David Deane & Associates Pty Ltd v Bonnyview Pty Ltd [2005] QCA 270

SUPREME COURT OF QUEENSLAND CITATION: David Deane & Associates P/L v Bonnyview P/L & Ors [2005] QCA 270 PARTIES: DAVID DEANE & ASSOCIATES PTY LTD ACN 010 105 549 (plaintiff/respondent) v BONNYVIEW PTY LTD ACN 087 181 575 DONNYVIEW PTY LTD ACN 087 181 557 RAVENSVIEW PTY LTD ACN 087 181 548 (defendants/appellants) FILE NO/S: Appeal No 11354 of 2004 DC No 4797 of 2002 DIVISION: Court of Appeal PROCEEDING: General Civil Appeal ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 5 August 2005 DELIVERED AT: Brisbane HEARING DATE: 21 July 2005 JUDGES: McMurdo P, Williams and Keane JJA Separate reasons for judgment of each member of the Court, each concurring as to the orders made ORDER: 1. Appeal dismissed 2. Appellants to pay the respondent's costs of the appeal to be assessed on the standard basis CATCHWORDS: CONTRACTS - PARTICULAR PARTIES - PRINCIPAL AND AGENT - RIGHTS OF AGENT AGAINST PRINCIPAL - REMUNERATION OR COMMISSION - CONDITIONS ESSENTIAL TO ENTITLE AGENT TO REMUNERATION - RELATIONSHIP MUST BE THAT WHICH AGENT IS EMPLOYED TO ESTABLISH - where appellants appointed the respondent as an agent to arrange for the sale of subdivided lots owned by the appellants - where the terms of the respondent's appointment provided for a commission to be payable if the respondent were to "introduce a purchaser who enters into a valid and enforceable Contract of Sale … and who completes such Contract" - where terms of appointment also provided that commission was still payable in the absence of completion of the contract of sale if it was the appellants who were -- 1 of 10 -- 2 responsible for the failure to complete - where respondent introduced a third party who entered into a put and call option agreement with the appellants - where land was sold to purchasers nominated by this third party - whether put and call option agreement amounted to a contract of sale - whether the contract of sale constituted by the option agreement was completed - whether any failure to complete the contract of sale constituted by the option agreement was the responsibility of the appellants Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57, applied L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52, cited Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2; (2001) 202 CLR 351, cited Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, applied Salter v Gilbertson [2003] VSCA 1; (2003) 6 VR 466, considered Vickery v Woods (1952) 85 CLR 336, cited COUNSEL: P E Hack SC for appellants P J Davis for respondent SOLICITORS: Lynch & Co for appellants McInnes Wilson Lawyers for respondent [1] McMURDO P: I agree with Keane JA's reasons for dismissing the appeal with costs. [2] WILLIAMS JA: I have had the advantage of reading the reasons for judgment of Keane JA and there is nothing I wish to add thereto. I agree with the orders proposed therein. [3] KEANE JA: The appellants were the owners of two parcels of land (Lot 6 on Registered Plan 77662 and Lot 800 on Registered Plan 882085) which they intended to subdivide into 45 lots for sale. By an agreement in writing dated 29 May 2001, the appellants appointed the respondent, which carried on business as a real estate agent, as their agent to sell the subdivided lots for an agreed commission the amount of which varied with the selling price of each lot. [4] On 5 July 2001, pursuant to an introduction by the respondent, the appellants entered into three put and call options with Traspunt No 2 Pty Ltd ("Traspunt"), a company associated with Mr David Trask and Mr Robert Trask ("the option agreements"). Each of these option agreements conferred on Traspunt the right to compel the appellants to transfer all the lots to it for the prices stipulated in the schedule. Each of these option agreements conferred on the appellants the right to compel Traspunt to acquire, either for itself or its nominee, a certain number of the lots at a stipulated price in the event that Traspunt did not elect to acquire that number of lots itself within periods of 90, 180 and 270 days respectively from the -- 2 of 10 -- 3 date of registration of the plan of subdivision. The cumulative effect of the three agreements was that all the lots could have been put by the appellant to Traspunt. [5] Subsequently, plans of subdivision in respect of the appellants' two parcels of land were registered thereby giving effect to the intended subdivision. By November 2002 all of the subdivided lots had been sold. [6] By a deed dated 28 November 2001 the appellants and Trask Development Corporation No 2 Pty Ltd ("Trask Development"), another company associated with the Trasks, agreed that the appellants would transfer the subdivided lots as they were sold to buyers introduced by yet another company associated with the Trasks. It may be noted that this Deed recited the existence of a contract of sale between the appellants and Trask Development in respect of land which included lots to be sold by the respondent. The Deed of 28 November 2001 purported to vary the terms of that contract of sale. [7] The respondent did not seek to ground its claim for commission upon the contract of sale referred to in the recitals in the Deed of 28 November 2001. Nevertheless, that Deed is relevant in that it expressly recognized the continued existence of the option agreements. [8] The learned trial judge upheld the respondent's claim for commission on the total price payable to the appellants under the option agreements. [9] The appellants accepted the correctness of the learned trial judge's finding that Traspunt had been introduced to the appellants by the respondent. The learned trial judge also found that the respondent took part in negotiating the terms of the option agreements. The appellants dispute the correctness of this finding. In the view I take of the matter, it is not necessary to resolve the appellants' challenge in this regard. [10] The learned trial judge found that each contract made with an ultimate purchaser of a lot was settled in a manner consistent with nearly all the substantial requirements of the Put and Call Options. The appellants challenge this finding, the challenge being based on the absence of evidence of delivery of call or put notices in accordance with the provisions of the option agreements. Before going any further, it is necessary to set out the relevant provisions of these agreements: "2. Call Option 2.1 In consideration of the payment of the Option Fee by the grantee to the grantor the grantor offers to transfer to the grantee or its nominee any one or more of the lots as have not been previously sold, for the price per lot stipulated in the First Schedule, by one or more contracts on the terms set out in the Second Schedule. 2.2 The grantee or its nominee may purchase the lots in any order and may purchase any one or more of the lots as specified by the grantee at any one or more times for the amount per lot which is not less than the amount stipulated in the First Schedule. 2.3 The offer contained in Clause 2.1 is irrevocable until the expiry date and will lapse on such date. 3. Exercise of Call Option 3.1 The grantee may accept the grantor's offer at any time prior to the expiry date by delivering to the grantor or its solicitors two -- 3 of 10 -- 4 copies of a contract executed by the grantee or its nominee with the name and address of the grantee or its nominee as purchaser and the price nominated by the grantee as provided in Clause 2.2 inserted in the contract. If the contract is executed by a nominee then the contract may have added to it a condition making the performance of the contract subject to the nominee obtaining finance to enable it to complete the purchase on terms and conditions acceptable to the nominee by a date to be nominated in the contract. If the nominee fails to obtain the finance and as a result the contract is terminated then the grantee shall be deemed not to have accepted the grantor's offer and the grantor's offer will remain open for acceptance until the expiry date. The grantor shall sign and return one (1) copy of such contract to the grantee with seven (7) days of the acceptance of the grantor's offer. 3.2 If the offer is accepted by a nominee then the grantee shall when delivering the contract as required by Clause 3.1 give notice to the grantor nominating the party who executes the contract as [sic] purchase as the grantee's nominee. 4. Put Option 4.1 If the grantee has not procured completion of contracts for the purchase of [either 10, 15 or 20 lots depending on the relevant option agreement] of the grantee's choice by the expiry date, the grantee grants to the grantor the right to require the grantee to purchase [the relevant number of lots] (less the number of lots that may have been sold to the grantee or its nominee/s pursuant to this option) of the grantor's choice at the price per lot as stipulated in the First Schedule. 4.2 The offer referred to in Clause 4.1 is irrevocable, can be accepted after the expiry date and will lapse without further notice on the date which is seven (7) days after the expiry date. 5. Exercise of Put Option The grantor may exercise the Put Option by delivering to the grantee or its solicitors two (2) copies of the contract in the form comprising the Second Schedule complete [sic] by adding appropriate details of the grantee, the price, the deposit and the date for completion ascertained in accordance with the provisions hereof and signed by the grantor as vendor. The grantee or its nominee shall sign and return one (1) copy of such contract to the grantor within seven (7) days of the exercise of the Put Option. Completion of such contract shall be forty-five (45) days after the exercise of the Put Option. . . . 7. Option Fee 7.1 The grantee will pay the option fee to the grantor when the grantee delivers this agreement to the grantor. 7.2 If the Call Option is exercised pursuant to Clause 3 the purchase price payable by the grantee or its nominee will be deemed partly paid to the extent of $1,000.00 on settlement of the sale of each relevant lot. 7.3 If the Put Option is exercised pursuant to Clause 5 the option fee will be retained by the grantor and the purchase price -- 4 of 10 -- 5 payable for the lots in respect of which the grantor has exercised the Put Option will be deemed payable to the extent of $1,000.00 per lot upon completion.” [11] The appellants are correct in pointing out that there was no evidence of the giving of call or put notices. Mr George, the sole director of the appellants, said that he did not receive call notices under clause 3.2 of the option agreements and that he did not pay the option fees payable under clause 7.1 of the option agreements. He signed the contracts of sale for lots as they were submitted to him by the Trasks. [12] Importantly, however, Mr George accepted in cross-examination that his relationship with the Trasks was constituted by the option agreements; and that he was not worried by the absence of any formal notices. In re-examination, he said he "had no choice but to sign those contracts under that put and call agreement". That acknowledgement is consistent only with the continued existence of the option agreements throughout the period during which the lots were realized by the appellants. In an affidavit, sworn for the purposes of resisting summary judgment, Mr George swore that the ultimate purchasers were introduced to the appellants by "Traspunt pursuant to 3 Put and Call Option Agreements". Mr George also swore that each of the ultimate purchasers of the lots "was introduced to the [appellants] … by way of the exercise of the Call Option under the said Put and Call Option Agreements". Mr George swore that the appellants paid "Traspunt a marketing fee in respect of each completed sale of a Lot. The marketing fee payable to Traspunt is determined by calculating the difference between the sale price of a Lot and the amount specified in the schedules to the Put and Call option agreements for that Lot … ". On the basis of this evidence, which is consistent only with continued subsistence of the option agreements while the lots were being realized, I consider that the learned trial judge's finding was soundly based. [13] Her Honour held that the option agreements each constituted a contract of sale but that they were not completed. Her Honour held that "the individual contracts which were completed did so consistently with the Put and Call Options and the variation agreement and, to my mind, there was no break in the chain of causation from the agency agreement to the completed contracts". Her Honour referred to the circumstances that the lots were sold for the prices set out in the schedule to the option agreements and that a marketing fee was paid to Traspunt in accordance with the formula in the option agreements. Her Honour relied in this regard on Moneywood Pty Ltd v Salamon Nominees Pty Ltd.1 [14] The appellants contend that her Honour's conclusion as to the "unbroken chain of causation" cannot be treated as a surrogate for the event upon which commission became payable under the respondent's instrument of appointment. The appellants argue that Moneywood Pty Ltd v Salamon Nominees Pty Ltd is distinguishable in that there was, in that case, no contractual statement of the event on which commission became payable of the kind which bound the parties here. In my respectful opinion, the judgment can be sustained on a footing which does not require this contention to be resolved adversely to the appellants. In this regard, the respondent submitted by way of a notice of contention that the learned trial judge should have concluded that the contracts of sale in the option agreements were completed by the parties thereto in the sense that the rights which characterized the 1 [2001] HCA 2 at [27] - [29]; (2001) 202 CLR 351 at 360. -- 5 of 10 -- 6 option agreements were satisfied notwithstanding the absence of insistence upon the mechanisms provided for the satisfaction of those rights. [15] The appellants argue that the option agreements cannot properly be described as enforceable contracts of sale and, in any event, that they were not completed so as to entitle the respondent to commission in accordance with the terms of the respondent's appointment.2 Under that instrument the agreed commission became payable in the event that the respondent should "introduce a purchaser who enters into a valid and enforceable Contract of Sale confirmed by [the appellants] for such property, and who completes such contract; or … [the appellants] do not complete such Contract; or [the appellants] agree to release the Purchaser from further obligation under such Contract". [16] The appellants contend that each of the option agreements cannot be described as a contract of sale. That contention is based principally on the proposition that the option agreements afforded Traspunt the right to acquire the lots, but did not oblige it to do so.3 Further consideration of the appellants' argument requires closer attention to the terms of the option agreements. [17] Clause 3 of each option agreement provided that the appellants' offer in clause 2 to sell each lot referred to in the instrument might be accepted by Traspunt by delivering to the appellants an agreed form of contract document executed by Traspunt or its nominee. As has been seen, the appellants emphasize that this mechanism was never invoked as between the appellants, Traspunt and the ultimate buyers of the lots. [18] Clause 4 of each option agreement provided that, should Traspunt not procure the completion of the prescribed number of rules of lots by an agreed date, the appellants would be entitled "to require [Traspunt]" to purchase those lots at a stipulated price. [19] Clause 5 of each option agreement provided that the appellants might exercise their right to put each lot to Traspunt by delivering an agreed form of contract to Traspunt. [20] Clause 6 of each option agreement provided that a contract shall come into effect and be binding upon the parties, in the case of the call option - upon delivery by Traspunt or its nominee of the contract document to the appellants, and, in the case of the put option - upon delivery by the appellants to Traspunt of the contract document. The appellants point out that the contract documents were not delivered as between Traspunt and the appellants or vice versa. [21] In my respectful opinion, the learned trial judge was correct in her conclusion that the appellants' argument does not accommodate the existence of Traspunt's obligation to purchase the lots pursuant to the exercise of the put option. The appellants' argument takes too blinkered a view of the terms of the option agreements which plainly contemplate that Traspunt had not only the right to acquire the lots but also, should the appellants choose to put the lots to Traspunt, the obligation to do so. 2 Cf L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52 at 66. 3 Commissioner of Taxes (Qld) v Camphin (1937) 57 CLR 127 at 132 - 133. -- 6 of 10 -- 7 [22] At this point, however, it must be acknowledged that the put option in each case obliged Traspunt only to acquire such lots as the appellants might elect to put to it. Traspunt's obligation as purchaser was conditional on the exercise of the put option. This does not mean, however, that the option agreements did not amount to valid and enforceable contracts of sale. Indeed, there is much to be said for the view that the option agreements are properly so described, even though the obligations of the parties to buy and sell depended upon the giving of notices exercising the options. In Laybutt v Amoco Australia Pty Ltd4 the High Court was concerned with an option to purchase land exercisable by notice in writing to the vendor. Gibbs J (as his Honour then was) considered at length the "standing controversy"5 as to the true nature of an option to purchase, and concluded:6 "I consider that an option to purchase (at least one in a form similar to that in the present case) is a contract to sell the land upon condition that the grantee gives the notice and does the other things stipulated in the option. An option to purchase, regarded in that way, is not an agreement which gives one of the parties the right to perform it or not as he chooses; it gives the grantee the right, if he performs the stipulated conditions, to become the purchaser." Similarly, in the present case, the put option gave the appellants the right to become the vendor. [23] Further, to speak of a contract of sale is to speak of a contract to transfer property for money.7 Those are the essential rights and obligations which characterize a contract as a contract of sale. The option agreements provided a mechanism by which these rights and obligations could be engaged. If the appellants elected to exercise their put option then the form and substance of the resulting contract, including the sale price, would be determined by reference to the provisions of the option agreements. In that regard, clauses 3 and 5 of the option agreements were machinery provisions facultative of realization of the lots by sale by the appellants to Traspunt or its nominees. Once the machinery conditions in the option agreements became irrelevant to the respective substantive rights of the appellants and Traspunt, the description of the arrangements in the option agreements as a contract of sale was undeniably accurate. What might have originally been characterized as options or contracts relating to a sale or even contracts simpliciter, but not contracts of sale, had become, by the mutual resolution of the contingencies to which they were previously subject, contracts which were properly characterized as contracts of sale and which were, indeed, performed as such. This point, that the character of a contract may change as its conditions are fulfilled or dispensed with, may be illustrated by reference to the observations of Wilson J in Perri v Coolangatta Investments Pty Ltd8 where his Honour said: "The obligation to complete [the contract] is contingent on the fulfilment of the condition, but in the meantime there is a conditional contract in existence from which neither party is at liberty to 4 (1974) 132 CLR 57. See also Meehan v Jones (1982) 149 CLR 571 at 581. 5 Braham v Walker (1961) 104 CLR 366 at 376. 6 (1974) 132 CLR 57 at 76. See also Kennewell v Dye [1949] Ch 517 at 522 - 523; Carter v Hyde (1923) 33 CLR 115 at 120, 128; Denham Bros Ltd v W Freestone Leasing Pty Ltd [2003] QCA 376 at [21]; [2004] 1 Qd R 500 at 509. 7 Littlewoods Mail Order Stores Ltd v Inland Revenue Commissioners [1963] AC 135 at 152; Chan v Dainford Ltd (1985) 155 CLR 533 at 537; Francis & Ors v NPD Property Development Pty Ltd [2004] QCA 343; Appeal Nos 6482 to 6487 of 2004, 24 September 2004 at [15]. 8 (1982) 149 CLR 537 at 556 - 557 (citations footnoted in original). -- 7 of 10 -- 8 withdraw at will. Interim obligations were undertaken by both parties. The vendor had to make good its title to sell, and the purchasers were obliged to pay the deposit and make all reasonable efforts to bring about a sale of the Lilli Pilli property. Speaking for myself, I have difficulty in assigning the decision in Aberfoyle to the very limited category of cases dealing with conditions precedent to the formation of a contract. It seems to me that when Lord Jenkins ([1960] AC at pp 128, 130) spoke of a condition precedent, he was speaking of the condition in that case as precedent to the coming into existence of a binding contract of sale. As Sachs L.J. remarked in Property and Bloodstock Ltd v. Emerton ([1968] Ch 94 at p 121), after referring to Lord Jenkins' words, 'The distinction, of course, is there drawn between a contract and a contract of sale, and that particular distinction is one which derives from the long-used phraseology, almost the traditional phraseology, such as that to be found in Anson on Contract, 22nd ed. (1964), p. 111, and in Chalmers' Sale of Goods 14th ed. (1963), p. 243.' Again, in In re Sandwell Park Colliery Co.; Field v The Company ([1929] 1 Ch 277 at p 282), Maugham J. refers to a 'condition upon which the validity of the contract as one sale depends' (sic 'one of sale') and to a 'condition precedent to the validity of a contract for sale of land' (my emphasis) ([1929] 1 Ch at p 283)." The result, in my view, is that it must be accepted that the option agreements constituted valid and enforceable contracts of sale between the appellants and Traspunt. [24] It must be remembered at this point that the terms of the respondent's appointment as the agent of the appellants made it clear that commission was not payable simply because a contract of sale was entered into as the result of an introduction made by the respondent. It was also necessary that the purchaser be someone who "completes such Contract; or who does not complete such Contract in circumstances where the Deposit or some part thereof is forfeited; or who does not complete such Contract pursuant to any default, act or omission by [the appellants]; or [the appellants] do not complete such contract; or [the appellants] subsequently agree to release the Purchaser from further obligation under such Contract". The appellants submit that none of the circumstances listed in the terms of appointment apply to the instant case. I am unable to accept that submission. [25] Even if it were accepted that the option agreements were not completed, which is a matter to which I shall return, it would not follow that the respondent was not entitled to a commission. The essence of the option agreements entered by the appellants and Traspunt was that if Traspunt did not procure the completion of contracts for the purchase of all 45 lots covered by the option agreements by an agreed date then the appellants could require Traspunt to take conveyance of those lots. Whether or not the put option was exercised was solely a matter for the appellants. The appellants chose not to exercise that option. That may well be because it had become unnecessary to do so, given the way in which events had developed, however that does not change the fact that it was the appellants who chose not to require Traspunt to complete the contracts of sale provided for in the option agreements. In those circumstances, once it is acknowledged that the option agreements represented valid and enforceable contracts of sale, the respondent was -- 8 of 10 -- 9 entitled under the terms of its appointment to a commission because it had introduced a purchaser who entered into a contract of sale that the appellants had then failed to complete. [26] In any event, those considerations may be placed to one side if one were to reach the conclusion that the terms of the option agreements were completed. As has been seen, the Deed of 28 November 2001 did not purport to rescind the option agreements; rather it assumed their continued existence. The machinery provisions of the option agreement clauses did not purport to proscribe the performance by Traspunt and the appellants of their substantive obligations under the option agreements by other means should they choose to do so. The respondent's right to commission was dependent on the completion of a contract of sale: it was not dependent upon completion of the contract of sale by the mechanisms therein provided. Should the parties to a contract proceed to completion without insisting upon the observance of the contractual machinery, the agent who brought the parties together would nevertheless be entitled to its commission.9 [27] It is clear from Mr George's evidence, to which reference has already been made, that the appellants recognized that during the realization process they were bound, because of the continuing existence of the option agreements and the substantive rights and obligations created thereby, to execute and complete individual contracts of sale with persons nominated by the Trask interests and that, within the Trask entities, that entitlement arose in Traspunt, in respect of which the appellants were under a correlative obligation. The entitlement and correlative obligation arose under the option agreements. [28] Traspunt's substantive obligations under the put option were such as to oblige it to purchase the lots; Traspunt could not avoid the obligation to pay for the lots if required to acquire them by the appellants. True it is, that Traspunt's obligation to purchase was contingent on notice of the appellants' election to sell, but any requirement of notice became irrelevant to the substance of Traspunt's obligation when the appellants agreed to transfer the lots to Traspunt's nominees. Mr George's evidence confirms that the individual purchasers were Traspunt's nominees to whom the appellants were obliged to transfer the particular lots. In Vickery v Woods10 Dixon J reaffirmed the correctness of the proposition that "a vendor's obligation is to execute a conveyance of the land sold to the purchaser or as he shall direct". In executing transfers to nominated purchasers, the appellants performed their substantive obligation to transfer to Traspunt's nominee. That obligation, as Mr George acknowledged, was sourced in the option agreements. The performance of that obligation may also have led to the execution of a contract of sale with the ultimate purchasers and the assumption by the appellants of additional and separate obligations to the ultimate transferees. But those additional and separate obligations are entirely consistent with its obligations under the option agreements. They cannot defeat the respondent's entitlement to commission because they do not detract from the conclusion that the event, on which the entitlement to commission depends, has occurred. [29] Equally, to the extent that the appellants received payment in return for the transfer of their lots without the need to put the lots to Traspunt, Traspunt's substantive 9 Lord v Trippe (1977) 51 ALJR 574 at 578. 10 (1952) 85 CLR 336 at 343. See also Lord v Trippe (1977) 51 ALJR 574 at 582. -- 9 of 10 -- 10 obligations in favour of the appellants were performed, the amounts received by the appellants being the prices referred to in the schedule to the option agreements. [30] Support for the reasoning outlined above may be drawn from the principle that, where a contract provides for a transfer to a named purchaser or its nominee, then a transfer to the purchaser's nominee will usually be regarded as an event occurring pursuant to the contract between the vendor and the purchaser rather than as part of a separate arrangement between the vendor and the purchaser's nominee. As Phillips JA, with whom Winneke P and Batt JA agreed, explained recently in Salter v Gilbertson:11 "Ordinarily, where there is an agreement of purchase and sale expressed to be between A (the seller) and B “or the nominee of” B, B is regarded as having the power simply to nominate who shall be transferee (that is, B or another at the direction of B) and a transfer to B and a transfer to B's nominee are alike regarded as in fulfilment of the contract between A and B." It might be said that the present case does not fall neatly within this statement because here there were separate contractual arrangements made with each of the nominees. It is not as if each nominee was simply the recipient of a transfer of land. Yet it was through the option agreements that Traspunt was able to require the appellants to enter into those other arrangements; and it was the option agreements that provided the foundational framework for them. If it is the case, as I have found, that the option agreements represented valid and binding contracts of sale and that the appellant's transferred the lots in question to other parties on the basis that those parties were nominees of Traspunt then, in my opinion, it follows that those transfers should be taken to have occurred in fulfilment of the contract between Traspunt and the appellants. [31] In short, to the extent that the appellants and Traspunt performed their correlative obligations under the option agreements they completed what had become (if they were not originally) contracts of sale because of their implicit agreement to proceed without the need for notices under clause 3 or clause 5 of the option agreements. [32] This conclusion, in my respectful opinion, recognizes the continued existence of the substantive rights and obligations of the appellants and Traspunt under the option agreements and the performance of those substantive rights and obligations. It is to recognize the legal substance which reflects the commercial reality acknowledged in the evidence of Mr George. [33] For these reasons, I conclude that the appellants and Traspunt entered into and completed contracts of sale so as to entitle the respondent to commission in accordance with the learned trial judge's calculation. [34] This conclusion makes it unnecessary for me to deal with the other arguments advanced by the respondent in answer to the appellants' contentions. Conclusion and orders [35] In my opinion, the appeal should be dismissed and the appellants should pay the respondent's costs to be assessed on the standard basis. 11 [2003] VSCA 1 at [17]; (2003) 6 VR 466 at 473. See also Harry v Fidelity Nominees Pty Ltd (1985) 41 SASR 458 at 460 - 461. -- 10 of 10 --