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[1970] HCA 31
High Court of Australia
1970-07-01
Walsh JJ, McTiernan J, Hoare J
Original judgment source is linked above.
These proceedings were directed on the footing that Collas was a trustee of the money in court and that O. 75 of the Rules of the Supreme Court of Queensland authorized these proceedings. Whether or not this was correct is no longer a matter in issue. In accordance with the direction which had been given Collas took out a summons directed to the owner and the claimant for determination of the following questions:
(1) whether the moneys remaining in court to the credit of this action or any and what part of such moneys are the subject of any and what trust or trusts;
(b) the person or persons beneficially entitled to the said moneys, and in what proportions, in terms of the said trusts.
Upon the hearing of this summons counsel for the claimant, the owner and Collas were heard and his Honour ordered that the costs of Collas be paid out of the sum remaining in court and that the remainder of such sum should be paid to the owner's solicitors. This order was based upon findings (1) that Collas had been a trustee in a situation which justified the payment of the $10,800 into court; (2) in the events which had happened the payment into court was a valid and effective payment into court by or on behalf of the trustee; and (3) that the claimant had not established a valid claim to the money remaining in court because it did act as a real estate agent and had breached the provisions of the Act so that its claim for remuneration was illegal and unenforceable.
It is the third finding that the appellant challenges and, although at one time some point was taken about the irregularity of the proceedings, it was, at the hearing of the appeal, conceded that the only matter now at issue between the parties was whether or not the third finding was correct. I therefore confine myself to consideration of that matter.
There is no doubt that the claimant did carry on business as a real estate agent; it is admitted that any act done by it as an estate agent in Queensland in relation to the sale or the negotiation of the sale would have been in breach of the Act and that the contravention of the Act would defeat its claim to the moneys in court. The claimant contended, however, that it did not act as, or carry on business as, a real estate agent in Queensland and so it was altogether outside the operation of the Act.
In deciding that the appellant did in fact act as a real estate agent and did so in breach of the provisions of the Act, the learned judge of first instance addressed himself to the question of the proper law of the agency contract made between the claimant and the owner in Queensland. Despite a term thereof - "4. For all purposes arising under this agreement the same shall be deemed to be entered into in the Colony of Hong Kong" - his Honour reached the conclusion that "the purported selection of the Hong Kong law was not a bona fide selection" and that Queensland law was the proper law of the contract so that the case was to be determined "on the basis that Queensland law applies to the legal relationship arising between the defendant and the claimant". His Honour then considered the definition in the Act of "real estate agent" and concluded that "the express reference to a person exercising or carrying on business "in respect of any one transaction" means that a person who, even in respect of one transaction, does something which, if repeated, would constitute the carrying on of a business, then for the purpose of the Act he (in effect) is to be regarded as carrying on that business". His Honour concluded that, for the reasons which he gave, he was satisfied "that the claimant did in fact act as a real estate agent and breached provisions of" the Act.
Counsel for the claimant before us contended that the ascertainment of the proper law of the contract was an unnecessary exercise because, upon its proper construction, the Act applies only to acts done in Queensland and that there was no satisfactory finding - nor was one open on the evidence - that the claimant had in the transaction acted as a real estate agent in Queensland or had carried on the business of a real estate agent in Queensland.
At this point it is convenient to examine the Act to determine whether, as the appellant contends, its operation is confined to persons acting as real estate agents or carrying on the business of real estate agents in Queensland. The relevant provisions are ss. 17, 23 and 23A. Section 17 prohibits a person from acting or carrying on business as a real estate agent unless he is the holder of the real estate agent's licence under the Act. Section 23 prevents a real estate agent from recovering remuneration for, or in respect of, any transaction unless he is the holder of a licence under the Act, and his remuneration is not in excess of that which is prescribed. Section 23A makes it an offence to demand remuneration in excess of what is prescribed. Ordinary principles of statutory construction would confine the operation of these provisions to acting as a real estate agent or carrying on business as a real estate agent in Queensland: Meyer Heine Pty. Ltd. v. The China Navigation Co. Ltd. [1] . There are in the Act other provisions which support the implication of this ordinary limitation (see s. 16). Thus a licence authorizes "the licensee to act as a real estate agent in any part of Queensland during the currency of the license".
The Act clearly enough is not concerned with what is done outside Queensland, even if it be done in accordance with a contract the proper law of which is the law of Queensland. On the other hand, whatever may be the proper law of an agency contract, the Act applies to a person who acts as, or carries on the business, of a real estate agent in Queensland and a Queensland court would give effect to it. It is not, therefore, possible to support the conclusion which his Honour reached on the ground upon which his Honour based it.
The critical question is rather, did the claimant, in doing what it did pursuant to its agency contract with the owner, act as, or carry on the business of a real estate agent in Queensland? The circumstances here are such that unless the claimant acted as a real estate agent in Queensland in the transaction with which we are concerned it did not carry on business as a real estate agent in Queensland, so that the question can be narrowed down to whether or not, in the course of the negotiation of the sale from Queensland Estates Pty. Ltd. to Golden Acres Ltd., it acted as a real estate agent in Queensland.
The starting point of this inquiry is the definition of a real estate agent to be found in s. 4 of the Act. In the circumstances here the words of that definition which are directly applicable are:
Any person who as an agent for others, and whether on commission or for or in expectation of any fee, gain or reward, and either alone or in connection with any other business, and either generally or in respect of any one transaction, exercises or carries on the business of selling land or negotiating for such selling So confined, the definition is simple and straightforward enough. It is clear that the appellant did what it did for gain and the question would simply be, did it, in Queensland, do any act as agent for others which amounted to the exercise or carrying on the business of selling land or negotiating for such sale? No act done otherwise than as an agent for others would bring it within the definition. The matter is, however, complicated by reason of the presence of that part of the definition consisting of the words "or advertises or notifies that he exercises or carries on the business of buying, selling land" etc. The point was made that because the words "as an agent for others" govern these words as well as the exercise or carrying on the business of buying, selling, etc., that the governing words cannot be given their natural meaning because such advertising or notifying might be simply on behalf of the agent himself. To my mind the words "as an agent for others" bear their natural meaning and limit all that follows to acts done as an agent for a principal. The advertising or notifying that a person exercises or carries on the business of buying, selling, etc., of land, etc., may or may not be on behalf of some one else, but unless it be so, to advertise or notify would not bring a person within the definition. If it should be thought that such a construction would unduly limit the definition and exclude from control activities which the legislature intended should be controlled, it is only necessary to refer to other sections of the Act which control such activities by any person, whether or not he is a real estate agent. An instance of this is to be found in s. 17 (3), which is as follows: Any person (not being the holder of a real estate agent's license) who -
(a) Acts as or carries on or advertises or notifies that he acts as or carries on business as a real estate agent; or
(b) Has any words painted or written or allows to remain unobliterated any words that have been painted or written over or about his house window or premises that lead to the belief or supposition that he is a real estate agent; or
(c) Places or causes to be placed any placard, board, writing, or thing in the public view to the intent that it may be believed or supposed that he is a real estate agent;
shall be liable to a penalty not exceeding one hundred pounds, or in the discretion of the adjudicating court to imprisonment for any period not exceeding six months. In this provision - which relates to a "person", not an "estate agent" - the activities that are prohibited are not confined to activities done "as an agent for others". Accordingly, the Act as a whole provides no reason for expanding the definition of real estate agent to be found in s. 4 beyond the ordinary meaning of the words that are there used.
My construction of the definition as relating only to a person who "as an agent for others" does certain things, excludes from consideration anything done by a person otherwise than "as an agent for others". Consequently anything that a person does merely for himself, e.g. constituting the relationship of principal and agent by entering into a contract with the owner of land to sell or negotiate the sale of the land, is not sufficient by itself to bring the person so contracting within the definition of a real estate agent. Furthermore, when a person is doing no more than dealing with his own sole principal, he is not acting "as an agent for others".
It is necessary, therefore, to examine the evidence and see whether it proves that, acting as an agent for others, the claimant exercised or carried on the business of selling land or negotiating for the selling of land in contravention of the Act. Unless it did so, the defence of illegality, which the owner has raised for the appellant's claim to the money in court, fails. The onus of proof of illegality rests, of course, upon the owner.
In the first place there is nothing in the evidence to prove that, in the transaction with which we are concerned, the claimant acted as agent for anyone other than the owner. It may, perhaps, be said that in some parts of the transaction one Steley, an agent of the claimant, might have acted as an agent for some other person than the owner, but that is not enough to establish positively that the claimant so acted. For present purposes Steley's activities are important only when it is established that he was acting on behalf of the claimant.
Next the evidence does show that negotiations between the claimant and the owner about the contract of agency and the making of that contract did take place in Queensland. For reasons already given, that evidence does not establish that the appellant acted as, or carried on the business of, a real estate agent in Queensland according to the definition. Furthermore, the evidence does show that all the negotiations, between the claimant, as agent for the owner, and the prospective purchasers of the land, took place outside Queensland unless what happened in Queensland between 14th and 29th December 1967 did form part of those negotiations. To my mind these happenings are of critical importance, and, to ascertain what they were and to judge their significance does require a short statement of preceding events.
The claimant is a company incorporated in Hong Kong. On or about 18th May 1967 its agent in Australia was Colin William Steley and on its behalf Steley negotiated with the owner for an "exclusive world wide franchise" for 1st July 1967 to sell 799 acres of land in Queensland known as Woogoompah Island. This franchise was granted by a deed executed by the owner on 18th May 1967. The terms and conditions upon which the claimant was authorized to sell were set out in an accompanying pro-forma contract which showed the price to be $87,000 payable $10,000 by way of deposit and ten annual instalments of $7,700 each with interest in accordance with the following provisions:
Interest shall accrue from and on the balance outstanding as at the First day of July, 1970 and the same shall be assessed and payable on a basis of monthly rests thereafter on the first day of each month following calculated at a rate of 7% per annum. It was a feature of the agreement that the appellant was authorized to sell at a figure higher than $87,000 and that it should "retain to its own account by way of administrative expenses and sales commissions any and all purchase moneys received in excess of the amounts due and payable to the vendor in the attached agreement of sale and there shall be no further claim for commission". In short the owner was to get $87,000 and the claimant was to get, as commission, any purchase money in excess of that amount. This I shall refer to as the original agency authority.
No sale was effected by 1st July 1967 but it is common ground that the time for making the sale was extended.
The claimant did negotiate with persons in Hong Kong and in the Philippine Islands for the sale of the land and in November 1967 negotiations were progressing towards a sale to a syndicate at a price of $120,000. On 26th August 1967 John Alroy, on behalf of the owner, took the step of writing directly to one Tay in Hong Kong - who was referred to as a sub-agent of the claimant - offering to sell the property in question for $100,000. This letter, which Tay must have handed to the claimant, brought a sharp response and cost the owner dearly. A letter to Alroy dated 29th November 1967 from one Beattie, a director of the claimant, was as follows:
I was surprised and disappointed on being informed by our sub-agent Mr. Tay that he had received a direct written offer from you for the sale of Woogoompah Island for $100,000 which except for $3,000 completely eliminated our sales commission.
You are obviously not aware of the very high selling charges which are necessary to cover selling costs in this area. Commissions as high as 35% are usually the minimum required to cover spotting fees, referrals, kick backs etc. together with the higher overheads and selling commissions. Because of our close association with Mr. Steley we had agreed to accept a lower on-cost in this instance only to find that this had been jeopardised by your unprecedented action in approaching our sub-agent (Mr. Tay) direct.
This also placed Tay in an embarrassing position as he had sold for $120,000 on the basis of your written offer to him of $100,000 i.e. a mark-up commission of $20,000.
As a compromise solution we sought your agreement to a reduction in your option price to me from $87,000 (plus $10,000 for shares) to $80,000 (plus $10,000 for shares). On receiving your verbal agreement (per phone call to Mr. Steley) and cabled confirmation of this reduction we resumed negotiations with Mr. Tay on a price of $110,000 as agreed by you direct with Mr. Steley in Mr. Tay's office. We are also arranging for the discrepancy in sales commissions to be further reduced by charging interest to 1st July 1970 (i.e. the interest free period as per the option).
Subsequent to the above Mr. Tay (with Mr. Steley's assistance) resumed negotiations with the members of his "Syndicate" and they have now made a firm offer of $120,000 subject to certain conditions outlined as follows:
(i) Your granting an option to purchase Kangaroo Island for $100,000 on terms similar to Woogoompah Island to which I am in agreement provided our interests are protected by you as per Mr. Steley's advice.
(ii) Your undertaking not to compete for the purchase of Woogoompah Island North.
(iii) Annual not monthly rests for payment of interest (Mr. Steley has advised agreement in anticipation of your approval).
We await your urgent advice re the above so that we may either terminate further negotiations or bring them to a successful conclusion. To this letter Collas, who in doing so was acting for the owner and Alroy, sent the following cable: Your letter 29th November received Stop Terms agreed to except for interest provision which is to be halved. Upon receipt of this cable Beattie wrote to Alroy as follows: Your cable (signed Collas) of 2 Dec received.
Your letter 29th November received Stop Terms agreed to except for interest provision which is to be halved.
Mr. Steley had already closed on the basis of your option and the agreed amendment to price and on Sunday departed for Australia via Manila, where he has to obtain the signatures of the Philippine members of the Syndicate.
We cannot agree to split the additional interest with you as
i. This is contrary to the terms of the option (as amended).
ii. As a result of your letter to Tay (handed to Mr. Steley) we have incurred additional heavy expenses and have had to make additional concessions to Tay in order to bring your sale to a successful conclusion.
You will appreciate that this is our entitlement according to the terms of the option and that your lowering our price from $120,000 to $100,000 has resulted in a drastic reduction in the amount of our commission.
If we are to continue to act for you we must insist that you stand by your written (and verbal) agreements.
We await your early confirmation of your acceptance of the agreement in this regard.
On or about 14th December 1967 Steley returned to Australia with a document which eventually became the contract of sale between the owner and Golden Acres Ltd. but which, at that time, was authenticated as follows:
Accepted and Approved this...... day of.........1967 by Golden Acres Limited by resolution by the Board of Directors and signed by Nelson H. Leo Gee-On Kwok Helmut Unkel (Common Seal) (Golden Acres) (Limited)
Steley, it seems, occupied a number of roles. He was an agent of the claimant. He was also one of the syndicate buying the land. Furthermore, upon the incorporation of Golden Acres Ltd. on 20th December 1967 he became one of the directors of that company and was acting for it. Collas, it seems, was acting as solicitor for all concerned.
It is in this setting that the events took place which I regard of critical importance in determining the question whether the applicant acted as a real estate agent in Queensland.
On 18th December Alroy and Steley instructed Collas to prepare amendments to the original agency authority to give effect to what had been agreed upon in the communications already referred to between Beattie and Alroy and to prepare an authority from the owner to the claimant for the sale of further land, i.e. Kangaroo Island. At about this time Steley produced to Alroy the contract for the sale of the Woogoompah land authenticated as already described. In what capacity Steley did this is uncertain. Shortly after receiving these instructions Collas prepared the draft documents which he handed to Steley. Presumably Steley received these documents on behalf of the claimant. On 29th December Alroy, having requested a conference with Collas for the execution of the documents prepared by Collas and the contract of sale, there was a meeting between Alroy, his wife, Steley and Collas at Collas' office. There the owner executed (1) an amended agency authority which was dated the same day as the original authority, viz. 18th May 1967, (2) a new agency authority authorizing the claimant to sell Kangaroo Island on behalf of the owner, and (3) the contract of sale from the owner to Golden Acres Limited of Woogoompah Island - the Woogoompah contract. In the last-mentioned document Steley, seemingly as agent for Golden Acres Ltd. - which had been incorporated on 20th December - inserted the date 30th December 1967 in the blank space in the authorization of the sealing by that company. In the meantime, at the first meeting of the directors of Golden Acres Ltd. on 21st December 1967, the following resolutions had been passed:
Land Purchase Contract: It was agreed that the Companywould enter into the land purchase contract with Queensland Estates Pty. Ltd., of Lido Arcade, Gold Coast Highway, Surfers Paradise, Queensland, Australia for the purchase of 799 acres of freehold land or South Woogoompah Island as Trustee for the original (purchasing) Co-owners of the said land subject to said Co-owners each signing a form of indemnity and an undertaking to pay their share of the land purchase price plus their (proportionate) share of legal costs and expenses.
Moreover, the secretary had been authorized to affix the seal of the company to the agreement. At this point it is pertinent to observe that, notwithstanding the obvious irregularity of the execution of the Woogoompah contract by Golden Acres Ltd., the parties to that contract, by the settlement already referred to, treated it as having effected an enforceable sale. The manifest irregularities are therefore of no importance for present purposes.
Before examining what changes were made in the original agency authority and the Woogoompah contract on 29th December, it is convenient to record what happened about the payment of the deposit thereunder. Steley, it seems, was a director of another company Co-ownership Land Development Pty. Ltd. He arranged for a cheque for $9,500, dated 29th December 1967 drawn upon that company's bank in favour of the owner, to be handed to Alroy and his wife. Indeed, Steley signed and handed over the cheque. Alroy then instructed Collas to pay $40,000 of the purchase money, when received from Hong Kong, to the claimant for the reimbursement of Co-ownership Land Development Pty. Ltd. and in satisfaction of what the claimant was entitled to receive under its authority to sell.
The differences between the original agency authority and the amended agency authority given by the owner to Steley on behalf of the claimant on 29th December were as follows. Firstly, the expiry date was extended. Originally it had been 1st July 1967. The new clause was as follows:
The date of expiry of this offer hereinafter called "the option expiry date" shall be the First day of July 1967 or the agreed date of extension as notified in writing by the Vendor. Secondly, the original authority had required the submission of a signed contract of sale before 30th June 1967. The amended authority required the submission of such a document "on or before the option expiry date". Thirdly, the agreed amount for the costs of the agreement etc., which the parties were to share equally, was increased from $60 to $80. Fourthly, the following clauses were added:
(a) That in the event that there be dispute between the parties as to the question of fact whether or not a default hereunder has been committed by the Vendor then the parties agree to submit such question of fact to be decided by the Supreme Court of Queensland and in accordance with the rules of such Court.
(b) Disclosures by the Vendor to its Solicitors or Tax Agents shall not be regarded as a default hereunder.
The Vendor hereby agrees for the sum of $250 (receipt of which is herewith acknowledged) to extend the option expiry date to 30th December 1967 and the Vendor grants to the Agent the right to further extend the option expiry date by not more than six (6) quarterly periods by payment quarterly in advance of the sum of $250 for each such extension with all payments made hereunder accepted as part payment of the purchase price.
Furthermore, the pro-forma contract of sale annexed to the original authority showed the initial price as $87,000. This, in the contract annexed to the amended authority, was altered to $80,000, thus entitling the claimant to an extra $7,000. The interest clause was altered so that interest ran from the date of the agreement with annual rests.
It was argued for the claimant that the foregoing changes were made merely to give formal expression to what had been agreed to previously in the correspondence between Beattie and Alroy, but, although I am satisfied that it was in that correspondence that Alroy made the substantial concessions for which the amended authority provided, I think that the analysis already made shows that the amendments actually made went beyond a mere recording of those concessions.
There is but one further document to be mentioned. The conditions of sale provided as follows:
The Purchaser acknowledges that prior to entering into this Contract he received a statement in writing in compliance with Section 24AA of The Auctioneers, Real Estate Agents, Debt Collectors and Motor Dealers' Acts 1922 to 1961. Such a statement was furnished. It was as follows: In compliance with "Section 24AA" of the Auctioneers and Commission Agents' Act, 1922 and 1953 the following statement is issued by Queensland Estates Pty. Ltd. of Lido Arcade, Gold Coast Highway, Surfers Paradise, Queensland, the Vendor in connection with the sale of the within described land.
(a) The Freehold Land is Subdivision 1 of Portions 40a and 43a, County of Ward, Parish of Pimpama, Registered Plan No. 92789, held under Certificate of Title Volume 3911 Folio 215. Subject to Consent Caveat in favour of Peter Ivor Collas
Address: 901 Kowloon CommercialCentre, 3 Salisbury Road, Kowloon, Hong Kong.
Particulars of the representation, promise and/or terms offered to the purchaser are as follows: -
i. On signing hereof the sumof $A 40,000 ii. The balance, namely the sumof $A 80,000 iii. Payable by 10 annual paymentsof $A 8,000 iv. Commencing on the first day of July, 1968.
(together with interest calculated to the 30th June each year at the rate of 7% per annum on the balance outstanding) with annual payments payable on the first day of each month until such time as the said balance and interest thereon is fully paid.
Date on which this statement is given 4th December 1967.
(e) Signature of Commission Agent/Vendor or Person authorised to sign C. Steley O. M. Alroy
This document bore the following endorsement: Received on behalf of Golden Acres Limited, Hong Kong, 24th December 1967
There was no evidence how or when the document was furnished or whether or not the dates set out thereon were accurate. No doubt in signing the document Steley - who was in Hong Kong on 4th December 1967, whereas Alroy was in Brisbane - was acting on behalf of the claimant.
In these circumstances the owner contended that in doing what he did between 14th and 29th December, Steley, on behalf of the claimant, did acts which, when attributed to the claimant, showed that it acted as a real estate agent in Queensland. I do not think this has been made out. It is clear that in obtaining the amended authority from the owner, Steley was acting on behalf of the claimant, but his doing this for the reasons already stated does not establish that the claimant, in dealing with its principal, acted as an agent for others. It is also clear that, in obtaining the authority relating to Kangaroo Island, Steley was acting as agent for the claimant but, again, that does not establish that as agent for others the claimant acted as a real estate agent in Queensland. It is uncertain on whose behalf Steley bargained with the owner about the alterations to the contract of sale. The evidence does not satisfy me that he was doing so on behalf of the claimant, but, even if he were, his negotiating with the claimant's own principal does not show that the claimant acted as agent for others. Whatever may be the significance of the document which purported to be made out and given by Steley to Golden Acres Ltd. in conformity with s. 24AA of the Act, it was not proved that Steley did anything in relation thereto in Queensland. My examination of the transaction, therefore leaves me satisfied that the basis upon which the learned trial judge found that the claimant acted as a real estate agent, so as to attract the operation of the Act, was not sound and it leaves me unsatisfied that there was any alternative basis to support that conclusion.
There is but one further observation to make. That is that on 14th April 1969 Steley swore an affidavit containing the following paragraph:
On or about the 30th day of December 1967 Freehold Land Investments Limited negotiated the sale of the defendant's land to the plaintiff. A copy of the said contract of sale was tendered at the trial of this action and was marked Exhibit 7. I crave leave to refer to the said Exhibit. - Exhibit 7 is the contract for the sale of the Woogoompah land.
Having regard to the facts as I have found them, I am not prepared to accept this statement as establishing that, on that day in Queensland, the claimant did negotiate the sale of the owner's land to Golden Acres Ltd. It was, of course, the fact that on that day the contract of sale negotiated by the claimant, was completed.
I agree with the reasons given by my brother Menzies for allowing the appeal, accepting as I do the construction which he has placed upon the definition of real estate agent in the Act. The evidence - confusing and unsatisfactory as it is - fails to satisfy me that the claimant acted as a "real estate agent" in Queensland in any relevant sense. In procuring by the hand of Steley authorities from Queensland Estates Pty. Ltd. to act as the latter's agent, the claimant was acting on its own behalf. In the other negotiations and discussions carried out by Steley in Queensland during December 1967 he seems rather to have acted not on behalf of the claimant but in one or other of his many roles, sometimes as a director of Co-ownership Land Development Pty. Ltd., sometimes as a member and representative of a syndicate which had been formed outside Queensland with a view to the purchase of the land and on other occasions as a director of Golden Acres Ltd. after the incorporation of that company towards the end of December 1967.
In an action in the Supreme Court of Queensland a sum of money was paid into court by the solicitors for Golden Acres Ltd. which as plaintiff in that action sought the specific performance of a contract to buy land from the present respondent. The action was settled and the parties to it agreed that the sum in court should be paid out to the respondent's solicitors. But it was brought to the notice of the Court that the present appellant claimed, against the respondent, to be entitled to part of that sum of money. Subsequently the question whether or not the appellant had a valid claim to part of the money which had been paid into court was litigated between it and the respondent in proceedings instituted and conducted in the manner which is explained in the judgment of Menzies J. herein. The claim of the appellant was rejected. This is an appeal against the orders made in those proceedings.
The appellant's claim was that it had become entitled to the money claimed under the terms of an agency retainer which it had obtained from the respondent. This had been procured, in the first place, on 18th May 1967, in the State of Queensland. There was a subsequent extension and variation of the retainer to which it will be necessary to refer later. What the respondent did by a deed executed on 18th May 1967 was to grant to the appellant, up to 1st July 1967, "an exclusive world-wide franchise for the sole right to sell" the land therein described subject to the terms and conditions of the land purchase agreement attached to the deed. The attached agreement provided for a sale at the price of $87,000. But the agent was authorized to sell for such increased amount as it might determine and to retain to its own account any purchase moneys in excess of the amounts which would be due and payable to the vendor according to the attached agreement of sale. It was provided that there should be no further claim for commission. The deed provided also that the vendor (the respondent) agreed that upon receipt of the amount of the deposit of $10,000 and upon the submission to it of a signed contract of sale on or before 30th June 1967 it would forthwith sign and seal the said contract of sale. Thus the agency document contemplated (1) that a signed contract would be submitted to the vendor; (2) that a deposit would be paid; and (3) that the vendor would sign and seal the contract of sale. Although the attached agreement was in a form which contemplated that the agent would enter into it on behalf of the vendor and that the sale so effected would be "subject to confirmation by the vendor", the agency authority was in terms which required that the vendor itself should sign and seal the contract of sale.
A further point to be noticed concerning the agency authority is that the agent did not become entitled to remuneration simply by finding a person who was able and willing to buy the property or even by procuring the signature of a prospective purchaser to a form of contract. The only remuneration of the agent was to be derived from purchase money "received" in excess of the amounts which would be payable to the vendor in accordance with the pro-forma contract. It should be noticed that the pro-forma contract provided (cl. 2) that the deposit should be payable to the agent for the vendor at Surfers Paradise and that the purchaser should pay all instalments and interest payable under the contract "to the vendor or to whomsoever he may from time to time in writing direct". When the agency authority was revised in December 1967, one of the additions made to it was cl. 8, which provided that the vendor authorized and instructed the prescribed authority "to receive all moneys (principal and interest) from the Purchaser and to pay to the Agent any and all moneys due and payable hereunder including land purchase monies (and/or interest) received in excess of the amounts due and payable to the Vendor in the said agreement of Sale at Annexure "A" ". It was by this means that the appellant (according to its contention) acquired a right greater than a mere contractual right against the respondent, in that it became an equitable assignee of moneys payable by the purchaser to the vendor. The validity of that contention was in issue in the proceedings in the Supreme Court but I think it is not now a material question. But the point which needs to be stressed here is that the basis of the appellant's claim to part of the money in court was that this was money to which it had become entitled under the terms of the agency authority, as granted on 18th May 1967 and extended and revised in December 1967, and I think that it is with reference to the terms of that authority that one must consider the acts done by the appellant, in order to determine the question which has to be decided in this appeal.
In my opinion it is not possible to take the view that the appellant's functions, in relation to the sale, which did take place eventually on or about 29th December 1967, were at an end as soon as its servants had carried out negotiations with prospective purchasers in Hong Kong and Manila and had obtained the purported signature of Golden Acres Ltd. to a form of contract. The functions which the appellant had to perform as the respondent's agent and for the performance of which it was to become entitled to remuneration included the taking of all steps necessary to bring about an actual completed sale. I shall attempt to explain later the importance which, in my opinion, is to be attached to those features of the agency arrangements, when considering the events which took place in December 1967 and the significance which should be attributed to those events.
At this point it is convenient to refer to the legislation which was regarded in the Supreme Court as preventing the appellant from succeeding in its claim. The expression "real estate agent" is defined in s. 4 of The Auctioneers, Real Estate Agents, Debt Collectors and Motor Dealers Acts, 1922 to 1960 Q. (hereinafter called "the Act"). I need not set out the definition but it will be necessary to refer to some parts of it which are of particular importance for present purposes. Section 17 (1) of the Act provides:
No person shall act as or carry on or advertise or notify that he acts as or carries on the business of a real estate agent unless he is the holder of a real estate agent's license under this Act. The appellant was not the holder of a real estate agent's licence under the Act.
In s. 23 (1) restrictions are imposed in relation to the recovery by a real estate agent of commission or other remuneration and these restrictions are such that they, as well as the provisions of s. 17 (1), would prevent the appellant from succeeding in this appeal, if it should be held that, in the circumstances of the case, those provisions are applicable to it.
The respondent contends that the provisions of the Act preclude the appellant from succeeding in the claim which it made to recover part of the sum of money in Court. In the Supreme Court it was held that the appellant did, in fact, act as a real estate agent and was in breach of the provisions of the Act. It was there submitted for the appellant that those provisions could not apply to an isolated transaction by a person who does not carry on business as a real estate agent. The submission was rejected. It was held, and in my opinion correctly held, that a person who does, in respect of one transaction, those things which if repeatedly done would constitute the carrying on of the business of a real estate agent, is to be regarded (because of the terms of the definition) as one who carries on that business.
It appears from a perusal of the transcript of the argument which took place in the Supreme Court (which was included in the material placed before this Court) and from the reasons of Hoare J. for his decision that, whilst he did not overlook the fact that the appellant through its servants negotiated with prospective purchasers in Hong Kong and Manila, that is to say, outside Queensland, his Honour regarded it as clear that the appellant did, nevertheless, act as a real estate agent, in the particular transaction out of which its claim arose, otherwise than by carrying on those negotiations abroad. Although he did not make specific findings concerning the acts which the appellant did or the places in which it did them, I am of opinion that it appears that his Honour considered that the appellant had acted in Queensland as an estate agent. It had been argued before him that the Act did not apply because the parties had selected the law of Hong Kong as the applicable law. His Honour thought that the law of Queensland was applicable. It had been argued also that the Act could not apply to the carrying out of one transaction but this submission was rejected. It appears to me that it was his Honour's view that once those points had been decided against the present appellant, there was no need to divide up the transaction into different stages and to examine at each stage the question whether the Act applied to each step taken or was excluded from applying because that step consisted of something which was done outside the territory of Queensland.
The appellant does not now dispute that in the transaction from which its claim arose it acted as a real estate agent, in the sense in which that expression is used in the Act. What it disputes is that it did so in the State of Queensland. The essence of the argument really is that it was only when the appellant was actually engaged (as agent for the respondent) in bargaining or discussions with other persons in an endeavour to persuade them to purchase the land that it could be said to be acting as a real estate agent (within the meaning of the definition) and that nothing which the appellant did in the State of Queensland answered that description. Having regard to the way in which the proceedings were conducted in the Supreme Court and to the reasons for judgment given by that Court there are some difficulties which stand in the way of deciding in this Court the questions raised by the appellant's contention. But, nevertheless, I am of opinion that this Court is able to decide those questions upon the material which is before it.
The Parliament of Queensland could have legislated validly for the control of agents who engaged, either in Queensland or elsewhere, in selling or buying or otherwise dealing with land or other property situated within the State of Queensland. It might have selected the locality of the property rather than the locality of the activities of the agents as providing a sufficient territorial connexion between the legislation and the State of Queensland. However the Act does not contain any express statement by which its general words are confined by some territorial limitation. The enactment in s. 2 (2) that the provisions of the Act relating to real estate agents and to certain other persons there mentioned "shall be in force throughout Queensland" is not of assistance in deciding the manner in which the provisions of the Act should be so construed as to accord with the presumption that they were not intended to have an extra-territorial operation. However I am of opinion that it is right to suppose that the relevant provisions of the Act (such as s. 17 (1), s. 23 (1) and s. 23A) should be construed so as to apply only to persons who in Queensland act as real estate agents or carry on the business of a real estate agent.
Although Hoare J. in the Supreme Court stated that there was evidence before him which indicated that the appellant could be said to be in fact carrying on the business of a real estate agent, I shall assume in favour of the appellant that the evidence was not sufficient to establish that it had been engaged in Queensland in a series of real estate transactions so that in the ordinary sense it could be said to be carrying on there the business of a real estate agent. But it is to be observed that s. 17 (1) prevents any person, except the holder of a licence, from acting as a real estate agent, as well as from carrying on the business of a real estate agent. The words of s. 17 (1), standing alone, might be thought to be wide enough to forbid the doing of any act of a kind which is commonly done by persons who carry on the business of a real estate agent and, therefore, to include in its prohibition such an act, for example, as seeking and obtaining from an owner an authority to sell land. On that view of its meaning, it would be perfectly plain that the appellant did contravene, in Queensland, the prohibition imposed by s. 17 (1). I am of opinion that there is some difficulty in attempting to read s. 17 (1) as if there were written into it, in place of the words "real estate agent", all the words which appear in the definition in s. 4 of that expression. I think this difficulty is not removed by the presence in the Act of s. 17 (3) which is itself a provision which gives rise to problems in attempting to carry into it the definition contained in s. 4. But in spite of that difficulty, I shall endeavour to give to the words "real estate agent" in s. 17 (1) the meaning set against those words in s. 4, which is the meaning which those words must be given "unless the context otherwise indicates".
The ultimate question is whether or not the appellant did act, in Queensland, as a real estate agent. When one endeavours in attempting to answer that question to give effect to the definition in s. 4, one must ask the question whether or not the appellant was a person who, in Queensland, as an agent for others and for gain or reward, either generally or in respect of any one transaction, exercised or carried on the business of buying selling exchanging or letting houses land or estates or negotiating for such buying selling exchanging or letting. The language of the definition refers to a business which a person "exercises" or "carries on". Leaving out of account in the present case the exchanging or letting of property, the business which the definition describes may be that of buying or selling houses etc. or it may be that of "negotiating for" such buying or selling of houses etc. Thus the provision covers cases where the agent himself buys or sells, on behalf of a principal, and cases where he negotiates for buying or selling, which is then effected not by him but by the principal.
However awkward it may be to assimilate the carrying out of one particular transaction to the carrying on of a business, the definition requires it to be recognized that, "in respect of any one transaction", a person may be said to exercise or to carry on a business of the kind described in the provision. This must mean, I think, that the definition may be satisfied if one transaction is carried out by a person and this transaction is either a transaction in which that person, being authorized so to do, buys or sells a house or land on behalf of a principal or a transaction in which that person negotiates for the buying or selling of a house or land by a principal who has retained him so to negotiate.
The words "as an agent for others" appear in the definition. The arguments for the appellant attach to these words two important consequences. One is that, in so far as a person acts to obtain from a landowner an authority to act as agent or acts otherwise for his own benefit, for example, in bargaining for terms in an agency authority which will give him a larger remuneration or some other advantage, he is not acting as an agent for others and, therefore, no such act done by him can bring him within the scope of the Act. Although I have concluded after much consideration of the matter that this part of the argument for the appellant should be accepted, I think it is not obvious that this is so. A brief statement of the doubts which I have entertained about it may help to explain why I do not accept the next stage in the appellant's submissions concerning the definition in the Act of "real estate agent".
It may be, perhaps, a mistake to treat the words "as an agent for others" as governing and restricting each of the following provisions in the definition in the manner assumed in the appellant's argument. The definition is primarily a definition of a person who carries on a business or advertises that he carries on a business of buying and selling etc. houses etc., or negotiating for such buying and selling etc. No doubt the main purpose of the inclusion of the words "as an agent for others" was to exclude from the operation of the Act investors and developers who buy and sell land on their own account. It is typical of the business of a real estate agent that the transactions of sale or purchase of land in which he takes part or with which he is associated are not his personal transactions but are those of other people. It is in that sense that the business is one which he exercises or carries on "as an agent for others" and, if a person does not do this "generally" but does it "in respect of any one transaction", that transaction as a whole is carried out as an agent for others. But in carrying on such a business the agent is, of course, acting also for his own benefit and for the advancement of his own business interests. Therefore he seeks retainers or selling rights and he advertises. His object is that he will have more opportunities available to him to buy or to sell or to negotiate for buying or selling, that is to say, more opportunities to do those things which, when he does them, he will do as an agent for others. It is not, I think, obvious that the definition must be given the meaning that no step taken by an agent for his own advantage to promote his business (it being supposed always that that business is the business of acting as agent for others) can be itself regarded as part of the "exercising" or "carrying on" by him of the business. But despite the doubts which I have just expressed, I accept, as I have indicated, that in deciding this appeal, the act performed by the appellant in Queensland of obtaining from the respondent the authority to sell the land should be treated as not being within the definition and should therefore be disregarded.
But then the appellant seeks to use the words "as an agent for others" to impose a further limitation upon the operation of the Act. It is said that whenever the agent is engaged in actions, discussions or communications with his own principal (as contrasted with actions, discussions or communications with the opposite party to the proposed transaction of sale etc.) he cannot be exercising or carrying on the business of buying or selling etc. within the meaning of the definition, for the reason that whenever he is so engaged he is not doing anything "as an agent for others". In my opinion this construction of the Act should not be accepted. Its acceptance would appear to require that the words "as an agent for others" are to be applied to each particular act done or word spoken by an agent in such a way as to lead to the conclusion that if, for example, a vendor's agent telephoned a prospective purchaser to arrange an inspection he would then be acting as an agent for others, but if he telephoned the vendor to inform him of that arrangement he would not then be acting as an agent for others. But in the case last mentioned, I can see no reason whatever for denying that the agent is still acting as agent for his principal (the vendor). I know of no reason why it cannot be part of the function of an agent to have communications with his own principal whenever these are thought necessary or desirable. In my opinion one must look to the whole transaction which is on foot. In the present case it was a transaction under which the appellant was authorized to bring about a sale of land which belonged to the respondent and was to get remuneration, in accordance with the terms of the agency authority which I have described above, which was given to it by the respondent. The appellant was engaged throughout (at least at all times after it had obtained the authority) in the process of seeking to negotiate that sale. Every step which it took which could aid in the achievement of a completed sale was a step in the transaction of negotiating the sale. It was "as an agent for others", that is, as an agent for the owner of the land, that the appellant was carrying out the whole of this process of seeking to bring about a completed sale.
I have referred earlier to the terms of the agency authority. This was clearly not a case in which an agent was authorized simply to introduce to the vendor a person willing to buy the property and was to obtain a commission for doing so. A signed contract was to be submitted to the vendor. A deposit was to be paid. The vendor was to sign and seal a contract. The agent was to get its remuneration from the surplus, above a certain price, of the moneys paid by the purchaser. In my opinion there is no reason for excluding from consideration, in examining what the appellant did, as agent for the respondent, in the negotiating of the sale of the land, any act of the appellant which was a step towards the completion of the sale and towards the fulfilment of the conditions to which the agency authority referred. A step which consisted in persuading the respondent as owner to agree to some stipulation which had been put forward as necessary for the completion of the transaction, was no less a part of the negotiating for the sale, than was the discussion with intending purchasers of the terms of a proposed contract of sale.
When Mr. Steley, who was a director of the appellant and who had procured in May 1967 the agency authority on behalf of the appellant, returned on or about 14th December 1967 to Queensland, he brought with him a document in the form of a contract of sale purporting to be accepted and approved by a company called Golden Acres Ltd. by resolution of its board of directors and to be sealed by that company. However that company had not yet been incorporated and it was only by reason of subsequent events that the document had an operative effect, either as an offer by that company to purchase the land or as a contract of sale and purchase binding both parties. In spite of its defective character in this respect, the document was produced by Steley to Mr. Collas (who appears to have acted for both the respondent and the appellant and also, at any rate at a later stage, for the purchaser of the land), and it was also produced to Mr. Alroy, a director of the respondent. There was some discussion at the hearing of this appeal on the question whether the acts of Steley, both in bringing this document to Queensland and in there producing it to the respondent, should be regarded as an act of the appellant (performed through its agent Steley) or as an act of the syndicate of persons who were to purchase the land and were to form the company Golden Acres Ltd. to act as a nominal purchaser. It happened that this syndicate included Steley himself. But I feel no doubt that the proper inference is that it was the appellant company which (through Steley) brought back the document and produced it in Queensland to the representatives of the respondent. That was exactly what the appellant would be expected to do, according to the terms of the agency authority. If, therefore, no obstacle had stood in the way of an immediate completion of the sale by means of the signing and sealing by the respondent as vendor of the document so produced and if it had been so completed, the result would have been in my opinion that the appellant would have acted, partly outside Queensland and partly in Queensland, as a real estate agent in relation to that transaction of sale. It would have so acted, partly in Queensland, because its production of the contract for the purpose of signing by the vendor would have taken place in Queensland and that would have been one of the essential parts of the appellant's function of negotiating for the selling of the land.
But for several reasons the transaction could not be completed forthwith and without further negotiations. One reason was that the purchasing company had not been incorporated. Another reason was that the original agency authority related to a sale which was to take place by 30th June 1967 and, although the parties had acted on the footing that the authority had been or would be extended, it was no doubt regarded as desirable to have a formal extension of it. Again, there were other important reasons for the making of alterations to the deed of 18th May 1967. These alterations were quite substantial. I do not think it is necessary for me to set out the details, of which an account is given in the judgment of Menzies J. As is explained in that judgment, some of the alterations were intended to give effect to terms that had been agreed upon in correspondence and in telegrams which passed between representatives of the appellant and of the respondent in late November and early December 1967. I think that the changes which were made went further than a mere formal recording of agreements that had already been made in that correspondence. For present purposes there are several important features of these negotiations and of the ultimate resolution of the matters to which they related. One feature is that, undoubtedly, the appellant, through Steley, took an active part in these negotiations. The circumstances that Steley was one of the purchasing syndicate and also became a director of Golden Acres Ltd. may tend to complicate the facts. But it seems plain that it was on behalf of and for the benefit of the appellant that he sought and obtained the advantages to the appellant which flowed from the alteration of the price stated in the pro-forma contract, annexed to the amended authority, from $87,000 to $80,000 and from the insertion in the amended authority of cll. 7 and 8 thereof. Another important feature is that these were not negotiations which had no other object and no other result than the obtaining by the appellant from the respondent of some additional advantages in respect of a sale transaction of which it could be said that it was certain in any event to be completed independently of whether or not those additional advantages were secured. I have said earlier that I am prepared to accept the view that mere haggling by an agent with his own principal for better terms would not be within the scope of the Act. But in this case that was not the character of the negotiations which occurred from about 18th December to 29th or 30th December 1967. It is plain that when Steley came back to Queensland there was as yet no contract of sale. It is plain, according to the evidence of Mr. Collas, that the acceptance of stipulations, which were thereafter introduced as alterations of and additions to the provisions contained in the original agency arrangement, was an essential condition for the completion of the sale. One extract from that evidence will suffice to demonstrate that point, although there are some other pieces of evidence to the same effect. Steley was asked questions about the insertion in the revised agency deed of cl. 7 and in this connexion the following evidence was given:
Tell me how this got in if it was only enlarging the sale of different land altogether to the original agreement of 18 May? That got in because the parties agreed to put it
It had nothing to do with the contract? It did not vary the terms of the contract in any way, did it? It had a lot to do with the contract for the simple reason there would have been no contract at all if that had not been signed.
By 29th or 30th December 1967 there was a contract of sale. Steley played a dominant part in bringing about the completion of that contract. He may have had various motives and various interests, including his own personal interests, which he wished to serve. But it was the function of the appellant to negotiate a sale. It was its task to bring matters to a point at which the owner signed a contract for the sale of the land. If, in order to achieve this, it became necessary that the appellant should exert persuasion upon the respondent to accept certain collateral conditions, it seems to me to be immaterial whether these were sought partly for the benefit of the purchaser or for the benefit of the appellant itself, rather than for the benefit of the respondent. The negotiation of the sale was not completed until the contract was signed. It cannot lie in the mouth of the appellant to say that it was not the appellant which negotiated the sale, but that it was Steley personally, or that it was the syndicate interested in the purchase, or that it was Golden Acres Ltd. The appellant had secured for itself "an exclusive world-wide franchise for the sole right to sell" the land. Its whole claim in these proceedings rests on the basis that the sale came about through its agency. In my opinion the arguments advanced on behalf of the appellant are erroneous inasmuch as they seek to treat the negotiations with the prospective purchasers as being the whole of the transaction of negotiating a sale, whereas in reality these are to be treated as but one part of that transaction, which on my view of the evidence became complete only by means of what was done by the appellant in Queensland.
In an affidavit sworn on 14th April 1969 by Mr. Steley he said, "On or about 30th December 1967 Freehold Land Investments Ltd. negotiated the sale of the defendant's land to the plaintiff". In my opinion that statement by the man who was throughout the chief representative of the appellant in this transaction describes accurately what the appellant had done, except of course that it must be recognized that its negotiating of the sale was not done wholly on the day mentioned, but was done over a period of time, extending up to and including that day. Part of that activity of negotiating the sale was performed abroad but an important part of it was performed in Queensland and this was in contravention of the Act.
Because I consider that the features of the transaction and the activities of the appellant to which I have already referred are sufficient to lead to the conclusion that the appellant did act in Queensland in contravention of the Act, it is not necessary for me to consider what findings ought to be made or what inferences ought to be drawn, either in relation to the furnishing to the purchaser of a statement in writing in compliance with s. 24AA of the Act, or in relation to the special arrangements which were made to meet the situation that the money due from the purchaser as a deposit was not available on 29th or 30th December 1967 and to enable the respondent to receive payment of the sum of $9,500. I have also refrained from discussing another document which came into being at the time of the completion of the sale, concerning which there was some debate in the proceedings in the Supreme Court. This was a deed of trust made on 29th December 1967 between Mr. Collas and Golden Acres Ltd. and appears to have been intended to afford protection in certain events to the members of the syndicate who were the real purchasers of the property. A consideration of this deed does not appear to be material to the question which is now the only question which remains to be decided in this appeal.
For the reasons I have stated I am of opinion that the appeal should be dismissed.
Freehold Land Investments Ltd
Queensland Estates Pty Ltd
High Court of Australia Barwick C.J. McTiernan, Menzies, Owen and Walsh JJ. Freehold Land Investments Ltd v Queensland Estates Pty Ltd [1970] HCA 31