Kaliappa v Khan [2000] FJHC 25; Hba0029j.1999s (15 February 2000)

Fiji Islands - Kaliappa v Khan - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

APPELLATE JURISDICTION

CIVIL APPEAL NO: HBA 29 OF 1999

BETWEEN:

JONATHAN KALIAPPA

Appellant

AND:

NAZMUN KHAN; and

SAMSHEER ALI KHAN

Respondents

Counsel: Mr J.K. Maharaj for Appellant

Mr S. Chandra for Respondents

Hearing:10th February 2000

Judgment:15th February 2000

JUDGMENT

This is an appeal from the decision of the Suva Magistrates Court of 10th August 1999 dismissing the appellant’s claim for $3,700 in alleged unpaid commission for the sale of a house.

The facts, from the record are that the appellant was a real estate agent who had an agreement with the defendants to sell their house at Cakacaka Road, Caubati. In December 1997, Nemani and Meresi Talemaitoga (the buyers) visited the appellant’s real estate agency and were shown a computerised image of the house. The agency told the buyers that the house was at 14 Cakacaka Road, Caubati and that it was not for urgent sale. The buyers then visited Cakacaka Road and found that there were three houses numbered No. 14. The buyers established the correct house after seeking assistance from a neighbour, and obtained the defendants’ telephone number from the neighbour. The buyers then contacted the owners (the defendants) directly and purchased the house for $72,000. No commission (of the agreed 5%) was paid to the plaintiff. The plaintiff had been told to sell the house for $75,000. The plaintiff then claimed for the 5% commission. The learned trial magistrate rejected the claim on the basis that the sale had not been effected by the plaintiff.

The grounds of appeal are:

2. That the learned magistrate erred in law and in fact by considering and allowing parole evidence to override and contradict written agreement between the Appellant and the Respondent.

3. That the learned trial magistrate misinterpreted and/or did not consider the legal and factual effect of the contract between the parties on the issue of ‘exclusive right’ given by the respondents to the appellant to put the property in the market and to find buyers for it.

4. That the learned trial magistrate did not properly consider or at all the laws relating to real estate dealings as they affected the obligations of the appellant and the respondent.

5. That the learned trial magistrate failed to consider that the conduct of the appellant in dealing directly with the prospective buyer was unconscionable and a form of constructive fraud upon the appellants.

6. That the learned trial magistrate finding that the appellants had not ‘effectively introduced’ the prospective buyer to the respondents was contrary to the weight of evidence.

The appeal was heard on 10th February 2000. Mr J. Maharaj for the appellant submitted that the learned trial magistrate should have found that the contract between the parties came into effect when the property was introduced to the buyers by the plaintiff’s agency. He submitted that practices and customs of the real estate business should have been implied as a term of the contract.

Mr S. Chandra for the respondent argued that the agreement between the parties only came into effect when the agency introduced the buyers to the owners, and that the learned trial magistrate was correct in her finding that no such introduction had taken place.

There is very little dispute on the facts. The only real issue is whether the learned magistrate erred in finding that since the plaintiff did not introduce the buyer and seller, the contract was inapplicable and the commission was not payable.

At page 16 of her judgment, the learned trial magistrate said:-

“I found the evidence from Mr and Mrs Talemaitoga compelling and conclusive. They testified that the plaintiff’s firm had initially provided them with the wrong address. Moreover, on their initial visit they discovered that there were three properties bearing Lot 14 in the pertinent vicinity. They confirmed that the plaintiff did not introduce them to the landlord/vendors, defendants herein. The landlord’s telephone number was obtained from a friend of Mr Talemaitoga and on the two occasions they inspected the property, this had been arranged independently of the plaintiff. They were not taken to the property by the plaintiff nor were any measures taken by the plaintiff to introduce them to the owners of the property.

The plaintiff has not established any direct involvement in bringing about the eventual sale ..... The evidence points conclusively to the fact that the plaintiff was not the effective cause of the sale.”

The agreement itself (at page 49 of the record) was tendered in the Magistrates Court. It is called a “Sales Inspection and Selling Agency Agreement” and is not an exclusive agency agreement. It is between Professional Real Estate and Nazmun Khan. Clauses 1 and 2 read as follows:

“1. That the Principal hereby grants to the agent selling rights of the property from 2/12/97 until sold such time as the property is sold or this agreement is terminated by either party giving notice in writing.

7. That the agent shall be entitled to a commission of 5% of sale if during the agency period effectively introduces a purchaser of the property who subsequently enters into a binding contract of sale and purchase agreement.” (My underlining)

The question is whether this clause requires an introduction to the owners of the property by the agency, or whether it requires an introduction to the property itself. If it requires the former, the 5% commission is not payable. If it requires the latter, the question then is whether the provision of the wrong address after showing the purchasers a photograph of the property, constituted an “introduction” for the purposes of the agreement. If it did, the 5% commission is payable. If it did not, it is not payable.

Counsel for the plaintiff suggests that “introduction” does not require introduction to the owners, only to the property, and that such a term should be implied on the basis of custom and practice of real estate agencies. However, no evidence was led in the lower court, of the customs and practices of real estate agencies. I therefore fail to see how the learned trial magistrate could have implied any such term.

Chitty on Contracts (26th Edition at p.2501 Vol. II) describes the phenomenon of real estate agencies as an example of “incomplete agencies” whose function is to introduce business.

The purpose of the agreement was to effect introduction to sale of the property. To that end, the learned trial magistrate asked, in my view, quite correctly whether the plaintiff had effected the sale. The question of whether or not the plaintiff introduced the buyers to the owners, is of little relevance. I agree therefore with Mr Maharaj that the “introduction” referred to in the agreement, does not necessarily mean introduction to the owners. The real issue is whether the property was introduced to the buyers by the plaintiff.

On this issue, the learned trial magistrate made findings of fact which would be difficult to interfere with on appeal. She accepted the evidence of Mr and Mrs Talemaitoga who said they had not seen the advertisements of the property in the Fiji Times, but had been told about the house by an employee of the plaintiff’s. They were given an address but failed to find the house. The plaintiff did not show them the house, and the buyers contacted the owners by telephone. The number was given to them by a neighbour. The inspections of the property were conducted by arrangement with the owner. Apart from the initial act of showing the buyers an image of the house, and providing them with an address, the plaintiff had no further role in the sale.

In the circumstances and bearing in mind that the purpose of the contract was to effect an introduction leading to the sale of the property, it is difficult to conclude that the plaintiff effected such a purpose. The buyers themselves, from the tenor of their evidence, clearly considered that they had effected the purchase directly from the owners.

In the circumstances the plaintiff’s appeal must be dismissed, with costs to be taxed if not agreed.

Nazhat Shameem

JUDGE

At Suva

15th February 2000

Hba0029j.99s