AUSTRAL PACIFIC INVESTMENT (H.K) LIMITED v URBAN ACTIVATION PTY LTD [2024] SADC 115

First Applicant: AUSTRAL PACIFIC INVESTMENT (H.K) LIMITED Counsel: MR E BELPERIO - Solicitor: DMAW LAWYERS Second Applicant: GLOBAL LINK PROPERTIES SDN.BHD Counsel: MR E BELPERIO - Solicitor: DMAW LAWYERS Respondent: URBAN ACTIVATION PTY LTD Counsel: MR L GENTRY - Solicitor: 1878 ELIX LAWYERS Hearing Date/s: 28/08/2023, 29/08/2023 File No/s: DCCIV-19-308 B DISTRICT COURT OF SOUTH AUSTRALIA (Civil: Application) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment 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 in which it was generated. AUSTRAL PACIFIC INVESTMENT (H.K) LIMITED & ANOR v URBAN ACTIVATION PTY LTD [2024] SADC 115 Judgment of his Honour Judge Slattery 25 September 2024 RESTITUTION - CLAIMS ARISING OUT OF INEFFECTIVE OR ILLEGAL CONTRACTS Austral Pacific Investment (H.K) Limited (Austral) was incorporated in Hong Kong and was the proprietor of the business name Austpac PRD Realty (Hong Kong). Global Link Properties SDN BHD (Global) was a limited liability company incorporated in Malaysia. In 2016, the respondent Urban Activation Pty Ltd (Urban) made an agreement with Eklipse Capital Pty Ltd (Eklipse) to carry out marketing works for a development called ‘Realm Adelaide’. Subsequently Urban entered into an agreement with Sunbright Investment Australia Pty Ltd to procure purchasers of units at 19-21 Poplar Street Box Hill Victoria (Tao Apartments) Urban also entered into an agreement with Queens Apartments Pty Ltd to procure purchasers of units built at 1- 5 Queen Street Blackburn Victoria (Sovereign Blackburn). Urban then entered separate contracts with Austral and Global to procure purchasers in the Asian market for these three sites. By a first agreement dated 19 December 2016, made with Urban, Austral agreed to procure purchasers for the Realm Adelaide Apartments in consideration of the payment of a 5 % commission of which 2.5% was payable at contract exchange and 2.5 % on settlement. By a further agreement made between Austral trading as Austral PRD and Urban, Austral PRD separately agreed to assist Urban to procure purchasers for the Realm Adelaide apartment complex for payment of a 5 % commission payable as to 2.5 % on contract exchange and 2.5 % at settlement. Austral procured 43 purchasers of units in Realm Adelaide and delivered invoices to Urban in the amount of $531,737.50. 32 of the 43 sales contracts proceeded to settlement and Austral then delivered to Urban invoices in the amount of $356,937.50 in respect of the Realm Adelaide project. -- 1 of 77 -- Of the total amounts of the invoices of Austral delivered to Urban, payment of the sum of $31,243.25 has been made to Austral. On 27 February 2017 Global and Urban entered an agreement called the Tao Home Agreement under which Global agreed to assist Urban to find purchasers of units at the Tao Homes project at Poplar Street Boxhill Victoria for a 5 % commission. The amount of 2.5 % commission was payable within 30 days after exchange of contracts, and so upon payment a deposit, and 2.5 % was payable within 30 days of settlement. Global obtained 9 contracts of sale for the Tao Homes Development and between May and July 2017, Global invoiced Urban for the sum of $105,625 which was paid. All of these 9 apartment sale contracts in the Tao Homes Development settled and Global sent to Urban a further invoice for $105,625 which is unpaid. By an exchange of emails on 4 April 2017, Urban and Global agreed that Global would procure purchasers of units in the Sovereign Blackburn Development in consideration of the payment of 5 % of the contract price as a commission. Global procured two purchasers of units in the Sovereign Blackburn development and then delivered to Urban an invoice dated 15 August 2017 for $14,625 for one apartment of which Urban has paid the sum of $13,950. On 23 May 2018, Global issued a second invoice to Urban connected with the settlement of the sale of the first unit which remains unpaid. On 11 June 2018, Global invoiced Urban for the sum of $24,950 for the second Sovereign Blackburn apartment which is unpaid. On each occasion that Austral and Global procured purchasers in the respective unit developments, each of those companies was not, in South Australia, a registered agent for s 4 and s 6 of the Land Agents Act 1994 (SA) or in Victoria, for sections 4, 6, 12, and 50 of the Estate Agents Act 1980 (Vic). Whether, in respect of the sale in the units in the Realm Adelaide apartments, Austral was acting for an agent for s 4(1) of the Land Agents Act (LAA) and consequentially, was required to be a licensed as an agent for s 6 LAA? Whether, in respect of the sales of the units in the Tao Homes Development and or the Sovereign Blackburn Development in Victoria, Global was acting as a real estate agent and therefore was required to be a licensed agent for s 4 and s 12 of the Estate Agents Act 1980 (Vic)? Whether, in South Australia, Austral acted through the instrumentality of an agent? Whether in the event that Austral and Global were required to be licensed in South Australia and Victoria respectively, there exists any right under the applicable legislation covering real estate agents or at common law, or in equity, to maintain any claim for agreed commission payments, whether under contract or under a claim for quantum meruit. Whether there was a sufficient connection between the states of South Australia and Victoria and the conduct of Austral and Global in conducting their business in the broader Asian market and procuring purchasers in that market of real estate interests in South Australia and Victoria respectively. Held: 1. That in assessing whether a person or entity acts as a real estate agent and is therefore required to be licensed under the relevant legislation it is necessary to analyse the activities of each of Austral and Global which were to be viewed as a whole in the conduct of their business. 2. When a view is taken of the whole of the conduct of Austral in South Australia and Global in Victoria in its entirety, each of them acted as a real estate agent and each were required to be licensed as a real estate agent in each state respectively. 3. Austral did not act through the instrumentality of an agent when it operated in South Australia. 4. There is a sufficient connection between each of the acts carried out by Austral and Global in South Australia and Victoria respectively with the subject real estate transactions such that each of them were required to be licensed as real estate agents in those places. -- 2 of 77 -- 5. In respect of the conduct of Austral in South Australia and Global in Victoria, the failure to be licensed as a real estate agent at the relevant times was a breach of the LAA and the Estate Agents Act 1980 (Vic). 6. Each of Austral and Global were not permitted to claim, receive or to retain any amounts of commission paid to them connected with the fulfillment by them of their role as an unlicensed real estate agent in South Australia or Victoria pursuant to contracts entered into in respect of the Realm Adelaide Apartments, Tao Homes and Sovereign Blackburn Developments. 7. Due to the illegality of the conduct of Austral and Global, a remedy in quantum meruit in respect of the work done by them is not available. The applicants’ claim in contract or alternatively in quantum meruit is dismissed. 8. The respondent cross claim for Austral and Global to disgorge the payment of commission made to them. 9. As the parties have not properly addressed the cross claim in the background of the evidence and their pleaded cases, the court will hear the parties further on the cross claim. 10. Question of costs reserved pending the courts consideration of the parties further submissions in relation to the cross claim. Land Agents Act 1994 (SA); Estate Agents Act (1980) (Vic); Uniform Civil Rules 2020 (SA); Land and Business (Sale and Conveyancing) Act 1994 (SA); Real Estate Agents, Debt Collectors and Motor Dealers Acts (1922) (Qld) , referred to. Guan v Lui [2021] NSWCA 65; International Harvester Co of Australia Pty Ltd v Carringan’s Hazeldene Pastoral Co (1958) 100 CLR 644 ; Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418; Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303; White Pointer Investments Pty Ltd v Creative Academy Group Pty Ltd [2023] NSWSC 817; Maxwell v Moorbool Developments Pty Ltd [2004] VSC 392; Sultana Investments Pty Ltd v Cellcom Pty Ltd [2008] QCA 357; [2009] 1 Qd R 589; Sutton v Zullo Enterprises Pty Ltd [1998] QCA 417; Davids Securities v The Commonwealth Bank of Australia (1992) 175 CLR 353; 109 ALR 57; Jordan v Persse [2017] SASC 133 ; Port McDonnell Professional Fisherman’s Assn Inc v South Australia (1989) 63 ALJR 671 ; Pearce v Florenca (1976) 135 CLR 507; Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1; Jenkins v Kedcorp Pty Ltd [1999] QCA 452; [2002] 1 Qd R49.; Holman v Johnson (1775) 1 Cowp 341 at [343]; 98 ER 1120 at [1121]; Gollan v Nugent (1988) 166 CLR 18 ; Oliver Hume (Australia) Pty Ltd v Land Source Australia Pty Ltd [2015] VSC 77 ; George v Greater Adelaide Land Development Co Ltd 1929) 43 CLR 91, considered. -- 3 of 77 -- -- 4 of 77 -- AUSTRAL PACIFIC INVESTMENT (H.K) LIMITED & ANOR v URBAN ACTIVATION PTY LTD [2024] SADC 115 1 The applicants Austral Pacific Investment (H.K) Limited (Austral) and Global Link Properties SDN. BHD (Global) claim against the first respondent Urban Activation Pty Ltd (Urban) for money allegedly owed to them under contracts made between them for the applicants to provide assistance to the respondent in procuring sales for apartments at various sites in Australia. 2 Austral claims for payment of the contract price payable for the apartments in two tranches of 2.5% (within 30 days of the contract exchange and so also upon payment of a deposit) and a further 2.5 % (at or within 30 days of settlement). This arrangement pertains to the sale of units in a high rise development in Austin Street Adelaide called ‘Realm Adelaide’. 3 Austral alleges that complete payment has not been made for the unit sales procured by it. It claims damages for breach of contract and alternatively for an assessment of a quantum meruit. 4 In its defence, Urban alleges that Austral was an agent for the vendor and was required by legislation to be registered as an agent under s 4 and s 6 of the, Land Agents Act 1994 (SA) (LAA), it was not so registered and by operation of s 27 of the Land and Business (Sale and Conveyancing) Act 1994 (SA), it was prohibited from receiving commissions on sale of land because it was not authorised under a sales agency agreement in an appropriate form. 5 Urban therefore admits the contract of 19 December 2016, but says that Austral was not entitled to make a claim for payment under any form of existing contract. Similarly, Urban alleges that Austral’s alternative quantum meruit claim fails; it contends that the services were provided in circumstances of illegality because of the failure to comply with the requirements of the legislative scheme. These pleadings carry with them the further admission that the work of procuring purchasers for the units was carried out by Austral, that these contracts of purchase were executed, were settled and the contract price was received by the vendors of the properties. The admissions made by Urban do not illuminate the amount of commission paid to it (or to any other person or entity) in relation to each sale. 6 There are two other similar but not completely identical claims made in relation to other developments in Victoria. 7 Urban entered into an agreement with Sunbright Investments Australia Pty Ltd (Sunbright) to procure buyers of units constructed upon a property at 19-21 Poplar Street, Boxhill, Victoria (the Tao Homes Apartments). Urban and Global made an agreement under which Global was appointed to assist Urban to procure sales of the Tao Home Apartments in consideration of the payment of the equivalent of 5 % (in two tranches of 2.5 %) of the contract price payable in respect -- 5 of 77 -- [2024] SADC 115 2 of each apartment. Global procured purchasers for nine of the apartments in the Tao Homes development and on exchange of contracts, delivered as was paid a first invoice of $105,625. 8 This amount of the balance of the 5 % commission ($105,625) was invoiced to Urban by Austral but has not been fully paid by Urban to Global. Urban contends that it is not answerable to Global for breach of contract or alternatively for a claim in quantum meruit. It alleges that the Global was not licensed as required by sections 4, 6, 12 and 50 of the Estate Agents Act 1980 (Vic). It contends that as an unlicensed entity, Global procured or negotiated for the sale of real estate on behalf of another and was therefore an estate agent for the purposes of that Act. In the absence of it being a licensed entity under that Act, it is not entitled to sue for or recover or retain any commission paid or payable under operation of s 50 of that act. 9 For the same reasons, it is not entitled to claim a quantum meruit. 10 These admissions by Urban carry with them the further admission that the work of procuring purchasers was actually done by Global, that those contracts of purchase procured by Global through its efforts were then settled and the contract price was paid to the vendors of the property. The admissions do not make clear how much commission was paid and to who (or what) in relation to each sale but implicitly, Urban has received the amount of commission payable to it under its contracts with the vendors as well as the commission that would have otherwise have been payable to the second applicant, if, on Urban’s case, the second applicant was a licensed agent. 11 The third development and the second in Victoria, concerned property in what is described as ‘Sovereign Blackburn’. On 4 April 2017, Global and Urban made a contract for Global to assist Urban (acting for Queens Apartments Pty Ltd) to procure sales of apartments at Sovereign Blackburn. Urban undertook that work, procured two relevant sales, those sales were settled and the Global makes claim for payment under its contract. There was part payment of $13,950 made by Urban to Global to under this contract. 12 Urban denies any liability to make payment under the Sovereign Blackburn agreement that it made with Global for the same reasons that it pleads in relation to the Tao Homes development. 13 In its cross claim, Urban claims against each applicant a repayment of any amount of money paid to those applicants under any such arrangements. It contends that the conduct of each applicant was illegal and so any contract made was unenforceable. It also contends that any money paid by it to either applicant is recoverable as money had and received by the applicants. 14 It is necessary to provide some further factual matters to the narrative of the case and to the pleadings. In relation to the Realm Adelaide Apartments, there is -- 6 of 77 -- [2024] SADC 115 3 no challenge that the vendor of those units was Eklipse Capital Pty Ltd (‘Eklipse’) which retained Urban in 2016 to carry out marketing works for the sale of the units in consideration of an agreed fee base. On or about 19 December 2016, an agreement was made between Austral and Urban; Austral was to assist in procuring purchasers for the apartments in Realm Adelaide, owned by Eklipse. This is called the ‘Realm Services Agreement’. Austral makes the first tranche of its claim of $531,737.50 under that agreement. 15 On or about 20 February 2017, Austral Pacific Pty Ltd trading as Austral PRD Realty (H.K) made another agreement with Urban that in consideration of an agreed level of payment of fees, that it would assist Urban to make sales of apartments in the Realm Adelaide building. The second tranche of the claim of Austral is in the sum of ($356,937.50). 1 16 In relation to the Tao Homes Apartments, it is agreed Urban was retained to market units in that development and that it retained Global for consideration, to assist in procuring sales of those apartments. Global performed its obligations under that agreement and has delivered a first invoice to Urban for the sum of $105,625 for work completed in accordance with the rates specified in its contract with the respondent (2.5 % for contract exchange). This invoice has been paid. A second invoice in the same amount was unpaid. 17 In relation to the Sovereign Blackburn agreement, it was agreed that Global was required to procure purchasers for units in the development, in consideration of an agreed rate of payment which has not been fully paid. Some part of the agreed amount was made on 12 October 2017, but this is the subject of the respondent’s cross claim. 18 The common feature are:- 1. The owners of buildings in South Australia and in Victoria, or their authorised representatives, wished to sell accommodation units within buildings which they owned or in which they had a saleable interest; 2. Each of the owners of the buildings retained Urban to act as their primary selling agent of these units available for sale; 3. Urban was unable to procure sales of all or of a sufficient number of the units in these developments in order to satisfy the requirements of the vendors. 4. As a result of Urban’s inability to procure the necessary purchasers for these properties, it entered into separate sales arrangements with the applicants. The first with Austral was connected with the Realm Apartments at Austin 1 Austral is a party to the action and in the proprietor of the business name. It is therefore not necessary to make any distinction between these two agreements on any claim made under them. The rights and obligations all belong to Austral. -- 7 of 77 -- [2024] SADC 115 4 Street Adelaide. Urban then entered into sales agreements with the Global in relation to the Tao Homes and the Sovereign Blackburn developments. 5. The agreements between the applicants and Urban each contained a term that the payments due by Urban under them was based entirely upon a percentage figure applied to the sale price of a unit, generally payable upon the exchange of a sales contract and so upon payment of the deposit under it (2.5 %) and the balance (2.5 %) within thirty days of settlement of that sale contract. 6. The obligation to pay this sum fell upon Urban (and not upon the owners of the buildings). It was therefore necessary for Urban to make at least two formal arrangements about the involvement of the applicants in finding and securing the purchasers for the real estate. The first was the separate retainer of the applicants by Urban for each building. The second was the arrangements which needed to be made with the vendors of the buildings for allowances to be made for payment of the amounts due under the separate contracts between the applicants and Urban. 7. It is contended that there was no privity of contract between the applicants and the vendors of the units. 19 There are a number of matters arising on Urban’s defence – Revision 2 dated 20 September 2022 (FDN 77) (the defence) that require attention. 20 Urban admits that Global made an agreement with the property vendor, Sunbright for the Tao Apartment Agreement (defence paragraphs 2, 2A and 18). At paragraph 18 of the defence, Urban pleads that invoices numbered 093, 0096, and 0100 were issued by Global to Sunbright and not Urban and so there has never been a liability on Urban to pay anything to Global as, no services have ever been rendered and no liability arises. 21 Implicitly this carries with it the admission that any payment received by Global was made by Sunbright, not Urban and if there is any requirement to disgorge payments of commission it is to Sunbright, not Urban. This raises difficulties in connection with the cross claim of Urban. 22 Second, Urban pleads that any entitlement of Global to receive payment was subject to the conditions precedent that an invoice be properly issued by Global to Urban which has not occurred. This is a slightly peculiar plea as it relies, at least in part, upon the acceptance of a right of payment under the agreement. It implicitly carries a contention that although the sale process occurred, settlement followed and Urban has been paid the full amount of its commission on that contract, Urban has no liability, including to account, because of a failure to correctly address an invoice. 23 In paragraph 20 of its defence, Urban admits that nine apartments of the Tao House Development settled with purchasers in October 2018 and, semble, that the -- 8 of 77 -- [2024] SADC 115 5 respondent has not only been paid its sales commission, it has retained the payment otherwise due to be paid to the applicant and, a priori has not disbursed any portion of that sum to any party. There is no acceptable evidence on this topic. It compounds Urbans difficulties on its cross claim. 24 In relation to the Sovereign Blackburn properties, Urban pleads that the contract was with AustPac PRD Reality, not Global; that entity agreed to procure buyers for the Sovereign Blackburn properties, but because of the breach of the applicable legalisation connected with the licensing of real estate agents in Victoria, no amount of commission may be claimed or is payable to Global or, it seems Austral, even though it procured purchasers and contracts of sale which were settled. It pleads also that invoices were directed to the landowner – vendor, not Urban and based upon privity principles, no liability can arise thereunder. In any event, it contends that based upon the operation of the agency statute, no claim for payment may ever be made by the second applicant in relation to that liability. The same difficulties in the cross claim therefore arise. 25 The parties proposed tender book contained in excess of 3500 pages. It was first suggested that I receive this into evidence as an exhibit. I refused to allow that book to be tendered as an exhibit as I gained the clear impression from counsels’ submissions that only a select number of the documents were directly relevant. Exhibit A7 is a list tendered by the consent of all parties which identified the documents within that book entitled ‘Court Book’ which were tendered as part of that exhibit. I have used this list as the reference point into the volumes first provided to me. The separate pages or documents in the volumes have not been separately tendered. I have identified these tendered pages and documents by reference first to the exhibit A7, then to the volumes and then the specific page numbers. 26 I turn then to the viva voce evidence in support of the claims of the applicants and is alleged to support the respondents claim for the repayment of all money paid to the applicants on the basis of the application of the relevant legislation in each state. I have already identified the difficulties arising on that cross claim. 27 For the sake of completeness and later reference I set out here the contents of each of the relevant statutes operating in South Australia, Victoria and Queensland. Schedule – Relevant Legislative Provisions South Australia 1. The Land Agents Act 1994 (SA) provides, relevantly, as follows (emphasis added): 4—Meaning of agent (1) A person is an agent for the purposes of this Act if the person carries on a business that consists of or involves: (a) selling or purchasing or otherwise dealing with land or businesses on behalf of others, or conducting negotiations for that purpose; or -- 9 of 77 -- [2024] SADC 115 6 (b) selling land or businesses on his or her own behalf or conducting negotiations for that purpose. (2) However, a person does not act as an agent in so far as— … (b) the person sells land or businesses, or conducts negotiations for that purpose, through the instrumentality of an agent; …. Part 2—Registration and management of agent's business 6—Agents to be registered (1) A person must not carry on business, or hold himself or herself out, as an agent unless registered as an agent under this Act. … (2) A person required by this Act to be registered as an agent is not entitled to commission or other consideration for services as an agent unless the person— (a) is, at the time of rendering the services, registered as an agent; and (b) is authorised, in writing, to act as an agent by the person for whom the services are rendered or a person authorised to act on behalf of that person. (3) Any commission or other consideration paid or given to a person who is, under subsection (2), not entitled to it may be recovered from the person as a debt. … Victoria 2. The Estate Agents Act 1980 provides, relevantly (emphasis added): 4. Definitions (1) In this Act unless inconsistent with the context or subject-matter- … estate agent or agent means any person (whether or not he carries on any other business) who exercises or carries on or advertises or notifies or states that he exercise or carries on or that he is willing to exercise or carry on or in any way holds himself out to the public as ready to undertake the business of: (a) Selling buying exchanging letting or taking on lease of or otherwise dealing with or disposing of; (b) negotiating for the sale purchase exchange letting or taking on lease of or any other dealing with or disposition of: (c) collecting rents for … any real estate or business on behalf of any other person; Part III—Licences 12 Estate agents to be licensed … (2) Subject to this Act a corporation shall not— -- 10 of 77 -- [2024] SADC 115 7 (a) exercise or carry on or advertise notify or state that it exercises or carries on or is willing to exercise or carry on the business of an estate agent; or (b) act as an estate agent; or (c) in any way hold itself out to the public as ready to undertake for payment or other remuneration (whether monetary or otherwise) any of the functions of an estate agent— unless it is a licensed estate agent. 1000 penalty units. 50 Commission (1) An estate agent is not entitled to sue for or recover or retain any commission or money in respect of any outgoings for or in respect of any transaction unless: (a) at all material times in relation to the transaction he or she is the holder of an estate agent's licence; and (b) the agent has complied with section 49A(1) with respect to the engagement or appointment to undertake the transaction and is not in breach of section 49A(2) with respect to the engagement or appointment; and Queensland 3. The Property Occupation Act 2014 (Qld) provides, relevantly, as follows (emphasis added): Division 3 Real estate agent’s authorisation and responsibility 26 What a real estate agent licence authorises (1) A real estate agent licence authorises the holder of the licence to perform the following activities as an agent for others for reward: (a) to buy, sell (other than by auction), exchange or let real property or interests in real property; (b) to buy, sell (other than by auction), exchange, or let businesses or interests in businesses; (c) to negotiate for the buying, selling, exchanging, or letting of something mentioned in paragraph (a) or (b); (d) to collect rents. (2) A real estate agent may perform the activities mentioned in subsection (1) in the carrying on of a business, either alone or with others, or as an employee of someone else. 89 Restriction on recovery of reward or expense—no proper authorisation etc. (1) A person is not entitled to sue for, recover or keep a reward or expense for the performance of an activity as a property agent or resident letting agent unless, at the time the activity was performed, the person: (a) either— (i) if the person performed an activity as a property agent—held a property agent licence; or -- 11 of 77 -- [2024] SADC 115 8 (ii) if the person performed an activity as a resident letting agent—held a resident letting agent licence; and (b) was authorised under the person’s licence to perform the activity; and 28 The principal contention of Urban is that, properly construed, each Act prohibits an unlicensed agent from claiming, receiving or retaining commission for acting as an agent. Any commission so received by such an unlicensed person which carries on the role in contravention of the act, must be disgorged. This is the fundamental proposition about which the whole of the response of Urban revolve. 29 In that background I turn to consider the evidence. 30 Yuen David Sing Chi gave evidence. He is a director of Austral, the first applicant a company incorporated in Hong Kong in February 1997.2 He is an Australian citizen. His background and education are described in his admitted affidavit as follows:- 3 Background and experience 4. I was granted Australian citizenship in 1983, however I spend very little time in Australia. Since 1993, I have never stayed for longer than 60 days a year in Australia, and generally staying less than 10 day per trip. Between the end of 2016 and 2022, I visited Australia on two occasions, being: (a) to the Gold Coast from 9 October 2017 to 13 October 2017; and (b) To Melbourne from 23 October 2017 to 27 October 2017, in relation to some personal affairs. 5. I have a Higher National Diploma in Mathematics, Statistics and Computer obtained from the London Metropolitan University in 1977. I have been a Justice of The Peace in Queensland since 1991. 6. I have been involved in the real estate industry since 1988, and Austral has been operating in the real estate industry since its incorporation. 7. Austral was incorporated in Hong Kong on 24 February 1997 (API.0001, ATB- UA.244266, ATB- ). 8. I have been a director of Austral since its incorporation. 9. Austral is the holder of registered business name Austpac PRD Realty (Hong Kong)(Austpac PRD). (API.0030, ATB- ). 10. Austral provided marketing and sales expertise in Hong Kong, as well as similar services through local real estate agencies in Singapore and Malaysia. 2 See transcript pp 29 onwards. 3 Exhibit P1, at paragraphs 4-14 of Yuen David Sing Chi. -- 12 of 77 -- [2024] SADC 115 9 11. Austral worked as part of a wider network in South East Asia. Austral was the head office of the network, and would distribute work to other entities. For example: (a) in relation to services provided in Singapore, Austral works with Shenton More Property Pte Ltd (also known as More Pte Ltd) to do some properties sales. All sales staffs are fully licensed and registered with Shenton More Property Pte Ltd; and (b) in relation to services provided in Malaysia, the marketing and sales were done through Global Link Properties Sdn Bhd (Global). All the sales staff are licensed under Global. 12. Austpac International Pte Ltd, an entity incorporated in Singapore, is also part of the wider Austral network. 13. My brother, Yuen Chi Wah, is the director of Global, the Second Applicant in this Proceeding. 14. Global works as a part of the wider Austral network in South East Asia, specifically providing marketing and sales assistance in Malaysia. 31 Austral is the proprietor of the registered business name of Austral PRD Realty (H.K). That business specialises in the sale and marketing of real estate in Hong Kong, Singapore and Malaysia and is part of a network of specialised agents operating in South East Asia. In Singapore it operates through an agent, Shenton More Property Pte Ltd. In Malaysia it operates through Global Link Properties SDN BHD (Global). 32 Austral and Global provide marketing and sales assistance through licensed entities in those places. 33 Urban was registered as a selling agent of the Realm Adelaide project, it initially retained Austral under a written services agreement to perform sales exhibitions in Hong Kong. A service agreement was entered into with Austral in January 2017 for Global to do exhibitions in Singapore and China. 34 In the period prior to March 2017, Austral entered into an agreement with Urban under which it agreed to procure purchasers from the Asian market for sales of Realm Adelaide units. Implicitly, at least, the vendor, Eklipse authorised the execution of a contract of retainer with Urban under which Austral agreed to market the units on behalf of Urban.4 This is called a Services Agreement which contained what is described as the ‘marketing proposal’ under which Austral was to be paid 5 % of the contract price in two tranches of 2.5 % on contract exchange (and so payment of deposit) and then the balance 2.5 % thirty days after settlement. Invoices for payment were all directed to Urban. 35 Following the establishment of these arrangements, Austral undertook the required work by conducting exhibitions in a number of places in Asia directed at 4 Exhibit A7, Vol 1, page 342-348. -- 13 of 77 -- [2024] SADC 115 10 Asian investors of significant wealth who may be attracted by such an investment. An example is an exhibition at Kuala Lumpur on 22 and 23 April 2017 at which Realm Adelaide was marketed. 36 Urban gave Austral all information connected with the marketable units for sale including contracts for execution prepared by solicitors in Adelaide. Austral marketed the available properties to potential purchasers who attended the exhibitions and then provided to them all the relevant marketing materials provided by Urban. 37 Any interested purchasers were required to pay a registration fee, and within seven days execute a contract of sale if the interested purchaser so intended. This was a form of formal offer to the vendor by the prospective purchaser. Also at the exhibitions, some parties executed a contract to receive information from Austral provided by Urban. 38 Austral procured sales of 43 units. The executed contracts of the purchasers were the forms of contract provided by Urban to Austral (and similarly, to Global). After execution, these were delivered to Urban, or the vendor’s solicitor which was then responsible to procure the execution by the vendor. All of the work to procure the purchasers was done by Austral staff which then invoiced Urban for work done. The first invoice delivered was in the sum of $531,737.50 (first 2.5 %). 39 The only payment received is in the sum of $31,243.25. On 4 October 2019. Urban attempted to make a shortfall payment of the sum of $186,937.50. Austral was then made aware of settlements occurring and delivered to Urban further invoices in the sum of $356,937.50 in respect of work done for the period of over 6 months between 15 July 2020 to 01 November 2020. No further payments were made and a letter of demand in the amount of $531,737.50 was sent to Urban by Austral on 5 June 2018 and for $356,937.50 (Total $888,675).5 40 On 2 April 2017 there was an exchange of emails between Urban and Austral which sought the assistance of Austral to procure purchasers of apartments in Cannon Hill in Queensland. No sales were achieved but Austral was paid $107,000 for the work done by it in conducting exhibitions. The nature of this payment and the contractual agreement under which it was paid are in contention. At a number of levels, it is peculiar that on the respondent’s case, this account was paid without the generation of any entitling sale. I am satisfied that the payments made in relation to the Cannon Hill development were paid in consideration of the holding of exhibition by the applicants. It was not and could not be connected with a sale of real estate in Australia or the negotiation; therefore, no such sales (or negotiations occurred). The claim sounds in contract. 41 In April 2017 Urban entered into a further agreement with Austral in relation to apartments in Cannon Hill, a suburb of Brisbane. There was not the same form 5 Exhibit A7, Vol 2, p 1616. -- 14 of 77 -- [2024] SADC 115 11 of written agreement as the services agreement executed between them and the parties operated under an exchange of emails. 42 The agreement reflected in this exchange of emails required the holding of exhibitions in Asia at a fixed costs for those exhibitions. This was a different arrangement which was connected with an obligation upon Austral to hold exhibitions in Asia in order to identify prospective purchasers. An amount of $107,000 was invoiced on 12 April 2017 and was paid, but under the different contractual arrangement described above payments were connected to the holding of the exhibitions. 43 David Yuen had been a registered real estate agent in Queensland from 1987 and worked with PRD Realty. In 1989 he moved to Hong Kong to establish an original Auswide PRD office there and then expanded his business into Singapore, Malaysia, Indonesia, Thailand, China, Macau and other places in Asia. 6 In Asia he operated within the PRD Licence and over a 30 year period including the time with PRD, Austral has marketed over 300 projects throughout Asia for very large Australian developments. Mr David Yuen said that for the majority of that time Austral has not been licensed in Australia. Asian purchasers require considerable assistance about Australian processes which Austral provided. Examples include: tax file numbers, bank and Foreign Investment Review Board (FIRB) approvals; financiers, tax returns, and general legal advice. Austral makes all these arrangement for clients who are required to have a clear understanding about their legal and other commercial obligations before and at the time they enter into any binding obligation to purchase real estate. Austral considered itself a marketing agent which introduced any clients to available markets of real estate possibilities. Its role is to discuss terms of sale, and these include contract terms, price, deposit, settlement terms and the exchange of offers. In the usual course a developer brings the proposal to Austral which is asked to approach existing and new investors to execute contracts. 44 Austral was associated with Global and where these two companies worked in association Global was paid by Austral.7 In such a case, Global secured the offer from the purchaser for the apartments and so was entitled to a payment from Austral. 45 A second entity, Sheraton More, was engaged to assist Austral in Singapore for providing a purchaser for apartment 1002.8. It is thus accepted that as an example other entities provided the purchasers for the Realm Apartments. These were companies or entities associated with Austral and were entitled to claim payment from Austral. The entity used depended upon the place at which particular exhibitions occurred. 6 T29, ln 28-32. 7 See Exhibit A7, Vol 1, p 7389. 8 See Exhibit A7, pp 7344. -- 15 of 77 -- [2024] SADC 115 12 46 The services agreement executed by Urban and Austral, entitles Austral to be paid commission on the sale of the Realm Apartments.9 At the exhibitions there were commercial documents available to be used by prospective purchasers and upon which an offer may be made by prospective purchasers. 47 Incentives were offered to prospective purchasers in the negotiation with Austral connected with the execution of contracts and they were recorded on the face of the contract.10 Some purchasers wanted incentives and others rejected them. Agents are authorised to offer incentives. One incentive offer was of vendor finance up 70 % of the purchase price. 48 The terms of such an incentive offer were determined by the manager employed by Austral, Global or its own authorised agents. A contract for the sale of a unit was not finalised as an offer without David Yuen’s specific authority. Negotiations may occur but as a final proposition, nothing was communicated without his specific authority. He or his brother Albert Yuen usually made the final decisions. 49 Notwithstanding, the question of acceptance (or not) of such an offer with conditions for example, was always a matter for Urban. This included, for example, the payment of deposits by instalments. This was all part of Urban’s decision-making process. If Austral negotiated a deposit of 20 % or more (of the full purchase price) then Urban agreed to pay Austral 100 % of the commission due to it under the ‘Services Agreement’. These were all issues controlled by Urban as the vendor’s agent. It could accept or reject any terms proposed by a purchaser. 50 Austral was aware that following the execution of a contract for the sale and purchase of land, legislation requires a Form 1 vendor’s statement or its equivalent to be provided to the purchaser. It was Austral’s role to deliver the Form 1 document which was prepared by Urban as prescribed, and was required to be served on time and in time under legislation applicable to real estate transactions. Thus, it was part of Austral’s role to comply with South Australian law and hence, for example, the delivery of the Forms 1. 51 In South Australia, Ms Helen Wu of Suntide Conveyancing was retained to undertake the conveyancing and potential purchasers were referred to Ms Wu by Austral. At times Austral sought advice about particular issues from Ms Wu on behalf of purchaser clients and advice received from Ms Wu was communicated to the purchaser by Austral. Advice was sought from Ms Wu on a broad range of topics, including foreign investment surcharges and, for example, on stamp duty issues.11 This process assisted to maintain the substance of the contract. Austral 9 Exhibit A7, pp 343, clause 6. 10 Exhibit A7, Vol 9, pp 7344; 7349. 11 T98.20-29. -- 16 of 77 -- [2024] SADC 115 13 also communicated directly with Urban on other matters such as colour schemes required by purchasers.12 52 Exhibit A3 is the witness statement and the evidence in chief of Mr Albert Yuen the sole director of Global. He has been an Australian citizen since 1980. Global was incorporated in 2013 and holds a real estate licence in Malaysia. Global works with Austral as a part of a network operating in South East Asia and as part of that network managed sales and marketing in Malaysia. It sometimes operated in conjunction with Austral, at which time it was in control of any joint venture, and it also operated separately under an arrangement with Austral for work done solely in Malaysia. 53 In July 2016, Lucas Giannotti of Urban telephoned Albert Yuen and sent an email about the Realm Apartments property. In November 2016 he met with Matt George of Urban in Kuala Lumpur to discuss the Realm Apartments and other commercial opportunities. They discussed marketing in Malaysia and the cost payable by Urban for such services. A services agreement was executed dated 17 November 201613 aimed at the marketing of Realm Apartments. As well, Austral executed a separate agreement to market the Realm Apartments in the same way. Austral was to invoice Urban and, upon payment distribute the share of commission owed to Global. 54 Under the Services Agreement made on 27 February 2017 in respect of the Tao Apartments, Global arranged contracts for the sale of nine of the Tao Apartments. Invoices for amounts of commissions payable were sent to Urban which requested these be sent to the vendor Sunbright.14 The first tranche of invoices for execution of the contracts made between May and August 2017 in the total sum of $105, 625 were sent and paid. On or about 19 January 2019, Global indirectly became aware of the settlement of these contracts and forwarded the invoice for the balance of $105,625.15 This invoice is unpaid. 55 In relation to the Sovereign Blackburn developments, the agreement was not formally recorded apart from an exchange of emails.16 Contracts were obtained and a demand made for commission and for payment for work done on marketing of the Sovereign Blackburn properties. There were three invoices: No 109; 15/02/2017, in an amount $14,625; No 119; 23/05/18 in an amount $14,625; and No 122; 11/06/2018 in an amount $24,950.17. Only invoice 109 was paid. Global issued a demand for payment in the sum of $40,250 on 12 March 2020. These demanded amounts are unpaid. 12 Exhibit A7, Vol 2, p 1064. 13 Exhibit A7, Vol 1, page 322-328. 14 Exhibit A7, Vol 1, p 426-432. 15 Exhibit A7, Vol 4, page 2292. 16 Exhibit A7, Vol 1, pages 295-32. 17 Exhibit A7, Vol 1, page 423, Volume 2, 1991, 1992, 1993 page 1463. -- 17 of 77 -- [2024] SADC 115 14 56 Mr Albert Yuen sent an email to Lucas Giannotti dated 25 July 2016.18 Which provides:- ‘Hi Lucas: I had visited your web site. I had seen most of the projects in your site. The agent log in may not have been activated. I will try again tomorrow. Obviously you property management which will be useful for overseas clients. Obviously the critical thing will be whether you can convince developer who engage you as master agent to spend marketing fee with us, whether we can deliver after using these marketing fee to deliver unconditional contract, what kind of commission is on offer, commission on sale without marketing cost and with marketing cost, I assume the comm will be normal at 50% after unconditional contract and 50% at settlement. Chance of projects are exclusive to us or open agent portal to other agents in Malaysia? Regards Albert’ 57 Albert Yuen was aware that Urban was the master agent. His evidence was that Global’s role was to find a purchaser and not to act as an agent. Urban represented the developer. It was for Urban to secure the funds to pay Global and that was not the business of Global. 58 There was no contact between Global and any vendor. Global relied upon Urban to make its own arrangements in order to fulfill its obligation. Global was not put on enquiry about the refusal of Urban to pay their fee. In the mind of Mr Albert Yuen, it was a consultant’s fees. The first arrangement is recorded on the document entitled Services Agreement.19 At page 7 of the document (page 328 of the exhibit) the payment entitlement of Global is described in Item E as an amount of commission. There was also a clawback arrangement of $5,000 per unit if the units did not sell.20 The clawback amount was deducted from consultant’s fee, not the marketing fee. 59 Incentives were paid in accordance with the policy of the Urban.21 If Global obtained 20% of the deposit it was entitled to receive 100% of its commission22 but this was not unusual. Global had authority to offer prospective purchasers the chance to pay a deposit in instalments. This would only be finally agreed by confirmation from Mr George of Urban. Insofar as there was any departure from any contractual aspect as stipulated by Urban, such as price, deposit amount, time or the like, it was necessary for Global to obtain the authority of Urban before any such ‘amendment’ became part of any contract offer. And under Malaysian law, it was necessary for Mr Yuen as CEO to execute any such documents. 60 Global had a role in securing the forwarding of any deposit to the appropriate trust account of a solicitor. The standard form signed by the prospective purchaser 18 Exhibit A7, Vol 1, page 301. 19 Exhibit A7, Vol 1, page 322 to 328 dated 17 November 2016. 20 Exhibit A7, Vol 1, page 417, Item E. 21 412 of Exhibit A7, Volume 9, PP 7389-7390. 22 Exhibit A7, Vol 1, pg 320. -- 18 of 77 -- [2024] SADC 115 15 connected with the deposit was forwarded to Urban to deal directly with the solicitor, and that the contract amount receipt was given to the purchaser.23 61 Mr Albert Yuen was familiar with a Form 1 Vendor statement (and its equivalent) and he had seen many versions of them in different jurisdictions.24 Global completed some parts of this document but in the main these were completed by and sent to Global by Urban with a request to deliver them to the purchasers who had executed contracts. For Realm Apartments the time period for service (SA law) was 48 hours and Urban requested Austral and Global to secure delivery of and then obtain proof of service of these necessary Forms. 62 As well, the conveyancer Ms, Helen Wu was recommended by Urban and on instructions of Urban, this name was provided to the purchasers by Global. Ms Wu was not otherwise known to Global. 63 When any issues in conveyancing arose they would be dealt with between purchaser and vendor. There were some communication between Global and solicitors in South Australia, for example, about stamp duty issues. On occasion, an extension of settlement was sought.25 There were arrangements made by Global for the electronic transfer of funds,26 and there were communications about valuations being obtained.27 All of this work was done with the authority of Urban and at the request, usually, of the purchasers. This, on occasion included assisting a purchaser to find finance.28 Another involvement was assisting the purchaser to obtain FIRB approval.29 This was all part and parcel of the usual work done by Global. It was not out of the ordinary. The same arrangement pertained for work done in Victoria and the solicitors involved were Mills Oakley. 64 Mr Darcy Baines Bruce gave evidence for the applicants as an expert valuer, and prepared a report.30 65 The instructions to Mr Bruce were summarised by him as follows:-31 INSTRUCTIONS Written instructions were received on 4 February 2022 from Andrew Brown, Partner, Mills Oakley. A supplementary letter of instruction was received on 25 March 2022. Those instructions requested me to provide expert evidence in quantifying the commercial value of the services that Austral Pacific Investment (H.K.) Limited (hereinafter referred 23 Exhibit A7, Vol 1, page 495. 24 Exhibit A7, Vol 1, page 366 et seq. 25 Exhibit A7, Vol 8, page 6146-6179. 26 Ibid pg 268. 27 Ibid pp 6410. 28 Exhibit A7, Vol 8, page 6113. 29 Exhibit A7, Vol 5, pp 3220-3221. 30 Exhibit A2. 31 Exhibit A7, Vol 1, page 111. -- 19 of 77 -- [2024] SADC 115 16 to as “Austral Pacific”) and Global Link Properties SDN.BHD (hereinafter referred to as “Global Link” (collectively “the Applicants”),, provided to Urban Activation Pty Ltd (hereinafter referred to as “Urban Activation”) (“the Respondent”) and the loss and damage they suffered form non-payment of those services. Specifically, I am requested to quantify separately the commercial value of: 1. The Realm Adelaide Services; 2. The Tao Apartment Services; and 3. “The Sovereign Blackburn Services” A copy of the Letter of Instruction is attached to this report and marked Appendix 1. A copy of the Supplementary letter of Instruction is attached to this report and marked Appendix 2. 66 Both the Appendix 1 – Letter of instruction and Appendix 2- Supplementary Letter of Instruction were tendered exhibits.32 67 After describing the contractual arrangements the terms of which are described above, Mr Bruce identified that in the Realm Apartments, 43 binding purchase contracts were made and the commission payable was in the sum of ($479,868.25 not $531,737.50 as claimed) and that 32 apartments settled creating entitlement to a money claim of $356,537.50 (in respect of the second tranche of entitlement). 68 The report of Mr Bruce addressed the question of the market demand for such accommodation and Mr Bruce then opined about commission rates. He said as follows:-33 My research, general knowledge and experience leads me to suggest that there has been insufficient demand from the South Australian, and indeed, Australian marketplace for larger developments to be sold exclusive to Australian nationals in a timely manner. Experienced marketers of larger projects recognise that, in order to achieve a satisfactory level of sales, overseas investors need to be sought. It is also recognised that most projects post-approval, but prior to building commencement require a certain level of sales, referred to as “off-plan” before either external or internal finance approval can be obtained to commence building works. Such a level of sales might normally be in the order of 40-70 %. It is also noted that traditional Adelaide and Australian purchases are reticent about buying an “off-plan”, possibly because of general conservative nature, preferring to wait until either building works have commenced or finished, providing them with more certainty. It has been demonstrated, however, that overseas buyers, particularly those from the Asia region, generally, do not adopt the same conservative nature, of the Australian purchasers. Many such Asian purchasers have, in recent years, been anxious to invest money in 32 Exhibit A7, Vol 1, pages 125-142. 33 Exhibit A7, Vol 1, pages 115-117. -- 20 of 77 -- [2024] SADC 115 17 Australian property for the purposes of either, receiving a return of their investment or commonly to provide accommodation for family members intending to study in South Australia. The result has been a relatively strong market to purchasers out of the Asian region generally for residential apartments in South Australia. Notwithstanding the above, it is noted that a number of relatively small developments in the Adelaide metropolitan area have been proved to be viable and successful without relying on overseas sales rather relying on local sales only. However, generally, larger developments require off-plan sales and ongoing sales of foreign investors. 69 In relation to the Tao Apartment developments, the contracts for 9 apartments were executed, the deposits paid and an initial claim for $105,625 was made. On settlement a further amount of $105,625 was claimed in respect of nine contracts. At page (119), Mr Bruce opined as follows:- THE SOVERIGN BLACKBURN DEVELOPMENT BACKGROUND I do not consider it necessary to repeat all of the background points made in the Letter of Instruction (points 38 to 40, pages 6 and 7). Suffice to say the Applicants were appointed to carry out marketing works to assist the Respondents in procuring sales of apartments at a development situated at 1-5A Queen Street, Blackburn, Victoria. It was agreed that payment for these services would be made based on 2.5 % commission payable within thirty (30) days of contract exchange and a further 2.5 % payable within thirty (30) days of settlement taking place. It is noted that two binding contracts for apartments were provided by the Applicants at prices of $499,000 and $585,000. Subsequently, both settled with the purchasers, and commissions, as agreed have been paid by the Respondent to the Applicant. 34 THE SOVERIGN BLACKBURN DEVELOPMENT35 The building has now been completed and comprises 79 apartments over 5 floors and is set out as follows: LEVEL AREA TOTAL Level Sub ground Car parking Level Ground Floor 18 apartments 18 Levels 1 to 2 19 apartments per floor 38 Level 3 18 apartments 18 Level 4 5 apartments 5 TOTAL 79 34 Exhibit A7, Volume 1, page 119. 35 Exhibit A7, Volume 1, page 120. -- 21 of 77 -- [2024] SADC 115 18 The Applicants negotiated two sales on level Ground. COMMISSION I refer to my comments above under the heading ‘THE REALM DEVELOPMENT COMMISSION’. I refer also to my earlier comments regarding Support Companies’ commissions of between 4 and 9 %. CONCLUSIONS I have been asked to quantify the commercial value of the services of the Applicants provided to Urban Activation and the loss and damage they suffered from non-payment for those services. Specifically, and separately the commercial value of: 1. The Realm Adelaide Services 2. The Tao Apartment Services 3. The Sovereign Blackburn Services As outlined within this report, commission paid to foreign companies (herein referred to as “support Companies”) vary between 4 % and 9 %. The level of such commission is seen by the Australian agents generally as far greater than they might achieve for negotiating similar apartment contracts. This level of these Support Company commissions is driven by a marketplace within the Industry both within Australia and overseas. The support Company commissions are also determined by an often-high number of individuals that might have to be remunerated for any one contract negotiation. This is often explained in Australia as “the way of doing business in Asia”. I therefore consider the level of commissions and timing of commission payments to be fair and reasonable in the marketplace. I also consider that the commercial value of the services of the Applicant provided to the Respondent should be calculated at the rate of: 1. 2.5 % of the contract price payable at the time of the signing of an unconditional contract (First Commission Entitlement, FCE) plus; 2. 2.5 % of the contract price payable at the time and subject to settlement of each contract (Second Commission Entitlement, SCE).36 He then made the following calculations page 121.37 36 Exhibit A7, Vol 1, pages 120-121. 37 Exhibit A7, Volume 1, page 121-122. -- 22 of 77 -- [2024] SADC 115 19 CALCULATIONS THE REALM ADELAIDE SERVICES Realm Adelaide FCE Note 1 $479,868.25 Realm Adelaide SCE Note 2 $356,937.50 LESS Amount Paid Note 3 ($31,243.25) AMOUNT OWING $805,562.50 THE TAO APARTMENT SERVICES Tao Apartment FCE Note 4 $105,625.00 Tao Apartment SCE Note 5 $105,625.00 LESS Amount Paid ($105,625.00) AMOUNT OWING $105,625.00 THE SOVERIGN BLACKBURN SERVICES Sovereign Blackburn FCE Note 7 $27,100.00 Sovereign Blackburn SCE Note 8 $27,100.00 LESS Amount Paid ($13,950.00) AMOUNT OWING $40,250.00 Note 1: Invoices sent March to November 2017 totalling $531, 737.50 but calculated at $19,194,730 @ 2.5 = $479,868.25. I have assumed that the difference between the invoices total and the calculated FCE is for additional agreed expenses. Note 2: I am unable to calculate this amount as I am unaware of the actual 32 contracts settled. I have adopted the invoice amounts dated July to November 2020. Note 3: Amount paid 4 October 2019. Note 4: Calculated at $4,225,000 @ 2.5 % = $105,625 in accordance with invoice sent May to July 2017. Note 5: Calculated at $4,225,000 @ 2.5 % = $105,625 in accordance with invoice sent 19 January 2019. Note 6: Amount paid May to August 2017. Note 7: Calculated at $1,084,000 @ 2.5 % = $27,100. NB: Actual invoices sent 15/08/17 - $14,625. 23/05/18 - $14,625 and 11/08/18 - $24,950. Total $54,200 (=total of notes 7 and 8 or FCE plus SCE). Note 8: Calculated at $1,084,000 @ 2.5 % = $27,100 (refer note 7). Note 9: Amount paid 12 October 2017. -- 23 of 77 -- [2024] SADC 115 20 70 In cross examination, Mr Bruce said that agents retained by developers in Australia commonly engage the services of support companies in and outside of Australia and the agents negotiate a rate of payment usually by a commission agreement over and above anything the developer pays to them by commission in Australia. 71 The usual arrangement is that a commission arrangement is settled between the developer and the Australian agent and then a second arrangement is established between the agent and the support company. 72 In examples given by Mr Bruce, a Hong Kong agent was paid 5 % commission on sales connected with an Adelaide development. The Australian agent was paid 2 %. The developer made available a pool of commission of 7 % under an agreement with the local agent. Where the local agent made the sales, then, in that instance, the commission amount payable to the local agent was 2 %. 73 This remained the position even if the sale was provided through the overseas agents who/which was paid a 5 % commission. Thus, in the usual course of things, if the overseas support company is not paid, the return for the developer increases. Mr Bruce said that Australian agents found it necessary to use service support companies because the Australian market could not support or sustain the purchase of these units at the asking price. 74 The unchallenged evidence of Mr Bruce was that the Australian market could not support or sustain such a development of the size of Realm Apartments. A second reason is that Australian purchasers are generally unwilling to buy ‘..off the plan…’. In general, Australian purchasers want to see an almost complete building before signing an unconditional contract. Asian based purchasers are generally prepared to enter into unconditional ‘off the plan’ contracts. 75 Mr Bruce opined (and none of his opinions were seriously challenged) that this is the reason why the support companies are introduced. In Australia, construction funding usually depends on obtaining unconditional sales of 60-65 % of the premises on offer and this is now assisted by support companies operating under these arrangements in the Asian market. 76 There was no challenge of substance to any of the expert views and opinions expressed by Bruce and I accept the opinions that he had expressed. He was an impressive witness. 77 So also do I find that each of the officers of the appellant companies Mr David Yuen and Mr Albert Yuen were honest, truthful and reliable witnesses. They gave their evidence in a truthful, reliable way, with equanimity and, I unhesitatingly accept their evidence. -- 24 of 77 -- [2024] SADC 115 21 78 The respondent first called Mr Benjamin James Small in evidence. His evidence in chief is a witness statement dated 9 August 2023.38 79 Mr Small was the Sales Manager of Urban. He is a registered land agent in Australia and New Zealand. In the 2011 he was appointed Sales Manager of the Realm Project by Urban. He was aware that both Austral and Global were involved in the Realm Project and he had regular communications with officers and staff from these companies. The principal discussion topics were construction updates, maintaining stock lists, giving settlement updates and arranging pre settlement inspection. He also provided information to Global and Austral on request. These included pre settlement inspection arrangements for purchasers and the names of mortgage brokers operating globally. Urban were the agents appointed by the vendor, and it would be surprising if Mr Small did not receive and then act upon such requests. The aim of the vendor after all, was to sell the ‘whole’ building. 80 Mr Small had direct contact with the vendor’s solicitor, Lynch Meyer. He received copies of documents executed by the purchasers which had the legal status of an offer to the vendor. If asked he made suggestions to Austral and Global in response to their enquires. 81 I was not assisted by the evidence of Mr Small. He was not privy to any discussions with the representatives of the applicants about any particular matters. For the duration of the matters the subject of this decision, he was based in Adelaide and dealt with the mechanical aspects of sales. I have not accepted into evidence any of the hearsay aspects of his witness statements namely paragraphs 22, 23, 24, 25 and 29. There are other paragraphs which contain a summary of documents and other forms of inadmissible evidence. I have given these paragraphs the weight that I considered appropriate, which in this case varied between negligible and none. Mr Small was not cross examined. 82 Mr Matthew George also gave evidence for the respondent.39 He is the sales and marketing manager for that company. His main role is to source and secure projects for Urban. He works with a vendor to initiate, settle and implement a sales and marketing strategy for a development. Mr George had for some time been earlier aware of the existence of Austral and Global and the involvement of Global in the Brisbane and Melbourne property markets. 83 The evidence of Mr George was that in late 2016, Urban reached out to Austral, although Mr George does not say why.40 I think that, self evidently, Urban needed assistance to find buyers of unit developments in Australia, but outside of the usual pool of available purchasers in Australia. Urban needed to engage support entities such as the applicants to achieve sales. It is unclear to me why Mr 38 Exhibit A7, Vol 1, page 103-106. 39 Exhibit A7, Vol 1, page 87-100. 40 Exhibit A7, Vol 1, page 79, para 13. -- 25 of 77 -- [2024] SADC 115 22 George was not more forthcoming in his evidence about these arrangements. This is surprising. At paragraph 15 of his statement Mr George says:- ‘Once Austral and Global Link had been engaged on the projects detailed below, they would promote the Australian properties and projects through advertisements in newspapers, social media and by holding events, such as marketing events held in Singapore, Malaysia, and China.’41 84 In this evidence Mr George says nothing about the retainer except that it occurred. The topic of the actual retainer is central to the issues I am required to decide in this action. 85 Mr George said that any purchaser introduced by Austral or Global did not directly negotiate with Urban. This is not a revelation but it is not strictly correct. The documents sent from Austral and Global were contractual offers delivered to the developer the principal of Urban. It was a decision for that principal whether such offers were accepted. That decision necessarily involved its agent, Urban, and communication with the offeror. Urban was engaged by the developer Eklipse to promote the Realm Project and obtain retail sales of the apartments in the development. 86 In his statement42 Mr George says that part of Urban’s role was to assist Austral and Global to carry out sales they had provided. Implicitly, Mr George suggests that Urban’s role was secondary. I am unable to accept this evidence of Mr George. Urban was the principal and primary agent involved in the sale this whole property. Any offers obtained by them outside of Australia required acceptance and execution by or on behalf of Eklipse. 87 A service agreement was executed by Urban and Global dated 17 November 2016.43 On 19 November 2016 Urban entered a similar agreement with Austral.44 These agreements both reflected an agreement to appoint the applicant companies as a ‘consultant’. 88 The relevant paragraphs are as Paragraphs 1, 2, 3, 4, 6, 9, 13, 19, 20 of Exhibit A7, Volume 1 (pages 322-327 and pages 342-346) as follows:- SERVICES AGREEMENT PARTIES The Person specified in Item A in Schedule 1 (Agent) AND The person specified in Item B in Schedule 1 (Consultant) 41 Exhibit A7, Vol 1, page 89, paragraph 15. 42 Exhibit R5, paragraph 24. 43 Exhibit A7, Vol 1, page 322-327. 44 Exhibit A7, Vol 1, page 342-346. -- 26 of 77 -- [2024] SADC 115 23 IT IS AGREED as follows: 1. DEFINITIONS In this Agreement: (a) Property means: one or more of the units, apartments, townhouses or any dwelling to be constructed on the Developer’s property located at the address specified in Item C in Schedule 1. (b) Commencement Date means: the commencement date of this Agreement being the date this Agreement is executed by both parties. (c) Marketing Services means: procure a buyer of the Property during the period of the agreement and obtain the execution of the Contract of Sale by the buyer for the purchase of the Property. (d) Developer means: the person specified in Item D in Schedule 1. (e) Contract of Sale means: a contract for the sale of real estate relating to the Property. 2. APPOINTMENT (a) The Agent hereby appoints the Consultant to perform Marketing Services in respect of sale of the Property on the same terms and conditions of this Agreement. (b) The Consultant’s appointment pursuant to this Agreement shall be for a period of 60 days commencing on the date of this Agreement, unless extended by mutual agreement. (c) The Consultant acknowledges that the appointment is non-exclusive and that the Agent has and may continue to appoint other persons to perform Marketing Services in respect of sale of the Property. 3. OBLIGATIONS OF THE CONSULTANT In performance of the Marketing Services, the Consultant must: (a) confirm with the Agent that a Property is available for purchase before allowing a purchaser to execute a Contract of Sale, to purchase that Property; (b) only use information about the Property provided by the Developer or its agents, including the Agent, pursuant to clause 3(d); (c) pay its own marketing and other expenses incurred in performing the Marketing Services; (d) not make any representation to purchasers or prospective purchasers of the Property on matters not specifically represented by the Developer or its agents, including the Agent, in writing; and (e) comply with all applicable laws relating to the sale and marketing of the Property. 4. AGENT’S OBLIGATIONS The Agent shall: (a) provide the Consultant with copies of the Contract of Sale for execution by prospective purchasers; and (b) allow the Consultant access to relevant materials for the purposes of marketing the Property, which may include brochures, plans and elevations, perspectives, -- 27 of 77 -- [2024] SADC 115 24 indicative construction and finishes schedules, project fact sheets and research papers, availability and price schedules, stamp duty savings, outgoings and owners corporation estimates and depreciation schedules. 6. COMMISSION (a) In consideration of the Consultant providing the Marketing Servcices, the Agent shall pay the Consultant commission in respect of the sale of any Property where such sale was procured by the Consultant in two 50% payments as follows: (i) 50 % of the amount specified in Item E in Schedule 1, payable within 30 days of the later of: (A) a Contract of Sale being entered into between the Developer and a Purchaser, which Contract of Sale must: (I) be properly completed and properly executed by the Purchaser; (II) have a purchase price which is no less than the price for that Property as notified by the Agent; and (III) be unconditionally binding on the Purchsaer. (B) the Developer’s solicitor receiving a 10% deposit and cleared funds (or qualifying bank guarantee) in respect of that Contract of Sale; or (C) the Agent receiving payment from the Developer (ii) 50% of the amount specified in Item E in Schedule 1, payable within 30 days of the later of: (A) Settlement of the Property occurs; or (B) The Agent receiving payment from the Developer; (b) For the avoidance of doubt, the Consultant acknowledges that: (i) the Consultant is not entiled to commission merely by introducing a Purchaser to the Agent, as the Consutlant must actually procure the Purchaser to execute a Contract of Sale and deliver a 10% deposit included clear monies in order to be entitled to commission; and (ii) If the Contract of Sale fails to settle for any reason: (A) The Consultant is entitled to retain the commission received pursuant to clause 6(a)(i), subject to clause 6(b)(ii)(C); (B) The Consultant is not entitled to payment of any commission pursuant to clause 6(a)(ii); (C) If the Developer requires the Agent to return any funds upon demand the Consultant must return to the Agent within 7 days, any commission received pursuant to clause 6(a)(i). (c) The Agent’s obligation to pay commission pursuant ot this Agreement is subject to the Consultant providing an Australian tax invoice for the amount due. (d) The Agent’s obligation to pay commission pursuant to this Agreement is subject to the Agent receiving payment from the Developer. -- 28 of 77 -- [2024] SADC 115 25 9. MARKETING BY THE DEVELOPER The Developer is not restricted in any way in the manner in which it and its agents, including the Agent, market the sale of the Property. 13. NATURE OF AGREEMENT Nothing in this Agreement is intended or will be construed as constituting a relationship of agent and principal, employer and employee, joint venture or partnership alliance between the parties. 19. SEVERABILITY If any covenant, undertaking or condition of this Agreement is found to be void or unenforceable at law, that covenant, undertaking or condition will not affect any other term of this Agreement and as, as far as is possible, will be read down to the extent required to make it enforceable. If necessary, the parties will, in good faith, negotiate a valid and enforceable replacement term to express their intention. 20. ENTIRE AGREEMENT This Agreement sets out the entire agreement between the parties concerning all matters dealt with by it, and it supersedes any prior agreement between the parties in regard to those matters. -- 29 of 77 -- [2024] SADC 115 26 SERVICES AGREEMENT PARTIES The Person specified in Schedule 1 (Agent) AND The person specified in Item B in Schedule 1 (Consultant) Austral Pacific Investment (H.K) Ltd IT IS AGREED as follows: 1. DEFINITIONS In this Agreement (a) Property means: one or more of the units, apartments, townhouses or any dwelling to be constructed on the Developer’s property located at the address specified in Item C in Schedule 1. (b) Commencement Date means: the commencement date of this Agreement being the date this Agreement is executed by both parties. (c) Marketing Services means: procure a buyer of the Property during the period of the agreement and obtain the execution of the Contract of Sale by the buyer for the purchase of the Property. (d) Developer means: the person specified in Item D in Schedule 1. (e) Contract of Sale means: a contract for the sale of real estate relating to the Property. 2. APPOINTMENT (a) The Agent hereby appoints the Consultant to perform Marketing Services in respect of sales of the Property on the terms and conditions of this Agreement. (b) The Consultant’s appointment pursuant to this Agreement shall be for a period of 60 days commencing on the date of this Agreeement, unless extended by mutual agreement. (c) The Consultant acknowledges that the appointment is non-exclusive and that the Agent has and may continue to appoint othe persons to perform Marketing Services in respect of sales of the Property. 3. OBLIGATIONS OF THE CONSULTANT In performance of the Marketing Services, the Consultant must: (a) confirm with the Agent that a Property is available for purchase before allowing a purchaser to execute a Contract of Sale, to purchase that Property; (b) only use information about the Property provided by the Developer or its agents, including the Agent, pursuant to clause 3(d); (c) pay its own marketing and other expenses incurred in performing the Marketing Services; -- 30 of 77 -- [2024] SADC 115 27 (d) not make an representation to purchasers or prospective purchasers of the Property on matters not specifically represented of the Developer or its agents, including the Agent, in writing; and (e) comply with all applicable laws relating to the sale and marketing of the Property. 4. AGENT’S OBLIGATIONS The Agent shall: (a) provide the Consultant with copies of the Contract of Sale for the execution by prospective purchasers; and (b) allow the Consultant access to relevant materials for the purposes of marketing the Property, which may include brochures, plans and elevations, perspectives, indicative construction and finished schedules, project fact sheets and research papers, availability and price schedules, stamp duty savings, outgoings and owners corporation estimates and depreciation schedules. 6. COMMISSION (a) In consideration of the Consultant providing the Marketing Servcices, the Agent shall pay the Consultant commission in respect of the sale of any Property where such sale was procured by the Consultant in two 50% payments as follows: (i) 50 % of the amount specified in Item E in Schedule 1, payable within 30 days of the later of: (A) a Contract of Sale being entered into between the Developer and a Purchaser, which Contract of Sale must: (I) be properly completed and properly executed by the Purchaser; (II) have a purchase price which is no less than the price for that Property as notified by the Agent; and (III) be unconditionally binding on the Purchsaer. (B) the Developer’s solicitor receiving a 10% deposit and cleared funds (or qualifying bank guarantee) in respect of that Contract of Sale; or (C) the Agent receiving payment from the Developer (ii) 50% of the amount specified in Item E in Schedule 1, payable within 30 days of the later of: (A) Settlement of the Property occurs; or (B) The Agent receiving payment from the Developer; (b) For the avoidance of doubt, the Consultant acknowledges that: (i) the Consultant is not entiled to commission merely by introducing a Purchaser to the Agent, as the Consutlant must actually procure the Purchaser to execute a Contract of Sale and deliver a 10% deposit included clear monies in order to be entitled to commission; and (ii) If the Contract of Sale fails to settle for any reason: (A) The Consultant is entitled to retain the commission received pursuant to clause 6(a)(i), subject to clause 6(b)(ii)(C); -- 31 of 77 -- [2024] SADC 115 28 (B) The Consultant is not entitled to payment of any commission pursuant to clause 6(a)(ii); (C) If the Developer requires the Agent to return any funds upon demand the Consultant must return to the Agent within 7 days, any commission received pursuant to clause 6(a)(i). (c) The Agent’s obligation to pay commission pursuant ot this Agreement is subject to the Consultant providing an Australian tax invoice for the amount due. (d) The Agent’s obligation to pay commission pursuant to this Agreement is subject to the Agent receiving payment from the Developer. 9. MARKETING BY THE DEVELOPER The Developer is not restricted in any way in the manner in which it and its agents, including the Agent, market the sale of the Property. 13. NATURE OF AGREEMENT Nothing in this Agreement is intended or will be construed as constituting a relationship of agent and principal, employer and employee, joint venture or partnership alliance between the parties. 19. SEVERABILITY If any covenant, undertaking or condition of this Agreement is found to be void or unenforceable at law, that covenant, undertaking or condition will not affecting any other term of this Agreement and as, as far as is possible, will be read down to the extent required to make it enforceable. If necessary, the parties will, in good faith, negotiate a valid and enforceable replacement term to express their intention. 20. ENTIRE AGREEMENT This Agreement sets out the entire agreement between the parties concerning all matters dealt with by it, and it supersedes any prior agreement between the parties in regard to those matters. 89 Then on 20 February 2017 Urban and Austral executed a document entitled ‘Realm Adelaide Marketing Proposal’.45 Which was an adjustment to the earlier agreement. It provided as follows:- 45 Exhibit A7, Vol 1, p 422. -- 32 of 77 -- [2024] SADC 115 29 90 These documents are signed by Mr George on behalf of Urban as ‘acceptor’, and not the vendor, Eklipse. Urban thereby bound itself to pay Austral in accordance with their terms. Mr George said that its purpose was to clarify ‘events’ in Singapore, China, and Malaysia. It is not clear to me what is meant by the expression ‘events’ or what was to be clarified. Each of Austral and Global were informed by Urban of the asking prices for a property, the property specifications, options for purchase, property selections and incentives. The firm of solicitors Lynch Meyer was retained on behalf of the vendor and that firm prepared the conveyancing contracts and documents used in the preparation of any prospective purchaser’s offers. Separately, the vendor provided a rental guarantee upon which prospective purchasers could rely and these were also prepared by Lynch Meyer. 91 In the usual course of things, a contract offer was put to the vendor and, if accepted, was executed by it, returned to the solicitors, Lynch Meyer, who then prepared the Forms 1 that were all forwarded by that firm to Austral and Global. Lynch Meyer received direct payment of the deposits payable by the purchasers under the contracts all of the documentation connected with the completion of the sale was handled by Austral and Global at the ‘purchasers end’. 92 The same arrangements were put into place with Global to find purchasers for the Sovereign Blackburn apartments in Blackburn Victoria, but using the firm -- 33 of 77 -- [2024] SADC 115 30 of solicitors Maddocks Solicitors acting for the vendor and the firm of solicitors Mills Oakley acting for the purchasers. In July 2017, Urban through Mr George retained Global to procure purchasers for the Sovereign Blackburn development. The terms of this retainer were in largely the same terms and any differences are insignificant. 93 In cross examination Mr George agreed that the contract for sale of any property was only returned when executed by the vendor, signifying legally the acceptance of the offer. That was always a matter for the vendor. Any offer put to the vendor through Urban Austral or Global was subject to guidelines promulgated by Urban and given to the applicants. Mr George insisted that these were provided by the vendor’s lawyer. I am unable to accept that evidence. There were multiple vendors. It is beyond peradventure that each would not have had the same guidelines. I find that they were fashioned by Urban even though they may well have been drafted in a generic way to suit a particular vendor. I am satisfied that this was convenient for Urban given that it was dealing with multiple sites for sale. I therefore reject the evidence of Mr George and accept that the applicants were at liberty to negotiate outside of these guidelines. It was always a matter for the respective vendor about whether terms proffered were acceptable. In the area of commercial real estate contract sales this is also not a revelation. Any request by a prospective purchaser for terms outside of the guidelines established by Urban with the vendor would be notified to Urban which then instructed Global and Austral. These instructions also included the entity to which the invoice from Global or Austral was to be delivered.46 94 Mr George appeared to suggest that the vendors were in reasonably consistent contact with Global and Austral.47 I am unable to accept this evidence. The documents of retainer discloses that Urban was the vendor’s agent and, in this case, Global was a consultant appointed to perform marketing services offered, defined to mean the procuration of a purchaser. 48 Procuring colour schemes was not part of the contract obligation but I am satisfied this was what was done by the applicants. So also did they involve themselves in procuring stamp duty advice and about FIRB requirements. From the viewpoint of commercial real estate contracts generally, it would be surprising that Austral and Global would not lend assistance to any purchasers based in Asia about such matters or on any similar matters. Those purchasers were introduced from Asia, the projects were in different parts of Australia and, there were differences of language, culture and legal requirements. 95 Assisting the purchasers to obtain finance was not something the applicants were contractually bound to do and again from a commercial and, so, common sense perspective, this occurred for the same reasons. I reject any suggestion or attempt by Mr George to the contrary.49 46 Exhibit A7, Vol 1, page 391. 47 T113.20-25. 48 For example, Exhibit A7, Vol 1, p 322. 49 T116. -- 34 of 77 -- [2024] SADC 115 31 96 I have earlier assessed the unchallenged evidence of Mr Bruce, the expert valuer, whose evidence I have accepted. Mr George was cross examined about the level of commission which Urban expected to achieve on sales. His initial response was that commissions were paid to Urban by the vendors. Realm Apartments paid between 3.3 % and 7.7 %. Tao Home Apartments paid between 3.3 % and 7.7 % and Sovereign Blackburn paid between 1.1 % and 6.6 %.50 97 This is a range of commissions entitlements. It is not absolute and so the rate payable is dependant on other determinants. These included whether [agents] referred buyers to Urban and whether Urban directly procured the sale. In the latter case the current commission rate was payable. In the former case, an amount was payable to the referrer in the amount determined between Urban and that referrer. 98 The rate of commission payable by the vendor for the apartments for which Austral and Global referred purchasers was 7.7 %. This amount was received by Urban from the vendor of the units. The failure to remit to Austral or Global is the basis of this claim. By 2021/2022 Urban had received the full amount of the 7.7 % commission on the sale price paid to the vendors for the purchase of the respective units. 99 The difference of between 6.6 % and 7.7 % paid by the vendor of the Tao Home Apartments project was that because of slow sales, the vendor increased the rate of commissions payable. Each of the developers were made aware that the amount of commission paid would be shared.51 In giving this evidence, I understood Mr George to be saying that the identity of the applicants was not a matter shared with the vendors, only that Urban were ‘sharing commissions’. At many levels this evidence is of little or no credibility or weight. As Mr Bruce said it was necessary to sell those projects ‘off the plan’ into the Asian market because of the absence of willing Australian purchasers to buy ‘off the plan’ (when compared to Asian purchasers). 100 The vendor had sales targets and it was committed to a development which it needed to be successful and this was to be achieved through sufficient sales of units. If Urban could not succeed in finding purchasers, its retainer could be terminated. Mr George said that Austral and Global were approached some months after the initial contract between Urban and the vendor. Prior to that time the respondents relied upon their own resources and ‘channel’ agents. I understood that the effect of this evidence, at least in part, was to demonstrate that the applicants were only several amongst many agents, capable of introducing purchasers for the properties. 101 There is an obvious flaw in this evidence and in that reasoning of Mr George. The applicants were not approached to act until ten months after the initial vendors retainers were executed with Urban. They were consequently not retained 50 T116.29-33. 51 T119.28. -- 35 of 77 -- [2024] SADC 115 32 following the successful sale of units as a form of back stop in the event that the balance of unsold units remained. Rather they were retained because the units were not selling off the plan which was necessary to obtain bank and other funding.52 The bank and other funding for such developments requires a 60-65 % (or thereabouts) sales commitment from purchasers; and sales were necessary for the properties to proceed to construction. These required sales had not been generated within the usual channels. I do not accept this evidence of Mr George. 102 Mr George denied the proposition put to him that it was of no concern to Urban whether the applicants were licensed to act as agents. He claimed, they were marketing and selling in Australia, the place where the properties were situated. He denied that the properties were being marketed in Asia and contended that this was the meaning of clause 3(e) of the Services Agreement which provides:- 53 ‘comply with all applicable laws relating to the sale and marketing of the Property’ 103 There are a number of weaknesses in that evidence. That there is no presumption about applicable laws to which reference is made only a general term which will be given its natural meaning and understood in the commercial context of the contract. The contract characterises Urban as the agent of a developer and that the applicants must in all things comply with the specific remit of the respondent as the developer’s agent. 104 Mr George then said that despite Urban being the actual registered agent for the vendor, he did turn his mind to the question whether Austral and Global were registered real estate agents in Australia. If he did so, he appears not to have made any enquiry about that issues with anyone involved in applicant companies. He said he expected experienced businesspeople to have appropriate credentials. If that be so, it is difficult to comprehend why he would turn his mind to the issue or why, having done so, he did not pursue any inquiry about the issue. 105 I am unable to accept this evidence of Mr George as I consider it a reconstruction of events by him in an attempt to place Urban’s position in the best possible light. In cross examination Mr George said that he assumed the applicants were licensed but he then did not raise the issue with them. It is peculiar and quite implausible in my view in this situation to have turned his mind to the issue which, at the time was so important to him, made the assumption which was based upon his expectation and then make no enquiry to verify the assumption. This is an obvious and unreliable reconstruction which has no credibility. 106 Mr George then compounded this lack of credibility when he confirmed his affidavit evidence that if he had known that the Austral and Global were not registered or licensed, he would not have engaged their services until they were. This evidence is not true. In August 2018 the respondents were represented by the firm of solicitors LSK Lawyers and at the time, the applicants were represented by 52 C.f. The unchallenged evidence of Mr Bruce. 53 Exhibit A7, Vol 1, p 322-323. -- 36 of 77 -- [2024] SADC 115 33 Mills Oakley solicitors. In a letter to that firm of 2 August 2018 LSK Lawyers said:-54 ‘We refer to previous correspondence. We are instructed that despite your letter dated 26 July 2018 our client continues to maintains its position and denies that it is indebted to your client in the sum of $531,112.50. Our client remains of the view that the invoices issued by your client include claims for commission in respect of contracts of sale that were not arranged by your client. Further we are instructed that our client does not accept your client’s assertion that it was merely providing ‘marketing services’ and therefore is not required to comply with or be regulated by the relevant provisions in the Land Agents Act 1994 (Land Agents Act).’ 107 It is implicit and I find that the letter was written on the instructions of Urban. Notwithstanding, following this correspondence, on 16 January 2019 Mr George sent an email to Mr Albert Yuen seeking provision of the applicant’s invoices for settlement commissions.55 This email was sent five months after the respondent’s solicitors’ letter of 2 August 2018. I accept the applicants’ contention and, as a result reject the evidence of the respondent to the contrary,56 that the request for the invoices was made in order to ensure completion of settlements and so the earning of commission by Urban. The exchange at T126.18-.28 inclusive is instructive:- Q. Why were you asking them for the invoices for settlement commissions if, according to you, you would never have paid them once you knew they were licensed. A. I think there was some communication between Albert and I, I'm not sure, I can't give you - I can't remember back to 2019, I can't give you clarity around that, but I assume that there had, potentially, been other discussions post August 2018. I mean, I feel it's a big jump in there somewhere, for me to be having that discussion when we're already conversing via lawyers back in 2018 for Albert to also be conversing with me in that way. 108 When confronted by the compounding effect of the inconsistencies in his own evidence, Mr George feigned a lack of memory which serves him very poorly. 109 Mr George then further compounded his absence of credibility. On 17 July 2019, Mr George sent the following email to Mr Albert Yuen.57 54 Exhibit A7, Vol 3, page 1747. 55 Exhibit A7, Vol 3, p 2029. 56 T126.18-.29. 57 Exhibit A7, Vol 3, p 2395. -- 37 of 77 -- [2024] SADC 115 34 110 Mr George agreed that at this time and despite those ‘great concerns’ he gave no indication of his intention not to pay the contractual payment due to the applicants. He attempted to dissemble by pointing out that a dispute is apparent. That may be so, but the dispute is unconnected with the question of whether or not the applicants were licensed. Mr George attempted to suggest that as the email is headed ‘dispute’ there must have been a dispute about an entitlement of the applicants to claim a right for payment. I am unable to accept this evidence, the dispute was about the quantum sought not the issue of whether the applicants were licensed. So much is obvious from the exchange of emails.58 The challenge of the respondent was that the invoices were not in the form of a tax invoice about, who was to pay for marketing expenses and some dispute about whether particular properties have actually settled. 111 It is apparent that there were the matters the subject of the dispute between the parties but not on this topic. I am satisfied that the whole approach of the respondent was driven by the desire to achieve settlements and so to receive its share of commission. It had no particular concerns about whether the applicants 58 Exhibit A7, Vol 3, p 2396, 2397, 2398, 2399. -- 38 of 77 -- [2024] SADC 115 35 were licensed or that the absence of a licence may in any way may affect its overall aim of generating income. That was its business after all, and in my view any suggestion by Mr George to the opposite is fatuous. 112 Exhibit A6 is a copy of an exchange of text messages between Mr George and Albert Yuen. From July 2019, Mr George requested Mr Albert Yuen to assist with a project in Ringwood Victoria by promoting it in Malaysia. This occurred a full year after a solicitor’s letter had been sent to the applicants referencing that commission could not be paid on work done by the applicants. Mr George said that the letter only related to work in South Australia.59 I am unable to accept this evidence as it is implausible, without credibility and is plainly a construct fashioned by Mr George in an attempt to explain away the inconsistencies of the respondent’s position. He said that this exchange related only to work done in Malaysia promoting sales of the Ringwood project for a fixed fee. He denied that this was an occasion of commission. There is an obvious contradiction in that evidence. 113 On 27 July 2019 at 12:11, Mr George sent Mr Albert Yuen the following text:-60 ‘Hi Albert I could pay $25000 for an event for Ringwood if you think we can get 5 to 7 sales?’ 114 I refer especially to the use of the expression ‘we’ in the above extract. It is apparent that he accepted this arrangement. So much is reflected in Mr Albert Yuen’s response at 14:54 which provides:- ‘5 probably difficult in today market in KL how about I try though my data base and you get developer to pay me 5k or each deal going unconditional for the time being. If we get reasonable respond then we go other way by doing exhibition if any deal less than 5 we deduct 5k out of the existing sale commission from them’ 115 Mr Albert Yuen makes clear his understanding of what is being proposed. Objectively it is clear that the two parties are discussing an arrangement where the applicants take steps to obtain purchasers in Malaysia for the Ringwood development and be paid on commission basis. 116 Objectively construed, it is quite apparent that the parties are discussing the obtaining of purchasers and so the denials of Mr George61 are without any credibility; I reject this evidence. Mr George then attempted to evade questions exploring the inconsistencies in his evidence.62 Transcript page 138 records the following:- 59 T135.22-.25. 60 Exhibit A6. 61 T137.1-.13. 62 T138.1-.20. -- 39 of 77 -- [2024] SADC 115 36 Q And so according to your understanding running ads was okay but talking to purchasers and signing them up wasn't. A I think when you're acting as an agent is to sign a contract with the purchaser. HIS HONOUR Q Mr George, can we just answer the question. Let me put the question to you. A. Yes. Q It is this: my understanding of your evidence is that you are now prepared to make a distinction between asking someone to put in an ad to advertise Australian property compared to, for example, fulfilling the terms of an agreement whereby they would procure a signature on a contract to be accepted or not by a vendor. A That's correct. HIS HONOUR: Anything further? MR BELPERIO: No. EXHIBIT #A6 COPIES OF WHATSAPP MESSAGES BETWEEN ALBERT YUEN AND MATT GEORGE COMMENCING 23/7/2019 TENDERED BY MR BELPERIO. 117 The purported distinction sought to be drawn by Mr George is barren and as an obvious attempt by him to reconstruct the position. 118 Save and except where the evidence of Mr George is corroborated by the evidence of the applicants, or by documentary evidence which I have assessed above, I am not prepared to accept the evidence of Mr George. For the reasons described above, his evidence was without credit, it was evasive and in part was fatuous. I am satisfied that the evidence of Mr George was in the main, an attempt by him to reconstruct the facts to best suit the respondent’s contentions. This attempt failed at every level. This lack of credibility and, on one aspect, the failure of Mr George to tell the truth is troubling at many levels. 119 Based upon the evidence assessed above, I make the following findings:- 1. The respondent Urban was engaged by developers in Australia to sell ‘off the plan’, a number of high rise developments in South Australia, Victoria, and Queensland comprising largely of residential units of varying size. 2. The applicants have for many years been involved in business in Asia as agents, including marketing Australian apartment developments to Asian investors. These companies are licensed real estate agents in a number of Asian countries. -- 40 of 77 -- [2024] SADC 115 37 3. The applicants were not licensed real estate agents in any Australian states in 2017, 2018, 2019. They had previously held such agents’ licences when they operated in Australia. They no longer held those licences. 4. At all times Urban knew that Austral/Global did not hold a real estate licence in any state of Australia. This knowledge was confirmed by the solicitors letter to the applicants, sent on behalf of the respondents. 5. In that knowledge, Urban continued to retain the applicants to provide purchasers in Asia of Australian real estate. 6. Following the retainer by Urban the applicants set about the task of procuring within Asia, and they did procure purchasers for real estate in South Australia and Victoria. 7. In order for these projects to proceed it was necessary for the developers to obtain from purchasers (referred to generally as ‘off the plan purchasers’) preconstruction commitments up to a particular percentage (usually 60-65 %) of the overall build. 8. The applicants procured in the Asian marketplace purchasers including ‘off the plan purchasers’ of real estate assets promoted by Urban as the retained agent. 9. These purchase contracts settled, purchase prices were paid and Urban received the whole of the amount of the commission receivable under the contracts with the developers. 10. Urban has profited to the fullest extent from the results of the work performed by the applicants. 11. There were some payments made to the applicants only for marketing services conducted by them in different locations in Asia. These are not claimable by the respondent on its cross claim. 120 The applicants contend, in that background for the following declaration and orders:- (1) . (2) . (3) . (4) Quantum meruit (5) The applicants were not engaged to perform the role of real estate agent. That is, the applicants do not seek a fee, reward or commission for real estate services. -- 41 of 77 -- [2024] SADC 115 38 (6) The applicants were engaged to and did in Asia provide the execution by the purchasers (an offer) of contracts for purchase of real estate. (7) Nothing done by the applicants after the execution by the purchasers of their contractual does or could affect their entitlement to be paid under their contract with the respondent. (8) The contract between the applicants and the respondent must so be understood and characterised. 121 The applicants contend that when they were appointed exclusive agents by the vendors of property. (Viz Ex A7, Vol 1, pp 204 et seq), the appointment was made under the standard ‘Exclusive Sale Authority’ contract.63 Item 9 on page 2 of 5, of that agreement governs commission sharing, and provides:- 63 Ibid. -- 42 of 77 -- [2024] SADC 115 39 122 Under the Victorian legislation applicable in respect of the Tao Home Apartment and Sovereign Blackburn developments, if commissions are to be shared, formal notice must be given to the Director of Consumer Affairs, Victoria. There is no evidence before the Court that such notice was given by Urban, raising an inference that, from Urban’s viewpoint it was not sharing commission with the applicant. 123 The agency agreement between the developer and the Urban,64 clause 7 (iii) governs the engagement by Urban of the services of third party introducers which requires prior written approval of the principal (developer). Urban does not contend that such an approval was sought or obtained for the applicants. 124 Under the South Australian Legislation, an agent may act through the instrumentality of an agent, who/which is not required to be licensed. 125 s 4 LAA provides:- 4—Meaning of agent (1) A person is an agent for the purposes of this Act if the person carries on a business that consists of or involves— (a) selling or purchasing or otherwise dealing with land or businesses on behalf of others, or conducting negotiations for that purpose; or 64 Exhibit A7, Vol 1, page 661 et seq. -- 43 of 77 -- [2024] SADC 115 40 (b) selling land or businesses on his or her own behalf, or conducting negotiations for that purpose. (2) However, a person does not act as an agent in so far as— (a) the person sells or purchases or otherwise deals with land or businesses on behalf of others, or conducts negotiations for that purpose, in the course of practice as a legal practitioner; or (b) the person sells land or businesses, or conducts negotiations for that purpose, through the instrumentality of an agent; or (c) the person engages in mortgage financing. 126 S 4(2)(b) LAA, recognises a sale may occur ‘through the instrumentality of an agent’. The expression instrumentality is not defined. The Oxford English Dictionary defines the noun as follows:- ‘The quality or condition of being instrumental; the fact or function of securing to bring about a result or accomplish, a purpose; indirect or intermediate agency’. 127 This last phrase is, in part, consistent with the definition in s 4 LAA. There is also an obvious inconsistency. Indirect or intermediate agency, remains a form of agency. S 4(2)(b) LAA logically does not stipulate that the intermediary stands in the shoes of the agent, as the agent, but it may act as an agents intermediary. No doubt procuring an offer to be put to the vendor is being instrumental, but such an activity remains more akin to the action of accomplishing a purpose by the identification and then commitment of a purchaser’s offer. 128 The applicants also contend that consistent with this approach to interpretation, the unchallenged evidence is that the applicants are registered as agents in every Asian country in which they operate as real estate agents. That, it may inferred, is a pre requisite in each of those countries to embarking upon the role as an agent in real estate transactions. Urban contends that consistent with that position, the applicants or their officers previously operated as agents in Australia and were well familiar with the requirements of the laws of Australia operative in each state. In response, the applicants point to the contracts of retainer provided by Urban. The applicants accept that this document does not establish the ‘metes and bound’ of every aspect of their conduct. 129 In a letter of ‘1 March 2016 to the Board of Valuers, Appraisers and Estate Agents Malaysia.’65 Urban advised:-66 65 Exhibit A7, Vol 1, page 266. 66 Ibid. -- 44 of 77 -- [2024] SADC 115 41 130 The applicants contend that this letter quite accurately records the nature of the parties relationship. It is then reflected in the form of the contract executed by the same parties.67 Clauses 1, 2, 3, 4 and 6 are set out in full at paragraph 89 (pages 24-24). 131 The parties agree the content of the marketing services and the appointment of the applicants to perform the marketing services is ‘in respect of the sales of properties’. The purpose of engaging the applicants to perform marketing services was to procure and then obtain offers to purchase properties in Australia from investors in Asia using all of the resources at their disposal. Urban agreed to pay for the marketing services by a payment of the equivalent of 2.5% of the purchase 67 Ex A7, Vol 1, page 322 et seq. -- 45 of 77 -- [2024] SADC 115 42 price at execution of a final and binding contract by the vendor and payment of the deposit, and the final 2.5 % 30 days after settlement. 132 If the contract failed there was no entitlement to the second 2.5 %, however the right remained to retain the first 2.5 % already paid. Under the contract the obligation (and so the entitlement to be paid) was to obtain purchasers willing to execute an offer (first tranche) and settle (second tranche). The amount payable depended upon the settled contract price agreed between the parties. The applicants had no material influence upon the eventuality of settlement. It is unclear how helpful it may be to characterise this part of the clause as a condition subsequent. That characterisation may distract from the actual terms of the contract. A failure of the parties to settle a contract circumscribes the obligation to pay the second tranche payment. 133 The parties themselves turned their minds to the nature of their relationship clause 23 of the Services Agreement provides:-68 23. NO PARTNERSHIP OR JOINT VENTURE This agreement is not intended to create a partnership, a joint venture or a relationship of principal and agent between the parties; and neither party will hold itself out as being so related. 134 The applicants were not appointed the real estate agents for the projects. This is apparent from the Forms 1 vendor statements for the Realm Apartments.69 At item 4 of the standard document, Urban is identified as the vendors registered agent. The Forms 1 in Part D record the ‘Certificate with respect to prescribed enquires by the registered agent… is completed by an agent of Urban’. It is a pre- prepared form which contemplates that it will be completed by the respondent. It is generated within the offices of the solicitors retained by the vendor (in this case Eklipse for the Realm Apartments project). The equivalent of the Forms 1 used in the other jurisdictions were generally in the same terms.70 All of the other agreements involving the particular projects were drawn to satisfy local requirements but were largely structured in the same way. 135 I have earlier found that at all times material to this action Urban was aware that the applicants were not registered real estate agents in the various relevant Australian states. Irrespective of the timing of when Urban became aware of this fact, Urban did not demand that the applicants ‘obtain’ registration before proceeding further. To the contrary, notwithstanding that knowledge, Urban sought to enlarge this ‘brief’ of available sales targets to the applicants, eg: to include a site in Ringwood Victoria. The issue was raised by the respondents’ solicitors after June 2018 where the solicitors gave notice of the inability of the applicants to claim payments in the absence of proof of a licence. Notwithstanding, 68 Ex A7, Vol 1, page 327. 69 Ex A7, Vol 1, pages 362-381; pages 382-389. 70 Viz: Ex A7, Vol 1 page 608 - 611. -- 46 of 77 -- [2024] SADC 115 43 there were then further retainers and the bulk of the commission payable by Realm to Urban was paid in June 2019 at a time when Urban were contemplating broadening the scope of its contractual relationship with the applicants by introducing new developments to them. There is an inconsistency between the apparent attitude now of Urban to refuse to pay the contracted price to the applicants and the eagerness with which it took up and sought to extend the relationship with the applicants. It suggests approbation and reprobation. 136 At June 2019, Urban did not raise with the applicants that they relied upon any legal basis to refuse payment of commissions, even after the solicitors letter in June 2018. The matter of concern to Urban was the sale of the units and the generation of their own income. This is what happened; the offers generated by the applicants were connected to binding contracts upon acceptance by the vendor and settlement occurred. The applicants also did other things, such as involve themselves in the purchasers choice of colour schemes, referrals for advice about Foreign Investment Review Board requirements, tax issues and the like. That was their choice. 137 The applicants contend that anything done after the execution of a binding contract does not disentitle them from claiming what is contractually due to them. Urban contends the opposite and relies upon a number of authorities in which such actions have been taken into account when assessing the whole of the circumstances of the case. Those authorities bind me in my consideration here. The applicants also contend, correctly in my view, that fees paid purely for marketing services performed are not claimable. An example is Queensland development which is one aspect of the cross claim of the respondent. 138 I turn then to the applicant’s arguments about the application of the relevant legislation. I deal first with the position in South Australia which revolve around the application of s 6 LAA. I have earlier set out that section at paragraph 27 (page 6) herein.71 139 Reliance is placed upon the operation of ss 6 (2) and 6 (3) LAA. The applicants contend that they are seeking commissions and other consideration for services they were engaged to perform under the marketing agreement. No payment is sought for rendering assistance after the time of the formation of the contract, and those tasks are said to have had no connection to the real estate made or with the terms and conditions of the agreements with Urban. 140 The applicants first rely upon the decision of the New South Wales Court of Appeal in Guan v Lui.72 The relevant facts were that Ms Guan’s property development company was insolvent and the properties it owned were to be sold under a mortgagee sale. Ms Guan was the guarantor of the mortgaged debt. In order to obviate any personal liability to the mortgagee, she needed a very 71 S 6 of the LAA is set out in full at paragraph 27 herein. 72 [2021] NSWCA 65. -- 47 of 77 -- [2024] SADC 115 44 successful outcome of the mortgagee sale process. Ms Guan retained Mr Lui to introduce prospective investment developers to the expression of interest sale process established by the mortgagee. That process was conducted by the mortgagee’s exclusive selling agents, JLL. 141 Mr Lui was retained by Ms Guan to introduce prospective purchasers and to encourage them to make non-binding bids. He did not represent Ms Guan in anything that he did. He had no authority from the mortgagee, and he was not a selling agent retained by the mortgagee or the agents of the mortgagee to represent them in introducing prospective buyers to the sale process. 142 The sale process established was to seek expressions of interest. Once those were assessed by the mortgagee and its agent, there would be a short list of one or several preferred parties identified for negotiation with the aim of entering into negotiations and the exchange of contracts. The vendor intended to select the negotiating parties from the first round of expressions of interest received. All prospective purchasers were encouraged to lodge their highest and best proposal at the time. The whole of the sale process, its structure, the terms of the proposed sale, the evaluation of the proposals, and the continued participation of any interested parties in the sale process was at the discretion entirely of the vendor and its advisors. The vendor reserved to itself the right to vary the process of sale at any time. 143 All enquires about the property were to be directed to the exclusive selling agents who would arrange appointments for inspection. Ms Guan asked Mr Lui to get his friends or potential buyers to participate in the bidding. She said that she would give him a commission if the bidding process succeeded. Under their written agreement, Mr Lui agreed to seek investment partners inside and outside of Australia in order to improve the current economic situation of Ms Guan. He agreed to use his reputation and prestige in the industry to generate offers to be submitted in sealed bids to the mortgagee’s agents. Ms Guan agreed to encourage the directors of her company with voting power to support the proposal of Mr Lui and she promised to give him a Rolls Royce motor car as a free gift when any sealed bid for the project is successful. 144 Mr Lui undertook to perform his role for the usual service fee of 2 % of the tender price. Ms Guan alleged that in so acting, Mr Lui was an agent for s 8 of the Property Stock and Business Agents Act 1941 (NSW). Mr Guan failed at first instance and the Court of Appeal of New South Wales dismissed the appeal. It considered the other applicable authorities in Australia and distinguished those authorities. 145 The commission payable to Mr Lui was connected with the ascertainment of the highest bid in an expression of interest process. It was not connected to whether that offeror was successful and the bid becoming the sale price. -- 48 of 77 -- [2024] SADC 115 45 146 The decision of the Court of Appeal was written by Meagher JA , with whom Bell P and Basten JA agreed. At [7] – [10] his Honour set out the relevant statutory scheme as follows:- The relevant provisions of the 2002 Act [7] The 2002 Act repealed and, with modifications, re-enacted the Property, Stock and Business Agents Act 1941 (NSW) (1941 Act). In doing so it continued to require that natural persons and corporations carrying on particular agency activities be licensed, and that salespersons and managers engaged in those activities be registered and employed by the holder of a licence. [8] The key provisions are ss 8(1)(a) and 8(2)(a): “8 Agents required to be licensed (1) A natural person must not act as or carry on the business of (or advertise, notify or state that the person acts as or carries on the business of or is willing to act as or carry on the business of)— (a) a real estate agent, unless the person is the holder of a real estate agent’s licence, or … (2) A natural person is not entitled to bring any proceeding in any court or tribunal to recover any commission, fee, gain or reward for any service performed by the person: (a) as a real estate agent, unless the person was the holder of a real estate agent’s licence, or employed the holder of such a licence, at the time of performing the service … ” [9] Section 3 includes the following relevant definitions. Ms Guan contends that the activities undertaken by Mr Lui fell within paras (a), (b) and (c) of the definition of “real estate agent”: “3 Definitions (1) In this Act— … 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 -- 49 of 77 -- [2024] SADC 115 46 (f) an on-site residential property manager. … 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. … real estate salesperson means a person (other than the holder of a real estate agent’s licence) who, as an employee of a real estate agent or a corporation that carries on the business of a real estate agent— (a) exercises any of the functions of a real estate agent, or (b) engages in any other activity that is prescribed by the regulations for the purposes of this definition. real estate transaction means the purchase, sale, exchange, lease, assignment or other disposal of land, whether or not an auction is involved.” [10] Section 8(2) and the definition of ‘real estate agent’ in s 3 were amended with effect from 23 March 2020 by the Property, Stock and Business Agents Amendment (Property Industry Reform) Act 2018 (NSW). That amendment was accompanied by a transitional provision which provided that s 8(2), “as in force” before this amendment, continues to apply in proceedings relating to services performed before the amendment: Sch 1, cl 31. 147 The principal contention of Ms Guan, was that if Mr Lui procured prospective purchasers who made final binding bids, he was acting as a real estate agent. A point of distinction pressed by Urban is that, here, different to the case at bar, the offerees were making non-binding bids whereas the applicants introduced offerors who were prepared to make a binding offer. At [14] Meagher JA set out the registered agents invitation to interested parties. It provides:- -- 50 of 77 -- [2024] SADC 115 47 [14] The Information Memorandum issued called for expressions of interest (by way of a purchase proposal) to be lodged with JLL by 3pm on 4 March 2015. It invited “interested parties” to register their interest with JLL and described the sales process as follows: “An assessment of all expressions of interest … will be made by the vendor and its advisors leading to the selection of a shortlist of parties or one preferred party to enter into exclusive negotiations and exchange of contracts. It is the intention of the vendor to select the parties from the first round of EOIs received and we encourage all prospective parties to lodge their highest and cleanest proposal at this time. The conduct of the sales process, the structure and terms of the proposed sale, the evaluation of proposals, and the continued participation of interested parties in the sale process is entirely at the discretion of the vendor and its advisers. The vendor reserves the right to vary the sale process at any time. Interested parties are encouraged to provide their best and final offer (in both price and terms) in order to maximise their chance of achieving a successful result. All enquiries about the property must be directed to the exclusive selling agent, JLL. All inspections of the property must be arranged via prior appointment with JLL.” 148 Ms Guan and Mr Lui formally recorded their agreement on 18 January 2015. It is set at [17] of the judgment of Meagher JA and provides:- [17] On 18 January 2015, the agreement between the parties was signed. It was in simplified Chinese script, although some parts were written in English. The relevant parts, as recorded in the English translation accepted by the parties to be accurate, provided: “Co-operative Agreement Party A: LEI, Jingquan [Mr Lui] … Party B: GUAN, Xiuyan [Ms Guan] … After discussions and negotiations in good faith, the Parties enter into the following agreement based on the principle of justice and fairness for mutual benefit: 1. According to the detailed explanation and analysis about the project given by Party B, Party A is required to seek good investment partners in or out of Australia in order to improve the current economic situation and solve the financial problems encountered by Party B. 2. Party A agrees that it will work hard to assist Party B to find appropriate investment developers in and out of Australia by using his reputation and prestige in the industry, and the investment developers will submit a sealed bid to the company which takes over the project. 3. Party B agrees to encourage directors with voting power for the project to support the proposal of Party A which involves a sealed bid in order to overcome her current financial difficulties successfully. -- 51 of 77 -- [2024] SADC 115 48 4. Party B promises Party A to give him a Rolls-Royce motor car … under the name of Party B as a free gift when a sealed bid for the project is successful. 5. Party B undertakes to pay Party A a usual service fee to the agent nominated by Party A at the amount of percent (2%) of the tender rate. The matters unspecified in the agreement may be completed in the formal cooperative document through discussions by the Parties identifying the duties, responsibilities and rights of each Party. The agreement is in quadruplicate and will take effect from the signature date by the Parties. (Handwritten words) the actual settlement price requires a separate talk.” 149 In Guan the meaning of the terms of the contract was not in issue between the parties. It was accepted that Mr Lui used all of his connections in the Asian community both inside and outside of Australia and he encouraged all of them to participate in the bidding process. There were twenty two bids, and two of them were companies connected with Mr Lui. At [19]-[20] Meagher JA said:- Mr Lui’s acts in performance of the Co-operative Agreement [19] The steps taken by Mr Lui to identify potential investors and introduce them to the sales process are recorded in detail in the extract of his affidavit at Judgment [203]. Mr Lui described himself as a “senior project development consultant” specialising in “obtaining funding for development projects in Australia from investors located both in Australia and overseas”. Over the years he had “formed associations and friendships with many high-net-worth individuals and developers, including a number of members of the Chinese community both in Australia and overseas”. [20] Between early January and 4 March 2015, when the expressions of interest process closed, Mr Lui “contacted various investors and introduced others” to the project and that process (Judgment [201]). He encouraged those investors to participate “using his reputation and prestige” in the wider Chinese community (Judgment [224]). That process generated 22 bids, two of which were by companies introduced by Mr Lui. They were Fairway Investment & Development Pty Ltd (Fairway) and Anson City. 150 Mr Lui made himself familiar with the project by retaining a consulting firm and he liaised with the vendor’s agent. He obtained and distributed a number of information memoranda to potential investors. One was a company, Hassan City Pty Ltd owned by a person to whom he was a business advisor. There was correspondence especially by email following this although Mr Lui was not copied into it. 151 This transaction was a one off for Mr Lui and he did not intend to be involved in any future transactions for Ms Guan. The Court of Appeal held that the proper question to be addressed was whether Mr Lui performed services as a real estate agent. 152 The meaning of agent under the legislation required the activities to be undertaken as an agent (for the benefit of another person) and so it was not necessary for the agent to have authority to negotiate the price or the terms of -- 52 of 77 -- [2024] SADC 115 49 purchase or sale. In this case, Mr Lui had a very restricted brief; he could not offer inducements (for someone to bid), to enter into the bidding processes or to persuade anyone to enter into a contract of sale. 153 Meagher JA held that the expression ‘as an agent’ within the legislation should not be read down or narrowly construed and ‘agent’ should be understood in its usual legal and technical sense: the capacity in one person to initiate legal relations between a principal and a third party. (International Harvester Co of Australia Pty Ltd v Carringan’s Hazeldene Pastoral Co).73 154 At [45] Meagher JA held that the role of representation (as an agent) describes acts and conduct undertaken with the principals’ authority and capable of effecting legal relation between the principal and other parties. 155 At [47] Meagher JA considered the decision of Walsh J in the High Court decision in Freehold Land Investments Ltd v Queensland Estates Pty Ltd74 and at [47] – [48]:- [47] In Freehold Land Investments, the issue was whether the statutory prohibition on the recovery of an agent’s fee applied to the appellant’s acting as agent to sell land in Queensland under an agreement which made Hong Kong law the proper law of the contract. The ultimate question was whether the appellant undertook activities as a real estate agent in Queensland (Walsh J at 440-441). The appellant contended that the words “as an agent for others” not only excluded from the activities to which the Act applied personal transactions in which the agent was engaged but also “actions, discussions or communications with his own principal (contrasted with actions, discussions or communications with the opposite party to the proposed transaction of sale etc)” [emphasis in original] (Walsh J at 442-443). [48] That contention was rejected because to exclude the latter was to exclude conduct in which the appellant was communicating in his capacity as agent, albeit with his principal. There was no doubt that his communications with prospective buyers were undertaken in his representative capacity. Walsh J, with whom Barwick CJ agreed, concluded (at 443): “ … it was a transaction under which the appellant was authorized to bring about a sale of land which belonged to the respondent … The appellant was engaged throughout (at least at all times after it had obtained the authority) in the process of seeking to negotiate that sale. Every step which it took which could aid in the achievement of a completed sale was a step in the transaction of negotiating the sale. It was ‘as an agent for others’, that is, as an agent for the owner of the land, that the appellant was carrying out the whole of this process of seeking to bring about a completed sale.” 156 The applicants here contend that the transaction under which they were authorized was not the process of seeking to negotiate a sale. The process was to obtain offers which may or may not be accepted by the vendor. The unchallenged evidence of expert Mr Bruce the was that the success of any such development 73 (1958) 100 CLR 644 at 644. 74 (1970) 123 CLR 418. -- 53 of 77 -- [2024] SADC 115 50 significantly depended, upon Asian purchasers who/which were prepared to purchase ‘off plan’; Australian investors were reluctant (at the time) to so commit. The Australian market of potential Australian purchasers is ultimately reflected in the need to seek out purchasers in Asia, using the services of the applicants. 157 Colbron v St Bees Island Pty Ltd75 concerned a claim for commission not dissimilar to the present. The applicant introduced potential purchasers of land but did not hold an agents licence for the Auctioneers and Agents Act 1971 (Qld). In Queensland a real estate agent is defined to be a person ‘who carries on the business of buying, selling, exchanging… houses, land or negotiating such buying, selling, exchanging or letting…’. Because of the width of the definition of ‘agent’ within the same Act the term ‘real estate agent is defined (s 3) to include a person acting as an agent for the introduction of a purchaser. 158 The applicants contend in the case at bar, that attention must be directed to the services that were performed for which commission is received. So much may be accepted however that approach must be applied in the context of the words of the statute. This was the approach of Lindgren J in Colbron. 159 The applicants rely upon the decision in Guan at [42] – [43] which provides:- [42] Turning to the meaning of that expression, as a general rule, terms with a technical legal meaning used in legislation are to be understood in their legal and technical sense: Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566; [1998] HCA 59 at [45] (Gaudron, McHugh, Gummow, Hayne, Callinan JJ). “Agent” is such a term and no intention contrary to its being understood in that sense appears in its use in this legislation. Indeed the provisions of the 2002 Act and in particular those in Pt 3 Div 4 (Conflicts of interest), Pt 4 (Agency agreements), Pt 5 (Residential property and rural land sales) and Pt 7 (Trust accounts) make plain that “agent” is used in its legal and technical sense. [43] In International Harvester Co of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Co (1958) 100 CLR 644 at 652; [1958] HCA 16, the Court (Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ) observed that the term “agency” is “used in the law to connote an authority or capacity in one person to create legal relations between a person occupying the position of principal and third parties”. See also Scott v Davis (2000) 204 CLR 333; [2000] HCA 52 at [227] (per Gummow J). The Court in International Harvester continued, citing the observation of Lord Herschell in Kennedy v De Trafford [1897] AC 180 at 188: “No word is more commonly and constantly abused than the word ‘agent’. A person may be spoken of as an ‘agent’ and no doubt in the popular sense of the word may properly be said to be an ‘agent’, although when it is attempted to suggest that he is an ‘agent’ under such circumstances as create the legal obligations attaching to agency that use of the word is only misleading.” 160 The applicants contend that there was no relationship of agency according to that authority which must be understood in the context of its facts. In relation to the discussion about concepts of for example, conducting negotiations for a 75 (1995) 56 FCR 303. -- 54 of 77 -- [2024] SADC 115 51 purpose (s 4(1) LAA) the applicants rely upon what fell from Meagher JA at [55] – [57] in Guan as follows:- [55] Turning then to Mr Lui’s activities, he undoubtedly introduced prospective purchasers to the selling process and encouraged them to make bids. He did this in the financial interests of Ms Guan, as well as in his own fee earning interest. In doing so he arranged for a feasibility study to be undertaken; made that study available to interested parties; familiarised himself with the expressions of interest process; distributed copies of the Information Memorandum; had discussions with interested parties about the sales process being conducted by JLL, as well as the feasibility of the proposed development of the land; assisted one prospective purchaser to complete two expressions of interest; accompanied another on a site visit; and on at least one occasion spoke to Ms Guan about what she might do in encouraging one of the prospective purchasers to participate in the process. [56] However, in undertaking each of these activities Mr Lui had no arrangement with, or authority from, the owner (Shuangfu), the mortgagee in possession (Australia Capital), the receivers and managers (McGrathNicol), the exclusive selling agent (JLL), or any of the prospective purchasers to represent them in any aspect of the expressions of interest process or any negotiation which followed. Nor did the evidence suggest that in undertaking any of these activities Mr Lui held himself out as acting for or representing any of these entities or persons. [57] In performing his agreement with Ms Guan that he would “find appropriate investment partners” and “using his reputation and prestige in the industry” encourage them to “submit a sealed bid”, Mr Lui was not undertaking or required to engage in any activity representing Ms Guan, who was not a participant in any capacity in the expressions of interest process. Nor did Ms Guan purport to authorise him to act on behalf of the vendor or any of its representatives in that process. Rather, he was required to identify potential investors from his existing business and other connections and, using his own reputation and experience as a senior project development consultant, to encourage them to participate in the selling process. 161 In Guan a point of distinction (at [56]) was that in performing the tasks (at [55]) Mr Lui had no arrangement or authority from anyone involved in the actual sale, especially the appointed agents, JLL. That is not this case. And a finding was made (at [56]) that Mr Lui did not hold himself out as representing any of these entities or purchasers. In that case there was an owner; a mortgagee in possession; receiver and manager appointed by the mortgagee and their agents JLL. Ms Guan was not a participant in the process and she did not and could not authorise Mr Lui to act on behalf of the vendor. In the case at bar, the applicants had authority to act for the vendor through its contractual relationship with Urban. 162 In Guan, the Court of Appeal accepted that Mr Lui sought to induce the making of a non binding offer. In the case at bar, the applicants prearranged for the execution of the binding offers for the acceptance (or not) of the vendor. Upon submissions of that offer and its acceptance (and so the payment of the deposit), the applicants were entitled to half of the agreed commission fixed by reference to a commission rate of 5 % of the contract price. -- 55 of 77 -- [2024] SADC 115 52 163 The applicants also relied upon the decision of Rees J in White Pointer Investments Pty Ltd v Creative Academy Group Pty Ltd.76 There the applicants sued for the sum of $800,000 under an oral contract under which it was required to source ‘childcare centres (for the defendants), for a fee of $2,000 per approved child place’ at [1]. 164 At [2], her Honour said:- [2] The defendants accept that the plaintiff “sourced” eight childcare centres, being Hurstville in New South Wales and Conder, Dickson, Macgregor, Red Hill, Taylor, Throsby and Woden in the Australian Capital Territory. Four issues arise: (a) was there an oral contract in the terms alleged; (b) did the parties enter into a binding settlement agreement in March 2020, such that the defendants are now obliged to pay far less than the amount due under the alleged oral contract; (c) is the plaintiff precluded from recovering its fees by the Property and Stock Agents Act 2002 (NSW) or the Agents Act 2003 (ACT), for want of a real estate agent licence; and (d) is the plaintiff obliged to refund fees already paid given the illegality of the oral contract or as payments made under a mistake, being that the plaintiff had the necessary licences to provide its services. 165 On the question of whether the applicants were carrying on a business, her Honour held at [253]:- [ 253] As to whether a corporation is “carrying on a business”, Ball J observed in Williams v ATM & CPA Pty Limited [2015] NSWSC 703 at [70]-[71]: “Whether a person carries on business as a real estate agent is a question of fact. In order to carry on business, repetition and continuity of the activities which characterise the business are necessary. However, an isolated activity with the intention of repeating it is sufficient. … Similarly, it seems to me that a person who holds himself or herself out as a person who is in the business of introducing potential buyers to potential sellers of property carries on that business even if the business is not generally successful in the sense that only in isolated instances do the introductions result in a sale.” 166 Her Honour then considered the requirement of the NSW Act from [254]. Under the NSW Act, ‘agent’ is defined (s 3(1)) to mean a real estate agent, which expression is, in turn, defined to mean a person who exercises real estate agents functions in the course of carrying on a business. In turn, those functions are defined to mean, inter alia:- (b) acting as agent for a real estate transaction; 76 [2023] NSWSC 817. -- 56 of 77 -- [2024] SADC 115 53 (c) acting as an agent including or attempting to induce or negotiating to induce a person to enter into a real estate transaction; (d) acting as an agent …. for the introduction of a prospective purchaser ‘Real estate transaction’ is defined to mean the purchase sale of land. Her Honour then considered the facts from [254] – [261] as follows:- [254] A plaintiff may be entitled to recover its fee for a “one off” transaction where it was not “carrying on a business” as an agent: Lendlease Real Estate Investments Ltd v Charter Hall Retail Management Ltd [2011] NSWSC 1624 (per Rein J). [255] Here, whatever services the plaintiff was providing to the defendants in respect of the Hurstville site could not be described as a “one off” transaction but a service provided in the course of carrying on a business conducted since the plaintiff was incorporated in 2015: see [14]. The question is whether that business was of an agent. [256] Terms used in section 9 are defined in section 3(1) as follows: (emphasis added) “agent means— (a) a real estate agent … real estate agent means a person (whether or not the person carries on any other business) who, for reward (whether monetary or otherwise), exercises real estate agent functions in the course of carrying on a business.” [257] Real estate agent functions include “real estate sale or leasing functions” (section 3A(1)(c)), defined in section 3A(2) as: (emphasis added) “real estate sale or leasing functions means— … (b) acting as agent for a real estate transaction, or (c) acting as agent 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 (d) acting as agent 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 … 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).” [258] Real estate transaction is defined in section 3(1) as: (emphasis added) “real estate transaction means the purchase, sale, exchange, lease, assignment or other disposal of land, whether or not an auction is involved.” -- 57 of 77 -- [2024] SADC 115 54 [259] As to whether the plaintiff was acting as, or carrying on the business of, a real estate agent by exercising real estate agent functions, the plaintiff accepted that it fell within sub-paragraph (d) as an introducer. That is, the plaintiff introduced the defendants as a prospective lessee of the Hurstville site to the owner of the land. The only issue then, is whether the plaintiff did so “acting as agent.” More specifically was the plaintiff acting as agent for the defendants, where this is the service for which the plaintiff rendered a fee. [260] Case law bearing on this requirement considered a definition of real estate agent which has since been amended. Section 3(1) then defined real estate agent as a person who “carries on business … as an agent.” Today, the requirement that the person be “acting as agent” has been re-located to each sub-paragraph of the definition of real estate sale or leasing functions. I do not consider there to be any difference between the phrase “as an agent” or “as agent.” The explanatory note to the Property, Stock and Business Agents Amendment (Property Industry Reform Build) Act 2017 does not suggest that anything was intended to be achieved by this grammatical difference. Rather, the bill reduced the number of licences and certificates of registration and consolidating these with real estate agents. The amendments omitted a number of definitions and inserted new definitions “to give effect to the consolidated licences and certificates of registration and the change of terminology.” As such, the case law remains apposite. [261] In Ryde Developments v The Property Investors Alliance [2017] NSWSC 436, Ball J considered that there was a need to give meaning to the expression “as an agent,” where the word “agent” does not have fixed meaning. Rather, its meaning must be ascertained from the context in which it appears, having regard to the legislative purpose of the requirement in which the expression is used: at [88]-[89]. Where the purpose of the Act is to protect the interests of consumers of real estate agency services, the term should not be interpreted narrowly: at [91]. At [262] – [263] Her Honour held:- [262] Ryde Developments was followed in Guan v Lui [2021] NSWCA 65, where Meagher JA (Bell P and Basten JA agreeing) considered that “agent” was used in its legal and technical sense in the legislation: at [42]. His Honour considered how the term “agency” had been described in the case law to connote an authority or capacity in one person to create legal relations between their principal and third parties: at [43], citing International Harvester Co of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Co (1958) 100 CLR 644 at 652; Scott v Davis (2002) 204 CLR 333 at 227. His Honour noted the observation of Lord Herschell in Kennedy v De Trafford [1897] AC 180 that no word is more commonly and constantly abused than the word “agent”: at [43]. Further, at [44]-[46]: “In Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co- operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 50; [1931] HCA 53, Dixon J repeated those observations of Lord Herschell and added: ‘Unfortunately, too, the expressions “for”, “on behalf of”, “for the benefit of” and even “authorise” are often used in relation to services which, although done for the advantage of a person who requests them, involve no representation. “In this context ‘representation’ describes the acts and conduct of the agent undertaken with the principal’s authority and capable of affecting legal relations between the principal and third parties. For example an agent for the introduction of prospective purchasers to an owner of land may make statements, provide -- 58 of 77 -- [2024] SADC 115 55 information and make an introduction, all whilst representing the owner. The legal relations which may thereby arise between the principal and a third party with whom the agent has dealt include, but are not confined to, contractual relations. … the essence of agency is the consensual representation of one person, the principal, by another, the agent. In the Restatement of the Law Second, Agency (American Law Institute, 1958) agency is similarly defined (at §1) as the ‘fiduciary relationship which exists between two persons, one of whom expressly or impliedly consents that the other should act on his behalf, and the other of whom similarly consents so to act or so acts’.” [263] Meagher JA reviewed authorities which considered when a person may be acting as a real estate agent. In Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418, the appellant was granted “an exclusive world-wide franchise for the sole right to sell” a piece of land for the vendor respondent. As to whether the appellant was acting as agent for the vendor, Walsh J (Barwick CJ agreeing) concluded at 443: “In my opinion one must look to the whole transaction which is on foot. In the present case it was a transaction under which the appellant was authorized to bring about a sale of land which belonged to the respondent … . The appellant was engaged throughout (at least at all times after it had obtained the authority) in the process of seeking to negotiate that sale. Every step which it took which could aid in the achievement of a completed sale was a step in the transaction of negotiating the sale. It was … as an agent for the owner of the land, that the appellant was carrying out the whole of this process of seeking to bring about a completed sale.” 167 Rees J confirmed that to be an ‘agent’ it was not necessary for the plaintiff to have authority to bind the principal. The pertinent question is whether the plaintiff’s actions were undertaken with the principal’s authority and capable of affecting legal relationships between the defendants and third parties where the legal relations include but are not confined to contractual relations (at [271]). For example, an agreement for one party to “steer [sites] your way for a fee, connected with the creation of leasehold interest,” meant that under the NSW Act an agency existed. 168 The applicants contend that by merely procuring purchasers to sign contracts and forwarding them to the agents (respondent) does not mean that the applicants were agents for anyone. In the application of principle, it is the case that, here, the applicants did carry on a business which, in this context, did involve negotiations for the dealing with the land. They did more than merely procuring purchasers to sign contracts. 169 Maxwell v Moorbool Developments Pty Ltd,77 involved, inter alia, a written arrangement between the parties as a joint venture and where one joint venture has an agent conducted sales without the requisite written appointment as an agent. 77 [2004] VSC 392. -- 59 of 77 -- [2024] SADC 115 56 170 In Victoria the Estate Agents Act 1980 defines the term ‘estate agent’, the content of which was discussed at [208] as follows:- [208] At the relevant time, s 50 of the Estate Agents Act stated as follows: “(1) Subject to sub-section (2) an estate agent shall not be entitled to sue for or recover or retain any commission or money in respect of any outgoings for or in respect of any transaction unless — (a) at all material times in relation to the transaction he is the holder of an estate agent’s licence; and (b) the agent has complied with section 49A(1) with respect to the engagement or appointment to undertake the transaction and is not in breach of section 49A(2) with respect to the engagement or appointment.” Section 50(2) had been repealed. Section 49A of the Act provided that: “(1) An estate agent must not obtain, or seek to obtain, any payment from a person in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent unless — (a) the agent holds a written engagement or appointment that is signed by the person (or the person’s representative); and (b) before obtaining the person’s signature to the engagement or appointment, the agent (or an agent’s representative employed by the agent) informed the person (or the person’s agent or representative) that the commission to be paid to the agent under the engagement or appointment and any money to be paid by the person in respect of outgoings were subject to negotiation; and (c) the engagement or appointment contains — (i) details of the commission and outgoings that have been agreed; and (ii) if a fee is to be calculated on a percentage basis, a statement of that fee expressed as both a percentage and as the dollar amount that would be payable on the reserve price or any other relevant amount set out in the engagement or appointment; and (iii) a statement identifying the source and the estimated amount of any rebate, discount or commission that the agent may receive in respect of any advertising expenses or other outgoings that the agent may incur on behalf of the person; and (iv) a statement in a form approved by the Director as to where a complaint concerning any commission or outgoings in the engagement or appointment can be made; and (v) anything else required by the Director; and -- 60 of 77 -- [2024] SADC 115 57 (d) the agent (or an agent’s representative employment by the agent) gave the person a copy of the signed engagement or appointment. Penalty: 100 penalty units. (2) An estate agent or agent’s representative must not destroy any document required by this section and must retain any such document for the prescribed period. Penalty: 100 penalty units.” The term “estate agent” is defined in s 4 of the Estate Agents Act as follows: “‘estate agent’ or ‘agent’ means any person (whether or not he carries on any other business) who exercises or carries on or advertises or notifies or states that he exercises or carries on or that he is willing to exercise or carry on or in any way holds himself out to the public as ready to undertake the business of — (a) selling buying exchanging letting or taking on lease of or otherwise dealing with or disposing of; (b) negotiating for the sale purchase exchange letting or taking on lease of or any other dealing with or disposition of; (c) collecting rents for; or (d) compiling information or preparing reports on the sale purchase exchange letting taking on lease of or otherwise dealing with or disposing of - any real estate or business on behalf of any other person.” 171 At [209] – [214] the trial judge, Habersberger J, said as follows:- [209] Mr Northrop submitted that Mr Maxwell clearly was an estate agent carrying on the business of selling real estate on behalf of another person and that as such he was caught by the prohibition on suing for, recovering or retaining any commission unless he held the required written appointment. This was regardless of whether Mr Maxwell was entitled to a fee of 10% of the profits for project management or to a half share of the profits as a joint venturer. Mr Northrop submitted that there was a clear demarcation between the roles of project manager (which is what I have found Mr Maxwell to be) and seller of the lots. The remuneration for the selling was always treated separately by the parties. This meant that the commission was an entitlement above and beyond any other entitlement and was to be earned by performing the task of selling the lots. This work was part of his business of selling property on behalf of Moorabool. [210] It was submitted on behalf of the defendants that, although there was no dispute that it had been agreed that Mr Maxwell would be paid $2,000 for every lot sold by him, the provisions of the Estate Agents Act were quite explicit in preventing an estate agent from suing for, recovering or retaining any commission when s 49A(1) had not been complied with. The wording of the prohibition could not have been wider or stronger. Mr Northrop referred to the decision of Beach J in Sevastopoulos v Spanos2 by way of analogy in submitting that Mr Maxwell could not even make a claim based on the well known principles concerning restitution and unjust enrichment outlined by the High Court of Australia in Pavey & Matthews Pty Ltd v Paul (“Pavey”).3 In the former case, his Honour rejected the submission that the -- 61 of 77 -- [2024] SADC 115 58 plaintiffs had brought their action in indebitatus assumpsit rather than pursuant to a domestic building work contract. However, his Honour went on to consider whether Pavey would have been applicable if the action had been based in indebitatus assumpsit. Beach J held that it would not, because of the difference in wording between the two statutory provisions. In Pavey there was s 45 of the Builders Licensing Act 1971 (NSW) which made the contract in question “not enforceable against any other party to the contract.” In Sevastopoulos there was s 19(1) of the House Contracts Guarantee Act 1987 which provided that “the builder is not entitled to recover in any court the cost of any work performed or materials supplied under the variation.” His Honour held that the latter provision was “far wider” and that it “specifically exclude[d] any claim whether founded on contract or otherwise.”4 [211] Mr Northrop submitted that the wording of the Estate Agents Act was even stronger as it even extended to a prohibition on the estate agent “retaining” any commission unless he held the required written appointment. I agree that if the relevant provisions of the Estate Agents Act are applicable then Mr Maxwell’s claim for his fee of $126,000 must fail. [212] However, Mr Heaton submitted that there was no breach of s 49A of the Estate Agents Act because Mr Maxwell was not carrying on the business of selling real estate on behalf of any other person and therefore was not caught by the definition of estate agent. He submitted that where, as in this case, Mr Maxwell was a joint venture partner of Moorabool, or given my findings in respect of Mr Maxwell’s role, he was an employee or contractor of the developer, then he was not carrying on the business of selling real estate on behalf of any other person. Rather, Mr Maxwell was acting in and for the business of the vendor, Moorabool, which was selling the lots to the public. This close relationship between Mr Maxwell and Moorabool, which meant that Mr Maxwell was not independently carrying on the business of selling real estate on behalf of another person, was exemplified by the unusual fact that Mr Maxwell signed all 63 sales contracts on behalf of Moorabool. [213] I consider that Mr Heaton’s argument is correct. It seems to me that the relationship between Mr Maxwell and Moorabool should not be seen as one where Mr Maxwell was carrying on the business of selling real estate on behalf of any other person. He was engaged to assist Moorabool in its business of selling the lots to the public. [214] This means that Mr Maxwell has succeeded in his claim for his fee of $2,000 per lot sold. Whether this outstanding amount totals $126,000 depends on whether or not the suggestion that Mr Maxwell had already been paid $20,000 or some other part of his fee is made out. 172 Mr Maxwell was a joint venturer with authority to sign and he did sign the contracts for purchase of real estate. In the case at bar, the contracts were in a standard form which were prepared by the vendor’s solicitors. These were held by the applicants and were presented in that form to the purchasers which were then executed and forwarded to the vendors agents and solicitors. Once that occurred, a deposit would be paid and then Forms 1 or their equivalents would be sent to the applicants for service upon the purchasers. The contracts which preceded these steps were prepared by the applicants, signed by the offerors and transmitted to the vendor and then to the vendors solicitors who received the deposits collected by Austral and Global. -- 62 of 77 -- [2024] SADC 115 59 173 Freehold Land investments Ltd v Queensland Estates Pty Ltd,78 concerned the appellant’s claim for money due on an instalment payments on the sale of land to a ‘prescribed authority’ under s 5(c) The Contracts of Sale of Land Act of 1933 (Qld) as commission payable under a deed. Under its terms, the deed appointed Freehold as an agent with an exclusive world wide franchise for the sole right to sell land in Queensland. The deed recorded that it was entered into in Hong Kong. The respondent denied the claim and contended the claim was barred under s 23(1) of the auctioneers Real Estate Agents, Debt collectors and Motor Dealers Acts 1922 (Qld) (RDMA). 174 Under the RDMA, the right to recover commissions was dependant upon compliance with certain conditions. In Freehold, the conditions had not been complied with. This contention was connected with the definition of ‘real estate agent’ in s 4 of the Act which states that an agent is:- ‘…a person.. who as an agent for others…carries on the business…of buying…selling land .. or negotiating for such buying, selling..land…or negotiating for such…buying, selling’ 175 In Freehold Mr Steley was an agent in Queensland for the appellant company which was incorporated in Hong Kong. He was also a member of the purchasing syndicate, became a director of it and then acted for the syndicate. In Queensland he was an agent for the vendor and a representative of the purchaser. The argument of Freehold was that it would be paid commission from amounts paid for the land. Despite Steley wearing at least ‘two hats’ in the transaction, McTiernan J held that when negotiations occurred, Steley negotiated for Freehold, (at page 426). It is not clear how it was possible to arrive at that conclusion. Steley was effectively negotiating with himself. McTiernan J also concluded that the negotiations for the sale occurred partly in Queensland and partly outside of Queensland and so the definition of agent was in part satisfied by Steley/Freehold. 176 Menzies J wrote a strongly dissenting judgment and Owen J agreed with Menzies J. The judgment of Owen J, though in dissent, bears repetition: (at p 435- p 436) His Honour said:- ‘I agree with the reasons given by my brother Menzies for allowing the appeal, accepting as I do the construction which he has placed upon the definition of “Real estate agent” in the Act. The evidence—confusing and unsatisfactory as it is—fails to satisfy me that the claimant acted as a “real estate agent” in Queensland in any relevant sense. In procuring by the hand of Steley authorities from Queensland Estates Pty. Ltd. to act as the latter’s agent, the claimant was acting on its own behalf. In the other negotiations and discussions carried out by Steley in Queensland during December 1967 he seems rather to have acted not on behalf of the claimant but in one or other of his many roles, sometimes as a director of Co- ownership Land Development Pty. Ltd., sometimes as a member and representative of a syndicate which had been formed outside Queensland with a view to the purchase of the land and on other occasions as a director of Golden Acres Ltd. after the incorporation of that company towards the end of December 1967.’ 78 (1970) 123 CLR 418. -- 63 of 77 -- [2024] SADC 115 60 177 Owen J, as Menzies J were plainly alert to the highly confusing factual basis of the claim. 178 Barwick CJ, agreed with the decision of Walsh J (at p 436 et seq). Walsh J described the facts of the case at pp 436-437. The claim of Freehold was made under an agency retainer with QE Estates (QE) dated 18 May 1967 and made in Queensland. This was “an exclusive world-wide franchise for the sole right to sell a certain piece of land” ending on 1 July 1967. The sale price was $87,000. The agent could retain all of the purchase price achieved above that amount but subject to the agreed terms with appropriate adjustments. This ‘excess amount’ was the only right claimable by the Freehold. The vendor was also contractually bound to sign any contract of sale (at or above $87,000) upon submission to it of a contract with a deposit of $10,000 accompanying the signed contract. At page 437 Walsh J held:- ‘Thus the agency document contemplated (1) that a signed contract would be submitted to the vendor; (2) that a deposit would be paid; and (3) that the vendor would sign and seal the contract of sale.’ 179 Walsh J emphasised that the only way remuneration could be claimed by Freehold is (1) to find a purchaser (at a price); and (2) procuring the purchasers signature on a contract. The amounts payable to Freehold was determined by the amount of the purchase price in excess of $87,000. 180 The agency agreement was revised in September 1967, to insert a new clause 8 under which the vendor authorised and instructed the prescribed authority to receive all money from the purchaser. 181 Freehold made its claim under the May 1967 agreement as varied by the September 1967 amendment. Walsh J held at page 438 that the functions to be performed by Freehold were as the agent of Queensland Estates, and so to claim its entitlement to remuneration included the taking of all steps necessary to bring about the completed sale. 182 Walsh J held at page 439 that the appellant was acting as a real estate agent in the transaction. The appellant contended that it did not do so in Queensland, it satisfied the test of being an agent but in performing those tasks, the agent was not in Queensland. In considering that question (at p 440) Walsh J assumed that Freehold did not engage in a series of real estate transactions and so could not be said to be carrying on business in Queensland. 183 His Honour emphasised that the prohibition is upon acting as a real estate agent as well as carrying on a business of a real estate agent. 184 In South Australia, under s 6(1) LAA, a person must not carry on business as an agent unless registered. Walsh J held that a similarly worded provision would be construed to include anything commonly done by persons who carry on the -- 64 of 77 -- [2024] SADC 115 61 business of real estate agents. The prohibition would thus include activities such as seeking and obtaining from an owner an authority to sell land. 185 At page 441 Walsh J then described the ultimate question as being whether Freehold did act in Queensland as a real estate agent. That is, did it, in Queensland, as an agent, ‘for fee or reward’ carry on the business …selling…land..or negotiate…for such land. Under s 4 LAA, an agent carries on a business that consists of or involves selling land or negotiating for the purpose. Walsh J held at page 445 that the definition is satisfied if the person ‘..negotiates for the … selling of a house or land… by a principal who retains (that person) to so negotiate.’ 186 At page 443, Walsh J held that it is necessary to look at the whole transaction which is on foot. In Freehold, the transaction was to bring about the sale of the principal’s land and be remunerated. Freehold was engaged in the whole process of seeking to negotiate a sale. At page 443, Walsh J said, in reference to the ‘agency authority’ of Freehold that it was not a case ‘…in which an agent was authorised to introduce to the vendor a person seeking to buy the property…’ (and then obtain a commission). In Freehold, the signed contract was to be submitted to the vendor and a deposit paid. Once the vendor signed the contract then, subject to the accepted price, the agent, was to be paid a commission. 187 Walsh J then held at page 443 – 444 as follows:- ‘In my opinion this construction of the Act should not be accepted. Its acceptance would appear to require that words “as an agent for others” are to be applied to each act done or word spoken by an agent in such a way as to lead to the conclusion that if, for example, a vendor’s agent telephoned a prospective purchaser to arrange an inspection he would then be acting as an agent for others, but if he telephoned the vendor to inform him of that arrangement he would not then be acting as an agent for others. But in the case last mentioned, I can see no reason whatsoever for denying that the agent is still acting as an agent for his principal (the vendor). I know of no reason why it cannot be part of the function of an agent to have communications with his own principal whenever these are thought necessary or desirable. In my opinion one must look to the whole transaction which is on foot. In the present case it was a transaction under which the appellant was authorized to bring about a sale of land which belonged to the terms of the agency authority which I have described above, which was given to it by the respondent. The appellant engaged throughout (at least at all times after it had obtained the authority) in the process of seeking to negotiate that sale. Every step which it took which could aid in the achievement of a completed sale was a step in the transaction of negotiating the sale. It was “as an agent for others”, that is, as an agent for the owner of the land, that the appellant was carrying out the whole of this process of seeking to bring about a completed sale. I have referred earlier to the terms of the agency authority. This was clearly not a case in which an agent was authorized simply to introduce the vendor a person willing to buy the property and was to obtain a commission for doing so. A signed contract was to be submitted to the vendor. A deposit was to be paid. The vendor was to sign and seal a contract. The agent was to get its remuneration from the surplus, above a certain price, of the moneys paid to the purchaser. In my opinion there is n reason for excluding from consideration, in examining what the appellant did, as an agent for the respondent, in the negotiating of the sale of the land, any act of the appellant which was a step towards the completion of the sale and towards the fulfilment of the conditions to which the agency -- 65 of 77 -- [2024] SADC 115 62 authority referred. A step which consisted in persuading the respondent as owner to agree to some stipulation which had been put forward as necessary for the completion of the transaction, was no less a part of the negotiating for the sale, than was the discussion with intending purchasers of the terms of a proposed contract of sale.’ 188 In context, it appears that Walsh J accepted that a discussion with an intending purchaser about the terms of a proposed contract of sale is part and parcel of conducting negotiations for the sale of the land. 189 The applicants submit that in contradistinction to the Freehold decision, the applicants were engaged only by Urban. The communications in Australia were all with Urban. The focus of Freehold is upon what was done by the agent in the furtherance of the purpose for which it was engaged. The applicants submit that is very different to the position of Urban and different from Freehold where the agent needed to procure the vendors execution of the contract; and the contract price above a particular figure determined its commission. The applicants were not retained to bring about all of the steps for the completed sale. In Freehold the agent communicated with the vendor in Australia to bring about the execution of the contract by it. 190 In Sultana Investments Pty Ltd v Cellcom Pty Ltd,79 the appellant owned land on which it planned to develop 175 units in Brisbane. The respondent was a Sydney based finance brokerage and planning business, the clients of which purchased units for the rental market. PRD Realty was the sole selling agent. The appellant contacted the representatives of the Sydney firm and they came to Brisbane for a meeting. The vendor was told that the representative of the respondent did not hold the appropriate Queensland real estate licences. They wanted to be identified in any contract and that they were to be paid a service fee of $10,000 per unit sold. 191 At [8] the Queensland Court of Appeal described the arrangement as follows:- [8] The letter, dated 25 September 2002, was faxed to the respondent in Sydney. The appellant offered seven units to the respondent to market to its clients in the following terms: “Thank you for your time on Monday and the interest you showed in The Mews at Bowen Hills and the future projects we have planned for West End. After our discussions I thought it would be favourable to get off on the right foot and forge a successful relationship whereby you will have access to luxurious apartments in one of Australia’s fastest growing cities. To achieve this I would like to take this opportunity to offer your company 7 of the largest and best situated apartments in the Mews at the following deal: 1. A discount off the list price for your client eg unit 3410 $390,000 now $380,000 79 [2008] QCA 357; [2009] 1 Qd R 589. -- 66 of 77 -- [2024] SADC 115 63 Unit 3510 $399,000 now $389,000 Unit 3511 $399,000 now $389,000 Unit 3610 $421,000 now $411,000 Unit 3611 $411,000 now $401,000 Unit 2502 $398,000 now $388,000 Unit 2402 $385,000 now $377,000 2. A $10,000 consultancy fee for each apartment sold. $5,000 payable 30 days after the sale goes unconditional and $5,000 30 days after the properties settle. This fee will be plus GST. 3. A 10% deposit will be required payable preferably by bank guarantee but a deposit bond will suffice. 4. This offer is subject to your company complying with PAMD ACT QLD so far as disclosure is concerned. I trust this proposal will meet your company’s investment criteria. You can gather that our company has taken the steps to begin a working professional relationship with Sultana Investments and would gladly offer you apartments in future projects before they reach the initial marketing stage. I stress that this offer is very favourable and is only available up until 12 noon Friday the 4th of October.” That offer was accepted by telephone a few days later. It will be referred to as “the Agreement”. 192 The contract was accepted and Sultana marketed 28 of the 175 units through its database of clients in its financial advice business. 193 These clients went to Brisbane to inspect the units and received tax advice at the expense of the respondent. Disclosure of the $10,000 fee was made in the contracts, all of which were sent to the vendor’s agent. 14 of the 22 contracts settled. The vendor paid the fee on the base of the successfully settled contracts; the respondent sought to be paid on the basis of the successfully executed contracts. One of the defences to the claim was that the respondent was acting as a real estate agent with a licence, contrary to the prohibition under the Property Agents and Motor Dealers Act 2000 (Qld) (PAMDA). 194 The Court of Appeal canvassed the various arguments of the parties about the interpretation of the PAMDA, and the expression ‘agent for others’ and held at [34] – [37] as follows:- [34] The expression “agent for others” in the context of the activities of a real estate agent has received judicial consideration. In Freehold Land Investments Ltd v Queensland Estates,27 the High Court considered a definition of “real estate agent” which entailed activities such as buying, selling and letting properties carried out by “any person … as agent for others and whether on commission or in expectation of a fee, gain or reward”. Walsh J observed: -- 67 of 77 -- [2024] SADC 115 64 “No doubt the main purpose of the inclusion of words ‘as an agent for others’ was to exclude from the operation of the Act investors and developers who buy and sell land on their own account. It is typical of the business of a real estate agent that the transactions of sale or purchase of land in which he takes part or with which he is associated are not his personal transactions but are those of other people. 28” [35] In Colbron v St Bees Island Pty Ltd,29 Lindgren J, applying the same definition used in a later Queensland Act, said: 30 “ … it has commonly been held that the authority of particular real estate agents has not embraced authority to commit the principal to a sale and has not extended beyond authority to introduce prospective purchasers, the commission being earned when that introduction is the effective cause of the sale in question.” His Honour expressed his “tentative view”31 that the words “as an agent for others” have: “ … a meaning related to the meaning of the expression ‘real estate agent’ as it is commonly understood, and so catch at least a person who is authorised by a landowner to introduce prospective purchasers, who does so and who then participates in the process by which the landowner and prospective purchaser come to terms by conveying offers and counteroffers. 32” [36] In Jenkins v Kedcorp Pty Ltd,33 this Court noted, with apparent approval, Lindgren J’s view that it was not necessary that the agent possess authority to commit his principal contractually before it could be said that he had acted “as an agent for others” and held that the expression “simply connotes a person engaged to act on behalf of another”. The Court continued: “The context, as the remainder of the definition indicates, is that of participating in some aspect of the buying and selling of real estate and associated activities. It is not amiss to note in this context that the classical function of a real estate agent has been regarded as ‘to find a buyer’ or to introduce a vendor and purchaser. ” [37] Something should be said about the expression “negotiate”, particularly as here, the price was non-negotiable. It is an expression of wide compass. The Oxford Online English Dictionary offers as its first two principal definitions: “To communicate or confer (with another or others) for the purpose of arranging some matter by mutual agreement; to discuss a matter with a view to some compromise or settlement. … To do business or trade; to engage in commerce.” 195 At [38] the Court of Appeal held that to claim for payment the first $5,000 of the consultancy required the respondent to introduce the client followed by an unconditional sale under the execution of a contract. It then negotiated for a successful completion of the sale in order to collect the second $5,000 of the consultancy fee. The Court held that the respondent negotiated the sale of the real estate for reward. -- 68 of 77 -- [2024] SADC 115 65 196 The Court of Appeal then addressed the question whether the nexus with Queensland existed sufficient for the operation of the PAMDA and the court held at [41] – [43] as follows:- [41] Accepting that the respondent was “acting as an agent for others” the question is whether it was doing so “in Queensland”. The 22 contracts were drafted in Queensland and were completed in Queensland when the appellant signed the offer to buy from the various clients. 37 There were numerous electronic communications by the respondent to the appellant either by facsimile transmission or telephone or email about aspects of the contracts, the finance and the painting and fit out. The respondent arranged for the clients to fly to Brisbane to inspect the development. This was arranged with the appellant. [42] As a matter of conventional statutory construction the prohibition in s 128 does not extend to conduct wholly carried on outside Queensland. 38 That this is so is reinforced by s 573A, s 573B and s 573C39 read in conjunction with s 573D(2) of PAMDA where the latter provides that those sections apply to conduct “ … whether happening in or outside Queensland, relating to residential property in Queensland”. [43] Professor W D Duncan summarises 40 the approach to real estate activity which occurs partly in Queensland and partly out: “A person will still be acting as a real estate agent for purposes of this legislation if part of the work is performed in Queensland and part outside Queensland. There are a number of steps which are conventionally taken by a real estate in a negotiation and finalisation of any real estate transaction. Introducing the property and negotiating the contract and any special conditions is no less a part of negotiating the transaction as obtaining the signature of the seller to the contract and advising that signature to the buyer. Where a person acts partly in Queensland and partly outside Queensland, regardless of how minor the act inside Queensland, that person will be acting as a real estate agent in Queensland for the purposes of the legislation. For example, notwithstanding that all other activities took place outside Queensland, the mere production of the contract for signing by the seller in Queensland would be deemed one of the essential parts of a real estate agent’s function in negotiating the selling of the land, and that person would have had to be licensed in Queensland to earn commission: Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418 at 444-445 per Walsh J.” To the extent that the primary judge concluded that PAMDA did not apply to the respondent because there was insufficient nexus between its activities in respect of the purchase of the apartments and Queensland his Honour erred. 197 The focus of the Court of Appeal in relation to the connection to the state (of Queensland) was that the act of completing the sale and so the act of settlement triggered the agents right to receive a commission. There was sufficient connection between the place (Queensland) and the completion. Urban contends that the applicants position is indistinguishable. In the case at bar, the right to the first payment of commission arose when the contract was signed and the deposit paid, which was to be remitted to the vendor’s solicitors in the various Australian states. This all occurred outside of Australia. It required no other act on behalf of the vendor. The right to second tranche of payment arose at settlement. Although perhaps a little peculiar, that was the parties bargain. It is the case that the right to -- 69 of 77 -- [2024] SADC 115 66 receive the second tranche payment occurred in connection with activities occurring in the jurisdiction and thus were connected with the parties contract. 198 I have discussed the content of s 4(1)(b) and 6 LAA in the context of the discussion in Freehold, Colbron and the other authorities. The position reached is that a person who carries on a business consisting of or involving, negotiating for the sale or purchase of land is caught by the definition of agent. 199 And in this case, it is not disputed that the contracts of sale used by the applicants were drafted in Australian state jurisdictions. The services provided by and entitlements of the applicants were directly connected to the execution by the offerors of these contracts, the payment of a deposit and later, settlement of them. The Court of Appeal of Queensland in Colbron accepted that this was a connecting factor to the state. I am bound by that decision of an intermediate Court of Appeal decision which applies the same process of reasoning as the majority of the High Court in Freehold. 200 As well, a number of decisions of this and other intermediate Courts of Appeal in Australia place emphasis upon other forms of connection of the applicants to an Australian state, such as the regular exchange of emails between for example the applicants and solicitors agents or other authorities in the various Australian states connected with finance, FIRB approval, colour schemes, fit out and settlement of the contracts generally. 201 In the case at bar, the first tranche of commission was payable upon the formation by the exchange of the contract and payment of the deposit to the solicitors trust account, the responsibility for which fell upon the applicants. The entitlement to be paid the first tranche of the commission therefore involved more than the mere execution of the contract. The applicants were required to deliver a signed contract and the deposit to the solicitors. It was also then a matter for the applicants whether they separately assisted with provision of purchasers finance, FIRB issues, retaining conveyancers for purchasers, resolving stamp duty issues and other state and federal requirements and other such tasks. 202 I am satisfied, and I find that for the Realm Apartments project in South Australia, all Form 1 vendor statements and contracts for the sale were prepared by the firm of solicitors, Lynch Meyer in Adelaide. Upon execution of the contract by the vendor, the Form 1 statements were delivered to the purchasers by Austral. All of this was, apart from one exception, done by Austral which served the Forms 1 in accordance with the requirement of South Australian legislation. Austral continually maintained contact with the solicitors on behalf of the purchasers, and obtained and forwarded trust account receipts. Austral was the essential intermediary between vendor and purchaser. This role involved completion of a variety of tasks: including pre settlement inspection of purchased properties through, usually, Mr Ben Small. There is a connection with activity in Adelaide that was directly related to the contracts and settlement. It was the conduit of the -- 70 of 77 -- [2024] SADC 115 67 information. It arranged inspections, valuations, approvals of financiers, and identification of visa documents and FIRB approvals. 203 In relation to the Tao Home Apartments, the following matters are significant: the vendor’s statement were provided to the purchasers by Global; Global sent purchasers’ contracts to a vendor in Victoria to be held there; Global procured deposits that are paid to the vendor’s solicitor; Global acted as an intermediary and, provided advice on stamp duty, it relayed legal advice on stamp duty, settlements, the FIRB requirments and generally, preparation execution and return of the mortgage documents, arrangements of various dates for settlements, resolution of mortgagors queries and then provision of executed mortgage documents an intermediary all correspondence about every aspect of the settlement was communicated between the interested parties and through Global and settlements were coordinated by Global through the vendors solicitor. 204 S 4 (2)(b) LAA is a ‘carve out’ provision under which a person is not acting as an agent, if that person sells land through the instrumentality of an agent. The applicants contend that if the LAA covers and has application to its conduct then, it has the benefit of the ‘carve out’ under s 4(2)(a) LAA because it always acted through the instrumentality of Urban, a registered agent. 205 In response Urban contends that the meaning of s 4 (2)(b) LAA and the reference to the instrumentality of an agent must be understood in the context of s 6 LAA, the requirement of the agents to be registered. In my view, the correct approach is to identify whether what is done by the alleged agent satisfies s 4(1)(a) or (b) LAA. If the alleged conduct satisfies that descriptor, then it is not necessary to attempt to consider the carve out provision of s 4(2)(b) LAA. Obviously enough, a person acting through the instrumentality of an agent is performing work or tasks that may, at a number of levels, be connected with an agency but which (sales, negotiations) are canvassed through an agent. That is different from the work actually done which attracts the operation of s 4(1)(a) LAA. 206 I do not think it is useful or advisable to attempt to opine further about s 4(2)(b) LAA because it requires a factual enquiry. An example is the decision of the Queensland Court of Appeal in Kedcorp Pty Ltd v Jenkins80 which relevantly turned on an enquiry about the proper characterisation of the factual substratum of the participants’ conduct and positions. 207 I make the following findings of fact and principle. 208 Between 2016 and 2020, Austral and Global were involved in the negotiation of the sale and completion of contracts of ‘off the plan’ apartments across developments in South Australia, Victoria, and Queensland. There were two developments in Victoria; the Tao Home Apartment and Sovereign Blackburn projects. The developments in South Australia was the Realm Apartment project. 80 [1999] QCA 452; [2002] 1 Qd R 49. -- 71 of 77 -- [2024] SADC 115 68 The development in Queensland was the Cannon Hill project and the only task performed for that project was the holding of information sessions. 209 The services provided by Austral and Global are described in services agreement executed with Urban. Austral and Global were required to provide particular services according to particular projects. Under the Realm Adelaide and Tao Apartment Services Agreement, Austral and Global were engaged:- To procure buyers for the relevant project and obtain execution of contracts of sale; (b) In consideration of the procuration of these buyers, Austral and Global Link were entitled to commission in two separate payment of 2.5 %. The first 2.5 % was payable upon a purchaser executing a contract of sale and delivering the deposit. The second 2.5 % was payable within 30 days of the settlement of the Real Adelaide Apartments. If the contract for sale failed, the latter 2.5 % was not payable. 210 Austral and Global were not registered or licensed to provide the services of Real Estate agent in any of South Australia, or Victoria. 211 In considering whether or not an agent located overseas, for example, had a sufficient connection with either South Australia, Victoria, or Queensland it is necessary to look at the whole transaction and this will include analysing all of the steps taken by the agent leading to the completion of the sale as being steps in the transaction of negotiating the sale. Thus, any act of an agent which constitutes a steps towards the completion of the sale or the completion of the conditions of sale are matters to be taken into account when considering the whole of the transaction.81 212 On the question of assessing the connection between the acts of the alleged agent and the jurisdiction, the focus is always upon the whole transaction, the steps taken by the agent pursuant to its contract, what was done physically by the agent outside of the jurisdiction, within the jurisdiction and in connection with the jurisdiction. This will include a consideration of such things as emails, exchanges of documents, the existence of personnel within the jurisdiction and all of the communications from outside of the jurisdiction, within the jurisdiction and between the participants to the transactions. 213 Also on the question of the territorial connection between a person and the jurisdiction, the law is well settled that if there is a real connection between the 81 Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418 at 421-422 per Mc Tiernan J; at 438 per Walsh J; At 443-446 per Walsh J, see also Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303, 310-312 per Lindgren J; see also Sultana Investments Pty Ltd v Cellcom Pty Ltd [2008] QCA 357. -- 72 of 77 -- [2024] SADC 115 69 activity and the jurisdiction, even if the activity is connected with a person who is remote from the jurisdiction, that is sufficient.82 214 I am satisfied that there is sufficient evidence of connections between the applicants and the states of South Australia and Victoria sufficient to substantiate the necessary connections. The contracts for sale were all specifically drafted in the relevant states in order to comply with the legislative schemes in those states concerning the transfer of interests in real estate. These were sent to Austral and Global. 215 When a purchaser had been identified, arrangements would be made by Austral and Global to arrange for the execution by the purchaser of the contract which would then be forward to the relevant Australian state by execution by the vendors. 216 Then, Austral and Global would arrange for the payment of the deposits into the bank accounts identified and these deposits were then retained by the solicitors appointed by the vendor. Arrangements were made directly between Austral and Global and the relevant vendor/solicitors for the payment of the deposits, usually into the solicitor’s trust accounts. 217 The Tao Home Apartments and Sovereign Blackburn contracts were executed by the vendors in Victoria and were retained there by the vendors. The Realm Apartment contracts were executed and then retained in South Australia by the vendors solicitors Lynch Meyer Lawyers. 218 Subsequent to the execution of the contracts and the payments of the deposits there was reasonably constant communication between Austral and Global and the relevant vendor’s agents. For example, there were negotiations and communications about: colour selections; rental guarantees; FIRB approvals; about purchaser’s finance; about execution of security documents and arrangement of finance; and stamp duty issues. 219 I am satisfied that Austral and Global were not acting through the instrumentality of the agency Urban or any other person or entity.83 220 It is well settled that there may be more than one agent in a transaction. It is also well settled that a person who is not a licensed agent who purports to act in conjunction with a licensed agent to bring about a sale does not, thereby, become a licensed agent for the purposes of the legislation. That is because it is necessary to analyse the activities of the agent which are to be viewed as a whole. Therefore, in context where a person or entity is acting as an agent, viewed in its entirety, in my view it is not an answer to contend that the relationship of that person with 82 Jordan v Persse [2017] SASC 133 at [17]- [24]; Port McDonnell Professional Fisherman’s Assn Inc v South Australia (1989) 63 ALJR 671 at 681; see also Pearce v Florenca (1976) 135 CLR 507, 518; See also Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1. 83 See Jenkins v Kedcorp Pty Ltd [1999] QCA 452; [2002] 1 Qd R49 at [12]; [14], and [16]. -- 73 of 77 -- [2024] SADC 115 70 another licensed agent meant that the unlicensed agent was acting through the instrumentality of a licensed agent. Quantum Meruit 221 The applicants also relied, in the alternative upon the principles of quantum meruit such that, in accordance with principle the applicants are entitled to an assessment under the principles of quantum meruit. The respondents contention is that as this is an allegedly illegal contract and that the applicable principles were summarised by McPherson JA in Sutton v Zullo Enterprises Pty Ltd84 at [9] – [10] as follows:- [9] The relevant statutory provision is materially different from those in other States on which reliance was placed on this appeal, which include Lee Gleeson Pty Ltd v Sterling Estates Pty Ltd (1991) 23 NSWLR 571 and O’Connor v Leaw Pty Ltd (1997) 42 NSWLR 285. I respectfully agree with the strictures on Tea Tree Gully Builders Co. Pty Ltd v Martin (1992) 59 SASR 344 made by White J. in her reasons in Mostia Constructions Pty Ltd v Cox [1994] 2 Qd.R. 55, 60-61, but not with her Honour’s own decision in Riteway Constructions Pty Ltd v Baulderstone Hornibrook Pty Ltd (Sup. Ct. no. 1987 of 1997, 28 August 1998). One of the difficulties in cases like this of adopting retention of benefits as the criterion of liability for restitution is that in practice the building owner rarely has the option of rejecting work and materials built into or on his or her land in the course of the carrying out the contract or works: cf. Sumpter v Hedges [1898] 1 QB 673. But, since the undertaking to do and the carrying out of the building work are both prohibited by s 42(1), it is difficult to see why the expression “monetary consideration for” doing the work should not receive a correspondingly wide meaning preventing recovery of restitutionary compensation for the prohibited work. [10] That the respondent expected to be paid for what he did in the way of building work is not in doubt. It plainly appears from his pleading in the action. He has, it appears, already been paid for part of what he did. He was, however, not appropriately licensed to do work of the kind agreed to be carried out by him. It follows from what has been said here that he is not entitled to the unpaid balance of what is claimed still to be owing to him. The result may elicit some sympathy for the plaintiff; but in this Court the legislation allows nothing more. Repeated instances of non-compliance with the Act, of which since its enactment several examples have come before the courts, can have the consequence only of diminishing the fund from which insurance is payable to disappointed building owners. No doubt it is also true that, by not paying the premiums or fees exigible under the Act, a builder who fails or refrains from doing so is able to assume a more competitive position in the building construction market than others who are more punctilious in complying with their statutory obligations. In the end, however, none of this affects the conclusion that, no matter how it is framed, the respondent plaintiff’s action in the District Court to recover the value of his building work is bound to fail. 222 The question for resolution in this case was whether a builder could recover a fair price for work done in connection of s 42(1) of the Queensland Building Services Authority Act 1991. Under it, a builder was prohibited from performing building work without an appropriate licence and if he did, he was not entitled to 84 [1998] QCA 417. -- 74 of 77 -- [2024] SADC 115 71 any monetary consideration for the work. He was also not entitled to an assessment under a quantum meruit because of the express provision of the statute. 223 It is well settled that if a person carrying out particular types of work, is by legislation required, for example, to be licensed (as a real estate agent) and the legislation forbids any unlicensed person from entering into a contract or performing work and may not receive or retain any payment therefore, then a claim for reasonable remuneration will be refused. These general principles rests upon the maximum: ‘…ex turpi causa non oritur actio…’ meaning that no cause of action may arise out of illegality.85 In Australia, this maxum is limited to contractual causes of action.86 This court is unable to claim jurisdiction to enforce a contract prohibited by statute because it is beyond the jurisdiction of this court to enforce such a contract. Courts at first instance and intermediate Courts of Appeal have held that a quantum meruit will not be available if statutory requirements have not been complied with.87 224 Under the LAA, an unlicensed person is not entitled to claim commissions or other consideration for services performed as an agent. Any payment made to such a person may be recovered as a debt. In Victoria, a person is not entitled to sue for, recover, or retain any commission in respect of such a transaction. In Queensland, an unlicensed person is not entitled to sue for, recover, or keep a reward or expense for the performance of an activity as a property agent. It follows, in my view, the application of the principles of equity or restitution do not come to the aid of the applicants here. 225 I am also satisfied that the only exception to the ex turpi rule is if the applicants were able to establish some form of independent cause of action which is independent of the contract and does not rely upon the illegality of the transaction to support the claim. 226 The maxim ‘…in pari delicto potior est conditio defendentis…’ is an expression of the rule that where parties are equally implicated in the illegality established, a court will not intervene. The essential question is whether or not parties are equally at fault. In the usual course, that is an extraordinarily difficult task to decide and is made more difficult by the application of the ex turpi rule about illegality. But even so, the two maxims do not complement each other because the ex turpi rule prevents any applicant from claiming upon a contract. 227 It is to be recalled, that in general, claims for restitution of money paid under an ineffective contract are based upon total failure of consideration. In George v Greater Adelaide Land Development Co Ltd,88 the High Court held that where a purchaser had paid part of a purchase price under a contract for sale of allotments 85 Viz Holman v Johnson (1775) 1 Cowp 341 at [343]; 98 ER 1120 at [1121] per Lord Mansfield: No court will lend his aide to a man who founds his action upon an immoral or illegal act. 86 Gollan v Nugent (1988) 166 CLR 18 at [46] per Deane, Dawson, Toohey and Gaudron JJ. 87 See Oliver Hume (Australia) Pty Ltd v Land Source Australia Pty Ltd [2015] VSC 77 at [32]-[39]. 88 (1929) 43 CLR 91. -- 75 of 77 -- [2024] SADC 115 72 of land which contravened the Town Planning and Development Act 1920 (SA) and where specific performance of the contract was refused by application of the ex turpi rule, the court also held that money paid by the purchaser was irrecoverable because it was paid to a party pursuant to the illegal contract. The court refused to order restitution. The High Court did not disturb the decision of the Full Court of the Supreme Court of South Australia.89 228 Each of the relevant legislation in South Australia, Victoria and Queensland have made clear that there are to be no exceptions to the ex turpi rule. Under s 63 LAA, the person receiving consideration who is not an agent, is subject to a claim for debt because that person is not entitled to receive that consideration. Under s 51 of the Victorian legislation, the agent is not entitled to retain any commission or money in respect of any transaction unless licensed. Under s 89(1) of the Property Occupation Act 2014 (QLD), a person is not entitled to keep a reward for the performance of an activity as an agent unless a person was licensed. 229 The applicants were at all material times in relation to the South Australian and Victorian projects acting as real estate agents for the purposes of the applicable legislation. 230 The applicants were not licensed as required by the applicable legislation in each state respectively. The applicants were not entitled to claim for payment of any commission or like consideration connected with their activities on real estate agents. Nor are the applicants entitled to retain any commission payments made to them in connection with work done by them. The applicants are not entitled to claim any form of quantum meruit in relation to the work done by them. 231 The decision I have reached here reflects the application of the decisions of intermediate Courts of Appeal and High Court. Those decisions reflect the interpretation of applicable statutory schemes established in each state jurisdiction. This legislation reflects an obvious public policy objective and purpose; the protection of members of the public involved in what usually is the largest transaction in their lives: the purchase of real estate. Those statutory schemes also reflect the requirement that anyone acting as an ‘agent’ must be licensed which is consistent with the same public policy objective and purpose. This is quite forcefully made clear in the decision of Pincus JA in Sutton v Zullo Enterprises Pty Ltd.90 232 I have earlier made reference to the cross claim by the respondent for the applicants to disgorge the amounts paid to them by the respondent. The respondent has bound itself to its pleaded case and there has not been a joinder of other interested parties who/which according to the pleading are the proper cross 89 It may reasonably be thought that this decision is very harsh. In light of more recent developments in the law of restitution, that may well be so, but restitution in the context of an unjust enrichment is not a cause of action but is a unifying principle. In Davids Securities v The Commonwealth Bank of Australia (1992) 175 CLR 353 at 400; 109 ALR 57. Brennan J referred to this decision without disapproval. 90 [1998] QCA 417 at [3]-[4], and [6] – [8]. -- 76 of 77 -- [2024] SADC 115 73 claimants. There are several difficulties. First the evidence is unclear about the identity of the proper cross claimant; second the amount of the cross claim as a result is also unclear because of this lack of clarity; third the authority of Urban to bring a cross claim in the context of this claim is therefore similarly in doubt; and finally, whether if another cross claimant is the proper party, what authority Urban had to bring such a cross claim. These matters have not been satisfactorily addressed. I am not prepared to make any orders on the cross claim until I have heard further from the parties. 233 I make the following orders: 1. Applicants claims are dismissed. 2. I will hear the parties further in relation to the respondent’s cross claim. 3. I reserve the question of costs. -- 77 of 77 --