None of this, of course, is new but it is important to recall such principles because there was in the present case no such claim that a vitiating element such as misrepresentation or mistake denied effect to what had been signed by the parties.
38 In the present case one starts with an admission of the written agreement on the pleadings. All that thereafter was asserted in answer by the respondents were the additional terms to which I have referred, but there was no suggestion, until the magistrate's intervention, that the contract constituted by the authority was other than what it purported to be. The difficulty is that the present case appears to have been decided upon the basis of an unpleaded term or at least of a variation of a term, which was not pleaded and which was not directly asserted except in the course of argument, to the effect that "sale" in both the authority and the endorsement meant "completed sale" or, possibly, a sale constituted by a contract of sale executed by both parties. The difficulty with the latter contention was that such a term appeared to run contrary to the definition of that word in the signed authority but that contention was dealt with, not by treating the written authority as varied to the relevant extent but by considering the oral arrangements and discussion as somehow denying effect to the relevant provisions, possibly on the basis that the respondents did not have notice of the definition and other terms on the reverse of the authority.
39 Thus, what seems to have been a dispute as to whether there was some term to the effect that unless the vendors received $450,000 net for their property, there would be no right in the agent to commission, was diverted into an argument as to whether the word "sale" in the endorsements, especially the endorsement "No sale no charge" meant a completed sale or not. The magistrate's reasons seem to have led to his conclusion that the offer in the form of a contract of sale signed by the purchasers was not sufficient to earn the stipulated commission. But the reasoning, as best one may discern, seem to have derived from an implicit acceptance that the respondents had wished to obtain $450,000 clear but this in some way had led to the endorsement which the magistrate had interpreted in the manner stated in his reasons.
40 There were, however, two quite separate issues. The first went to the alleged additional term as to obtaining $450,000 clear, in other words net of commission, auction expenses and conveyancing and other charges. But the second involved interpreting the endorsements as requiring a completed sale at whatever the stipulated or agreed price might be. The principal difficulty, however, is that the magistrate, after expressing some views which seemed to point to a conclusion that he was resolving the "conflict in the facts" so as to hold that the agents had failed to get a sale at $450,000 net and thus had not achieved a sale in the terms agreed by the parties, at least orally, nevertheless proceeded to relate that issue to the meaning of the endorsement, or at least the first endorsement. So, because there seemed little or no discussion between the parties as to the nature of the "sale" which was required under the authority, except by reference to the desired price, he discerned, at least in the first place, the endorsement as meaning "something in addition" and further, after expressing himself in terms of gardening vernacular, he said the vendor was anxious to "have it clearly expressed that ... he wanted his money clear". If that was so, then the language of neither endorsement appears to have any reference to price, nor to any agreement as to a price based on a figure clear of commission, for in terms, in the case of each endorsement there was to be no "charge" unless there was a sale. However the magistrate did not seem to think that these broadly-expressed conclusions as to the vendors' intentions was the end of the matter. So he said that the endorsement was put down the side of the document by the appellant "in the context of an anxiety to get work and where they were willing in some circumstances to forego commission". But all that he concluded at that stage was that "the vendor is half way there", an expression which is hardly judicial, if I may say so, and which has no clear connotation.
41 Thereafter, in concluding his reasons, after "bearing in mind that the vendors have been insistent", the magistrate found "as a fact" that the expression meant "exactly what no sale, no charge means" and, more importantly, that, as the respondents did not obtain a sale, they could not "be charged anything". The passage appears at the beginning of these reasons in paragraph [2] and in full context again in paragraph [23], but the conclusion appears twice, namely, that "no sale, no charge" meant exactly what it said. From that one would infer that there was no question of inferring that it meant impliedly "no sale at $450,000 clear of commission etc.", for his Worship never addressed that question, so that one is left to infer that he was considering merely the meaning of the word "sale", finding that the form of offer received was not sufficient to satisfy his interpretation.
42 The very fact that it is difficult to interpret with precision what the magistrate stated in his recorded reasons points to the conclusion that it is difficult to uphold his reasoning. Moreover, the gaps in the reasoning again show how unsatisfactory the decision was.
43 The meaning of the word "sale", both in the printed authority and in the endorsements, was especially a matter with which the reasons dealt unsatisfactorily, inasmuch as the magistrate failed in his concluding reasons to consider the relationship of the word as found in various places in the document, including the definitions appearing on the second or reverse page. Nothing in fact was said by him at that stage as to the meaning of the printed terms on either the front or the reverse pages, nor was anything said explicitly as to the significance and relevance of the definitions contained on that reverse page including those in conditions 1.16 and 1.5. The failure to deal with the document as a whole again in itself would most probably render the reasoning unsatisfactory, for his apparent acceptance that the word meant "completed sale", was inconsistent with those definitions. It could only be justified by a conclusion, not stated anywhere, that the admitted authority was varied by the parties to the extent of deleting all provisions on the reverse page but it might have been justified, if that had been possible, from what was said between the parties at the time, by inferring that the agreement authorising the auction was partly oral and partly written with the written part comprising (if possible) only that which appeared on the front page. These hypothetical means of justifying the magistrate's conclusions simply did not form part of his final reasoning.
44 In dealing with the argument that the magistrate failed to consider the entire authority the learned judge did her best to extract from the totality of the hearing a finding by the magistrate that the reverse page was irrelevant and did not form part of the contract between the parties. She noted that none of the relevant terms on the reverse had been brought to the attention of the respondents and that there was no evidence that they had read or been aware of them. She noted also that towards the end of the cross-examination of the first respondent's son his Worship had observed: "But nobody has bothered to read the back part, even the agents, it seems, in the relevant part of this document ...". From this her Honour said, as stated in the passage set out in paragraph [27], that the magistrate had not erred in disregarding the terms on the reverse page and that there was in her opinion "ample evidence" supporting "the finding of fact implicit in his reasons" that, insofar as the terms of the authority were intended to form a record of the agreement, "they did not include clause 1.16" or any term on the reverse page.
45 Such reasoning, with respect, seems to me unacceptable inasmuch as it is by no means clear that the magistrate made any concluded finding on the subject, let alone did he seek to incorporate it in his reasons for dismissing the appellant's claim. Upon the face of it the signed authority comprehended both front and reverse pages and until it was shown that they did not form part of the agreement between the parties, or could otherwise be disregarded on the basis of fraud, mistake or for any other specific reason of the kind adverted to in Equuscorp and Toll, then the magistrate was not entitled simply to put to one side the explicit terms of the document. The terms have already been set out and it is clear that the word "sale" is given a special meaning in the REIV form which is wide enough to comprehend the receipt of a binding offer which "would ... result" in an enforceable contract. The case-law leading to the insertion in authorities to sell of terms such as this need not be examined and, although it may thought otherwise to be unusual, there has been no attempt as part of the respondents' case to show that the terms, especially the agreed conditions, had been misrepresented to them.
46 It should be added that it is by no means clear that one can treat the front sheet of the auction authority independently of the reverse page, if only because there appeared at least two references of relevance on the front page to the conditions which appear on the reverse. Most significantly, in the only operative term on the front page (clause 2), which included the direct obligation of the vendor to pay the agent its fee if the vendor sold the property during the currency of the agreement, there followed immediately the advice to "Note particularly the meaning of 'sells' as defined in Agreed Condition 1.16 over page" (emphasis added). In addition, in bold type at the top of the page, there was a reference to a condition on the reverse page where it was pointed out that "This is a continuing Authority - See Condition 11", immediately under the heading of the authority and immediately above all particulars. Although not presently relevant, the fact that an authority is a continuing authority is frequently of importance to sellers, especially where they, as here, contemplate an auction which may or may not result in a sale. More importantly, in general terms, as already pointed out, most of the true contractual provisions appeared on the reverse page, including the terms of the actual authority of the agent to sign a contract, as well as the detailed provisions relating to the right of the agent to receive not only its fees but marketing and other expenses. The mere fact that the endorsements were written on the front page could not detract from the totality of the document and indeed the word "sale" is one of the defined terms, albeit that the only reference on the front page to the definition was that to the related meaning of "sells".
47 In truth, however, this is the very kind of case contemplated by the High Court of a party or parties signing a document, ignorant for various reasons (as is by no means uncommon in this era even with highly-educated or experienced contracting parties) as to the law requiring the signed document to be treated as the repository of the parties' intentions unless and until it is shown that it was not and regardless, short of misrepresentation or the like, of the parties' direct knowledge of those terms. In the context of auction authorities one may observe that in various jurisdictions more stringent requirements are imposed on agents but, so far as the present case is concerned, no provision of the Estate Agents Act 1980 or the relevant regulations was drawn to the Court's attention, nor am I aware of any for myself, which would preclude the agent from relying on the whole of the authority. Finally, it should be repeated that there was no argument advanced which relied on any special circumstance as denying the inclusion of the reverse page, save for the imprecisely-expressed opinion that, because a number of the parties were unaware of what appeared thereon, it should not be treated as binding. I think I have said sufficient to show that that is not a correct understanding of the law, but its adoption has the consequence that the magistrate made an error of law in construing the terms of the authority, including the endorsements, as he did and in ignoring what otherwise were relevant provisions on the reverse page. His failure to deal with that aspect at all merely makes his reasoning the more unsatisfactory. With respect, nothing in the judge's reasons would justify the conclusion that this was a mere question of fact dependent on the judge's assessment of the witnesses, nor was anything contained in her reasoning or in counsel's arguments which would justify the conclusion that it was a mere question of fact or that the word "sale" should be construed without consideration of the meaning in the definition, at least as those arguments were presented to this Court. I would add that the Court drew attention to the recent decision in Phillipson in which the word "sale" in a similar but by no means identical authority was considered, but the language was clearly distinguishable from the present case and nothing in that decision has persuaded me that the magistrate reached a correct conclusion in the present case.
48 There was a second, if subsidiary, defect, or at least arguable defect, in the magistrate's reasoning as to the meaning of the expression "No sale, no charge". It has been contended that the magistrate failed to take into account the whole of the endorsement, meaning both lines, including the second endorsement "No sale - no charge for conveyancing". The assumption behind the magistrate's reasoning was that, once it was concluded that there was no sale, it followed that the appellant agent was entitled to neither commission nor to any other charges referred to in the authority. A reading of both endorsements suggest the possibility of the meaning being narrower inasmuch as the word "charge" is used in each. "Charge" could in many circumstances, I would concede, be a sufficiently broad description to comprehend a charge for commission, although that is more frequently described as a fee. If the magistrate had looked at both lines as part of the construction exercise he may have realised that there were a number of charges and that there may have been a purpose in distinguishing between them. As was argued below, "charge", if given its wide meaning, would be sufficient to comprehend every one of the fees, expenses and charges which the respondents were obliged to pay to the appellant. The word "charge" was not defined in the authority and it appears that the more general words used therein were "professional fees", which were in fact defined in clause 1.2 as a total of the agent's fees and the marketing expenses. So far as I am able to see the only use of the word "charges" was in the definition of "marketing expenses" which were said to comprehend both the "marketing expenses and charges of the agent", in terms which suggest that the agent's expenses comprehended outgoings and that charges were somewhat more general but would not have comprehended the agent's fees.
49 Although the magistrate appears to have rejected the evidence of the appellant as to the nature of the discussion relating to the endorsement, it is difficult to be confident that he reached that specific conclusion because he appears to have slid from his discussion as to receiving the $450,000 minimum price net of commission and other expenses to a conclusion that "No sale no charge" meant that nothing was to be paid unless and until there was a completed sale. The one simply does not lead to the other. Moreover the magistrate failed to consider what "charge" meant in the context of this agreement. Without having his full findings on the relevant facts, there remains the evidence that the appellant as agent included the endorsements so as to make clear that there would be no relevant charge made unless and until there was a sale. It might otherwise be thought to be obvious to the point of not requiring repetition or endorsement that, if there were no sale, there could not possibly be a charge for commission, assuming the word "sale" to be used consistently throughout. The agent's evidence suggested that the respondents, or at least the first respondent and his son, were emphatic that they wished to be under no obligation to pay anything unless and until the property had been sold. In the case of an auction authority, it may be said to be so well-known as to be capable of judicial notice, that, although an ordinary sale by private treaty frequently does not require the payment of any sum by the vendor until the property is sold, (save possibly for some special advertising), nevertheless in the case of a sale by auction the marketing expenses, especially the advertising costs, are to be paid "up front". That is indeed, regardless of one's understanding, what clause 2 here stated in that it said that the marketing expenses incurred were to be paid "whether or not a sale takes place" and, but for the failure to strike out one alternative, were to be payable on signing the authority or at least upon demand. By contrast paragraph 2(c) made clear that the agent's fees were not to be paid unless the vendor sold the property. Now, although his Worship emphasised the unwillingness of the vendors to put their property up for sale, that might equally suggest that they would be unwilling to suffer the burden of paying out the marketing expenses before a sale at their price was achieved.
50 One might say that conclusions of this kind are essentially those on issues of fact but the difficulty is that the magistrate appears at least to have inferred that they were relevant to the construction of the document put before him. Moreover his reasoning seemed inexplicably, at least at first, to treat the vendor's insistence on obtaining $450,000 net as leading to the inclusion of the endorsement, a conclusion which to my way of thinking is simply untenable as there was no relationship, one to the other, on the face of the document or even on the oral evidence as presented to the Court. This argument of the appellant formed part of a general argument under the ground relating to the magistrate erring by misconstruing the endorsement. The failure to take into account relevant aspects of the evidence may be so characterised but I am not entirely clear that the appellant did not slip into an argument merely to the effect that the magistrate reached an erroneous conclusion of fact, a matter which is incapable of correction on appeal to this Court.
51 Finally on the matter of construction there remains the argument directed to the magistrate's conclusion that, notwithstanding the terms of the authority, there was an additional term that the property would not be sold unless a price of $450,000 net of commission and expenses was received on the completion of a sale. The magistrate's reasoning leading to this conclusion of fact may be thought to be not entirely consistent but in the end I believe it is clear enough that this is the view of the facts which the judge accepted. I say that, notwithstanding that her Honour appeared to express the opinion that the conclusion had not been expressly stated by the magistrate in his reasoning, certainly when she was considering the third ground of appeal relating to the alternative claim for damages for breach of an implied term. This then would seem to be a decision on a question of fact but the difficulty is that the magistrate did not make a finding that there was such an additional term as pleaded but rather treated it as a basis for his construction of the endorsement "No sale, no charge". If it were so used, and I am inclined, as was her Honour, to think that was the sole way in which a conclusion of that kind was used, then, as stated earlier, one does not follow from the other. The difficulty with the additional term is that it was pleaded as additional and not as a variation of any explicit term of the authority. The authority stated the price to be $450,000 or any other price agreed to by the vendor, the latter part of which seemingly attracted criticism by the magistrate as being "sloppy drafting".[28]
52 More importantly the magistrate seems to have overlooked that not only was the sum of $450,000 included as the authorised sale price but that in addition, in handwriting, the rate of commission had been converted into a figure payable on a sale of $450,000. The Estate Agents Act seems to require that a clearly stated figure should be notified to the vendors on an authority. The figure of $13,500 which there appears, however, is in fact three per cent of $450,000 which in the ordinary course of events would mean that that amount could be taken out of the sale price of $450,000, not added on. If the parties had intended that the $450,000 price should be clear of commission (let alone expenses), then the relevant figures appearing on the document should, on my calculations, have been $463,917 as the authorised price, with the stated commission at three per cent being $13,917. Perhaps one cannot expect perfection or arithmetical accuracy in circumstances such as here occurred but, as it stands, the form is inconsistent with the alleged additional term. It may be, as I will suggest, that on a retrial some different way of approaching the allegation may be made but at present the question of the agreed selling price has not been satisfactorily resolved by the judge. Indeed, as an alleged additional term, there has not been any specific finding, and, if it should be treated as found, then it has not been satisfactorily explained in terms of consistency with the written terms of the agreement. One would hesitate to remit on this basis only, but the magistrate's reasoning, being deficient in so many respects, seems again erroneous.
53 Having regard to the various matters discussed above, and in particular to the first matter raised and the relationship of the endorsement to the whole of the authority, I consider that the magistrate did err in construing the authority as requiring that there should be a completed sale before commission was earned. The learned judge was also wrong in her conclusion rejecting this principal ground and in concluding that the question was essentially a matter of fact which was open to the magistrate on the evidence. In saying that the magistrate erred I am not, however, concluding that it follows as night the day that the appellant's construction had to be accepted and must now be accepted by this Court. The vice of the magistrate's conclusion is his process of reasoning and the factors which he wrongly took into account, so it appears to me, in saying that a completed sale was required before the appellant agent earned its commission. It may be, having considered all the various arguments which might tend to a conclusion that "sale" meant a sale as defined in the authority, nevertheless the term might be given a meaning consistent with the respondents' argument. More importantly, even if that argument of construction were rejected, there remains the significance of the pleaded additional term which might, upon proper consideration, be treated as a term varying or amending those contained in the authority or it may be treated as a collateral term requiring that a price of $450,000 net of all charges and expenses be obtained. Such a term might be considered as qualifying the language of the printed and written authority. The magistrate failed to make any appropriate findings to that effect, whatever he may have suggested in his reasons and in the course of argument for, to the extent that he accepted that there was some such term, he thought that its acceptance meant that the vendor was only, in his terms, "half way there". In other words, despite the difficulties which may be seen to face the respondents, a new trial properly conducted may result in the respondents' still defeating the appellant's claim for commission and other expenses. I would not, however, on the present materials wish to suggest that any specific outcome should be preferred.[29] The relevant ground is made out and the matter must, therefore, be remitted for rehearing by the Magistrates' Court.
Ground relating to implied term
54 It was here argued that the magistrate overlooked an alternative claim for damages based on the proposition that, the respondents having received an offer capable of being accepted by them, they were impliedly obliged to take such steps as were appropriate as not to deny the appellant's rights. There is not the slightest doubt that, insofar as it had been argued before him (for there was no doubt that some such term was pleaded, however imperfectly drafted), his Worship had failed altogether to consider the argument and to rule upon it. There is no reasoning of the magistrate which this Court is able to consider. On the other hand, the learned judge attempted to justify the magistrate's failure by saying that his construction was such that there could be no basis upon which such term might be implied for there was no offer of a kind which might be accepted within the terms of the authority, at least as varied by agreement between the parties. So her Honour said that in substance the magistrate had accepted the view that there was a term whereby the minimum price on sale should be $450,000 net of all commission, marketing, conveyancing and other charges and expenses. So she concluded that "although not articulated", the magistrate "would seem to have at least declined to find as a fact that the parties had agreed upon a price of $450,000 'gross' in relation to the sale of the property". A finding of fact of the latter kind was in her opinion a necessary prerequisite to a finding of any breach of implied term resulting from the alleged failure of the respondents to accept an offer of $450,000 as made by the purchasers.
55 The difficulty is that these conclusions were in fact not articulated by the magistrate, let alone related to the alternative claim. After referring to some of the evidence and to a long and convoluted exchange between counsel and the magistrate, her Honour gave her reason for accepting this approach in these terms[30]: