Buist v Simmons & Anor [1991] QSC 112

-'·• ( ·""-.•· 10 (N THE SUPREME COURT OF QUEENSLAND lREVISED COPIE-S"iSSuiolCourt Reporting. Bureau. Date: &,- / 4, ,!j I i_ 1 . Sc$; I//~No. 3962 of 1989 1 :::OMMERCIAL CAUSES JURISDICTION 3EFORE MR. JUSTICE DOWSETT 3RISBANE, 18 JANUARY 1991 BETWEEN: (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) Plaintiff 10 n20 CHRISTOPHER JOSEPH BUIST -and- 20 () ' / CJ SPENCER LEIGH SIMMONS First Defendant -and- LEWIS SIMMONS Second Defendant 30 JUDGMENT HIS HONOUR: All of the parties to this action are, I Pind, experienced in the field of property development, roperty consultancy and in the business of real estate agency. l\.t some time relatively early in 1987, the plaintiff and the 40 Pirst defendant, who were previously known each to the other, ~ad a conversation. The plaintiff lived and worked on the Gold :::oast, and the first defendant lived and worked in Sydney, as jid the second defendant. The thrust of the conversation was that the plaintiff offered to find development propositions in so ~eal estate on the Gold Coast for the first defendant with the intention that the first defendant acquire the relevant properties at his own expense and subsequently resell them at a :>rofit. The plaintiff and the first defendant would share the orofits. The plaintiff was not to invest any moneys in the Govt. Printer, Qld. 1 30 40 50 -- 1 of 14 -- r:_, I·. ' 10 20 acquisitions; · ·but ·his: contribution would be by way of identifying each property and then disposing of it at a profit. He was to·take such' steps as.might be necessary to facilitate such sales, • although precisely what such steps might be is a little'difficult to estimate. In about July of ·1987, the.first and second defendants came to the Gold Coast with the intention that the first defendant take advantage of.the·proposa1· previously made by the plaintiff. It may be that the first and second defendants were to act in conjunction in any subsequent acquisition~ although it is not clear that any final arrangement had been reached as between them at that time. On the occasion of the visit, the plaintiff met the defendants at the airport at the Gold Coast'and showed them various prospective· property investments including, as I 10 0 30 understand the evidence, a property at Tugun, which the first 30 and · second · defendants subsequently acquired and a property at West Burleigh which was subsequently acquired by the company Waraj- Holdings Pty. Ltd. I have said that the Tugun property was acquired by the defendants but it, in fact, was also 40 acqui.red by a company, which company was owned by the first and second defendants. Waraj Holdings was owned by the first and second defendants and a third person, de la Vega, who has given evidence in the trial. ··" This action· concerns· the entitlement of the plaintiff to so share - in the proceeds of resale ·of; each of those properties and also a third·- property in Jefferson Lane at 'Palm Beach. I need not consider the Tugun property because it "has beeri agreed between: _the' piaintiff and ·the·. defendants ·that the property was resold at·a net·loss. Any agreement between the Govt. Printer, Qld. 2 0 40 0 50 -- 2 of 14 -- r-,.._ l .. n (J C) 10 20 30 40 50 60 I arties only involved .. the plaintHf. in participating in a net rof it on resale •. I will deal first with the Jefferson Lane property. It the plaintiff's assertion that after showing the defendants arious other properties on the Gold Coast, he drove up efferson Lane ~hich is a one~way, northbound road on the beach t Palm Beach. I accept that it is not a heavily trafficked oad, but it would seem to me that anybody who was lo~king for each front properties would locate it easily enough. Although he plaintiff was at great pains to say that his advice to the refendants was that beach front property was a good investment, t have no doubt that the first and second defendants were t l, huefmfsieclive.enst,ly well-versed in the ways of the. world to be, aware of that matter. Indeed, I doubt that anybody ould doubt the value of beach front land. The plaintiff submits that in the course of driving along efferson Lane he suggested to the defendants that_ they contact. real estate agent who was known .to him and who was likely to ave suitable properties in that area and that as a .resul:t of r he defendants agreeing to that course, they approached a Mr. raros who then · introduced · the parties to a property in refferson Lane which . they subsequently bought, or which. the· tlefendants' company subsequently bought and resold at a. profi_:t Lf $226,921. It is instructive to look at the plaintiff's own account f the obligation undertaken by_ him pursuant to the alleged greement_with the_ defendants. His evidence was to this effect t p .-7 of the transcript: '.'The effect was ·that .. if I was in a position to identify some good investment opportunities, he ( the first defendant) might be able to_organise the equity necessary Govt. Printer. Old. 3 10 20 30 40 50 60 -- 3 of 14 -- 10 20 for those transactions and look after the financial side of it>' 'if'. I . would - see to the acquisitions of the right properties and the resale of those properties with a view to making a· profit and the agreement·that we made·is that . any profit_ that emanated from such a transaction or 'frarisactiohs would be divided between the two·of us.", nd a little later on·p.8: "Yes, that if I was able to identify properties for purchase and see to.their resale, if there was a profit made, that we would divide the property equally between US. II Even taking the. plaintiff's evidence as to the initial at face value, he did not discharge the obligation of inding investment properties simply by referri·ng the efendants to a real estate agent. On his account of the ra_nsaction., I would be inclined to the view that he had not the property which was subsequently bought in Jefferson - ' ' in the sense contemplated by his alleged agreement~ However the defendants gave a substantially different 30 ccount of the acquisition of that property. They.agree tn,at he plaintiff. was driving them along Jefferson Lane after a of the Gold Coast, but say that in the course of so. the second defendant identified a particular property s_ ~ei~g attractive. Both defendants say that as a result of 40 h~ir, u:r:;ging or the urging of. one or other. of them, the laintiff contacted Mr. Karas whose sign was outside that 50 60 It was discovered that the property in question had but Mr. Karos said that he had another w:tlich might e .of interest to_ them in the same vicinity. It then emerged hat Mr. Ka,~os' office was. very. close to where they were, and ~ 9-:r;-ra,nged to. me.et them_ in .Jefferson Lane immediately . and did o. As_a result _of this_contact they went to another property hich _ ~n,ey inspecte9_. a.nd _ event:1:1ally __ bought. They , say that robably prior_tp:~egot~ating a pQrchase price with,Karos, but Govt. Printer, Qld. 4 10 0 30 0 40 0 50 60 -- 4 of 14 -- n () '1 10 £ter. inspecting 'the prope.rty, they said to. the plaintiff that his property ~ould not be said to be within the terms of the arlier arrangement,· but that they were willing to reward him his efforts on the day in question. The plaintiff uggested that an appropriate reward might be for them to rovide him with- a new fax machine. This was never done, ccording to the defendants, because the plaintiff never rovided them with paitic~lars of the.machine he wanted, and matter was subsequently overlooked. It is obviously desirable to resolve this dispute, ot so much for the purposes of this transaction because·as·I ave already said, it seems to me that even on the plaintiff's ccount · of what happened, it does not come within Ii.ls greement, but · more because it will - be necessary to resolve uestions of credibility generally in connection with the West 3o urleigh property. By and large, my impression of the- witnesses-was that I uch-preferred the defendants and the witness de la Vega to the laintiff. The plaintiff struck me as a rather vague· person. .. hose evidence was marked by an extreme degree of imprecision. 40 e seemed to vacillate in his evidence, and I formed· -the istinct impression that he was reconstructing on many 50 60 ccasions. The defendants and Mr. de la Vega, on the other and, impressed me as efficient businessmen who had very'clear 'deas of what happened at the time and of.what they had in mind hen · ·they · dealt with the •- plaintiff. Their evidence was enerally cionsist~nt · interna·liy aJd also as amongst themselves. - . ' s I · say,· they· struck me as witnesses who were both competent 'n .their business "field and' also quite honest. ·In general, - I. referred their evidence t·o the evidence· of the plaintiff. Govt. Printer, Qld. 5 10 20 30 40. 50 60 -- 5 of 14 -- 10 I am sal:is'fied to· dispose of the conflict between the ccounts· of·-· the· plaintiff and the defendants in respect of the effe:tson'Lane property in this way: I accept the evidence of defendants as to the circumstances leading up to the ransaction and reject that of the plaintiff. I conclude that any event, the plaintiff is not entitled to recover in espect'of this transaction simply because the property was not by him in accordance with the terms of the prior rrangement. I should say that the various agreements which ave been alleged in these proceedings are marked by extreme 20 'mprecision as to the obligations· undertaken by the plaintiff. his is true in respect of both the evidence of the plaintiff rid the defendants on this score. However neither side has ubmi tted that any "contract" should be held to be void for ncertainty, and so I proceed upon the basis that the agreement 30 s found is sufficiently precise to allow enforcement and that of uncertainty arises~ I turn now to the West Burleigh property. This, I might ay, is the most substantial of the properties, and it has also aken tip most of the time at the trial. The property shown by 40 he plaintiff to the defendants in July was a larger property han that eventually acquired by the company to which I have eferred. It was a property which was valued in total at about 10 million: On it was erected a tavern and also some sort of aravari park. The price of $10 million put the matter beyond ·-, 50 ·he iesourc~s of the defendants, and I am satisfied that they aid sb ~i the time. However the property was obviously of ome interest to them and subsequently, the first defendant ''pdke to.' Mr·~ .. ·de .. la - Vega. It had beeh "discovered ·tha·t there ere, in fact, two mortgagees, each having a security over part Govt. Printer, Old. 6 10 0 30 0 40 u (-_ 50 -- 6 of 14 -- · 1 f the property. One of the mortgagees was National estminster Bank, a . company with which Mr. de la . Vega had pecial connections. As a result of these.connections.he was ble to negotiate a purchase 9f part of the property for . a rice in excess of $4 million, which put the transaction within 1o he combined resources of the defendants and de la Vega. I am _, 20 atisfied that on or about 8 October, probably on that date, he defendants and Mr. de la Vega attended at the office of Mr. yrne a partner in the firm of Tress Cocks & Maddox in Sydney nd that they were attending there for the purpose of inalising documentation incidental to the acquisition of the Cl () CJ C) ) roperty. In the course of the transactions, they spoke . by elephone with the plaintiff and with respect to the relevant onversations, I am satisfied to accept that the conversations ccurred on a conference telephone so that all of those present 30 ,n Sydney could hear what was being said, and the plaintiff was ble to hear what they were saying. I am satisfied that in the ourse of such telephone calls, the plaintiff indicated that he onsidered that he was entitled to participai:e . in any pr 1 qfi t.s erived from the acquisition and resale of the West.Burleigh 40 roperty by virtue of the prior arrangement between.him and 50 60 he first defendant. I am satisfied that the defendants and Mr. de la Vega, .in particular Mr. de la Vega, objected to this proposition on the lasis that the property to which they had b~en introduced, was ot substantially the same.as that which.they were acquiring in he sense i:hat they were acquiring a smaller part at a lower rice as a result of Mr. de la Vega's special intercession with atwest. I am satisfied.,_that_ the plain_tiff asserted his claim nd that as a result of this dispute, it was agreed tbat .the Govt. Printer, Qld. 7 't-' > - •• ·•~ 10 20 30 40 50 60 -- 7 of 14 -- lai;ntiff could participate to. the extent. _o~ 20 pe~ ?.e!:t. .f~. any e.t profit upon the basis that he undertook to perform •. certain I do not think that in the course of the conversation it as stated explicitly.what express items of work were to be erformed in consideration of his receiving 20 per cent of 10 he net profit. I think rather that in the course of the 20 30 40 60 onversation a number of different tasks were mentioned from to time, and the plaintiff made it clear that he was illing to attend to all of those on behalf of the venturers. question . arises as to the extent of those duties. I am that one of those duties was to supervise the ontinued operation of the tavern which was part of the roperty to be acquired. I am satisfied also that one of the uties.was to supervise the subdivision of the land which was contemplated by the parties at that time. This would involved liaison with surveyors and local authorities in he way alleged in para.15 of the defence. I am satisfied, the plaintiff became obliged to participate in the of the property by developing a sales strategy, reparing photographs, and generally attempting to effect a Again, I must say that these obligations could be said o be vague and impr.ecise, but the parties have not submitted h?t r. should refuse to enforce the agreement for that reason . . A,que~tion ~rises as to the parties to the agreement made n 8.0ctober. It is the plaintiff's asser~ion that the urious that this should be so. One would have thought that it ould be made a·t the very least with the defendants and with r. de la Vega but, o.f ~ourse, it is .the· plaintiff's case that he 9 greement.wa~ referable .to the earlier arrangement, perhaps Govt. Printer, Qld. 8 10 200 0 30 0 40 0 60 -- 8 of 14 -- ~· r f ,, n C) C) C) :•- ireinforced by the:·· prior dealings between - him and•. the I 1 aefendants. He did not agree that the agreement was, in fact, . I . . . . made in the·way I have found. He asserted that it was made or re-affirmed at the , Gold Coast airport, but • I · pref er the !evidence of the defendants and de la Vega on this point. 10 I· The defend ants were of the view that any contract· was !made with the company, Waraj Holdings, which had, by 8 October, ibeen identified as the vehicle by medium of which the -1 'transaction was to be effected. On the oral evidence, I would find myself in some doubt as to whether or not the name of the 20 !company, Waraj Holdings, was mentioned in the course of· the Jtelephone conversation between the plaintiff, the defendants I land de la Vega. The plaintiff said on some occasions that he II lwas not really aware of the identity of the company · until later. I do not think that I could, with confidence, act on ' 30 I the oral evidence called by the defendants in finding · that the 40 · !company was mentioned at any time on the 8th or prior thereto. !However there is other evidence which points that way, and-some of the evidence of· the plaintiff also suggests as much. At p.19 lines 55 to 60, this passage appears: "Had either Mr. Spencer Simmons or Mr. Lewis Simmons-or Mr de la Vega ever said anything to you about a company called Waraj? - Not previously, no. When was the first time you yourself became aware of-the existence of such a company? To the best of my recollection, it was when the deci.sion had been made to purchase the tavern and Spencer Simmons was the one who told· me that Waraj was the ·vehicle they had chosen in 10 20 30 40 50 which to. complete th:e purchase. " 50 60 Again, at p. 21 of the transcript, this passa~e appears: ,."Could. you,anow .have a _look at p.43 of Exhibit appears to be a· copy of i letter to you· dated 11 198.8'? .· Do_ you remember when you received it? receive the original of it?-- Yes. . . 1, which February Did you l • • Do you remember when?...:- It was in February of 1988. Govt. Printer, Qld, 9 60 -- 9 of 14 -- ( r" ,.. 10 At that~stage,· did yo~ know of the company, Waraj .Holdings Pty. Ltd.?-'."" Yes, I did. , I<· - J" • • ,. ' •• . .How long had you known of it by then?- - I became aware · of it when it emerged as 'the purchaser of the tavern .. _ back i,n August. or September,. around that time in 1987." . . . ~ ,. . This again suggests that the plaintiff was, indeed; aware f Waraj at a very early stage and probably, at least, no later han 8 October 1987. However, the matter goes further. At a ater stage, it became apparent to the plaintiff that the efendants were denying.his interest in any of the proceeds of ale : an·d so he sought - interlo·cutory relief to · prevent 10 20 isbursement of the proceeds of sale of the · West Burleigh J roperty without accounting to'him. The plaintiff had received letter dated 11 February 1988, to which reference is made.in ... .. ~ - . ' he passage I have ··just ·quoted. · That letter purported to be - rem Waraj . Holdings Pty. Ltd. , signed .• by the first defendant on f - - . ~ • ' • • ,- 30 ehalf of that company. The letter confirmed to the plaintiff 30 he existence of, "Your interest in the profit potential of the . . ,' •. Town project ... equal to 20 per cent of the net roceeds'' ~ JOn 29 September 1988, the plaintiff'i solicitors wrote to 40 essrs. Tress Co"cks & Maddox claiming· Mr. Buist' s · interest in 40 he proceeds of sale. Apparently no satisfactory response was (J because on 7·october·l988, a writ was issued on behalf f the plaintfff and· a company owned by him claiming lternative ·entitlement as·against.the first defendant in that 50- ction, Waraj Holdings Pty ~ ,. Ltd~ , as follows: 60 . ~ . . "A declaration that an agreement was entered into between the first plaintiff and/or alternatively the second plaintiff.on the one part and the first·defendant on the other part, whereby_ it _was agreed t.h.at the first plaintiff and alternatively the.second plaintiff, was and is enti tl_ed to be paid by the first defend ant, the sum equaf to 20 'per centum of· thelprofit'upon resale-of the land .•. " Govt. Printer. Qld. 10 50 60 -- 10 of 14 -- (;J73; ·-.1::~;"~· 10 There seems little .. doubt, therefore, that. at t~at stage plaintiff was asserting a·contract with Waraj Holdings Pty. An . affidavit filed · in support of ari application for · nterlocutory · relief is rather less clear, but nonetheless, in terms, assert the contrary. An attempt was made to suggest that perhaps the action was launched other han on proper instructions, but I did not find the evidence ufficiently convincing to explain away the fact that the laintiff had initially made such a claim against Waraj oldings . /.~) 20 ( In those circumstances, I think it more probable . that he at all times from and after 8 October 1987 () hought that he had an agreement with that company rather than ith the present defendants. Of course, the fact that he was asserting such an greement does not exclude the possibility that the agreement 30 as, ·in reality, with someone• else, but in the circumstances f the present case, I am inclined to conclude on balance. that he plaintiff, in . fact, contracted with the purchaser of the est Burleigh land knowing that the identity of that purchaser as Waraj Holdings. 40 50 60 That is enough to dispose of. this matter, but it is. ppropriate that I say a little more about another aspect. It ·s the defendants' case that .the plaintiff failed to perform he . obligations which he _undertook and . in consideration of hie~ performance he.was to receive an amount equivalent .to 20 er cent of the proceeds of sale .. He s~ys that he busied imself. with the promotion of the . sale of the property on a ery active basis .from the time 0£ the 13:greement -until the roperty was .eventually sold~ I have_ no doubt that from time o,time, he had .various discussioriswith.Mr. James, a real Govt. Printer, Qld. 11 10 20 30 40 50 60 -- 11 of 14 -- .10 state ·agent., :·and· that - he,. from time . to tinie, visited _.· the He may·•· have · spoken _:·to'. - the subdi viders, he may. have poken to architects from time to time, but my own impression as that.in hi:s evidence he was substantially embroidering the · his activity. I have formed the view that the laintiff is very much a talker and not much of a doer. He was uite a different sort of-person from the defendants and Mr. de a Vega, who struck·me as people who were much more inclined-to et ions than words. I am satisfied that the first defendant ery quickly formed the conclusion .that the plaintiff was not 20 oing to ·· do the things he had said he would and that he, i:mself, therefore attended to the supervision of the ubdivision. Any involvement by the plaintiff in bringing that bout-was peripheral and by no means sufficient to constitute a ~scharge of his obligation. 30 I find~ similarly, with respect to the supervision of the avern .. operation; that the plaintiff failed to do what he .greed to .do. As I have said, he probably visited the tavern n · a · few occasions, but I find that at least some of those ct:urred in his capacity as a patron rather than in his · 40 apaCi ty ·as· a supervisor. I accept the account given by Mr. len Cattanach as -to the extent of his involvement .with the laintiff. It is, ·of course, true that the plaintiff could,- as e said, have visited the premises and not seen Mr. Cattanach, ut I • think that by.·.· and · large, any· supervision •. was of a 50 erfunctory and . occasional kind. I again accept that .. the 60 efendants formed the view that he was not discharging his duty nd ·that, thereafter, substantially did it themselves. I am unable to form any conclusion ·· as ·· to · the extent of. is participation :in ·his other duties,: namely .the promotion of Govt. Printer, Qld. 12 10 0 30 0 40 0 50 60 -- 12 of 14 -- 10 he.property. I,do not accept at face-value his own estimate attendances upon· Mr.- 'James, nor do I, for that matter, Mr. James' evidence: I am sure he did attend ·on a :of . occasions, but · I am· not satisfied to accept ·· the that were given. They seemed a little ,too glib to The question arises as to.what might be the proper legal onsequence of his .failure to discharge these obligations~ This s a matter .which has .caused me some difficulty·in the course f the trial. In particular, I have wondered about the 10 (--... 20 \) nt~tlement of a person in the position of the defendants to etermine such an agreement for non-performance without notice 20 C) C) o the plaintiff. In the end, it seems to me that the proper haracterisation . of the problem is this: in order that the laintiff earn his entitlement to participate in the profit;~he· 30 as obliged to perform certain tasks. A failure to discharge· 30 hese obligations would mean that· his entitlement would .. not rise~ The defendants would be obliged not to do anything to revent him from earning his entitlement. . If they breached his obligation, .he_ would be entitled to recover damages for. 40 reach of some implied term on their part to the effect which I.. 40 50 60 ave mentioned. He . has not sought to establish such a case nd, really, in.face of the facts which.I have found, he would· ot have been able to do so~ In the circumstances, I am satisfied that the company, araj Holdings, would have been entitled to . determine the greement, but in. any event, his entitlement .to payment would_ ot arise because the conditions precedent. to his entitlement ave not been satisfied. • In the circumstancesf _I will give judgment for the Govt. Printer, Qld. 13 50 60 -- 13 of 14 -- efendants against the plaintiff with costs. There is an alternative claim on a quantum meruit, but it imply does not arise in the context of this case. The laintiff performed such work as he did in respect of the West urleigh property pursuant to an agreement. That agreement has 10 ailed because of his own breach. I do not" see any basis upon hich it is possible to divide up the obligations and the emuneration, and so no partial claim arises. With respect to the Jefferson Lane property, there is lso an alternative claim on a quantum rneruit, but I cannot see 20 ny basis, either for making an award in that regard. 30 40 50 60 I will adjourn the matter for consideration of the uestion of reserved costs. Govt. Printer, Old. 14 10 0 30 0 40 0 50 60 -- 14 of 14 --