I find that it was the practice, in the quite complicated and long running dealings between them, that changes to contractual arrangements were documented in writing and were taken not to be in effect until they were, as specifically put in the question above by the plaintiffs' counsel and agreed to by Mr Lawrence on behalf of the defendants.
17 I find that what occurred during late November and early December 1996 was a process of negotiation between the two men. Various documents bear the signature of one or the other, but I am not prepared to find that there was an agreement between them on the subject matter until there was a document signed by both of them. That document is the document page 61 dated 16 December 1996 which undoubtedly bears both their signatures, as modified by the document dated 17 December 1996, which is likewise signed by both. A difficulty with the document of 16 December 1996 is that it does not spell out which lots were referred to or what the new rates of commission were to be, or the new incentive rates. In my view the document that sets those out and which is to be taken to be incorporated in the agreement of 12 December 1996, is the document headed "Annexure A", that is, the first document under Tab 2 in Exhibit 15. That document appears to date from around 3 December 1996. It is not dated but contains a reference to that day in its third line, referring to an exclusive selling agency, not a sole selling agency. A sole selling agency and an exclusive selling agency appear to be, on the evidence, agreements different in their terms. Furthermore, the agreement in this document, Annexure A, was to be for a period different from and longer than the period ultimately specified in the document of 16 December 1996. So far as Annexure A is inconsistent with that subsequent document, it must be taken to be superseded by it, but the terms as to commission and the regime as to incentive are not otherwise stated and there is no dispute between the parties as to what those terms were in either case. The undisputed terms are the terms stated in the document Annexure A. Furthermore that document defines the lots that it is to apply to as lots 1, 2, 6, 8 and 9, which were the lots in relation to which there had been no contract of sale exchanged as at this time, apart from lot 13. Then, by the amending document of 17 December 1996, lot 13 is added to the regime.
18 It has been suggested that other documents were incorporated in the contract, or that the contract should be read by reference to them. But in at least one case the document propounded contains a reference to lot 13, which would make no sense at all as part of a document from which lot 13 was excluded. I do not find that any document was incorporated in the 16 December agreement other than Annexure A to the extent mentioned in [17].
19 By reason of the manner in which business between the men proceeded, as I have found, I find that the agreement did not come into operation until 16 December 1996, which is the date of the page 61 document on which both signatures appear. The agreement that then came into effect incorporated the provisions of Annexure A as to rates of commission and basis of incentives and as to the lots to which applied. On that basis lot 4 was excluded from the new regime as to commission and entitlement to incentives, no doubt by reason of the fact that contracts in relation to it had been exchanged long before.
20 However, there is another leg to the plaintiffs' case in relation to lot 4. The plaintiffs claim that there was incorporated in the agreement of 16 December 1996, or coexisting with it, an oral term or agreement, that the new regime should apply to lot 4. Lot 4 was in discussion between the parties at that stage because its sale was settled at about that time, late November 1996, in fact, on 29 November.
21 Mr Bernoth, in an affidavit, deposed that he had a telephone conversation with Mr Lawrence on 28 November 1996. He asserted that in that conversation Mr Lawrence said to him that he was going to increase the commission and incentive arrangements and give Mr Bernoth a sole agency agreement. Mr Bernoth claims that he asked what commission and incentive arrangement were to apply in respect of the settlement of lot 4 to Baardwyk and Lawrence replied, "I will give you 5 per cent on the first $100,000, and the incentive payments are to start at $92,000." On 2 December 1996 Mr Bernoth wrote to Mr Lawrence a letter which claimed commission at the higher rate of $5,000, stated to be "as agreed", and also claimed "incentive as discussed & agreed upon 28/11/96". That letter I find was sent by Mr Bernoth to Mr Lawrence. Furthermore, on Mr Bernoth's copy there is a note at the foot in his hand, dated 4 December 1996, "Wayne agreed but would not pay until the deed is completed."
22 Furthermore, Mr Fairbairn points to cross examination of Mr Lawrence on 4 December 1998 in the original trial which he says demonstrates that Mr Lawrence agreed that the relevant amounts were owing and that the rates of commission payable in respect of lot 4 were "varied by agreement 28 November 1996". However, Mr Lawrence submits that all he was doing in that cross examination was agreeing with Mr Fairbairn that those were various figures and words that appear in Annexure AP to an affidavit of Mr Bernoth that was before Mr Lawrence in the witness box at the time the questions were asked. The questions are rather equivocal in form and the answers are therefore equivocal. I am not convinced that Mr Lawrence was intending to make or making the admissions which it is said by Mr Fairbairn that his answers represent. Mr Fairbairn announced at that time an intention to return to that subject matter at a later time in his cross examination but, perhaps by reason of focus passing off Annexure AP as a central document in the case, this did not occur and the answers were left equivocal, as I have said.
23 The subject matter is not an entirely easy one because there is some possible support for Mr Bernoth's claimed version of the conversation in the note at the foot of the letter of 2 December 1996. However, Mr Bernoth did appear to me to be a perpetual optimist who was always hopeful that his proposals would be accepted. When one comes to the documentation which constituted the agreement of 16 December 1996 (including the relevant portions of annexure A), there is no mention of lot 4. In all the circumstances I am not prepared to find that there was an agreement to pay commission according to the new regime in respect of lot 4. The correct amount of the commission is therefore $3,400.
24 So far as item [5] is concerned, that has been settled. The amount of the incentive in respect of lot 4 is agreed at $1,500.
25 Item [6] relates to the sale of lot 8 to Marsden. The dispute is in relation to the commission. The plaintiffs claim commission of $4,500, the defendants deny any entitlement to commission. The answer to this question depends not on the rates dispute but on whether or not this sale, which was not effected by the plaintiffs, but by another agent, fell within the period of the sole agency agreement so as to entitle the plaintiffs to commission, although they were not the selling agents. The selling agents involved were Nationwide.
26 The sale was effected by exchange of contracts on 8 September 1997. The sole agency agreement, which I have found to exist, was for a term which expired on 7 April 1997 and contained no option to renew. It is clear on this material that the sale was outside the terms of the sole agency agreement and the plaintiffs were not entitled to commission in the sum of $4,500, or at all.
27 There was an alternative argument put by Mr Fairbairn that the term of the selling agency was nine months after 3 December 1996, which is stated in Annexure A referred to above as being the commencing date of a selling agency for six months with an option for a further three months. However, I have found that there was not a selling agency for that period. Even if there were, there is no evidence of the exercise of any option in relation to any selling agency after December 1996, so that its maximum possible length would have been six months. Even if there had been an exercise of option, the date of contract of 8 September 1997 is outside even the nine month period argued for.
28 Item [7] relates to lot 9 sold to Bray. It relates to an incentive. The plaintiffs claim an incentive payment of $2,150 and the defendants deny any entitlement to incentive. They have now, however, withdrawn that denial and admit the plaintiffs' entitlement to $2,150 incentive in relation to this sale.
29 The last item is item [8] in relation to lot 10, sold to Cassar. It related to the amount of payment to the plaintiffs. The defendants say that $10,550 was due. There is no doubt that the plaintiffs received the sum of $10,550. However, they say that they paid $2,626 to the purchaser to assist the purchaser to pay stamp duty. They say that they ought be entitled to take that sum out of account as paid to them, treating the paid amount as $7,924 only. The defendants say that any loan to the purchaser was a private transaction between the plaintiffs and the purchaser after the purchaser had paid the money to the plaintiffs. The payment was not authorised by the defendants and the amount paid by the defendants ought not be treated as diminished by that amount.
30 With this last submission I agree. The evidence shows that an amount of $10,550 that was to stand towards the deposit was paid to the plaintiffs and put into a trust account before the exchange of contracts. The relevant trust account ledger shows the money being paid in on 4 September 1995. Contracts were exchanged on 28 September 1995 and the trust account ledger shows that the $2,626 went out in a cheque to the Office of State Revenue on 9 October 1995. In a letter from Mr Bernoth to the defendants dated 22 May 1996, there is the following narration concerning that payment:
"As instructed by the purchaser, we withdrew and paid from this money to The Office of State Revenue Stamp Duty payable on the contract. This was paid on the 9/10/95 - soon after this the purchaser signed the contract and authorised us to effect an immediate exchange."