it. At the relevant time, the appellant wanted to sell the property in order to discharge the debt owing on it, his negotiations to acquire his wife's interest in it having failed, and he having not brought Mr and Mrs Rahme to a point where they were ready to sign a contract for purchase. In all the circumstances, including the terms of the exclusive agency agreement, it must be concluded that there is no sufficiently valid argument available to the appellant to resist the respondent's claim to commission. Conclusion 1. On the basis of the conclusion which we have expressed above, whether or not the hearing miscarried in the sense that the Member should have granted an adjournment rather than persisting with the hearing becomes irrelevant, because the appellant's application was bound to fail in any event. 2. Each of the grounds of appeal involves questions of law and to this extent, leave to appeal is not required. Accordingly, the appellant is entitled to appeal as of right. 3. However, for reasons which we have set out above there is no merit in the appeal. Nor is there any need to consider the ground based on the inadequacy of reasons given by the Member. Furthermore, there is no doubt that the Member was entitled to make the order for monetary compensation. For these reasons the appeal must be dismissed Order 1. We make the following order, namely that the appeal is dismissed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 September 2018