Soushen Pty Limited v Barclays Business Brokers

2 A number of documents were annexed to the claim including an 'Agency Agreement' between the parties dated 6 October 1998, correspondence between the parties and copies of a Summons filed by Soushen against Barclays in the Supreme Court in July 1999 (Orders of the Supreme Court of New South Wales dated 23 July 1999 and 6 August 1999).

3 The substance of the application is described briefly in the Tribunal Application form as follows: Soushen Pty Ltd ('Soushen') retained Barclays Business Brokers (Australasia) Pty Limited ('Barclays') to act as its agent with respect to part of its business. Barclays supplied a retainer agreement which was signed by Soushen and Barclays subsequently found a purchase ISIS.

The sum of $150,000.00 was paid to Barclays by ISIS by way of deposit. Barclays released $50,000.00 of these monies to Soushen but failed to release the balance. On 6/8/99 Barclays was ordered to release a further $47062.00 of the deposit monies.

Barclays forwarded an itemised account dated 17/9/99. Soushen disputes this account, specifically , Barclays right to claim the amount of commission that it has claimed.

Soushen has incurred legal costs of $21,028.44 in obtaining those orders annexed to the application and dated 23/7/99 and 6/8/99.

Progress of the Application in the Tribunal 4 This matter was first before the Tribunal on 1 February 2000 when the Applicant's legal representative appeared and Mr Poppeliers, Director of Barclays, appeared in person. Mr Poppeliers asked the Tribunal for the opportunity to obtain legal advice and this was granted. The Applicant's representative advised the Tribunal that proceedings between the parties in the Supreme Court had been adjourned pending the determination of this application by the Tribunal.

5 The matter was before the Tribunal a second time on 18 February 2000 by telephone. Both parties were then represented and a timetable for progressing the matter was set. The Applicant foreshadowed the lodgement of an Application for Security for Costs. The Tribunal made the following directions: 1. The Applicant is to file and serve Affidavit evidence in support of the Application by 17 March 2000. 2. The Respondent is to file and serve Affidavit evidence in support of the Application by 18 April 2000. 3. Both parties are to file and serve written submissions by 18 May 2000. 4. The Applicant is granted leave to make an Application for Security for Costs and if such Application is made the Respondent is to file written submissions in response to the Application within 14 days of service on the Respondent.

6 The Tribunal consented to the application by both parties for the whole of the matters in dispute between the parties to be determined on the basis of the documents provided, in accordance with Section 31 of the Fair Trading Tribunal Act 1998.

7 The history of this matter before the Tribunal has been set out in some detail because there has been continual non-compliance with the Tribunal's directions by Barclays and consequent complaint by Soushen of disadvantage due to delay. Soushen duly filed Affidavits on which it relied on 16 March 2000. An Application for Security for Costs was filed on 24 March 2000 and served upon Barclays. Despite follow up from the Tribunal, Barclays did not file any documents in the Tribunal until 10 May 2000 when an Affidavit by Mr Poppeliers was filed along with a brief submission which addressed only the Application for Security for Costs. The Tribunal extended the time for filing of final submissions on the substantive application until 9 June 2000. Both parties were advised. Soushen filed final submissions on 5 June 2000. As at 21 July 2000 Barclays had failed to file final submission on the substantive application.

8 In the circumstances the Tribunal has proceeded to determine both the Application for Security for Costs and the substantive application pursuant to the Property Stock and Business Agents Act 1941. Application for Security for Costs 9 The Applicant has claimed a total security for costs in the amount of $67,262.18. The basis of this claim was set out in written submissions which have been considered by the Tribunal but which are not set out in detail here. In summary, the Applicant claims that: o the Respondent has previously appropriated deposit monies held in trust without authority to do so, o has failed in the past to pay monies due to the Applicant pursuant to a determination of costs, o is likely to be unable to pay the costs of the Applicant if ultimately ordered to do so, o is likely to become insolvent in the near future, o has caused damage to the Applicant by its failure to release monies due, o has failed to appear in Supreme Court proceedings and has been ordered by the Court to cease trading, o has failed to comply with orders of the Supreme Court in relation to dealing with disputed monies, o the Applicant's claims are bone fide and have a reasonable prospect of success and that, o the Respondent has failed to take any steps to resolve the dispute through mediation.

10 The Respondent submitted that the Fair Trading Tribunal has no power to make an order for security of costs because: o The Tribunal has no inherent powers, being a creature of statute and; o The Fair Trading Tribunal Act 1998 contains no provision empowering the Tribunal to make such an order. 11 The Respondent also submitted, apparently in the alternative, that it cannot be required to give security for costs because "it is a well established principle that a party to litigation who is defending rights may not be ordered to give security for costs (Willey v Synam (1935) 54 CLR 175; Re Travelodge Australia Limited (1978) 21 ACTR 17). Decision on Application for Security for Costs 12 The Tribunal has considered the application and documents supporting each parties position on it. The Fair Trading Tribunal is created by the Fair Trading Tribunal Act 1998 ('the Act'). Section 48 of the Act provides for the awarding of costs by the Tribunal as follows: 48 Costs (1) The parties to a matter before the Tribunal are to bear their own costs, except as provided by this section (2) In cases where an amount claimed or disputed, costs are not to be awarded if the amount does not exceed $10,000 (or such other amount as may be prescribed by the regulations) unless the Tribunal is of the opinion that the exceptional circumstances of the case warrant an award of costs. (3) Except as otherwise provided by the regulations or by any other Act or law, in cases where an amount is claimed or disputed in the Commercial Division or the Home Building Division, the Tribunal may award costs if: (a) the amount claimed or disputed exceeds $10,000 (or such other amount as may be prescribed by the regulations, and (b) the parties were granted the right to legal representation. (4) The Tribunal may, however, in any case award costs in relation to proceedings before it in any Division: (a) in respect of expenses incurred in obtaining professional or expert services (other than legal services), if the amount ordered to be paid by the Tribunal exceeds the amount prescribed for the purposes of this paragraph, or (b) in repsect of expenses incurred in a manner or in circumstances prescribed by the regulations, or (c) in respect of any particular expenses, if it is satisfied that there are special circumstances warranting an award of costs in respect of them. (5) If costs are to be awarded the Tribunal may: (a) determine to whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in Division 6 of Part II of the Legal Profession Act 1987 or on any other basis. (6) In this section costs includes: (a) costs of or incidental to proceedings in the Tribunal, and (b) the costs of or incidental to the application.

13 Fair Trading Tribunal Regulation 1999 provides for the award of costs in Clause 32 as follows: 32 Costs in respect of professional or expert services . (1) For the purposes of section 48(4)(a) of the Act, the amount prescribed in $25,000. (2) Under section 48(4)(b) of the Act, the Tribunal may order: (a) that the costs of proceedings on an application for rehearing of a matter be born wholly or in part by the applicant, if the applicant fails to attend the rehearing of the application, or (b) that the costs of proceedings adjudged by the Tribunal to be frivolous, vexatious, misconceived or lacking in substance, or as otherwise not to be entertained , be borne wholly or in part by the person who instituted them. (3) The amount of the relevant costs is to be substantiated in accordance with directions in that behalf given by the Chairperson or, in default of such directions, in such manner as the Tribunal thinks fit.

14 This matter is in the Commercial Division of the Tribunal and the amount claimed is in excess of $10,000. The Application is for costs in respect of professional services, namely the legal costs of the Applicant.

15 The Tribunal is governed by the Act and is without the inherent powers which attach to a court (Rajski v Computer Manufacture and Design Pty Limited [1982] 2 NSWLR 443). The consequence of this is that the Tribunal has only those powers conferred by the Act. The Tribunal is of the view that the Acts provisions in relation to the award of costs are clear. Section 48(1) provides a clear statement that the Tribunal can only alter the position that parties pay their own costs, in the circumstances set out in the rest of the section. The Act does not give the Tribunal an express power to order a Security for Costs. Nor is there anything in section 48 of the Act or elsewhere which might imply such a power as incidental to the Tribunal's power to award costs.

16 The Tribunal is of the view that even if it had an express power to order a Security for Costs, that in the circumstances of this case it would not do so. In coming to this view the Tribunal is guided by the objects of the Fair Trading Tribunal Act 1998 which are are set out in Section 3 as follows: 3. Objects of Act The objects of this Act are as follows: (a) to establish an independent Fair Trading Tribunal to determine disputes in relation to matters over which it is given jurisdiction by an enactment, and (b) to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair, and (c) to enable proceedings before the Tribunal to be determined in an informal, expeditious and inexpensive manner

17 The Tribunal, unlike the courts, does not operate on the expectation that 'costs follow the event' in that the party in whose favour an order is made might expect a consequential order in their favour in relation to costs. This reflects the Tribunal's approach to dispute resolution. The Tribunal is a forum for the expeditious and fair resolution of disputes. It provides a variety of dispute resolution options including an oral hearing, mediation and conciliation. Parties in the Tribunal are not required or expected to have legal representation. The Tribunal is accessible to persons who may wish to represent themselves for either financial or other reasons. It is clear that these provisions were designed to create a forum whereby applicants could seek resolution of certain disputes without the near certainty of an order for costs against them should they be unsuccessful.

18 This is not to say that all disputes in the Tribunal will be relatively small claims. The Tribunal has a wide jurisdiction which, in the Home Building Division for instance, is unlimited in monetary terms. In some proceedings in the Tribunal all parties have legal representation. Tribunal procedures are informal and flexible to accommodate the demands of the individual case (Section 27 of the Act). In this matter both parties have legal representation, although on the first occasion Mr Poppeliers appeared for himself. This matter is to be determined, with the consent of both parties, on the documents presented to the Tribunal, without an oral hearing. There is nothing before the Tribunal to suggest other than that the Respondent is doing other than properly defending a genuine claim against it (Willey v Synam (1935) 54 CLR 175; Re Travelodge Australia Limited (1978) 21 ACTR 17; Joye v Rehuxo [1999] NSWSC 1064).

19 The Tribunal appreciates that the Applicant is concerned at the allegedly precarious financial position of the Respondent and the possibility that it may not be able to meet an order for costs if it is made at the conclusion of the proceedings. There are inevitably costs and risks involved in litigation. However the Tribunal also notes that this very possibility could defeat the Respondent's ability to defend the action taken against it if Security for Costs is ordered (Warner v Frost [1999] NSWCA 327). The Tribunal has taken the view that the prompt determination of the substantive issues in dispute is the best way in which to deal with these concerns.

20 The Application for an order for Security for Costs is refused. APPLICATION PURSUANT TO THE PROPERTY STOCK AND BUSINESS AGENTS ACT 1941 THE ISSUE 21 The Applicant asks the Tribunal to determine the entitlement of the Respondent to the whole or part of any commission which was payable by the Applicant to the Respondent. The Property Stock and Business Agents Act 1941 establishes a licensing regime and otherwise regulates the conduct of business agents (and others). Section 42A of the Act provides for the review of commissions as follows: 42A Review of commissions, fees etc ( 1) No action or other proceedings shall be commenced by any licensee for the recovery of: (a) any remuneration by way of commission, fee, gain or reward for services performed by such licensee in his or her capacity as such, or (b) any sum as reimbursement for expenses or charges incurred in connection with services performed by such licensee in his or her capacity as such, until the expiration of 28 days after a statement of claim in writing setting out the amount claimed and containing details of the services performed by such licensee in respect of which such commission, fee, gain, reward, expenses or charges are claimed has been served personally or by post on the person to be charged with the same. (2) (Repealed) (3) Where any sum of money has been paid to or is or has been retained by a licensee out of any moneys received by or paid to such licensee in respect of any transaction by or with him or her as a licensee such moneys being so paid or so retained as remuneration by way of commission, fee, gain or reward for services performed in connection with such transaction or as reimbursement for expenses or charges incurred in connection with such transaction, the person paying such moneys or the person who would be entitled to the moneys so retained by such licensee had such moneys not been so retained, may, if an itemised account of such transaction has not been received by such person, require such licensee to furnish the person with an itemised account of such transaction under and in accordance with section 38A. (4) Without limiting the Consumer Claims Act 1998, the person served with the statement of claim in accordance with subsection (1) or the person receiving or obtaining an itemised account as provided in subsection (3) may, in accordance with section 6 of that Act, apply to the Tribunal for the determination of a consumer claim within the meaning of that Act in relation to: (a) the entitlement of the licensee to the whole or any part of the amount specified in the statement of claim or the itemised account, or (b) whether the whole or any part of the amount is reasonable, or both. (5) Without limiting the Consumer Claims Act 1998, the Tribunal has jurisdiction to hear and determine any such consumer claim despite: (a) the terms or conditions of any agreement or contract entered into between the licensee and the applicant, and (b) the amount being more or less than the maximum amount (if any) of remuneration to which a licensee is entitled under this Act. (6) The regulations may make provision for or with respect to requiring the inclusion, in the manner prescribed by the regulations, in statements of claim or itemised accounts referred to in this section, of a notice, in a form approved by the Director-General, containing advice concerning remedies available under the Consumer Claims Act 1998.

22 When making orders in a consumer claim, the Tribunal must take into account the matters set out in section 13 of the Consumer Claims Act. That section, in so far as it is relevant to this matter reads as follows: (1) When making an order or orders under this Part, the Tribunal must make such Orders as, in its opinion, will be fair and equitable to all the parties to the claim. (2) Without limiting subsection (1), when the Tribunal is considering whether or not to make an order or orders under this Part, the following factors are relevant, so far as they are material to the particular circumstances of the case: (a) whether or not there was any material inequality in bargaining power between the parties to the claim, (b) whether or not (i) any party to the claim was not reasonably able to protect the party's interest, or (ii) any person who represented any of the parties to the claim was not reasonably able to protect the interests of any party represented by that person, because of the age or physical or mental capacity of that party or person, (c) the relative economic circumstances, educational background and literacy of (i) the parties to the claim, and (ii) any person who represented any of those parties, (d) whether or not and when independent legal or other expert advice was obtained by the claimant, (e) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the claimant (i) by any other party to the claim (ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the claim (iii) by any person to the knowledge of any other party to the claim or of any person appearing to or purporting to act for or on behalf of any other party to the claim (f) the conduct of the parties to the claim in relation to similar transactions to which any of them has been a party, (g) where the subject of the claim is a contract for the supply of goods or services or a contract collateral to such a contract: (i) whether or not before or at the time when the contract was made its provisions were the subject of negotiation, and (ii) whether or not it was reasonably practicable for the claimant to negotiate for the alteration of or to reject any of the provisions of the contract (iii) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or are not reasonably necessary for the protection of the legitimate interests of any party to the claim, and (iv) if the contract is wholly or partly in writing, the physical form of the contract and the intelligibility of the language in which it is expressed, and (v) the extent (if any) to which the provisions of the contract and their legal effect were accurately explained by any person to the claimant and whether or not the claimant understood the provisions and their effect and (vi) the commercial or other setting, purpose and effect of the contract. FACTS 23 The Applicant has filed a Statement by Mr Henson, dated 14 March 2000, and an Affidavit of Mr Cohen, sworn 23 July 1999 and filed in the Supreme Court of NSW. The Applicant also filed written submissions dated 5 June 2000. A number of other relevant support documents were attached to these documents and have been considered by the Tribunal. The Respondent has filed an Affidavit of Mr Poppeliers, Director of Barclays, dated 10 May 2000.

24 There are certain facts which are not in dispute and which are set out in summary as follows: o In 1998 the Applicant, Soushen retained the Respondent, Barclays, to act as a business broker for the sale of its business, known as 'Select Learning". o The agreement between the parties was in writing in a standard form entitled "Agency Agreement For Sale of Business" ('the Agency Agreement'), dated 6 October 1998 and signed on behalf of both parties. There are some handwritten and initialled changes to the written form of the agreement. The agreement provided (by Clause 11) for the agent, Barclays to be remunerated as follows: "Profile Data Base. Internet $650 Advertising. Financial review $2412 The Agent shall be entitled to the selling fee stipulated hereunder in the event that they or any co-joined Agent introduces a Purchaser to the Principal and/or the business or is otherwise responsible for the Principal being introduced to a purchaser. Selling Fee based on the Sale price of the Business and the Stock at Valuation $5000 under $100,000 or 4% over $100,000 less $3062.00 Upon Settlement."

o The words 'upon settlement' are in handwriting, as is 4 which is written over the typed number 5 followed by %. o Clause 4 of the agency agreement provides that: "The sale price of the business shall include the value of all plant, fixtures , furniture and effects and goodwill being sold therewith. The value of any plant furniture, effects and stock in trade to be sold to a purchaser subject to an existing Bill of Sale or Hire Purchase or Lease Agreement the liability under which (by arrangement with the Principal's secured creditor or lessor) is to be taken over by the Purchaser shall, for the purposes of calculation of the Agents selling fee be treated as part of the purchase price, by adding to the sale price the amount of the debt outstanding or rental/hire purchase payment plus residual value as the case may be."

o The Agency Agreement also states as follows: "14. It is irrevocably agreed that all monies that shall be paid by the Purchaser as deposit monies shall be held by the Agent in their trust account as stakeholder pending completion. The Agent is entitled to deduct their selling fee and any expenses or charges to be paid or reimbursed by the Principal from such monies on receipt of authorisation from the Purchaser or their solicitor to account to the Principal or their solicitor."

o Barclays was at all material times the holder of a "Corporation Licence" under the Property Stock and Business Agents Act 1941. o It is not disputed that Barclays introduced Soushen to Mediacom Pty Ltd, who later became ISIS Communications Pty Ltd and nominated ISIS Education Pty Ltd as the purchaser of the business. o On 21 January 1999 "Heads of Agreement" were entered into between Mediacom Pty Ltd, and Soushen. The sum of $50,000 was lodged by ISIS with Barclays, as stakeholder, in January 1999. An Agreement for Sale of the business was entered into in March 1999 and ISIS lodged a further $100,000 deposit with Barclays on or about March 1999. o On 14 July ISIS wrote to Barclays stating that it "authorises Barclay Brokers to release the amount of $150,000 held in trust by Barclays, as a deposit on the acquisition of Select Learning. The deposit of $150,000 now represents an initial payment on the acquisition of Select Learning." o Barclays replied by facsimile of 14 July that it would "release the funds accordingly to the Vendors in question". o On 15 July the Solicitor acting for Soushen wrote to Barclays asking that the commission be calculated and deducted from the deposit with the balance of the funds ($150,000)to be sent to Soushen forthwith. In the event that Barclays were unable to calculate the commission the entire $150,000 was called on by Soushen. On the same day Barclays acknowledged their receipt of a copy of the final sales agreement between Soushen and Isis. o On 16 July Barclays released an amount of $50,000 to Soushen. o On 19 July Soushen wrote to Barclays stating that commission of "4% less the $3602.00 on a purchase price of $1.25 million" was to be deducted from the deposit of $150,000 and the balance to be paid to Soushen "without delay". o On 23 July 1999, Barclays solicitor responded to Soushen to the effect that Souschen claimed a 'lien over the balance of the fund' pursuant to Section 36(3) of the Property Stock and Business Agents Act 1941. This arose from claims by Barclays that Soushen's conduct of the negotiations for the sale of the business were a breach of contract and had caused damage calculated by Soushen to be 'far in excess of the balance of the fund which it has been instructed to remit'. o Barclays referred the matter to their legal advisors on 21 July 1999 and on 23 July 1999 Soushen filed a Summons in the Supreme Court of NSW seeking certain orders in relation to the deposit monies of $150,000. On 23 July 1999 the Court ordered that Barclays cease to carry on business from that day. o The matter was again before the Court on 6 August 1999 and a number of orders were made, including a dissolution of the order to cease trading and an order that Barclays pay the amount of $47,062 be paid to Soushen's solicitors and to be held in trust. The Court further ordered that "Pending resolution of the dispute as to commission payable to the defendant [Barclays] by the plaintiff [Soushen] the defendant be restrained from dispensing , appropriating or otherwise dealing with the sum of $8000, being the balance of the deposit paid to the Defendant pursuant to the Sale of Business Agreements dated on or about 19 July 1999". The Court also ordered that Barclays was to pay Soushen's costs " as agreed or assessed of the proceedings except for the appearances on 27 July 1999 and 29 July 1999". o On 9 August 1999 Soushen forwarded an assessment of costs for the sum of $21,028.44. A 'Certificate as to Determination of Costs' pursuant to the Legal Profession Act 1987 was issued to Barclays by Soushen on 11 February 2000 for the amount of $18,819.29. Soushen no longer claim these costs in relation to the Supreme Court proceedings as part of their application to the Tribunal. An amount of $9809.43 being costs in the Tribunal, is now claimed (Affidavit of Henson, 14 March 2000). o On 30 August 1999 a Sale of Business Agreement was settled between Soushen and Barclays with a nominated purchase price of $1,400,000.00. o On 16 September 1999 Barclays sent to Soushen an intemised account of Commission due in a document headed 'Settlement Advice'. Soushen lodged this application in the Tribunal on 6 October 1999. Proceedings in the Supreme Court are adjourned pending determination by the Tribunal of the entitlement of Barclays to the amount of commission claimed.

25 Barclays claims that after the request to release the deposit monies to Soushen on 14 July 1999 it requested a copy of the sale agreement so as to calculate commission owing to it and that Soushen failed to provide such a copy. However the faxcimiles exchanged between Barclays and the solicitor for Soushen on 14 July, and found at annexure D, E and F of the affidavit of Mr Cohen, suggests that Barclay had a copy of the agreement on 15 July 1999 and that deposit is to be released to Soushen on that date or shortly after.

26 The agency agreement between Soushen and Barclays was signed by Mr Brown for Barclays, and Mr Hensen for Soushen. Mr Hensen, in his affidavit of 14 March 2000, stated that he amended the agency agreement in particular to state that commission was to be payable 'upon settlement' to accommodate the fact that the selling price would vary from the purchase price to reflect legitimate deductions. Mr Hensen stated in his affidavit (Annexure H) that the advertising funds of $3602 were not spent and thus should not be payable by Soushen.

27 Mr Cohen, solicitor for Soushen, states in his affidavit of 23 July 1999 (filed in the Supreme Court proceedings), that Mr Drummond of counsel telephoned Mr Tzovares, solicitor for Barclays, on 22 July 1999. In the course of this phone call Mr Drummond advised Mr Tzovares that the remainder of the deposit monies were required urgently by Mr Henson, Director of Soushen, to use for the purchase a property in the United States. In another telephone call between Mr Drummond and Mr Whitehead, of Tzovares Yandell Solicitors, on 23 July 1999 Mr Drummond repeated Mr Henson's urgent need for the remainder of the deposit monies held by Barclays.

28 It is accepted by both parties that in early 1999 negotiations for the sale of 'Select Learning' occurred between ISIS and Soushen directly, without the assistance of Barclays. Barclays have not submitted directly to the Tribunal that these negotiations constituted a breach of the Agency agreement. This is a matter raised in correspondence between the parties and annexed to the Affidavit of Mr Cohen of July 1999 (at Annexure T).

29 Soushen submitted to the Tribunal that Barclays has no entitlement to commission for a number of reasons. These are, in summary, that Barclays caused damage to Soushen by its failure to release deposit monies required by Mr Henson, of Soushen, for the purchase of a property in the United States; that the failure to release the deposit monies resulted in Soushen taking costly Supreme Court action against Barclays; that Barclays has been 'derelict' in its duty to Soushen by failing to return telephone calls and correspondence and in not acting in the best interest of Soushen, who was its client; that Barclays has failed offers from Soushen to resolve this dispute by mediation. FINDINGS

30 While much has transpired between these parties since the signing of the Agency Agreement of 6 October 1998 there is very little evidence before the Tribunal which relates to the entitlement of Barclay's to 'the whole or any part of the amount specified in the statement of claim' or 'whether the whole or any part of the amount is reasonable'. There are two issues which must first be decided, namely: 1 What were the terms of the Agency Agreement of 6 October 1998 in relation to the payment of commission to Barclays?

2 Taking into account the provisions of section 42A of the Property Stock and Business Agents Act 1941, what is the entitlement of Barclays to commission pursuant to this agreement?

31 It appears to now be undisputed that the Agency Agreement of 6 October 1998 refers to a percentage figure of 4% rather than 5% on the amount over $100,000.

32 The Tribunal has considered what to make of the insertion of the words 'upon settlement' which have been handwritten on the agreement and to what final figure the agreement relates. There has been confusion with the use of the terms 'sale price' and 'purchase price' almost interchangeably. The term 'sale price' is in the written agency agreement while 'purchase price' is used in the Sale agreement.

33 Barclay's have not disputed that the words 'upon settlement' appear on the original agreement however it maintains that commission is to be calculated on the 'Sale Price', being the 'total purchase price' (Affidavit of Poppelliers paragraph 14.) These words also appear in Clause 11 of the Agreement which states, in part, that the 'selling fee based on the sale price of the business and the stock at valuation". The definition of 'sale price' in Clause 4 of the agreement does not assist as it refers to the inclusion of plant, fixtures and goodwill, which, in this case, were included in the 'purchase price' under the Sale Agreement and are not items which appear to have made up any 'adjustments to the agreement'. The Sale Agreement between Soushen and ISIS defines the 'purchase price' as $1,400,000.00 'less any adjustments as specified under this agreement'.

34 To allow commission to be calculated on the stated 'Sale' or 'Purchase' price, without taking into account any adjustments made to the final payment would be to give the words 'upon settlement' no meaning at all in the context of the agreement between the parties. The Tribunal accepts the evidence of Mr Henson, (Hensen Affidavit, Annexure 'H') that the words 'upon settlement' were inserted into the agreement to reflect variables in the final price. The Tribunal finds that the 'sale price' referred to in the Agency Agreement should be construed as the 'Purchase Price' pursuant to the Sale of Business Agreement of July 1999. This was "$1,400,000.00, less any adjustments as specified in [the] agreement"(as per Sale of Business Agreement , Annexure A to Cohen Affidavit). The purchaser was allowed a discount of $100,000.00 due to early completion and a number of other adjustments were made leaving a total of $1,198,538.03 as the total 'purchase price' at the time of settlement.

35 The Tribunal therefore finds that the selling fee, or commission due, should be calculated on the purchase price upon settlement. This is an amount of "4% over $100,000 less $3062". This calculation is properly based on the sum of $1,198,538.03. Were there no dispute as to Barclays entitlement to this commission the amount would be $47,941.52.

36 In determining whether Barclays is entitled to the whole or any part of the commission the Tribunal has taken the following factors into account: o The agreement was in writing, in standard form, and signed by both parties. The Tribunal finds that the agreement reflected negotiation between the parties as to its terms. o This was a commercial agreement between two businesses both of which had the benefit of legal advice. There was no inequality of bargaining power between these parties. o Both parties to this agreement were reasonably able to protect their own interests. o There is no evidence that undue influence or unfair tactics were evident by either party to the agreement.

37 The question of the 'reasonableness' of Barclay's claim to commission must also be understood in the commercial context of this agreement. Whether or not any or all of the services to be performed under the Agreement were in fact so performed is a relevant factor. The conduct of the parties pursuant to the agreement is also relevant.

38 The evidence before the Tribunal is that Barclays did in fact introduce the purchaser, ISIS, to the vendor, Soushen. There is no evidence as to whether other services under the agreement were performed. It is clear from the evidence that ISIS and Soushen entered into direct negotiations shortly after they were introduced by Barclays. The Tribunal is of the view that this does not detract from the entitlement of Barclays to commission under the agreement. There is no evidence that the direct negotiation between vendor and purchaser was due to a failure by Barclays to properly act as the vendors agent. Mr Poppelliers claimed that he was unaware of the negotiations which were held directly between the parties. He also claimed, not directly to the Tribunal, but in letter sent by his solicitor to Soushen in July 1999 (Annexure T of Cohen Affidavit) that as a result of Soushen and ISIS negotiating without recourse to Barclays that Barclays had lost credibility and been damaged in relation to other business arrangements. Barclays presented no evidence of this claim in these proceedings and they are therefore not matters which the Tribunal has taken into account in determining the entitlement to agents commission.

39 Two amounts, of $2412.00 for advertising in the Financial Review and $650 for 'Profile Data Base Internet" are set out in the Agency Agreement and claimed by Soushen in their itemised account as 'marketing costs'. Mr Henson claims in his affidavit that the no monies were spent on newspaper advertising. No other evidence has been presented to the Tribunal in relation to either the advertising or internet profiling. In the absence of evidence to the contrary the Tribunal accepts that these costs were incurred as per the Agency Agreement and the Itemised Account.

40 The Agreement provides, in Clause 14, that the Agent is entitled to deduct commission fees from deposit monies. ISIS advised Barclays on 14 July 1999 to release to Soushen deposit monies held in trust. The Tribunal is satisfied that Barclays was entitled, in accordance with Clause 14 of the Agency Agreement, to deduct commission from deposit monies. Soushen appears to have conceded as much in their letter to Barclays of 19 July 1999, authorising deduction of commission and asking for immediate payment of the remainder of the deposit to Soushen.

41 However the Tribunal has considered the import of the action of Barclays in not releasing deposit monies as instructed by ISIS. At the time, Barclays held an amount of $150,000 in trust as deposit on the sale. On any calculation this is far in excess of the commission which it would have been entitled to deduct. It was not until ordered to do so by the Supreme Court that Barclays then forwarded an amount in of $47,062 to Soushen. The Tribunal is satisfied that the failure of Barclays to release the deposit monies when they were requested in July 1999 caused difficulty for Mr Hensen in the purchase of his property and led to Souchen taking the action it did in the Supreme Court. However this has been dealt with in the Supreme Court proceedings and Barclays have had an order made against them in relation to the costs of those proceedings.

42 The Tribunal is not satisfied that the action of Barclays in failing to release the deposit monies should further impact on their entitlement to commission under the Agency Agreement. The Tribunal rejects the claims by Soushen that this action was so significant as to amount to a total failure by Barclays to properly act as the business broker between the parties under the Agency Agreement. The claims by Soushen that Mr Poppelliers failed to promptly respond to telephone calls relates to the same issue and period of time during which the deposit monies were in dispute. The Tribunal does not accept that this failure was so great as to affect the entire entitlement of Barclays to commission. The commercial agreement between the parties was on foot for over six months and this complaint relates to a short period of time (from 14 July -6 August 1999) during which it appears both parties held informed views that they had a lawful claim to the disputed deposit monies. On this issue the Supreme Court ultimately found that the monies should be released to Soushen.

43 On balance the Tribunal has come to the view that that Barclays is entitled to the whole of the commission under the Agency Agreement, calculated on a figure of $1,198,538.03 being the 'sale price at settlement'. This is an amount of $47,941.52. In accordance with the agreement, an amount of $3062 is then to be deducted, leaving commission payable of $44,879.52.

44 In relation to the claim by Soushen for the costs of this application in the sum of $9809.43 the Tribunal orders that each party bear their own costs. The application is brought by Soushen and Barclays was required to defend it or to submit to the Tribunal's determination without being heard. The matter has proceeded without an oral hearing, on the basis of the documents and with the consent of both parties, so as to minimise costs. The Tribunal is of the view that there are no circumstances which warrant an award of costs against Barclays. DECISION 1 The Tribunal orders that Barclays Business Brokers Pty Ltd is entitled to $44,879.52 commission pursuant to the Agency Agreement with Soushen Pty Ltd dated 6 October 1998.

I HEREBY CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF THE FAIR TRADING TRIBUNAL.

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