Kaisara Real Estates v Niko [2012] WSSC 126 (8 November 2012)

SUPREME COURT OF SAMOA

Kaisara Real Estates & Anor v Talamaivao Masoe Niko [2012] WSSC 126

Case name: Kaisara Real Estates and Kaisara Toeupu v Talamaivao Masoe Niko

Citation: [2012] WSSC 126

Decision date: 8 November 2012

Parties: KAISARA REAL ESTATES a duly incorporated company having its registered office at Vaitele (First Plaintiff) and KAISARA TOEUPU trading as Kaisara Real Estates (Second Plaintiff) and PEPIGE POTA Mechanic of Faleasiu (Second Defendant) and ANAZ BANK (SAMOA) LIMITED of Matafele (Third Defendant)

Hearing date(s): 12 October 2012

File number(s): CP 114/11

Jurisdiction: CIVIL

Place of delivery: MULINUU

Judge(s): JUSTICE SLICER

On appeal from:

Order:

Representation:
K Ainuu for the plaintiffs
K Kruse for the defendant

Catchwords:

Words and phrases:

Legislation cited:
Supreme Court (Civil Procedure) Rules 1980 Rule 32

Cases cited:
Martin v Perry and Daw [1931] 2 KBD 310
Luxor(Eastborne) Limited v Cooper [1945] 1 AC 108
Jaques v Lloyd D George and Parkers Ltd [1968] 2 All ER 187
Coles v Enoch [1939] 3 All ER 327
Allen v Anderson [1969] NZLR 951
Burchell v Gownie v Blockhouse Colleries Ltd [1910] UKLawRpAC 44; [1910] AC 614
Jack Windle Ltd v Bricly [1952] 1 All ER 398
Nightingale v Parsons [1914] UKLawRpKQB 66; [1914] 2 KB 621

Summary of decision:

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU
BETWEEN
KAISARA REAL ESTATES a duly incorporated company having its registered office at Vaitele
First Plaintiff
AND
KAISARA TOEUPU trading as Kaisara Real Estates
Second Plaintiff
AND
TALAMAIVAO MASOE NIKO of Salelologa, Businessman
Defendant

Counsel: K Ainuu for the plaintiffs

K Kruse for the defendant

Hearing: 12 October 2012

Judgment: 8 November 2012

JUDGMENT OF SLICER J

1. The plaintiff was an estate agent trading as a business, Kaisara Real Estates. The action was originally, wrongfully brought in the name of an ‘incorporated company having its registered office at Vaitele’. Rather than strike the matter out, since no such company existed, the Court, in order not to prolong the matter, ordered, pursuant to the Supreme Court (Civil Procedure) Rules 1980 Rule 32, that Kaisara Toeupu be joined as a party. The alternative would have been to dismiss the action which would require the real plaintiff to commence a fresh action. Instead, the Court ordered that Kaisara Toeupu pay the defendant’s costs incurred up until, but not including, the hearing date, in any event.
2. At trial, the plaintiff successfully sought to amend its Statement of Claim paragraph 4 to reduce the claimed sale price from $850,000 to the sum of $752,000 and paragraphs 5 and 8 to reduce the commission claimed from $31,500 to $26,607. The defendant relied on those amendments to show that the plaintiff had not been involved in the sale. Had he been the agent he would have been aware, before the Statement of Defence dated 10 September 2012, of the actual sale price.
3. There had been previous dealings between the parties. In 2006, the defendant and his wife had been banished from their village and suffered damage to their property. The plaintiff was engaged to value the property for the purpose of claiming damages and was paid $2,100 for his service. He failed to do so, although he received the money, claiming that he did not wish to act contrary to the wishes of the village. The failure caused loss and damage to both husband and wife. Some 2 years later, the plaintiff was again employed to undertake and report on a valuation of the plaintiff’s property. The arrangement was that the original sum already paid on the unfulfilled contract would be deducted from the costs of the fresh valuation. Those dealings might explain why the defendant chose to approach the plaintiff on the sale of his property, but it does not, of itself, support the conclusion that he appointed the plaintiff as the sole agent for this transaction.

History of Proceedings

4. In 2010, the plaintiff was approached by the defendant who requested him to undertake the sale of his property at Faga, Savaii. The plaintiff agreed on the basis that, if successful, he would receive a commission of 5% of the sale price. It is not clear whether the agreement was one of sole agency or otherwise. The plaintiff claimed that ‘sole agency’ was agreed but supplied no documentation in support of that claim. He stated that it was the defendant who supplied a written copy of the terms of agreement and took the original with him. The Court finds that claim to be specious. It is unlikely that it was the defendant who brought an agreement document containing a ‘sole agency’ provision, or if so, that the plaintiff did not make a copy and retain it with his records. In fact, when asked by the Court to produce other documentation relevant to these proceedings he failed to do so. It would appear that he kept little documentation concerning his business affairs. It is more probable that neither party averted to the question. The Court accepts the evidence of the defendant and his wife that the instructions were for the sale of 4.5 acres, for a price of $1.8 million. The Samoa Observer advertisement, tendered at trial, dated 20 December 2010, shows the proposal as being for the sale of 5.5 acres at a price of $2.3 million, contrary to the instructions. There was no evidence as to how many advertisements were ‘run’ but the Court accepts the defence evidence that despite repeated requests, the plaintiff failed to rectify the advertisements.
5. The plaintiff made some inquiries about prospective buyers, and placed a number of advertisements in the Samoan newspapers. There were few approaches. The plaintiff tendered a diary entry, dated 12 October 2010, suggesting that he had contacted ‘Alauni Kafareli’ on that day and arranged for an appointment with her at 3 p.m. The diary entry included the name ‘Paul Kafareli’ and the plaintiff stated that Alauni was the mother of Paul Caffarelli, the eventual purchaser. Alauni Caffarelli was not a witness at trial.
6. Even if the entry is correct and there was some contact, nothing further eventuated. Its meaning is that either the plaintiff spoke with her but the suggested purchase price was not acceptable and, in any event, she had no power to bind her son, or that she showed any interest in her own right.
7. On the plaintiff’s version, he met with the defendant in November and he had been made aware that there was another person interested in the land for a purchase price of $1.8 million.
8. The plaintiff did introduce a prospective buyer, the church group, the Samoa Independent Seventh Day Adventist Church (“SISDAC”) through its representative Uili Papu and continued with negotiations which came to an end when representatives of the church indicated that it could not raise sufficient money to complete the purchase.
9. The plaintiff travelled to New Zealand in November 2010 and never had dealings with Paul Caffarelli, the eventual purchaser. He agreed, at trial, that he had not shown Alauni Caffarelli the land nor had any dealings with Paul.
10. Paul Caffarelli gave evidence for the defendant and the Court accepts the totality of his evidence. He said that he had seen an advertisement for the sale of the land in the Samoa Observer, offering the land for the price of $2.5 million but had no interest in its purchase. He had had discussions with his mother in general terms but she had no interest in the land and opposed the purchase. Paul Caffarelli himself had no interest and did nothing further.
11. On 17 December 2010, Paul Caffarelli met the defendant’s wife, Tiaua Mafa at a social function and the two discussed Caffarelli’s interest in adjoining or nearby land and his inquiry as to whether the price was negotiable for portion of the defendant’s land. That casual discussion was not connected with the advertisement of 20 December advertising 5.5 acres of land at Faga for $2.3 million. In February 2011, Caffarelli visited the defendant at his home ‘Taitaialofa’ and the two discussed a sale. That visit was not a result of any introduction by the plaintiff. Eventually the two (Paul Caffarelli as a director of Fico Constructions Limited) agreed on a sale price of $42,500 per quarter acre with a total price of $752,143 which represented approximately 4.42 acres. The defendant had originally informed SISDAC that, contrary to the plaintiff’s advertisement, he was seeking $1.615 million for 4 ¼ acres and that the advertised price of $2.3 million was incorrect. He had finally agreed to an overall sale at $1.53 million to SISDAC or $90,000 per quarter acre plus two pre-fabricated houses. But, as stated, SISDAC was unable to complete the purchase.
12. The defendant’s negotiations with Caffarelli commenced at a selling price of $200,000 per acre which, following the failed negotiations with SISDAC, fell to $170,000 per acre.
13. On any view of the evidence, there was no nexus between the original approach to the plaintiff and the eventual sale to Caffarelli, either in the amount of the land sold or the price paid.
14. Paul Caffarelli never met with the plaintiff nor negotiated through him. The plaintiff never ‘introduced’ the purchaser nor took any part in the dealings between vendor and purchaser.

Estate Agents and Commission

15. In order to entitle an agent to receive his or her commission, that person must have carried out that which he or she bargained to (Martin v Perry and Daw [1931] 2 KBD 310). A contract by which an owner of property puts it into the names of an agent for sale amounts to a promise binding upon the principal to pay a sum of money upon the happening of a specified event through the instrumentability of the agent Luxor (Eastborne) Limited v Cooper [1945] 1 AC 108. In that case Lord Russell, with whom the Law Lords agreed, stated at 124:

“A few preliminary observations occur to me. (1). Commission contracts are subject to no peculiar rules or principles of their own; the law which governs them is the law which governs all contracts and all questions of agency. (2) No general rule can be laid down by which the rights of the agent or the liability of the principal under commission contracts are to be determined. In each case these must depend upon the exact terms of the contract in question, and upon the true constructions of those terms. And (3) contracts by which owners of property, desiring to dispose of it, put it in the hands of agents on commission terms, are not (in default of specific provisions) contracts of employment in the ordinary meaning of those words. No obligation is imposed on the agent to do anything. The contracts are merely promises binding on the principal to pay a sum of money upon the happening of a specified event, which involves the rendering of some service by the agent. There is no real analogy between such contracts, and contracts of employment by which one party binds himself to do certain work, and the other binds himself to pay remuneration for the doing of it.

I do not assent to the view, which I think was the view of the majority in the first Trollope case (1), that a mere promise by a property owner to an agent to pay him a commission if he introduces a purchaser for the property at a specified price, or at a minimum price, ties the owner’s hands, and compels him (as between himself and the agent) to bind himself contractually to sell the agent’s client who offers that price, with the result that if he refuses to offer he is liable to pay the agent a sum equal to or less than the amount of the commission either (a) on a quantum meruit or (b) as damages for breach of a term to be implied in the commission contract. As to the claim of a quantum meruit, I do not see how this can be justified in the face of the express provision for remuneration which the contract contains.”

16. If an agent desires the principal to pay the commission not only on sale but on the introduction of a person who makes an offer to purchase, as contrasted with one who actually buys, he or she must use clear and unequivocal language to that effect (Luxor (supra), Jaques v Lloyd D George and Parkers Ltd [1968] 2 All ER 187). Here the introduction of the agent to the Seventh Day Adventist Church to purchase the property and its later withdrawal of that conditional offer, because of lack of funds, did not entitle the plaintiff to charge for any commission.
17. The test is a completed sale to one who was introduced by the agent to the principal or vendor of the property. Remuneration can be claimed only on transactions which are the direct consequence of the agency (Coles v Enoch [1939] 3 All ER 327). While it is not necessary that the agent should personally complete the transaction, he or she must show that it was brought about as the direct result of his or her intervention (Allen v Anderson [1969] NZLR 951, Burchell v Gownie v Blockhouse Colleries Ltd [1910] UKLawRpAC 44; 1910 AC 614, Jack Windle Ltd v Bricly [1952] 1 All ER 398). It is not sufficient to show that it would not have been entered into but for his or her services, if it resulted therefrom only as a casual or remote consequence (Nightingale v Parsons [1914] UKLawRpKQB 66; [1914] 2 KB 621. See generally Halsbury 4 Ed. Vol. 1, paras 800 – 806).
18. There is support for the defendant’s case in the pleadings themselves. The plaintiff stated in his claim an eventual sale price of $850,000 which shows how little he knew of the actual sale. He amended his claim at trial but only after the delivery of the defence.
19. The claim for commission does not accord with the principles stated above.

Payment of $11,000

20. The plaintiff claimed that the defendant paid the sum of $11,000 and in doing so admitted that he owed the full commission as claimed. The Court rejects that submission. It accepts the defendant’s statement that he voluntarily made an ex gratia payment of $11,000 as an equitable and moral acknowledgment that the plaintiff had undertaken some work and incurred advertising expenses in attempting to sell the land. The Court finds that, in law, the defendant was not required to pay anything but did so out of fairness or moral responsibility. But he was not required to do so in contract.
21. The claim of the plaintiff ought be dismissed.

ORDERS:

(1) The action is dismissed.
(2) The plaintiff pays the defendant’s costs on the action, such costs to be taxed.

..............................

(JUSTICE SLICER)