Hawk Australia Pty Ltd v George Ambrose Commercial Pty Ltd

Conveyancing Act 1919 LEGISLATION CITED : Local Courts Act 1982 Property, Stock and Business Agents Act 2002

Colonial Mutual Life Assurance Society Limited v The Producers and Citizens Co-operative Assurance Company of Australia Limited (1931) 46 CLR 41 Farrell v Bannister (1952) 52 SR(NSW) 73 International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co (1958) 100 CLR 644 CASES CITED : LJ Hooker Limited v WJ Adams Estates Pty Limited (1976-1977) 138 CLR 52 Magnate Projects Pty Ltd v Youma Constructions (No. 2) Pty Ltd [2005] NSWCA 3 Petersen v Moloney (1951) 84 CLR 91 Pettitt v Dunkley (1971) 1 NSWLR 376 Sittingbourne Urban District Council v Lipton [1931] 1 KB 539

PARTIES : Hawk Australia Pty Ltd (Plaintiff) George Ambrose Commercial Pty Ltd (Defendant)

COUNSEL : T Bors (Plaintiff) M Dulhunty (Defendant)

SOLICITORS : Robinson Legal (Plaintiff) Slater & Gordon Lawyers (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

11978/07 Hawk Australia Pty Ltd v George Ambrose Commercial Pty Ltd

JUDGMENT 1 BELL J: The plaintiff, Hawk Australia Pty Ltd (Hawk), appeals against the whole of the judgment of Magistrate O'Shane given on 29 March 2007 in the Downing Centre Local Court. Judgment in the sum of $20,625.00 with interest was given in favour of the defendant (the plaintiff in the Local Court), George Ambrose Commercial Pty Ltd (GAC). I will refer to the parties by their names for convenience.

2 The appeal is brought pursuant to s 73 of the Local Courts Act 1982 and is confined to error of law. 3 The appeal was commenced by summons which was filed on 20 April 2007 and which set out thirteen grounds of appeal. The summons was filed before Hawk had obtained the transcript of the proceedings and of her Honour's reasons. Hawk was given leave to file an amended summons in Court at the commencement of the hearing. Seven grounds of appeal are set out in the amended summons. The first three grounds challenge her Honour's determination of a preliminary question, concerning whether GAC's claim was barred by operation of s 9(2) of the Property, Stock and Business Agents Act 2002 (the Act). 4 The remaining four grounds overlap and were developed on the hearing as aspects of an overarching ground that her Honour's reasons were insufficient in that she failed to construe the agreement and state her finding as to the event that entitled GAC under the agreement to the fee that was the subject of its claim: Pettitt v Dunkley (1971) 1 NSWLR 376 per Moffitt JA at 386 and following and, in particular, at 388.F; LJ Hooker Limited v WJ Adams Estates Pty Limited (1976-1977) 138 CLR 52 per Gibbs J at 66. In light of my view concerning the determination of the preliminary question it is not necessary to deal with this challenge. 5 By ordinary statement of claim filed in the General Division (Civil Claims) of the Local Court GAC claimed the sum of $20,625 as due to it under an agreement entered into by the parties on or about 23 September 2003, for the provision by GAC of commercial real estate consultancy services to Hawk (the agreement). Express terms of the agreement were pleaded: 4(a) The defendant would pay the plaintiff an annual consultancy fee of $12,000.00 plus GST, (b) the defendant would pay the plaintiff a fee of 0.5% of the sale or purchase price of any property acquired or sold by or on behalf of the defendant as a result of the consultancy services provided by the plaintiff. 6 GAC's case was that pursuant to the agreement it had inspected three properties on Hawk's behalf and recommended that (subject to a final inspection) Hawk acquire the property located at 57 St Hilliers Road, Auburn (the Auburn warehouse) and that Hawk accepted the recommendation. GAC pleaded that it had invoiced Hawk for its fee, which was payable under the agreement and that Hawk had refused to pay. 7 GAC's director, George Ambrose, gave evidence that GAC provided advice to companies, entities and individuals regarding the purchase and sale of commercial real estate and that it also acted as a managing agent for clients (paragraph [3] of statement, dated 13 June 2007) . 8 In September 2003 Hawk was looking to acquire a warehouse with certain specifications and sought GAC's assistance, including its advice concerning the acquisition of properties adjacent to its existing Croydon warehouse. Mr Ambrose met with representatives of Hawk in early September and following the meeting he sent Hawk, his "scale of fees", dated 23 September 2003 (exhibit "18"). Relevant parts of the document are set out below: SCALE OF FEES

July 1, 2002 SALE AND PURCHASE : 2.% of Sale/Purchase Price LEASING : Up to 3 Years 11% of Gross Annual Rental 4 Years 12% of Gross Annual Rental

5 Years 13% of Gross Annual Rental Leases in excess of 5 Years, an additional 0.5% Per Annum, over 5 Years (13% Scale) will apply. CONSULTING FEES : $12,000.00 Per Annum (RETAINER) Entitles Client to Market Research. Expert Appraisals. Kerbside Valuations. Rent Review Negotiations Commercial Real Estate Advice. When negotiating Acquisitions, Sales and Leasing Arrangements on behalf of Consultative Clients, a 50% Reduction of the above Scale of fees applies. ALL FEES ARE SUBJECT TO 10% GST

9 Following the submission of the scale of fees, Hawk agreed to retain GAC for a six month term on payment of the consultation fee $6,600.00 (inclusive of GST) and on the basis that the "success fee" would be reduced to 0.5 per cent of the sale/purchase price. Hawk paid the consultation fee and retained GAC for six months from around 23 September 2003.

10 Mr Ambrose, on behalf of GAC, gave Hawk certain advice concerning the neighbouring Croydon premises. Hawk did not proceed to acquire the Croydon premises.

11 Independently of any input from GAC, Hawk came to learn that the Auburn warehouse was for sale and that it appeared to suit its requirements. Hawk entered into discussions with the vendor's agent and agreed to purchase the Auburn warehouse for $3,750,000.00. Subsequently, Hawk sought GAC's advice in connection with the proposed acquisition. Mr Ambrose made certain inquiries about the purchase and had dealings with the vendor's agent, Mick Ferreri, on Hawk's behalf in connection with the purchase.

12 On 27 January 2004 GAC wrote to Hawk advising that neither of the neighbouring Croydon properties would give a "good industrial result for your future business needs" and that the Auburn warehouse was a much better industrial solution all round. The letter concluded: All things being equal, I recommend a competent firm to carry out a thorough building/pest inspection prior to exchange of contracts. If you need my building consultant to do the report, please let me know. Please find attached a formal offer I need to forward to CB Richards' Mick Ferreri on your behalf, counter signed by your company. If you agree, please sign and date on the bottom of the page and fax back for us to proceed to heads of agreement stage. Finally, I reiterate my term of engagement entered into on September 23rd 2003, for six months retainer until 24 March 2004, with my fee reduced to 0.5 per cent of purchase price, plus GST.

13 On the same day GAC wrote to Mr Ferreri in these terms: Re: 57 St Hilliers Road, Auburn

Proposed purchase by Hawk Australia Pty Ltd Thank your for your facsimile of 21/1/04. Subject to final approval of my above client's solicitors of the contract, I am authorised to proceed to heads of agreement stage on the following basic terms and conditions. Price: $3,750,000.00 Deposit: Five per cent invested for both parties. Settlement: 90 days (14 days grace) from exchange. Access: 60 days (by mutual agreement). Conditions: Heads of agreement is subject to due diligence and building inspection. Should the vendor insist on 10 per cent deposit and longer settlement, the purchase price will be subject to further negotiation, otherwise please forward heads of agreement for signature to both parties and a copy to the writer.

14 Contracts were exchanged on or about 3 March 2004 and Hawk acquired the Auburn warehouse for the sum of $3,750,000.00. GAC submitted an invoice to Hawk claiming $20,625.00, being its 0.5 per cent success fee. Hawk disputed that GAC was entitled to the fee. 15 By its amended defence dated 15 May 2006, Hawk denied its indebtedness to GAC and, in the alternative, pleaded that GAC was not entitled to any commission or expenses, unless the services performed by it were pursuant to a written agreement complying with the regulations to the Act and that no such agreement had been entered by the parties (paragraph 9).

16 Section 9 of the Act provides: 9 Corporations require corporation licence

(1) A corporation must not act as or carry on the business of (or advertise, notify or state that the corporation acts as or carries on the business of or is willing to act as or carry on the business of) an agent unless the corporation holds a corporation licence.

(2) A corporation is not entitled to bring any proceeding in any court to recover any commission, fee, gain or reward for any service performed by the corporation as an agent unless the corporation was the holder of a corporation licence at the time of performing the service. 17 It would appear that after filing the amended defence Hawk learned that GAC was not the holder of a corporation licence at the material time. The matter was argued before the Magistrate (and on the appeal) on the basis that it was common ground that GAC first obtained a corporation licence on 12 February 2004. 18 The preliminary question which Hawk sought to have the Magistrate decide was whether the claim brought by GAC was barred by operation of s 9(2) of the Act. 19 At the conclusion of oral evidence on 20 October 2006 her Honour invited the parties to prepare written submissions on the preliminary question. Copies of each of the parties' submissions were attached to the submissions filed by GAC on the appeal.

20 The matter was listed before the Magistrate on 8 December 2006 for mention. On that occasion her Honour informed the parties that she had decided against Hawk on the preliminary question. She did not deliver reasons for her determination at that time. The parties agreed to supply her Honour with written submissions addressing the merits of the claim. On 29 March 2007, following receipt of the further written submissions, her Honour gave judgment for GAC. Her reasons were given orally. Counsel for Hawk requested that her Honour provide reasons for her determination of the preliminary question. Her Honour duly published reasons for this determination on 27 April 2007. 21 Three grounds challenge the determination of the preliminary question: 1. Her Honour erred in finding that there was no evidence that the defendant's activities brought it with (sic) the statutory definition of "agent" for the purposes of the Property, Stock and Business Agents Act 2002. 2. Her Honour erred in applying an unjustified inference as to the intention of the parties in determining whether the defendant was an "agent" within the meaning of the Property, Stock and Business Agents Act 2002. 3. Her Honour misdirected herself as to the law, in applying common law considerations of agency in determining whether or not the defendant was an "agent" within the meaning of the Property, Stock and Business Agents Act 2002. 22 I will set out a number of provisions of the Act before turning to her Honour's reasons for concluding that GAC was not an agent for the purposes of the Act and, accordingly, that its claim was not barred by operation of s 9(2) of the Act. 23 Section 3(1) defines a number of words and expressions including: agent means

(a) a real estate agent, or (b) a stock and station agent, or (c) a business agent, or (d) a strata managing agent, or (e) a community managing agent, or (f) an on-site residential property manager. land includes

(a) a lot within the meaning of the Strata Schemes (Freehold Development) Act 1973 or the Community Land Development Act 1989 and a leasehold interest in a lot within the meaning of the Strata Schemes (Leasehold Development) Act 1986, and (b) shares that, under a company title scheme, entitle their holder to the possession of premises. real estate agent means a person (whether or not the person carries on any other business) who, for reward (whether monetary or otherwise), carries on business as an auctioneer of land or as an agent:

(a) for a real estate transaction, or (b) for inducing or attempting to induce or negotiating with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction, or (c) for the introduction, or arranging for the introduction, of a prospective purchaser, lessee or licensee of land to another licensed agent or to the owner, or the agent of the owner, of land, or (d) collecting rents payable in respect of any lease of land and otherwise providing property management services in respect of the leasing of any land, or (e) for any other activity in connection with land that is prescribed by the regulations for the purposes of this definition. but does not include a person who carries on business as an auctioneer or agent in respect of any parcel of rural land unless the regulations otherwise provide. Note . This definition is not limited to the selling of land and extends to an agent acting on behalf of the buyer of land (a buyer's agent). As noted in section 168 of the Retirement Villages Act 1999, a selling agent acting on the sale of residential premises in a retirement village must be licensed as a real estate agent under this Act. real estate transaction means the purchase, sale, exchange, lease, assignment or other disposal of land, whether or not an auction is involved. residential property has the same meaning as in Division 8 of Part 4 of the Conveyancing Act 1919. rural land means land that is used or apparently intended to be used for gain or profit for grazing of livestock, dairying, poultry farming, viticulture, orcharding, beekeeping, horticulture, the growing of crops of any kind, vegetable growing or any purpose declared by the regulations to be a rural purpose. 24 It is to be noted that provision is made in s 5 exempting various categories of person from the requirement of holding a licence under the Act. 25 In Hawk's submission, the evidence established GAC was carrying on business as an agent within the meaning of subparagraph (b) of the definition of real estate agent. It was submitted that the scale of fees document contemplated that (i) GAC would be involved in "negotiating acquisitions, sales and leasing arrangements"; (ii) this was to be done "on behalf of consultative clients"; and (iii) this was a service distinct from its purely consultative activities which attracted a different fee.

26 Mr Ambrose gave evidence that Hong Yaa Cai's request, "I need you to find a warehouse for us" formed part of his "terms of reference". Hawk submitted that this evidenced that GAC had been engaged as agent for the introduction of a prospective purchaser (Hawk) to the owner, or the agent of the owner, of land within the meaning of real estate agent for the Act. 27 Hawk relied on the letter dated 27 January written by GAC to the vendor's agent as evidencing that GAC was negotiating with a view to inducing a person to enter into a contract for a real estate transaction within the meaning of subparagraph (b). It will be remembered that the letter contained a representation that the purchase price would be subject to further negotiation should the vendor insist on a 10 per cent deposit and longer settlement. 28 It was Hawk's position that its asserted liability could only arise as the result of GAC having negotiated an acquisition on its behalf. (This was how the claim was pleaded.) GAC was submitted to be a real estate agent for the purposes of the Act, precluded from bringing proceedings in any court to recover any commission or fee by operation of s 9(2) because it was not the holder of a corporation licence at the time of performing the service. 29 GAC's case was that it acted as a consultant to Hawk in connection with the acquisition of the warehouse premises. It was an independent contractor and not Hawk's agent. In its written submissions GAC relied on the principles explained in International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co (1958) 100 CLR 644 and Colonial Mutual Life Assurance Society Limited v The Producers and Citizens Co-operative Assurance Company of Australia Limited (1931) 46 CLR 41 in support of its contention. It pointed to the absence of an agency agreement between it and Hawk and placed emphasis on the fact that it lacked the capacity to bind Hawk. 30 GAC also submitted that its activities did not fall within the definition of real estate agent for the purposes of the Act because they had not involved negotiating with a view to inducing any person to enter into, or make or accept an offer to enter into, a real estate transaction: Hawk had located the Auburn warehouse, and agreed to purchase it, before GAC became involved in the transaction. 31 Finally, it was GAC's submission that it was not a real estate agent for the purposes of the Act because the Auburn warehouse was zoned "General Industrial" (annexure "B", affidavit of Hong Yaa Cai). The definition of real estate agent imports the concept of real estate transaction in subparagraphs (a) and (b), which is defined to mean the purchase, sale, exchange, lease, assignment or other disposal of land. Subparagraphs (c) and (d) refer in terms to land. GAC submitted that land in this statutory context does not include land that is zoned commercial or industrial. GAC noted that the Act defines residential property by incorporating the definition contained in Division 8 of Part 4 of the Conveyancing Act 1919. Residential property does not include land or a lot that is used wholly for non-residential purposes. It was noted that the Act contains a definition of rural land. 32 In written submissions GAC put it this way: It is clear from both the Act and the Conveyancing Act 1919 that the property bought by the defendants is not residential property. It is expressly excluded from the definition of residential property. It is clear that the property bought by the defendants is not rural land as defined in the Act. It is also not land that is a lot within the Strata Schemes (Freehold Development) Act 1973, Strata Schemes (Leasehold Development) Act 1986, Community Land Development Act 1989 or the Retirement Villages Act 1999. 33 I will address the grounds of appeal to the determination of the preliminary question in reverse order. 34 Ground three complains that the Magistrate erred her application of "common law considerations in determining whether GAC was an agent within the meaning of the Act". The Magistrate took as her starting point the definitions of agency and agent contained in Butterworths Concise Australian Legal Dictionary, which are directed to the capacity of the agent to create or affect legal relations between the principal and third parties. Her Honour accepted GAC's submissions that it was not an agent by reference to the application of the principles of agency at common law explained in Colonial Mutual Life Assurance Society Limited. In this respect her Honour noted that GAC had no authority "to create legal relations between the defendant and a third party and it did not do so" (J 4). 35 Her Honour also appears to have accepted GAC's submission that the acquisition of the Auburn warehouse was not a real estate transaction because it did not relate to land for the purposes of the Act; (J 6.5).

36 I consider that her Honour erred by approaching the question of whether GAC was a real estate agent by taking common law principles of agency as her starting point. The term real estate agent is defined for the purposes of the Act and is to be understood by reference to the statutory definition and not the general law. Counsel for GAC submitted that it was appropriate to have recourse to the common law to give content to the word agent because s3(1) did not define the term but only served pick up the categories of agent with which the Act is concerned. This submission seemed to me to pay insufficient regard to the definitions of each category of agent that are found in s 3(1). It is to be noted that prior to the enactment of the present Act the authority of a real estate agent was recognised as limited. The engagement of an agent to find a purchaser did not imply authority to bind the principal: Petersen v Moloney (1951) 84 CLR 91 at 95. 37 On the hearing of the appeal counsel for GAC relied on passages in the judgment of Hodgson JA in Magnate Projects Pty Ltd v Youma Constructions (No. 2) Pty Ltd [2005] NSWCA 331 in support of the Magistrate's approach. In that case judgment was obtained after a hearing in the absence of the defendant. One component of the claim was a "selling fee" in respect of the sale of units in a development in Chippendale. The defendant successfully moved to have the judgment set aside contending that it had a bona fide defence. On appeal the issue was as to the test to be applied on such an application. Hodgson JA was of the view that the defendant had an arguable defence based on s 9(2) of the Act in that it was open to conclude that the selling fee was for services performed by Magnate as a real estate agent within the meaning of paragraph (b) and/or (c) of the definition (at [65]). His Honour went on to say (at [66]): It is arguable for Magnate that it was acting as a principal, and not as an agent for Youma, having guaranteed a return to Youma and being entitled to the excess of the prices it obtained; and that engagement in this one transaction did not amount to carrying on a business. However, in my opinion the contrary position is also arguable. 38 I do not consider that his Honour's remarks support GAC's submission that a real estate agent for the purposes of the Act is to be understood as limited to an agent having the authority to bind his or her principal. His Honour considered that Magnate may not be a real estate agent because the arrangement was one whereby Magnate guaranteed Youma's return and secured for Magnate any excess on the sale of the lots. It also appeared open to Magnate to argue that it was not carrying on business as an agent since this was a a single transaction. It is to be noted that under the provisions of earlier legislation dealing with auctioneers, stock and station and real estate agents it was held that a single isolated transaction did not constitute carrying on of the business of a real estate agent: Farrell v Bannister (1952) 52 SR(NSW) 73 per Street CJ at 74. 39 Although not strictly raised by its grounds of appeal, Hawk contended that her Honour was also in error in holding that land for the purposes of the Act does not include land that is zoned industrial or commercial. The definition of land in s 3 (1) is an inclusive one. I do not see a warrant for reading down land as excluding land which a local government authority has zoned for industrial or commercial use. Section 57(1) provides for licensees to disclose certain rebates, discounts and commissions. Subsection (2) excludes from the operation of this provision a real estate transaction relating to "commercial land" - being land used or intended to be used principally for commercial, business or industrial purposes. The provision is inconsistent with construction of the Act for which GAC contends. If the scheme of the Act were such that the definition of land were to be understood as excluding land that is zoned commercial or industrial there would be no requirement for the exclusion contained in s 57(2).

40 I consider that the Magistrate erred in approaching the preliminary question on the basis that consideration of the capacity of the agent to bind the principal was relevant to the determination of whether GAC was a real estate agent and by (what appears to be) her acceptance that the purchase of the Auburn warehouse was not a real estate transaction because it did not involve land for the purposes of the Act. 41 Ground two challenged her Honour's finding that the parties had not intended that GAC be engaged as Hawk's agent and that had that been their intention they would have executed an agency agreement (J 3.8). Since I consider that her Honour misdirected herself concerning the definition of a real estate agent for the purposes of the Act it is not necessary to deal separately with this ground. The circumstance that the parties had not entered an agency agreement (agency agreements are dealt with in Division 1 of Part 4 of the Act) is not determinative of the question of whether GAC was a acting as a real estate agent at the time it performed the service that is the subject of its claim.

42 Her Honour set out the definitions of agent and real estate agent in the Act. She went on to say (J 3.3): On the evidence before the Court there is nothing which suggests that the plaintiff's activities fall within any of those provisions. Rather the evidence of the plaintiff is that Mr Ambrose was approached by someone who apparently acted on behalf of the defendant, seeking that Mr Ambrose lend his assistance in finding a suitable building for the defendant's business operations. 43 Ground one complains that her Honour erred in finding that there was no evidence that GAC's activities brought it within the provisions of the statutory definition. In Hawk's submission the finding that there was no evidence capable of bringing GAC within the provision amounts to error of law: Sittingbourne Urban District Council v Lipton [1931] 1 KB 539 per Avory J at 544. 44 The entire thrust of GAC's evidence was submitted to be that (i) it had been retained to negotiate the terms of the purchase of the Auburn warehouse; (ii) it had done so; (iii) it was entitled to the success fee because the purchase went ahead on the terms that it had negotiated. 45 Hawk pointed to the evidence of George Ambrose: Q. Are we to understand and is it your suggestion in this matter, that that success fee would be payable in any event if Hawk entered into a contract to purchase or a new lease? A. If I negotiated the terms and brought it to fruition, yes. … Q. So what terms were you supposed to negotiate? What did you need to do to earn this money? A. To put a sale and purchase on behalf of the purchaser into a form of contract that is acceptable. In other words, terms that is acceptable to the purchaser that I represent. … Q. For which terms are you responsible? What are the terms that you negotiate in order to earn your success fee? What do you do, sir? A. Succeed to a purchase (27/07/06 16-17). Q. Who gave you the authority to make negotiations for an extended settlement? A. That was previously discussed with Uiial (sic) (27/07/06 28.16-18). … Q. Well, the item that you had negotiated for in respect of grace, that was not granted, instead they negotiated on 30 days rather than the 14 that you were negotiating for. A. That's correct. Q. So there must have been some kind of negotiation in between your letter of 27 January and the signing of this heads of agreement that you were not involved in? A. No. I did all the negotiations with Mr Ferreri (27/07/06 45.44-53). … Q. What I'd suggest to you, sir, is that those matters are matters that would be covered by your retainer. Is that correct? A. The question of retainer is different to my fee regarding the final outcome. Therefore, if you say to me that I have done that under my retainer, then the point is that seeing the deal hasn't been done, it was still part of my negotiation process. … Q. You'll see there about the half way point on the page, it says, "consulting fees 12,000 per annum", then under that "(retainer)". Then it says, "entitles client to market research, expert appraisals, kerbside valuations, rent review negotiations, commercial real estate advice". A. That's right. Q. So the matters that you're speaking about in paragraphs 22 and 23 of your statement, those would fall within those categories that I've just taken your attention to as being things that the client is entitled to because they have retained you? A. Correct. Q. The fact of you having done those things doesn't one way or another entitle you to this success commission or this success fee? A. It's a negotiation fee that only applies if the deal is done (T 46.8-39). 46 Hawk also relied the scale of fees document and the letter of 27 January. In its submission it was not open to find that there was no evidence that GAC's activities brought it within (b) of the definition of real estate agent.

47 The Magistrate's finding which I have set out at paragraph [42] is to be understood in the context of her consideration of the statutory definition real estate agent (at J 5, [10]): Paragraph (b) of the definition of "real estate agent" requires more than simple negotiations. Paragraph (b) requires a person to induce or attempt to induce or negotiate with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction. The plaintiff did not induce or attempt to induce or negotiate with a view to inducing any person … .

Her Honour referred to the definition of "inducement" in the Butterworths Concise Australian Legal Dictionary , "to persuade or influence a person to act". 48 Her Honour's factual findings on the preliminary question were that GAC had not introduced Hawk to the Auburn warehouse and that its activities in relation to the property comprised (J 5, [9]): (a) Appraising and comparing the property with other possible properties as per the plaintiff's letter dated 27 January 2004. (b) Inspecting the property and arranging a pest and building inspection report, a valuation of the property and assisting the Defendant to find suitable finance. (c) Proposing/negotiating the terms upon which the purchase of the property would proceed to completion. It was these terms which formed the Heads of Agreement after the defendant was unsuccessful in negotiating terms with the vendor of the property. Ultimately a contract for the purchase of the property was prepared and the defendant purchased the property. 49 The Magistrate found that GAC was involved in proposing/negotiating the terms of the contract. It appears that her Honour considered that since Hawk and the vendor were each anxious that the sale proceed (J 6, [10]) it could not be said that GAC's activities had induced either party to enter into or to make or accept an offer to enter into the transaction. Subparagraph (b) catches negotiations conducted with a view to inducing any person to enter into a contract for a real estate transaction. Contracts were not exchanged until around 2 March. The letter of 27 January contained an assertion that should the vendor insist on a 10 per cent deposit or on a longer settlement the purchase price would be the subject of further negotiation. It seems to me that the letter can only be construed as an endeavour to persuade the vendor to enter a contract for a real estate transaction on the terms set out in it and that this must be so notwithstanding that the vendor may have been anxious to sell. 50 In the event, the contract that was entered provided for a deposit of 5 per cent of the purchase price. GAC's claim was for the recovery of a fee for its service in negotiating the terms of the contract (statement of claim para 4(b)).

51 On the facts which are not in dispute I am satisfied that Hawk has established that the Magistrate erred in law in holding that GAC was not acting as a real estate agent in performing the service for which it claimed its fee. It follows that the claim is one precluded by the operation of s 9(2) of the Act. 52 By its amended summons Hawk claimed orders setting aside the judgment given on 29 March 2007 in the Local Court and substituting judgment in its favour. On the hearing of the appeal counsel for Hawk submitted that in the event the appeal succeeded on the s 9(2) point this was the appropriate order. He acknowledged that if this point failed but the appeal succeeded on any of grounds four to seven it would be necessary to remit the matter to the Local Court. Counsel for GAC did not question the power to give judgment for Hawk in the event the s 9(2) point was good. 53 Section 75 provides: The Supreme Court may determine an appeal made under this Division: (a) By varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal. 54 There is no occasion to remit the matter since there was no issue as to the facts on which the s 9(2) point turned. Section 75 is in the same terms as s 69(4) of the Local Courts (Civil Claims) Act 1970. This Court has proceeded upon the basis that the power conferred under the provisions of the former Act authorised it to order judgment in favour of a successful appellant: Citibank Limited v Department of Public Works and Services [2001] NSWSC 1066.

ORDERS 1. Allow the appeal and set aside the judgment given in the Local Court on 29 March 2007 and substitute therefor judgment for the plaintiff;

2. The defendant is to pay the plaintiff's costs in this Court and in the Court below.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.