Active Auto Parts (PNG) Pty Ltd v Hull [1990] PGNC 9; N833 (5 March 1990)

Unreported National Court Decisions

N833

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS NO 637 OF 89
BETWEEN: ACTIVE AUTO PARTS (PNG) PTY LTD
PLAINTIFF
AND: BRIAN HULL
FIRST DEFENDANT
AND: PORT MORESBY REAL ESTATE PTY LTD
SECOND DEFENDANT
AND: NACO (PNG) PTY LIMITED
THIRD DEFENDANT

Waigani

Salika AJ
5 March 1990

CONTRACT OF SALE OF LAND - vendor and estate agent - whether Estate agent had authority to enter into contract for sale of land - Effect of a deposit with estate agent.

Case Cited

Wragg v Lovett [1948] 2 All ER 968

Statutes

Frauds and Limitation Act of 1988

SALIKA AJ: This a claim made by thintlaintiff, Active Auto Parts (PNG) Pty Ltd agents Brian Hull (first defendant), Port Moresby Real Estate Pty Ltd (second defendant) and Naco (PNG) Pty Ltd (third defendant).

Before I with the actual claim I wouI would like to put on record preliminary matters that arose before the claim was heard.

This matter was set down for trial to be heard on the 5th March 1990.

All parties were aware that the matter was set for trial on that date.

Then on the 28th February 1990 a Notice of Motion was filed at the National Court by Mr Karingu seeking orders that the hearing of the matter on 5th March 1990 be vacated and that the matter be listed on the callover list for listing.

That application by Mr Karingu was set for the 2 March 1990.

After Mr Karingu had filed the notice of motion he served the third defendant the notice. He however did not serve the other two defendants. The first and the second defendants were not made aware of the application by Mr Karingu.

On the 2 March 1990 Mr Karingu sought to have the notice of motion heard before me. As expected the first and second defendants were not present as they were unaware of the application by Mr Karingu.

I refused to hear the application then and adjourned the application to the 5th March 1990 at 9.30 am when all parties would be present.

On the 5th March 1990 at 9.30 am the defendants lawyers were in court but the plaintiff and his lawyer did not appear. The court did not start until 9.45 am. The plaintiff and his lawyer had by then not made any appearance and I caused my associate to call the matter outside the courtroom.

After my associate called the matter outside court there was still no appearance by the plaintiff or his lawyer.

Mr Sleight for the third defendant made an application under Order 4 Rule 46 of the National Court rules to hear and dispose of the Notice of motion seeking to vacate the 5th March 1990 as the trial date.

I granted the application and dismissed the application on the basis that there really was no good excuse to vacate the trial date. Mr Sleight again made an application to proceed with the substantive issue under Order 10 Rule 12 (1) (b).

Again I granted the application on the basis that here was the plaintiff who is alleging a breach of contract and is not here to persue it. It is his claim and he must be here to substantiate it. There was absolutely nothing in evidence (affidavits of otherwise) to support the allegations of breach of contract from the plaintiff.

That is how this matter came to be disposed in the manner it was. At the time of writing this I have not been informed of reasons of the plaintiffs non-appearance.

After I granted the application to proceed with the matter the third defendants lawyer elected to adduce oral evidence which the court heard.

I now turn to the claim proper. The statment of claim reads:

1. & T60; The First Defendant is a businessman and a resident of Port Moresby.

2. &ـ T60; The Sece Second Defe is aany dncorpd unde Companies Act Chat Chapter 146 and can sue and be sued.

.

3

3.&#16. &#16e Thirdndantlso aany duny duly duly incy incorporated under the Companies Act Chat Chapter 146 and can sue and be sued.

4. &&##16inisaa ny a ny ducorpucorporated under ther the Come Companiepanies Acts Act Chap Chapter 146 and can sue and be sued.

5. ټ ҈ irst drst dant was at all material times, the agee agent ornt or serv servant of the Second Defendant.

6. ҈ & The d he d Defendant waslat all material times the principincipal or the master of the First Defendafendant and further was at all material tihe Retate for the Third Defendant.

7.&#16. ـ I6 i It is alls alls alleged that on or about the 17 February 1989 the Plaintiff offered to the First Defendant a sum of K185,000.00 for the purchase of a State Lease being Allotments 4 &am(consted) on 34 Hoholaohola in t in the Nahe National Capital District.

8. Further it isgallehad the the Third Defendant through its agent the Second Defendant accepted the offer and requested for ten percent (10%) deposit and suppo evidof fi beinilabl>

60; #160;&#160  &< 160; The The Plaintiff paid a sum of K18,500.00 being the requested deposit to the Second Defendant by a ANZ Bank Cheque # 440944 and was issued with a receipt # 4219.

10. ټ Taintiffntiff in aoin aon submitted to the Second cond Defendant a letter to the Second Defendant from ANZ Bank confirming the approval of K185,000.00 loan e plaf for the purchase of the above mentioned State Late Lease.ease.

11. Taintiff claims that the Dthe Defendants are in breach of the agreement.

12. The Plaintiff furthar clthms that the Defendants havear re and ontiny refusing to honour the said said agre agreementement.

.

13. ; Thentiff is stis still will willing to honnd ab compand said agrd agreemeneement.

At the outset there is no affidavit or oral evidence to support the statement of claim. On the tdate laintas not not causecaused an d an appearance and has not had the courtesy to inform the court for his non-appearance.

In the plaintiffs absence the third defendant called one witness Johnson Tia who is employed by Port Moresby Real Estate Pty Ltd as a real estate agent. His duties as a real estate agent are to sell and market properties, find purchasers and organise finance. It is not his business to enter into any binding contracts. He is only agent for the owner of the property which in this case was the third defendant.

He gave evidence that there was no written document between him and the owner of the property for him (Real Estate agent) to enter into a binding contract with the purchaser. His job was only to find a buyer.

The statement of claim alleges the plaintiff offered K185,000-00 for the purchase of a state lease Allotments 4 and 8 Section 34 Hohola which was accepted by the third defendant through the second defendant.

The plaintiff paid 10% deposit of K18,500.00 and provided evidence of finance to pay the balance. He also furnished a letter from the ANZ Bank confirming the approval of K185,000.00 loan.

The statement of claim then goes on to say that the defendants are in breach of the agreement and that the defendants have refused and are continuously refusing to honour the agreement.

The statement of claim does not say how the agreement was breached and what happened to the property and the deposit.

Obviously these matters would have been cleared up had the plaintiff been here to give evidence. He choose not to be here thus making if difficult for the court to come to a just solution. The court is placed in a vacuum so to speak.

The defendants argued that even if there was a contract that contract would not be enforceable pursuant to the provisions of the Frauds and Limitations Act No 43 of 1988. Sections 2 and 4 of the said Act provide:

SECTION 2

CREATION, ETC., OF INTEREST IN LAND

(1) ;ټ Subjectbject to Suto Subsection (2) and Section:

a) & n60; no interest in land can be created or disposed of except

i0; ټ by writingiting sigg sign signed:

(A) by the person creating or disposinghe int; or

(B) ;&&#1y that pers personRn’s agent lawfully authorised in wrin writingiting for for the pthe purpose; or for the purpose; or

iii) < &160;
y0; bl; and

b)&#1b) ـ&claration of trust rust respecting any land or interest in land must be manifested sted and pand proved-

i) ҈&&#1e wrmting signedigned by a person lawfully able to declare such trch trust; ust; or

ii) ;ټ b60; by that that person’s wandc)&##160; ҈ posisposisposition tion tion of anof an equitable itneres or trust subsisting at the time of the dispositon be -

i)& ҈& i60; in writ writing sing signed:

(A) <; 160; by re person dion disposing of the equitabteresthe trust; or

(B) by thatopers21&#8 ag;s ages agent lant lawfully authorized in wiritng for the purpor

i)҈ < &1600;&#1y ; by will.

(2) ҈ Nothingthing contained ineSubsection (1) shall be construed as effecthe crn or operation of resulting, implied or constructive trusts, and that subsection tion shallshall be read and construed accordingly.

CONTRACTS FOR FOR THE STHE SALE OF LAND, ETC

No action shall be brought upon a contract for the sale or other deposition of land or memorandum of the contract, the contract, or some note or memorandum of the contract, upon which the action is brought is in writing signed:

(a) e thsonergainat whom the the action is brougth; or

(b) &#by an agent of that persoperson lawfully authorized in writing for the purpose.

I respectfully awith submi because as it involved land twas no written agreement between the third defendant and the the estatestate agee agent annt and as such no action can be brought upon a contract for sale of land.

Furthermore the plaintiff alleged in his statement of claim that there was a contract between him and the 1st defendant who was the Estate agent of the third defendant for the plaintiff to make a deposit and purchase the property. The defendant however argues Volume 1 of Halsburys laws of England paragraph 740 which provides:

“The making of contract is no part of an estate agents business and authority to make such a contract is not to be lightly inferred from vague or ambiguous language. Accordingly an estate agent authorised to procure a purchase has no implied authority to enter into a contract of sale or to give a warrantee, nor has an agent who is merely authorised to treat with people and permit them to view the property. Similarly an agent authorised to act “in and about” a purchase has no implied authority to purchase; but where definite and unequivocal instructions are given to sell at a stated price, it may be inferred that the agent has authority to enter into an open contract. This, however, does not imply authority either to make conditions as to title or to receive the purchase money.

It is within the implied authority for an estate agent who is instructed to find a purchaser to accept a deposit”.

That proposition is supported by Wragg v Lovett [1948] 2 All ER 968 at p 969 where Lord Green MR said:

“The making of a contract is no part of an estate agents business, and, although, on the facts of an individual case, the person who employes him may authorise him to make a contract, such an authorisation is not lightly to be inferred from vague or ambiguous language”

I apply the above common low principles in the instant case pursuant to Schedule 2.2 of the Constitution.

In this case there is no evidence whatsoever that the estate agent was authorised to enter into a contract with the plaintiff for the sale of land and further that it was not the estate agents duty to enter into a contract for any sale of land. He may accept a deposit but that does not mean that, that deposit will tie the vendor to sell unless the vendor specifically instructs his agent that any deposit accepted by him (agent) will bind him (vendor).

As there is no evidence of the existence of such instructions by the vendor to the estate agent, and no evidence authorising the estate agent to enter into a general open contract I accept the evidence of Johnson Tia that his job was only to find a purchaser and nothing more.

One other matter that I would like to say is that whilst in a contract for sale of land a requirement that a deposit should be paid is a fundamental term the fact that the purchaser abandoned his original offer and put in a new one in my view would mean that the original offer lapses and the new offer suffices as happened in this case.

I accordingly dismiss the plaintiffs claims and enter judgement for the defendants with costs.

Lawyer for the Plaintiff: Karingu Sitapai Kemaken and Associates (C.K Karingu)

Lawyer for the First & Second Defendant: Steeles (M. Goodman)

Lawyer for the Third Defendant: Blake Dawson Waldron (J. Sleight)