First Plaintiff v Defendant

2 Mr Thomas John Russell, the defendant, was the registered proprietor of the Property. This proceeding concerns Mr Russell's failed attempt to sell the Property to Mr Tan and Dr Lo.

3 In early 2014, Mr Russell decided to sell the Property. On 26 February 2014, he signed an exclusive auction authority appointing Marshall White Real Estate ('Marshall White') as estate agents for the sale of the Property and Mr Andrew Gibbons of Marshall White was allocated the Property. Mr Gibbons was assisted by Mr Chris Burne, an employee of Collins Simms, a real estate agency associated with Marshall White.

4 The first and second plaintiffs, Mr Tan and Dr Lo, inspected the Property on 29 March 2014 with Dr Jean Low. Mr Tan subsequently inspected the Property with an architect on 1 April 2014. On 3 April 2014, Mr Tan and Mr Gibbons exchanged a number of text messages regarding the proposed purchase and settlement terms for the Property. Mr Tan and Mr Gibbons continued to communicate extensively by text message until 9 April 2014 about the Property.

5 At approximately 12pm on 3 April 2014, Mr Tan and Dr Lo met with Mr Gibbons and made an offer to purchase the Property for $3.5 million. They provided a bank cheque for $350,000 for a deposit, payable to Marshall White Trust Account and then signed two copies of a contract of sale.

6 At approximately 2:25pm that day, that is, 3 April 2014, Mr Tan received a phone call from Mr Gibbons advising him that the defendant had rejected the offer of $3.5 million.

7 There is some dispute between the parties about the events of the following day. However, as these events are not determinative of the issues in dispute, I will make no conclusive findings regarding them. Suffice to say that on 4 April 2014, Mr Tan and Dr Lo believed that they had entered into a binding contract of sale with the defendant to purchase the Property for $3.695 million.

8 On the afternoon of 4 April 2014, Mr Tan and Mr Gibbons had a conversation. The effect of the conversation was that Mr Gibbons indicated that another prospective buyer had inspected the Property, and that Mr Russell wished to have a private auction between that prospective buyer and Mr Tan and Dr Lo. Despite their belief that a binding contract for the purchase of the Property had already been entered into, Mr Tan and Dr Lo attended the private auction at the Property on the evening of 4 April 2015.

9 The private auction resulted in Mr Tan and Dr Lo agreeing to purchase the Property for $4.48 million. The contract of sale that they had previously entered into was hand amended to reflect the increased purchase price and deposit ('the Contract'). As the 10% deposit required under the Contract had been increased to $448,000, Mr Tan and Dr Lo were required to pay the balance of the deposit owing ($98,000) by the end of June 2014. Mr Russell also signed the Contract. After the signing of the Contract, Mr Tan, Dr Lo, together with his wife, Dr Low, were able to inspect the Property further.

10 On Wednesday 9 April 2014 at 5:56pm Mr Tan sent the following email to Mr Gibbons and Mr Burne ('the email'):

Hi Andrew and Chris,

After due and further re-consideration by the entire investment syndicate regarding this property, we have decided to exercise the 3 clear business days' cooling off period with immediate effect.

That is, we are withdrawing from this tentative Contract of Sale as allowed by law.

Thanks.

Regards,

Eng K. Tan[1]

11 Dr Lo, Dr Low, and Mr Tan's wife, Ms Elaine Chong, were copied to this email.

12 Mr Tan contended that at 5:56pm on 9 April 2014 he also sent a text message to Mr Gibbons which read:

Andrew, we have decided NOT to proceed with this tentative purchase with immediate effect. Thanks, Eng.[2]

13 Mr Tan also said that he telephoned Mr Gibbons and left a voicemail message to the same effect as the email.

14 Mr Gibbons denied receiving this text message, the voicemail message, or missing a phone call from Mr Tan. Given the concessions made by the parties, the determination of whether these communications were in fact received became irrelevant. Accordingly, I will not consider the text message or the voicemail message further.

15 At 11:55pm that day, that is, 9 April 2014, Mr Tan wrote to Mr Gibbons and Mr Burne requesting the return of the deposit. Mr Gibbons responded to this request the next morning in these terms:

This matter will be in the hands of the Solicitor as the 3 Day cool off expired at 5:00 pm yesterday afternoon close of business working day. We will advise Dr. Thomas John Russell for his instructions on what his Solicitor advises Chris & I to do.[3]

16 Later that day, McKean Park Lawyers, on behalf of Mr Tan and Dr Lo, wrote to Warringal Conveyancing (the defendant's conveyancer as indicated in the Contract) demanding the defendant refund the deposit.

17 On 1 July 2014, Mr Russell's solicitors served a notice of default on Mr Tan and Dr Lo on account of their failure to pay the balance of the deposit by the end of June. The notice required, amongst other things, that the default be remedied with 14 days of service of the notice. Mr Tan and Dr Lo did not comply with the notice. As a result of these events, Mr Russell contended that the Contract was rescinded on 15 July 2015. Mr Russell then proceeded to re-sell the Property.

18 On 30 August 2014, following a public auction, the Property was sold for $4.07 million. Settlement of the sale occurred on 27 February 2015. This amount was less than the Contract amount.

(a) A declaration that the Contract was terminated by them on 9 April 2014;

(b) Payment of the sum of $341,040 (being the deposit of $350,000 less $8,960 being 0.2% of the purchase price of $4.48 million);

(c) Interest pursuant to s 48 of the Supreme Court Act 1986 on $341,040 on and from 17 April 2014 at the rate prescribed by the Penalty Interest Rates Act 1983;

(d) Alternatively, interest pursuant to section 60 of the Supreme Court Act 1986 on $341,040 at the rate prescribed by the Penalty Interest Rates Act 1983;

(f) Interest on the sum recovered by way of damages pursuant to section 60 of the Supreme Court Act 1986 on $341,040 at the rate prescribed by the Penalty Interest Rates Act 1983;

(h) Such further or other order or direction as the Court deems appropriate.

20 Mr Russell denied that the Contract was validly terminated by Mr Tan and Dr Lo, and, by counterclaim, asserted that because of the breach of contract by Mr Tan and Dr Lo, the Contract was validly rescinded on 15 July 2015. By the counterclaim, Mr Russell seeks:

(a) The residue of the deposit (being $98,000);

(b) The loss on resale of the Property at $4.07 million (short of the $4.48 million which was the Contract price);

(c) The costs incurred in respect of the resale of the Property (including the cost of a sworn valuation) and by reason of the delay in settling the sale of the property; and

21 The primary issue is whether Mr Tan and Dr Lo, by sending the email to Mr Gibbons, validly terminated the Contract within the three day cooling off period provided for by s 31(3) of the Act.

22 After various concessions were made and matters agreed between the parties prior to and during the course of the trial, the issues in dispute to determine this question were substantially reduced. It was agreed by the parties that the content of the email dated 9 April 2014 (to which I have referred) was clear and unequivocal. Mr Tan and Dr Lo sought to terminate the Contract and the email was signed by Mr Tan in his own right and on behalf of Dr Lo. It was further conceded by both parties that the email was received by Mr Gibbons on that day in accordance with the requirement of s 13A of the Electronic Transactions (Victoria) Act 2000 ('the Electronic Transactions Act'). Therefore, the issues remaining for determination are:

(a) Was Mr Gibbons the agent of Mr Russell for the purposes of receiving a notice of termination during the cooling off period pursuant to s 31 of the Act?

(b) If so, did the signature by Mr Tan meet the requirement of s 9 of the Electronic Transactions Act?

(c) Does the failure of Dr Lo to provide written authority, as opposed to oral authority, for Mr Eng to give the notice of termination to dispose an interest of land on his behalf, contravene s 126 of Instruments Act 1958 (Vic), and render the notice of termination invalid or inoperative?

23 If all of these questions are answered in favour of Mr Tan and Dr Lo, their claim will succeed; however, their claim must fail if any question is answered in Mr Russell's favour.

Was Mr Gibbons the agent of Mr Russell for the purposes of receiving a notice of termination during the cooling off period pursuant to s 31 of the Act?

24 Section 31 of the Act relevantly provides as follows:

31 Power of purchaser to terminate a contract for sale of land

...

(2) Where a purchaser under a contract for the sale of land signs that contract he may at any time before the expiration of three clear business days after he has signed the contract give notice to the vendor that he wishes to terminate the contract and where he has signed that notice and given it in accordance with the provisions of this section the contract shall be terminated.

(3) A notice under subsection (2) shall be given to the vendor or his agent or left at the address for service of the vendor specified in the contract or the address of his agent within three clear business days after the purchaser has signed the contract.

(4) Where a contract for the sale of land has been terminated in accordance with the provisions of this section the purchaser shall be entitled to the return of all moneys paid by him under that contract except for the sum of $100 or 0·2 per centum of the purchase price (whichever is the greater) which may be retained by the vendor.

...

(8) Any provision in the contract or in any other document whereby any right conferred by this section on the purchaser is excluded, modified or restricted shall be void and of no effect.

25 Mr Tan and Dr Lo submitted that Mr Gibbons had necessary authority to receive the notice of termination because either there was:

(a) Statutory authority by virtue of s 31 of the Act; or

26 It was contended by Mr Tan and Dr Lo that s 31(3),[4] upon its proper construction, creates a statutory authority for a vendor's estate agent to receive a notice. They argued that this arises because: [5]

(a) section 31(3) expressly provides that the notice is to be given to the 'vendor or his agent';

(b) the word 'vendor' is defined in s 30 as including 'any person acting as agent for the vendor';

(c) the definition in s 30 applies to Part II of the Act;

(d) part II of the Act is entirely confined to a contract for sale of land;

(e) the definition of 'vendor' in s 30, in context, includes 'any person acting as agent for the vendor' with respect to the procuring or completion of a contract for sale of land;

...

(f) section 31(3), in context, therefore provides that the notice is to be given to the vendor or 'any person acting as agent for the vendor' with respect to the contract for sale of land or the vendor's agent with respect to the contract for sale of land; and

(g) Gibbons was clearly a 'person acting as agent for the vendor' with respect to the contract for sale of land.[6]

27 It was contended that s 32 of the Act requires that a vendor give a disclosure statement to a purchaser before the purchaser signs a contract. However, s 32 does not state that the vendor or his agent may give the required disclosure statement. In practice, however, the disclosure statement will generally be provided to a purchaser for signature by the vendor's estate agent. Accordingly, in this context the Court was invited to conclude that 'vendor' in s 32,[7] when read with s 30,[8] means as a matter of common sense, the named vendor or 'any other person acting as agent for the vendor'.[9] In this context it was contended that that includes the vendor's real estate agent.

28 In support of this construction, it was submitted by Mr Tan and Dr Lo that 'section 31 of the Sale of Land Act 1962 is a remedial provision intended to grant to the purchaser a statutory right to terminate a contract of sale of land without cause and therefore should be construed, in the case of ambiguity, in favour of achieving the statutory objective',[10] in accordance with s 35(a) of the Interpretation of Legislation Act 1984. To this end, Mr Tan and Dr Lo submitted:[11]

(a) Prior to 1982 there was no right to terminate a contract within 3 business days;

(b) By s 31 [of the Act] the legislature clearly intended to grant to the purchaser a new statutory right to terminate a contract;

(c) It is relevant that the right to terminate is confined to a period of three business days after the signing of a contract, that is the purchaser must be able to readily serve the notice within the limited three day period;

(d) The provision must allow a commercial and sensible interpretation;

(e) The expression a 'person acting as agent for the vendor' with respect to a contract for sale of land in the context of s 31 [of the Act]:

(i) was intended to create certainty as to the person or persons who may receive the notice;

(ii) was intended to include the vendor's estate agent or solicitor who is acting as agent for the vendor with respect to the contract for sale;

(iii) obviates a requirement that a 'person acting as agent for the vendor' with respect to the contract for sale have express authority to receive the s 31 notice;

(iv) obviates the need for the purchaser to make (possibly fruitless) inquiries within the three business day period as to whether any particular agent acting with respect to the contract has an express authority to accept the notice;

(f) the purchaser may serve the notice pursuant to ss 31(2) and (3) [of the Act] on any person 'acting as agent for the vendor' with respect to the contract for sale and such notice will be service on the 'vendor'.

29 In support of these propositions, Mr Tan and Dr Lo refer to Lloyd and Rimmer's Sale of Land Act Victoria:

For the purposes of s 31, "agent" will include but is not limited to the estate agent engaged by the vendor in connection with the sale.

...

The notice could be given by email to the email address for the vendor or estate agent designated in the particulars of sale in the contract. [12]

30 It was contended that Mr Gibbons had implied or ostensible authority to receive the notice for the following reasons:

(a) Mr Gibbons was the agent who had consistently acted for Mr Russell with respect to the sale;

(b) Mr Russell held out Mr Gibbons as the conduit for communication with respect to the sale and the Contract (and including after the date of the signing of the Contract). [13]

31 Mr Tan and Dr Lo relied, and rely upon, the following facts in this regard:[14]

(i) Mr Russell did not instruct Mr Gibbons to provide his contact details to a prospective purchaser;

(ii) In particular, Mr Russell did not instruct Mr Gibbons to provide his contact details to Mr Tan and Dr Lo;

(iii) Mr Russell's contact details did not appear in the advertising material for the sale;

(iv) Mr Gibbons' and Mr Burne's contact details appeared in the advertising material;

(v) Mr Gibbons and Mr Tan had extensive communications by text and telephone, both before and after the contract was signed on 4 April 2015;

(vi) Mr Russell was informed of [the above] communications with Mr Tan;

...

(d) Mr Gibbons had provided the contracts for signature;

(e) Mr Gibbons had procured signatures of Mr Tan and Dr Lo to the earlier contract;

(f) Mr Gibbons had received the first deposit;

(g) Marshall White, who employed Mr Gibbons, were holding the deposit;

(h) Mr Russell did not expressly limit the scope of Mr Gibbons' authority.[15]

32 As I have previously observed, it was also contended that Mr Russell held out Mr Gibbons as a conduit for communication with respect to the Contract after its execution by including Mr Gibbons' email address in the Contract. The plaintiffs argued that this could only be to enable the purchaser or purchaser's representative to contact Mr Gibbons as agent for the vendor for the purposes of the Contract. It was contended that, as a consequence of the Contract having been signed, the inclusion of Mr Gibbons contact details could only have been included for the purposes of the Contract post-execution.

33 Mr Russell rejected the contention that Mr Gibbons was his agent for the purposes of receiving a notice of termination under s 31 of the Act. In essence, Mr Russell said that Mr Gibbons' agency was, in essence, confined to a marketing and sale mandate.[16]

34 Mr Russell also rejected the contention that s 31 creates a statutory authority in his real estate agent to receive notices.[17] Mr Russell submitted that: [18]

1. There is a presumption against interpreting a statute in a manner that alters common law doctrines or in a manner that invades common law rights.[19] There is nothing in the Act to suggest that the legislature intended to give a special meaning to the word 'agent' in s 31 [of the Act]; and
2. The definition of 'Vendor' provides no assistance in determining who is an agent of the vendor. The definition merely makes plain that notices can be served on the vendor's agent.

35 Accordingly, Mr Russell submitted that it is for Mr Tan and Dr Lo to show that Mr Gibbons was Mr Russell's agent for the purposes of the service of a notice under s 31 of the Act and not simply an agent for other or broader purposes.

36 Mr Russell submitted that Mr Tan and Dr Lo have failed to give any evidence of implied or ostensible authority being given to Mr Gibbons to accept the notice of termination.

37 Mr Russell's principal contention is that, ordinarily, an estate agent is not the agent of their vendor and does not have authority to make a contract for the sale of land or bind the principal in the sale of property. He contends that Mr Gibbons was retained to market and sell the Property only and, as such, the role of Mr Gibbons is consistent with this established, limited, grant of authority.

38 In support of this proposition, Mr Russell referred to a number of authorities. In Peterson v Maloney, the Court held:[20]

When a person is employed to find a buyer of property, he is commonly said to be employed as an agent, and the term "estate agent" is a common description of a class of person whose business is to find buyers for owners who wish to sell property. But the mere employment of such a person under the designation of agent does not, apart from the general rule that the employer will be responsible for misrepresentations made by him, necessarily create any authority to do anything which will affect the legal position of his employer...But it must, we think, be regarded as settled law that an agent employed to find a purchaser has no implied authority to receive the purchase money in the sense that a receipt by him is a receipt by his principal and will therefore discharge the purchaser.[21]

39 In Brien v Dwyer[22] Gibbs J distinguished between an 'agent' at law, and an estate agent:

The expression "agent", when used in relation to an estate agent acting for a vendor, is misleading, as has been pointed out by this court in Petersen v Moloney [1951] HCA 57; (1951) 84 CLR 91 at 94-5, and by the House of Lords in Sorrell v Finch [1976] 2 All ER 371 ; [1977] AC 728 at 750, 753. Such so-called agents do not have a general authority to act on behalf of the vendor in relation to the contract. They have no general authority either to accept a deposit before a contract is made (Sorrell v Finch) or to receive the purchase money (Petersen v Moloney), although such authority may, of course, be conferred on an agent in a particular case.[23]

But it is said that, when on 10 May the estate agents were told that the post-dated cheque could now be banked and cleared, there was then a payment which affected the rights of the vendors. I am at a complete loss to understand how the unauthorized acts of the estate agents can, without any knowledge or act of the vendors, affect the vendors' rights. In my opinion, upon any proper view of the law of contract, or of equity, they cannot. The more so, if anything further were needed, when the estate agents have been acting not in the interest of the vendor but in the interests of the purchaser and in complicity with her agent. The removal on 10 May of the condition on which the March document had been held did not turn that document into a cheque within the meaning of cl 1.[24]

41 This reasoning was reflected in Markson v Cutler:

There is no doubt that Mr Finger had the usual authority of a real estate agent acting for a vendor on a sale. However, appointment as a real estate agent does not confer authority to bind the vendor to anything. A real estate agent has authority to find a purchaser, not to bind the vendor to terms with the purchaser. So much is made clear by high authority, such as Brien v Dwyer [1978] HCA 50; (1978) 141 CLR 378, 387 (Barwick CJ), 395 (Gibbs J);Peterson v Maloney [1951] HCA 57; (1958) 84 CLR 91, 94-5; and Sorrell v Finch [1977] AC 728, 753.

Accordingly, it is only if Mr Finger or his firm had express or ostensible authority to accept a five per cent deposit that the Cutlers would be bound by his conduct. So far as ostensible authority is concerned, an agent cannot by its own acts cloak itself with authority wider than the usual authority of an agent of the relevant class; some holding out or representation by the principal to cloak the agent with the relevant authority is required. The agent cannot create its own authority.

For Mr Markson, it has been argued that a distinction is to be drawn between authority to bind a vendor, and authority to communicate a vendor's position. There is no doubt that a real estate agent generally, and in this case Mr Finger in particular, has authority to communicate the negotiating position of his principals, in this case the Cutlers; but a communication of a negotiating position is not one that gives rise to legal relations; it is not the communication of an offer capable of immediate acceptance. It is true that, in some cases, authority to communicate - for example by signing a letter on behalf of a principal - may carry with it ostensible authority to bind - that is, to make an offer contained in that letter [First Energy (UK) v Hungarian International Bank Ltd]. But even that depends upon the context, and a letter on a company's letterhead signed by an executive officer is quite distinct from a letter from a real estate agent who does not ordinarily have authority to make a binding contract.[25]

42 In Swan v 56 Manning,[26] Wilson J found that the estate agent in question was not the agent of the vendor to receive notice that finance had been approved. There was no such authority implied in the estate agent's authority to sell, nor did the estate agent have ostensible authority to receive the notice as 'as there was no holding out by the defendant vendor to that effect'.[27]

43 Mr Russell also relied on IVI Pty Ltd v Baycrown Pty Ltd,[28] in which a vendor attempted to revoke an offer made to a prospective purchaser by sending an email to the purchaser's nominated solicitors in the contract of sale. Keane JA observed that:

There is no basis in principle or authority for the proposition that one party may successfully revoke an offer to another party by giving notice of that revocation to the solicitor for the other party in the absence of an express conferral of authority on the solicitor to receive such communication. In this regard, in Singer v Trustee of the property of Munro & Anor (bankrupts) Walton J said:

It is, of course, a common fallacy to think that solicitors have an implied authority on behalf of their clients to receive notices. They may have express authority so to receive them, but in general a solicitor does not have authority to accept a notice on behalf of his client_._[29]

44 Mr Russell contended that these observations apply, perhaps with greater force, to the question of a real estate agent's authority to receive notices or documents.

45 In addition, Mr Russell referred the Court to the following extract from Dal Pont's Law of Agency:

A real estate agent's authority is, aside from unusual and additional terms in the agency agreement, a limited mandate. The mere employment of such an agent does not, apart from the general rule that a principal will be responsible for misrepresentations made by an agent, necessarily create any authority to do anything that will affect the principal's legal position...the law does not imply from the mere fact of engagement to find a purchaser any general authority to contract on the principal's behalf or to do on behalf of the principal anything incidental to the effecting of a sale.[30]

46 Mr Russell argued that there are no facts which establish any authority in Mr Gibbons beyond that usually granted to estate agents, in the normal course.

47 Mr Russell also submitted that the inclusion of the estate agent's contact details in the Contract is irrelevant; the inclusion of these details, it was said, was merely pursuant to the obligation imposed by the Estate Agents Act and Estate Agents (Contracts) Regulations, and does not constitute an agreement that notices could be served on Mr Gibbons. He relied on special condition 3.2 of the Contract, as follows:

Any demand, notice or document required to be served by or on any party may be served by or on the legal practitioner or a conveyance for that party. It is sufficiently served if served on the party or on the legal practitioner or conveyancer:

(a) personally; or

(b) by pre-paid post; or

(c) in any manner authorised by law or the Supreme Court for service of documents, including any manner authorised for service on or by a legal practitioner; or

(d) by email.[31]

48 Based on this, Mr Russell contended that:[32]

1. By including Special Condition 3.2 in the Contract of Sale, the parties, having turned their mind to the question of how notices under the Contract of Sale were to be served, expressly agreed to the service of notices on the parties personally, and on their conveyancers and solicitors.
2. Had the parties intended to agree that notices could be served on representatives of Mr Russell's real estate agent, Special Condition 3.2 would have referred to such persons along with conveyancers and solicitors. [33]

49 Aside from the arguments to which I have referred to, Mr Tan and Dr Lo's submissions may be summarised in this way:[34]

(a) The general proposition regarding an estate agent's limited authority does not affect the statutory authority granted by s 31;

(b) Swan v 56 Manning[35] and IVI Pty Ltd v Baycrown Pty Ltd[36] are distinguishable from the present case, and merely indicate that, in a suitable case, an estate agent may have authority, actual or ostensible, to receive notices;

(c) The defendant has ignored 'the fact that by including the estate agent's contact details in the contract after the contract had been concluded and signed the vendor was clearly holding out the agent as a contact point for notices pursuant to the contract';[37]

(d) Special condition 3.2 is 'facultative...and not mandatory and therefore does not preclude any other lawful method of service';[38]

(e) To contend that the inclusion of the estate agents contact details is pursuant to the obligation imposed by the Estate Agents Act and Estate Agents (Contracts) Regulations misconstrues the relevant provisions, and ignores s 53 of the Interpretation of Legislation Act 1984 for the following reasons:

(i) Section 53A of the Estate Agents Act 1980 does not dictate that any particular form must be used to effect a sale of land, nor does it affect the form of contract adopted by the parties, or require that every contract for sale of land must include an agent's email address; and

(ii) Section 53 of the Interpretation of Legislation Act 1984 provides that strict compliance with prescribed forms is not necessary. A form need only be "to the like effect of the prescribed form".[39]

(f) Accordingly, as inclusion of the estate agent's email address in the contract was not compulsory, an inference can be drawn that 'any notices addressed to Mr Gibbons as agent for the vendor may be sent by email to that address'.

What conclusions should be drawn from these facts?

50 In my view, Mr Tan and Dr Lo's contention that s 31(3) of the Act creates a statutory authority in the manner they contended cannot be sustained.

51 Rather, as Mr Russell submitted, the definition of 'vendor' in the Act simply includes an agent of the vendor, but does not give any further content or meaning to the term 'agent'.[40] This conclusion is reinforced by the fact that the Act specifically refers to estate agents in other provisions. There is simply no basis on which to conclude that 'agent' means anything but an agent at law. To the extent that Lloyd and Rimmer suggest that 'agent' in this context will include an estate agent[41] (as opposed to may), their conclusion, with respect, is not supported by the clear words of the statute, nor is it supported by authority.

52 The fact that, in practice, a real estate agent may provide a disclosure statement to a prospective purchaser pursuant to s 32 of the Act, is a situation entirely distinct from, and irrelevant to, the consideration of whether a real estate agent may, in the particular circumstances of the case, be deemed an agent for the purposes of s 31(3) such that they can affect the legal rights of their vendor client by valid receipt of a notice of termination.

53 Mr Tan and Dr Lo contended that Mr Gibbons had implied or ostensible authority to receive the notice, by virtue of the defendant holding out Mr Gibbons as the conduit for communication with respect to the sale and the contract, including after the execution of the contract. For the reasons that follow, I did not find the authorities relied on by Mr Tan and Dr Lo persuasive.

54 The cases Magripilis v Baird,[42] Australasian Performing Right Association Ltd v Metro on George Pty Ltd,[43] and Westway Homes Ltd v Moores,[44] all concerned communications with solicitors. The relationship between a solicitor and a client and an estate agent and a vendor customer are not analogous, generally speaking. In any event, I refer to Walton J as to the authority given to solicitors:

It is, of course, a common fallacy to think that solicitors have an implied authority on behalf of their clients to receive notices. They may have express authority so to receive them, but in general a solicitor does not have any authority to accept a notice on behalf of his client.[45]

55 These cases were particular to their facts. In my opinion, these cases go no further than the proposition advanced by Mr Tan and Dr Lo that, on the particular facts of a case, a solicitor may become an authorised channel of communication and an agent at law.

56 In Yenula Properties Ltd v Naidu,[46] it was unnecessary to consider the issue of implied (or apparent or ostensible) authority as it was found that the defendant had given his conveyancers actual authority to receive the impugned notice on his behalf.

57 Mr Tan and Dr Lo also relied on Young v Lamb[47] and Parras v FAI General Insurance Company Ltd (prov liq apptd).[48] Both cases concerned a lessor-lessee relationship. The relationship between lessor and managing agent, and subsequently a lessee pursuant to a lease, is distinguishable from that between vendor, estate agent, and a (prospective) purchaser with regard to a contract of sale.

58 In Oscar's Town Centre Restaurant Pty Limited v Port Shores Pty Limited,[49] cited in Parras, it was said that:

[T]he management of property leased to tenants would ordinarily embrace the receiving of a notice from a tenant exercising an option for renewal of his lease, and the managing agent of such property would in the absence of proof of some relevant limitation to his authority be presumed to have authority to receive such notice.[50]

In Parras, there was also extensive evidence of the extent of the agent's authority supporting this proposition.[51] Similarly, Young v Lamb concerned a managing agent of a leased property, and there was extensive evidence of the breadth of the agent's authority.[52]

59 I do not consider these cases of assistance to Mr Tan and Dr Lo, and they have not contended that the propositions regarding an estate agents' usual authority put by Mr Russell are incorrect. In light of the above, what Mr Tan and Dr Lo need to establish is that, on the facts, there was something in the present case that indicated that Mr Gibbons had authority that went beyond the established authority usually granted to an estate agent by a vendor client.

60 It is not sufficient for Mr Tan and Dr Lo to establish that the alleged agent was 'held out' as having the requisite authority to receive a notice of termination. They must establish that the principal did so:

No assertion of authority by the agent will suffice in and of itself. An agent cannot simply by asserting an authority that exceeds the limits laid down by the principal and notified to the contracting party create an apparent or ostensible authority wider than that.[53]

61 I have previously commented on the conduct on which Mr Tan and Dr Lo rely. None of this conduct goes beyond that of an estate agent attempting to market or sell a property. There is nothing in Mr Russell's conduct, in my opinion, which suggests that Mr Gibbons had any authority beyond that to market and sell the Property. In particular, I note that it is of no consequence that Mr Russell's contact details were not included in the Contract. Mr Russell's conveyancer's contact details were, and Mr Tan and Dr Lo could have made inquiries to ascertain Mr Russell's contact details.

62 Special condition 3.2 provides that notices could be served on the legal practitioner and the conveyancer and certain details were accordingly provided. I accept the submission that special condition 3.2 does not exhaustively detail all permissible means of service. However, service must be on a person or entity who is the agent of the vendor for the relevant purpose.

63 The receipt of the deposit by Marshall White was pursuant to the purchasers' contractual obligations. Clause 11 of the Contract provided that a purchaser must pay the deposit to the vendor's licensed estate agent.[54] The deposit was only to be paid to the vendor's legal practitioner or conveyancer if there is no estate agent. It is clear that the Contract did contemplate Mr Gibbons playing a role post-execution:

(a) Clause 11 of the Contract requires the deposit to be paid to the estate agent. As the balance of the deposit remained unpaid at signing, the estate agent still had a role to play under the Contract with respect to the deposit; and

(b) Putting aside the amendment of the deposit in this instance, if the Contract had been terminated, the estate agent would in any event, as the holder of the deposit, need to be contacted by either party.

64 There is no evidence upon which I could find that Mr Gibbons had the necessary authority to receive the notice of termination pursuant to s 31 of the Act. Accordingly, the plaintiffs' claim must fail.

Submissions in relation to s 9 of the Electronic Transactions Act

65 Given the conclusion in relation to the limits of the agency of Mr Gibbons, and the decision that Mr Gibbons was not an agent of Mr Russell for the purpose of receiving a termination notice, it is unnecessary for me to determine whether the 'signature' of Mr Tan on his email meets the requirement of s 9 of the Electronic Transactions Act.

66 I do observe however that, pursuant to s 9(1)(c) of the Electronic Transactions Act, Mr Russell would be, in effect, be required to consent to the method used to identify a person and indicate the person's intention in respect of the information communicated.[55]

67 Whilst there was no cross examination on this issue, I note that special condition 3.2 of the Contract provides that any notice required to be served under the Contract may be served by email.

68 As I have observed, however, these observations are not determinative in my decision.

Instruments Act submissions

69 Given my conclusions about the status of Mr Gibbons, it is unnecessary for me to determine any issues in relation to the Instruments Act 1958 ('the Instrument Act').

71 Section 126 of the Instruments Act provides as follows:

126 Certain agreements to be in writing

(1) An action must not be brought to charge a person upon a special promise to answer for the debt, default or miscarriage of another person or upon a contract for the sale or other disposition of an interest in land unless the agreement on which the action is brought, or a memorandum or note of the agreement, is in writing signed by the person to be charged or by a person lawfully authorised in writing by that person to sign such an agreement, memorandum or note.

72 Counsel for Mr Russell conceded at trial that Dr Lo gave authority to Mr Tan to send the termination notice to Mr Gibbons. However, it was submitted that such authority was deficient as it failed to comply with s 126,[56] which would require that authority to be in writing.

73 I do not accept that argument. Section 126 requires certain agreements such as a contract for sale of land be in writing.[57] According to the statute, an action must not be brought upon 'a contract for the sale or other disposition of an interest in land'[58] if the person signing the contract was not authorised to do so in writing.

74 In my opinion, s 126 has no work to do in this case.[59] In this case, there was no dispute as to the enforceability of the Contract, which was duly executed, prior to its termination. Mr Tan and Dr Lo's proceeding relates to their statutory right to exercise the cooling off period under s 31 of the Act and whether they have in fact lawfully terminated the contract of sale by sending the termination notice to Mr Gibbons. The right of Mr Tan and Dr Lo to send a termination notice is a statutory right pursuant to s 31 of the Act. It does not, in my opinion, fall within the confines of s 126.[60]

75 The Contract required Mr Tan and Dr Lo to pay the remainder of the deposit, $98,000 by the end of June 2014.[61] They were also required to pay the balance of the purchase price, $4,032,000, 180 days after the date of the Contract. In the event that a party breached the Contract, they were required to pay the other party, on demand, compensation for any reasonably foreseeable loss resulting from the breach, and any interest due under the Contract as a result of the breach.[62] During a period of default, interest of 2% above the rate fixed under the Penalty Interest Rates Act 1983 is payable on any money owing under the Contract.[63]

76 General condition 27.1 of the Contract provides that a party cannot exercise a right arising from the default of the other party, other than the right to receive interest and the right to sue for money owing, until the other party has been given, and failed to comply with, a written notice of default.[64] In general terms, the Contract is immediately terminated if:

(a) The notice of default states that unless the default is remedied, and the reasonable costs and interest are paid within the period specified, the Contract will be terminated in accordance with general condition 28.2; and

(b) The default is not remedied and the reasonable costs and interest are not paid within the period specified in the notice of default.

77 If the Contract is brought to an end by a party's failure to comply with a default notice:

(a) The deposit is forfeited to the vendor; and

(b) The vendor may retain the property, sue for damages for breach of the Contract, or may resell the property and recover any deficiency in the price on the resale, and any resulting expenses by way of liquidated damages.

78 Mr Russell claimed that, as the Mr Tan and Dr Lo failed to pay the remaining $98,000 of the deposit by the end of June 2014, he was entitled to serve a notice of default on them on 1 July 2014, which he did by posting it, through his solicitors, to Mr Tan and Dr Lo and their solicitors.

79 The notice of default required Mr Tan and Dr Lo to:

(b) pay Mr Russell's legal costs of the notice of $660; and

(c) pay interest on the amount due under the Contract at 13.5% per annum.

80 The notice of default also stated that unless those requirements were met within 14 days of the service of the notice, the Contract would be rescinded pursuant to general condition 28 of the Contract. Mr Tan and Dr Lo did not comply with the requirements of the notice of default in the specified time or at all. Accordingly, Mr Russell contended that the Contract was rescinded on 15 July 2014.

81 In essence, Mr Tan and Dr Lo's defence to the counterclaim was that as at 9 April 2014 they had validly terminated the Contract, it could not then be rescinded by Mr Russell, nor could they have breached the Contract in the manner contended. As I have observed, however, I do not consider that Mr Tan and Dr Lo validly terminated the Contract. Accordingly, their defence must fail.

82 It may be, and I accept, a common occurrence in commercial life for parties to assume that a real estate agent is an agent for the vendor of a property for all purposes. However, this is not necessarily the case.

83 An agent, and a real estate agent, is defined by their mandate, absent any ostensible authority with which they are clothed.

84 An assumption by a purchaser as to the scope of the authority of an agent does not equate to a 'holding out' of that agent by the vendor.

85 The exercise of a statutory 'cooling off' period is a serious matter. It involves a contract, validly entered into, and its termination. The parties may prescribe the circumstances in which a contract may be terminated if they wish.

86 The legislature has decreed how this valid termination may occur. However, it has not, in my opinion, relieved a party who chooses to take advantage of this provision, from complying with the specific provisions of a particular contract and its special conditions or having regard to common law principles of agency.

87 Mr Tan and Dr Lo entered into the Contract with Mr Russell. In exercising their statutory right to a 'cooling off' period they, it appears, made an assumption that a communication with Mr Russell's real estate agent was sufficient.

88 I do not accept, based on my observations above, that Mr Russell 'held out' Mr Gibbons to be his agent for all purposes, thus granting him ostensible authority to receive notices pursuant to s 31(3) of the Act. There was no evidence that Mr Tan or Dr Lo made any inquiries as to Mr Russell' details for the purposes of serving the notice nor, indeed, sought to ascertain whether Mr Gibbons had authority to accept the notice.

89 It follows that Mr Tan and Dr Lo's claim must fail. Mr Russell, in my opinion, has complied with his contractual obligations regarding the provision of a notice of default and rescission of the contract. Accordingly, his counterclaim must succeed.

90 I will hear the parties on the form of orders and on the question of costs.

[5] Plaintiffs' Outline of Submissions, 21 October 2015, 15.

[7] Sale of Land Act 1962.

[9] Sale of Land Act 1962 s 30.

[10] Plaintiffs' Outline of Submissions, 21 October 2015, 16 [25].

[12] D P Lloyd, W F Rimmer, Sale of Land Act Victoria (Lawbook Co, 2015) 31.130-31.140.

[13] Plaintiffs' Outline of Submissions, 21 October 2015, 17 citing Magripilis v Baird [1926] St R Qd 89, 91 (Isaacs J).

[14] Plaintiffs' Outline of Submissions, 21 October 2015, 18.

[17] Sale of Land Act 1962.

[18] Defendant's Outline of Submissions, 5 [36]-[37].

[19] D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed 2014) [5.27]-[5.28].

[20] [1951] HCA 57; (1951) 84 CLR 91.

[21] Ibid 94-91 (Dixon, Fullagar, Kitto JJ).

[22] [1978] HCA 50; (1978) 141 CLR 378.

[25] (2007) 13 BRP 25, extracts from [7]-[9].

[26] [2003] QSC 163.

[28] [2005] QCA 205.

[30] G E Dal Pont, Law of Agency (LexisNexis Butterworths, 2nd ed, 2008) [1.28].

[32] Defendant's Outline of Submissions, 8.

[33] Defendant's Outline of Submissions, 8.

[34] Plaintiffs' Outline of Submissions, 21 October 2015, 31.

[35] [2003] QSC 163.

[36] [2005] QCA 205.

[37] Plaintiffs' Outline of Submissions, 21 October 2015, 24.

[38] Ibid 25; Express Clearances Pty ltd v The Austral Brick Company Pty Ltd [2007] NSWSC 213; Emhill Pty Ltd v Bonsoc Pty Ltd [2003] VSC 333; Ex parte Dally-Watkins; Re Wilson (1955) 72 WN (NSW) 456; Galinksi v McHugh [1989] 1 EGLR 109.

[39] Sabella v Montgomery [1998] 1 EGLR 65; B Osborn & Co Ltd v Dior [2003] EWCA Civ 281; Ravenseft Properties Ltd v Hall [2001] EWCA Civ 2034; [2002] 1 EGLR 9; Speedwell Estates Ltd v Dalziel [2001] EWCA Civ 1277; [2002] 1 EGLR 55; Barclays Bank v Ascott [1961] 1 WLR 717; Morrow v Nadeem [1986] 1 WLR 1381; Adams v Lambert (2006) 228 CLR 409.

[40] Sales of Land Act 1962 (Vic) s 30.

[41] D P Lloyd, W F Rimmer, Sale of Land Act Victoria (Lawbook Co, 2015) 31.130.

[42] [1926] St R Qd 89.

[43] [2004] FCA 1123; (2004) 210 ALR 244.

[44] [1991] 2 EGLR 193.

[45] [1981] 1 WLR 1358, 1361 (Walton J).

[46] [2002] EWCA Civ 719.

[47] [2001] NSWCA 225.

[48] [2001] NSWSC 1077 ('Parras'); see also FAI General Insurance Company Ltd (prov liq apptd) v Parras (2002) 55 NSWLR 58.

[49] (1987) NSWConvR 55-331.

[51] [2001] NSWSC 1077 [50]-[53].

[52] [2001] NSWCA 225.

[53] G E Dal Pont, Law of Agency (LexisNexis Butterworths, 2nd ed, 2008) [20.32].

[54] Particulars of Sale, general condition 11.

[55] Electronic Transactions (Victoria) Act 2000, s 9.

[56] Instruments Act 1958, s 126.

[61] Particulars of sale, general condition 11.