Creative Academy Group Pty Ltd v White Pointer Investments Pty Ltd

1. [1]

   MEAGHER JA: I have had the benefit of reading Adamson JA’s reasons for judgment. What follows assumes a familiarity with those reasons. I agree with her Honour’s conclusions with respect to all issues except those relating to whether any of the services provided by White Pointer in relation to the ACT sites constituted a “real estate agent service” within s 8(2)(b) of the ACT Act. It is not controversial that fees with respect to such services could not be recovered by the bringing of proceedings because of the operation of s 23 of that Act. In my view, none of the services provided in relation to those sites answered that description.

2. [2]

   In addition to explaining my reasoning for this conclusion, in what follows I first summarise the consequences for the restitutionary claims of that conclusion. I then make some further observations for my agreement that ground 1 (whether the Settlement Proposal was unenforceable for want of valuable consideration) should be dismissed.

The restitutionary claims

1. [3]

   A consequence of my conclusion that White Pointer did not provide any “real estate agent service” in the ACT is that s 23 of the ACT Act did not apply. It follows that the two bases on which the appellants contended they were entitled to restitution of payments already made in respect of those sites could not be made out. Those claims as made were to recover payments for which there had been a total failure of consideration, or as made under a mistake of fact or law.

2. [4]

   Each of these bases of claim proceeded on the assumption that White Pointer was required to be licensed because it was supplying services which were within s 8(2)(b) of the ACT Act. The total failure of consideration was said to follow because the Moncur Agreement was unenforceable and void for illegality. The relevant mistaken belief was that White Pointer was licensed as required, and that the agreement between it and CAG was legal and enforceable.

3. [5]

   In relation to the ACT sites and payments sought to be recovered, the underlying assumption that ss 8(2)(b) and 23 were engaged was not made out before the primary judge, and in my view is not made out in the appeal.

4. [6]

   In relation to the Hurstville site in New South Wales, the primary judge concluded that the Moncur Agreement was not rendered unenforceable or void for illegality by reason of the provisions of the NSW Act. I agree, for the reasons given by Adamson JA at [229]-[238] below, that the appeal from that aspect of the primary judgment should be dismissed.

5. [7]

   The primary judge also concluded that the Moncur Agreement was not rendered unenforceable or void for illegality by reason of the relevant provisions of the ACT Act, but did so for the reason that White Pointer was not required to be licensed. Applying similar reasoning to that applied with respect to the provisions of the NSW Act, Adamson JA (at [239]-[244] below) concludes that the Moncur Agreement was not rendered unenforceable or void for illegality by reason of the provisions of the ACT Act, notwithstanding that White Pointer was required to be licensed.

6. [8]

   It follows from Adamson JA’s reasoning that neither of the ways of putting the restitutionary claim in respect of the ACT sites is made out (and irrespective of whether White Pointer was required to be licensed). Although I have reached the same conclusion on the basis that s 8(2)(b) was not engaged, I nevertheless agree with her Honour’s reasoning that, if it was engaged, the Moncur Agreement was not thereby rendered unenforceable or void for illegality.

7. [9]

   Finally, in respect of the claims for restitution on the basis of mistake, the primary judge held that the appellants had failed to prove that the mistake relied on was "causative" of the payments (J [324]). That finding is the subject of appeal ground 8, which in my opinion is not made out for the reasons given by Adamson JA at [246]-[251] below.

The Settlement Proposal

1. [10]

   There was no contest before the primary judge that the offer constituted by the making of the proposal in Mr Larcombe’s email of 14 March 2020 was accepted and that, objectively, the parties intended to be bound in the terms of that offer (J [234]). The only issue was as to whether their agreement was supported by consideration. The primary judge held that the agreement, which was to replace the existing agreement with one imposing different and far less favourable payment and other terms (including in respect of childcare sites already sourced), was not binding for want of consideration (J [238]-[248]).

2. [11]

   In Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 at 456-457; [1954] HCA 20, the High Court accepted the bargain theory of consideration (see Beaton v McDivitt (1987) 13 NSWLR 162 at 168-169 (Kirby P) and 181-182 (McHugh JA); and generally JD Heydon, Heydon on Contract: the General Part (2019, Lawbook Co) at [5.80], [5.90]; JW Carter, E Peden and G Tolhurst, Contract Law in Australia (5th ed, 2007, LexisNexis Butterworths) at [6-09]-[6-11]). That theory treats a contract as a bargain struck between the parties by an exchange and requires that “consideration must be satisfied in the form of a price in return for the promisor’s promise or a quid pro quo. The price can be in the form of an act, forbearance or promise” (Beaton v McDivitt at 168 (Kirby P)).

3. [12]

   The contract said to arise from the Settlement Proposal is a bilateral one. From the appellants’ perspective, it may be expressed in terms of promises exchanged between CAG and its associated SPV companies, on the one hand, and White Pointer and Mr Hedley, on the other, as follows:

4. [13]

   One of the arguments made by CAG was that the Settlement Proposal resolved a bona fide disputed claim or claims arising out of differences as to the proper construction and application of the Moncur Agreement.

5. [14]

   As Adamson JA observes at [140]-[141] below, the terms of the Moncur Agreement, though limited, were clear. I agree with her Honour that there was “no room for the implication of terms requiring a refund or limiting the time within which a childcare centre had to open”. To the extent that there were questions as to whether the amount of the second tranche should be adjusted if the number of places in the childcare centre as opened were different from those stipulated in the original DA, they were discussed and addressed in the course of the parties’ dealings. That was the case in February 2020, when Mr Hedley accepted that “if things changed after the Lease Signing and DA approval”, the fee would be altered in the second tranche.

6. [15]

   On 7 February 2020 Mr Larcombe sent an email at Mr Hedley’s request confirming the outstanding fees in respect of each of the identified centres at the agreed rate of $2,000 per place. As at 14 March 2020, CAG had made no payment to White Pointer since September 2019, and it was clear that White Pointer was seeking and requested payment urgently. For example, on 19 February 2020, Mr Hedley said to Mr Larcombe “Also I need some of my invoices paid and still need to invoice you for Conder can you pay anything today please it’s now critical”.

7. [16]

   In its terms, Mr Larcombe’s 14 March 2020 email makes no reference to there being any genuine dispute as to any amounts payable under the Moncur Agreement. Rather, it proceeds from the premise that the terms of that agreement were no longer commercially acceptable to CAG. This is reflected in the reasons given for the changes to the payment and other terms proposed to be applied to each of the already-introduced childcare centres. The $2,000 per place fee agreed in respect of the Hurstville, MacGregor and Red Hill centres was described as no longer justifiable because the development of those centres had “dragged out”; the fee in respect of Dickson was described as no longer justifiable because there was “No government guaranteed take out”; and the fee in respect of Throsby and Conder was described as no longer justifiable because there had been “building issues” or excessive costs variations. In these cases, the proffered replacement fees ranged between $500 and $1,650 per place.

8. [17]

   The contextual evidence as to the making of the Settlement Proposal does not suggest that there were any particular claims or disputes which had been made or responded to, and the proposal itself had not been the subject of any earlier negotiation. What was proposed was a “full and final settlement”, which described CAG’s final position in respect of the payments it was prepared to make in relation to the parties’ past and future dealings.

9. [18]

   Mr Hedley’s evidence was that before receipt of the email of 14 March 2020 no one had questioned the basis on which the calculations in White Pointer’s invoices were made or raised any disputes. The primary judge considered this not to be “strictly correct” (J [239]):

10. [19]

    Although there were such issues, they did not give rise to a bona fide dispute which CAG sought to resolve by means of the Settlement Proposal. Rather, CAG decided to give White Pointer an ultimatum in the form of a “full and final” offer as to the terms to which it would agree in respect of past and future dealings. As the primary judge held, the email of 14 March 2020 was “another attempt to re-negotiate the oral contract on more favourable terms, rather than an offer to resolve a bona fide dispute” (J [240]).

Whether White Pointer was prohibited from bringing proceedings to recover monies alleged to be due in relation to childcare centres in the ACT

1. [20]

   Section 8(2) of the ACT Act is set out in Adamson JA’s reasons at [165] below.

2. [21]

   The primary judge held that s 8(2)(b) was directed towards the conduct of an agent with respect of the vendor/lessor of a site, which was described in submissions as “outward-facing conduct”. I agree with that construction of s 8(2)(b) for the reasons given by the primary judge at J [285]-[286], and add the following observation.

3. [22]

   Section 8(2)(a) describes transactional activities relating to the acquisition or disposal of an interest in land in relation to which a real estate agent may provide a service for a principal. That principal will be on one side or other of the relevant transaction and accordingly either acquiring or disposing of the relevant interest in land. Section 8(2)(b) describes conduct of the agent directed to achieving the outcome sought by the principal in such a transaction. Where the principal is acquiring, that conduct is directed to the person who is disposing of the interest sought to be acquired. Where the principal is disposing of the interest in land, that conduct is directed to the person acquiring that interest. That is to say, whereas par (a) describes the transactional activity from the perspective of the principal as moving party, par (b) describes conduct of the agent interacting with or directed to the proposed counterparty in the transaction with the principal. Thus, the “person” in s 8(2)(b) is the, or a, counterparty of the principal.

4. [23]

   There were seven childcare centre sites in the ACT. The primary judge found that, in his dealings with Mr Randell and his principals, Mr Hedley (acting as White Pointer) did not engage in any of the activities described in s 8(2)(b) of the ACT Act. The primary judge made findings as to the underlying facts with respect to those dealings, and they are not challenged on appeal. Those sites include Red Hill, MacGregor, Taylor, Conder and Dickson. Adamson JA has concluded that White Pointer was required to be licensed in the ACT in respect of the services provided for the Red Hill, MacGregor, Taylor and Dickson sites, and that the primary judge erred in holding otherwise. For the reasons below, I consider that the primary judge did not err in holding that White Pointer did not as agent for CAG engage in conduct which fell within s 8(2)(b) of the ACT Act with respect to those four sites.

5. [24]

   As to the Red Hill site: Section 8(2)(b) describes conduct whereby in the interests of its principal an agent relevantly “attempts to induce” the counterparty to make or accept an offer to enter into a contract such as a lease. That is, the attempt to induce must be undertaken by the agent and directed to the counterparty. In relation to this site, the only inducement, if any, was constituted by the terms of CAG’s offer, which Mr Hedley delivered to Mr Randell. The findings do not include that in delivering the offer Mr Hedley said or did anything to elaborate upon or “spruik” the terms of the offer. Merely delivering the offer did not amount to an attempt to induce.

6. [25]

   For this reason, the primary judge correctly concluded that there was no conduct on the part of Mr Hedley in relation to the Red Hill site that constituted providing a “real estate agent service” for CAG for reward within the meaning of s 8(2)(b).

7. [26]

   As no part of the respondents’ primary claim included an amount in respect of Red Hill, this conclusion has no effect on the judgment sum. It does, however, follow that the respondents are not precluded from recovering any amount in respect of the second tranche if a childcare centre opens at Red Hill.

8. [27]

   As to the MacGregor site: Mr Randell informed Mr Hedley that this site was available for lease with 150 places. Mr Hedley advised Mr Larcombe that that was too many places, and that the site should be leased in stages. As Adamson JA records at [204] below, “CAG prepared an offer, which was provided to Mr Hedley, who then ‘forwarded’ that offer to Mr Randell. At the same time, Mr Hedley suggested to the appellants that they check whether there were other obligations which they would be required to meet in respect of 150 places, notwithstanding that their offer was based on 120 places…”. None of this involved Mr Hedley negotiating with Mr Randell or his principals or inducing or attempting to induce Mr Randell or his principals to make or accept an offer to enter into a contract to lease.

9. [28]

   What is described above involved the requesting and communication of information relevant to the preparation of an offer, the formulation of that offer by CAG, the communication by Mr Hedley of that offer to Mr Randell, and the proffering of advice by Mr Hedley to CAG and its directors. Mr Hedley’s forwarding of CAG’s offer to Mr Randell did not of itself involve any negotiation with Mr Randell or his principals in which Mr Hedley was communicating as agent for CAG. Nor did it involve inducing or attempting to induce Mr Randell’s principals to accept that offer.

10. [29]

    This conclusion will not preclude the respondents from recovering any amount in respect of the second tranche if a childcare centre at the MacGregor site ever opens.

11. [30]

    As to the Taylor site: At the time Mr Hedley asked Mr Randell not to go to market, no offer had been made by CAG, and there was no standing or other offer from Mr Randell’s principals. By making this request, Mr Hedley was seeking to encourage Mr Randell’s clients to provide the opportunity for CAG to make an offer. In doing so, he was not inducing or attempting to induce Mr Randell’s principals to make an offer to CAG or to accept an offer made by CAG to enter into a lease.

12. [31]

    Furthermore, in communicating the appellants’ initial offer to Mr Randell, and later conveying their amended offer, Mr Hedley was thereby not undertaking any negotiation on behalf of CAG with respect to either of the written offers that he “forwarded” on. It follows that the respondents are not prohibited from bringing proceedings to recover $121,000, being the first tranche of the commission due with respect to the Taylor site. Nor are they prevented from bringing proceedings to obtain payment of the second tranche of $121,000, which became due on the opening of the childcare centre at that site and after the judgment at first instance was ordered.

13. [32]

    As to the Dickson site: The circumstances in which Mr Hedley saw and responded to an article in the Australian Financial Review (AFR) concerning Edhod are set out in Adamson JA’s reasons. I agree that Mr Hedley’s intention in sending the newspaper article to Mr Randell was to discourage Mr Randell’s principals from proceeding with a lease to Edhod. That was calculated to provide an opportunity for the appellants to make an offer.

14. [33]

    The purpose of the email was not to induce or attempt to induce the owners of the Dickson site to make or to accept an offer to enter into a lease agreement with CAG. It was querying whether there was at that point an opportunity for CAG to make an offer, the terms of which were not specified. Whether the owners might subsequently be induced to accept that offer obviously depended upon the terms of the offer, which would come from CAG and not Mr Hedley, and what might be said in elaboration of it. None of this involved conduct by Mr Hedley falling within s 8(2)(b). Mr Hedley’s action in sending the AFR article disparaging the current proposed tenant provided the context in which he was able to “introduce” the site to CAG, as the primary judge effectively found (J [297], [309]).

15. [34]

    The respondents claimed $59,400 (in addition to the first tranche payment of $90,000), which took account of an agreed adjustment to the first payment to reflect the circumstance that the Dickson centre only had 72 child places. As there was no conduct within s 8(2)(b) in respect of this site, the respondents were entitled to recover that amount of $59,400.

16. [35]

    I agree with Adamson JA’s conclusions and reasoning in respect of the Throsby, Conder and Woden sites. With respect to the Conder site, I make the following observations in support of her Honour’s conclusion.

17. [36]

    As to the Conder site: In mid-May 2019, the appellants were reviewing an offer which had not yet been made. Mr Larcombe sent that offer for Throsby to Mr Randell for his comments. Mr Randell asked whether the appellants were interested in making an offer for the Conder site (also referred to as the “second Throsby site”). Mr Larcombe responded to Mr Randell that he would “give Conder a miss”. In the same conversation, Mr Hedley asked Mr Randell whether the Conder owner would be interested in a differently structured deal where rent was payable as places were filled (J [133]).

18. [37]

    At this time, Mr Hedley was advising the appellants that they “need to send the message [to Mr Randell] that you are still expanding in Canberra and keen for more stock”. In this context, Mr Hedley said to CAG that he still wished to “explore Conder and believed [CAG] could get the deal they wanted” (J [134]). However, on 17 May 2019, and after he had provided a final offer for the Throsby site to Mr Randell, Mr Larcombe emailed Mr Randell and Mr Hedley, setting out the appellants’ position on the various childcare sites in Canberra, including Conder (which he described as “not for us”) and Throsby (“we are keen on this”).

19. [38]

    None of this identified any act on the part of Mr Hedley which constituted negotiating or inducing Mr Randell and his principals within s 8(2)(b). The reference to Mr Hedley asking Mr Randell whether the owner of Conder might be interested in a “differently structured deal” (J [296]) did not constitute or involve any negotiation of any existing proposal. Nor did it involve inducing or attempting to induce Mr Randell’s principal to “make or accept an offer to enter into” a contract of lease. At that time, no offer had been formulated or made in respect of Conder. Sometime later on 3 July 2019, Mr Larcombe provided an executed offer for the Conder site to Mr Randell, and to Mr Hedley. The primary judge did not find that Mr Hedley had participated in any negotiations in June 2019 with Mr Randell which preceded that outcome in early July 2019 (J [148]-[150]).

Conclusion

1. [39]

   In the result, I would increase the judgment at first instance from $747,650 to $868,650, as the childcare centre at the Taylor site has now opened. More generally, it would follow that the appeal should be dismissed, and that there should be judgment in that amount, together with interest, against the first defendant.

2. [40]

   WHITE JA: The issues on this appeal are explained by Adamson JA at [67]-[73] in her Honour’s reasons for judgment. I agree with Adamson JA that, for the reasons her Honour gives, the Moncur Agreement was binding and enforceable and neither ground 10 nor ground 11 has been established. I also agree with Adamson JA’s conclusion that the Settlement Proposal did not involve the resolution of a bona fide dispute and was not binding for lack of consideration and with her reasons for that conclusion. I also agree with the additional reasons of Meagher JA for that conclusion.

3. [41]

   I also agree with the reasons of Adamson JA and Meagher JA that, irrespective of whether White Pointer was required to be licensed under the Agents Act 2003 (ACT) (“the ACT Act”), Creative Academy Group Pty Ltd (“CAG”) is not entitled to restitution for the moneys paid to White Pointer for its services in relation to sites in the Australian Capital Territory. I also agree, for the reasons given by Adamson JA, that CAG is not entitled to restitution for the moneys paid to White Pointer in respect of the Hurstville site.

4. [42]

   Meagher JA and Adamson JA take different views on whether White Pointer was required to be licensed under the ACT Act in respect of the services it provided in connection with CAG’s purchase or leasing of sites in the ACT.

5. [43]

   This turns on the construction of s 8 of the ACT Act that is quoted in the reasons for judgment of Adamson JA at [165].

6. [44]

   Meagher JA and Adamson JA are agreed that the “person” referred to in s 8(2)(b) is the, or a, proposed counterparty in the transaction with the principal (at [22], [182]). I agree, for the reasons their Honours give. The question then is whether, on the basis of the primary judge’s uncontested findings of fact as to Mr Hedley’s dealings with Mr Randell on behalf of the owners of the sites, Mr Hedley was negotiating with the counterparty or was attempting to induce the counterparty to sell or lease, or to make an offer to do so, or to accept an offer from any of the appellants to buy or lease the relevant land.

7. [45]

   Mr Hedley’s perceived, and no doubt actual, credibility with Mr Randell is relevant to that characterisation.

8. [46]

   Clearly, the appropriate characterisation of Mr Hedley’s conduct as to whether it involved negotiation with the counterparty or attempting to induce the counterparty to sell or lease, or to make or accept an offer, is something on which minds may legitimately differ. The relevant facts are stated in the reasons of both Meagher JA and Adamson JA. I will deal with each site seriatim.

Red Hill

1. [47]

   In respect of the Red Hill site, the primary judge found (J [292]) that Mr Hedley forwarded the appellants’ initial offer to Mr Randell. After Mr Randell provided feedback on the offer and Mr Hedley had made suggestions to CAG as to how a revised offer should be presented, Mr Hedley then provided the revised offer to Mr Randell. He arranged a meeting with his clients in Canberra with Mr Randell and liaised between Mr Randell and the appellants for further offers for the site. He inspected the site with Mr Randell and the appellants. I agree with Adamson JA that Mr Hedley was thereby attempting to induce the owners (through his dealings with Mr Randell) to make an offer to sell or lease the Red Hill site to the appellants within the meaning of s 8(2)(b) of the ACT Act. He was not merely delivering an offer. Rather by his dealings with Mr Randell and his attendance at the meeting between his client and Mr Randell he was using his personal connection with Mr Randell, which amounted to an attempt to induce the owners to sell or lease the site to the appellants or to make a counter offer.

MacGregor

1. [48]

   The primary judge found (J [293]) that in respect of the MacGregor site, Mr Hedley’s dealings with Mr Randell were limited to enquiring whether, if the appellants built a smaller centre with 90 places rather than the 150 places for which the site was advertised for sale, a new development application would need to be lodged. He arranged a meeting between Mr Randell and the appellants. He forwarded the appellants’ offer for the site to Mr Randell. He received the ACT developers’ response to the offer and passed on an amended offer. He attended a site inspection with Mr Randell and the appellants.

2. [49]

   In relation to this site, I agree with Meagher JA that the mere forwarding of the appellants’ offer to Mr Randell did not of itself involve any negotiation with Mr Randell or his principals. Nonetheless, I would characterise Mr Hedley’s dealings with Mr Randell as an attempt by Mr Hedley to induce Mr Randell’s principals to sell the site to CAG.

Throsby

1. [50]

   I agree with Adamson JA’s reasons in respect of the Throsby site.

Taylor

1. [51]

   The primary judge found (J [295]) that having obtained information from Mr Randell in relation to what was an appropriate market rate per child in the area and having obtained updated plans for the site from Mr Randell, Mr Hedley asked Mr Randell not to go to market as he was sure that his clients would take the site. Mr Hedley inspected the site with Mr Randell and the appellants. He forwarded the appellants’ offer to Mr Randell. Having passed on Mr Randell’s advice that the offer was insufficient, he forwarded an amended offer. He arranged for the owners’ designer to start talking with the appellants’ architect. He forwarded a revised offer for the site.

2. [52]

   In my view, these actions constituted an attempt by Mr Hedley to induce the owners to lease the land to the appellants.

Conder

1. [53]

   I agree with Adamson JA and Meagher JA that the evidence did not establish that there was any contravention of s 8(2)(b) of the ACT Act in respect of this site.

Dickson

1. [54]

   As Adamson JA explains, the primary judge found that Mr Hedley provided both Mr Larcombe and Mr Randell with an article in the Australian Financial Review which indicated that the proposed lessee of the Dickson site was in financial trouble. Mr Larcombe advised Mr Hedley that he was obviously keen to get the site. There was already an existing agreement in place with the proposed lessee. Mr Hedley asked Mr Randell whether it was “worth putting an offer under the owner’s nose as an alternative given all the bad press” about the then current proposed lessee. Adamson JA has set out the terms of that email (at [217]). The primary judge found (J [297]) that Mr Hedley explored the possibility of leasing the site with Mr Randell as Mr Larcombe was keen to pursue the opportunity.

2. [55]

   The primary judge found (J [310]) that all Mr Hedley sought to do was to persuade the owner to entertain an offer from the respondents to lease the site where the owner may have already agreed to lease the site to another party. Her Honour characterised this as no more than an introduction of the defendants to the owner for the owner’s consideration.

3. [56]

   I agree with Adamson JA that Mr Hedley’s conduct went beyond the mere introduction of his client to the owner for its consideration. In the knowledge of his client’s intention to make an offer for the lease of the site, Mr Hedley’s disparagement of the then proposed lessee is properly characterised as an attempt by Mr Hedley to induce the owners (through Mr Randell) to accept an offer to lease the Dickson site to the appellants.

Woden

1. [57]

   I agree with Adamson JA’s reasons in respect of the Woden site.

Conclusion

1. [58]

   For these reasons I agree with Adamson JA’s proposed orders 1 and 2. I also agree with her Honour’s proposed orders in relation to the costs of the proceedings below and of the appeal.

2. [59]

   ADAMSON JA: The first appellant, Creative Academy Group Pty Ltd (CAG), the second to sixth appellants, CAG’s associated companies, which operated as special purpose vehicles (SPVs), and the seventh appellant, Simon Larcombe, a director of CAG (together, the appellants) appeal against a judgment ordered by Rees J (the primary judge) on 25 July 2023 in favour of the first respondent, White Pointer Investments Pty Ltd (White Pointer), in the sum of $747,650 plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).

3. [60]

   In the Court below, White Pointer claimed monies alleged to be owed to it by the appellants pursuant to an oral contract it made with CAG in or about October 2017 for services provided by White Pointer’s sole director and secretary, Hilton Hedley, the second respondent. It was common ground that, by about September 2017, CAG wanted to lease and develop a site at Hurstville for a childcare centre (the Hurstville site) as well as to lease sites for childcare centres in the Australian Capital Territory (the ACT sites). CAG acknowledged that it lacked connections to obtain sites for that purpose. Mr Hedley, who was familiar with the market for childcare centres, offered to identify sites for CAG and assist it to lease them in return for a fee.

4. [61]

   White Pointer alleged, and the primary judge found, that there were discussions in around late September 2017 regarding the proposed arrangement between Mr Hedley, Mr Larcombe and Glenn Dumbrell, a business associate of Mr Larcombe who had worked with Mr Hedley in the past. These discussions took place at the Woollahra Hotel. On 20 September 2017, following the first of these discussions, CAG (then under a different name) was incorporated and Mr Larcombe and Jim Mascitelli, who was the Managing Partner of Mazars, an accounting firm, were appointed as its directors. Mr Mascitelli acted as CAG’s accountant. Mr Dumbrell was appointed CAG’s executive general manager.

5. [62]

   The shareholders of CAG are, so far as is revealed by the evidence, as follows:

6. [63]

   In about September 2017, Mr Hedley started to do some work for CAG with a view to obtaining the Hurstville site for it, although no agreement as to his remuneration had yet been concluded.

7. [64]

   The primary judge found that in or about October 2017, either in the course of a lunch at Bistro Moncur (located in the Woollahra Hotel) or shortly thereafter, an oral contract was entered into between White Pointer and CAG (the Moncur Agreement) on the following terms:

   1. (1)

      Mr Hedley would source sites suitable for childcare centres for CAG;

   2. (2)

      in return for Mr Hedley’s services, CAG would pay White Pointer a total of $2,000 plus GST for each child place at each childcare centre of which:

8. [65]

   Subsequently (as set out in more detail below), on 14 March 2020, after Mr Hedley had introduced a number of such sites, CAG, by email from Mr Larcombe to Mr Hedley, proposed a different arrangement (the Settlement Proposal) which, if accepted, would result in a substantial diminution of White Pointer’s remuneration. Under the Settlement Proposal, CAG proposed that it pay less than $2,000 per child’s place at various centres and that it provide “advance payments” of these lesser amounts, which White Pointer would be obliged to repay if the relevant centre did not actually open. CAG alleged, and the primary judge accepted, that White Pointer had agreed to the Settlement Proposal. However, the primary judge found that the Settlement Proposal was not binding as it was not supported by consideration.

9. [66]

   On 4 June 2021, White Pointer commenced proceedings against the appellants in the Commercial List of the Equity Division of the Supreme Court, claiming amounts alleged to be outstanding under the Moncur Agreement.

10. [67]

    The appellants resisted the claim on the following four bases:

    1. (1)

       White Pointer had not proved the Moncur Agreement as alleged;

    2. (2)

       Because White Pointer had breached the Property and Stock Agents Act 2002 (NSW) (the NSW Act), the appellants were not liable to White Pointer in respect of any of the childcare centres in NSW;

    3. (3)

       White Pointer was prohibited from bringing proceedings to recover the amounts outstanding in respect of the ACT sites by reason of s 23 of the Agents Act 2003 (ACT) (the ACT Act) as the services which White Pointer had provided through Mr Hedley were “real estate services” within the meaning of s 8(2) of the ACT Act, for which he was required to be, and was not, licensed; and

    4. (4)

       the Settlement Proposal was binding and, accordingly, CAG was liable only for a much lesser amount, which took into account a refund of $79,200 (including GST) which it had paid White Pointer in respect of the Hurstville site (which the Settlement Proposal provided White Pointer had to repay if no childcare centre opened at that site).

11. [68]

    In their cross-summons filed on 10 June 2022 against White Pointer and Mr Hedley (the respondents), the appellants claimed to be entitled to recover the amount of $79,200 paid in respect of the Hurstville site either on the basis of the Moncur Agreement or, in the alternative, on the basis of the Settlement Proposal.

12. [69]

    The appellants also claimed restitution of all amounts paid to White Pointer, alleging that the services which the respondents had provided to the appellants constituted work for which the respondents were required to have been licensed as real estate agents under the NSW Act (for the Hurstville site) and under the ACT Act (for the ACT sites). The appellants’ claims for restitution were founded on two bases:

    1. (1)

       that the amounts had been paid on the basis of the appellants’ mistaken belief that the respondents had all requisite licences and could enforce any claim for commission or fees against the appellants; and/or

    2. (2)

       that the Moncur Agreement was illegal, unenforceable or ineffectual and it was incongruous with public policy and the purpose of the relevant legislation that the respondents be permitted to retain any commission paid to White Pointer pursuant to that agreement.

13. [70]

    The primary judge, in her Honour’s detailed and considered reasons, found:

    1. (1)

       the Moncur Agreement was valid, binding and enforceable (J [214], [216]-[218]);

    2. (2)

       neither White Pointer nor Mr Hedley was required to be licensed to source the ACT sites and, therefore, White Pointer was not prohibited from bringing proceedings to recover the amounts outstanding under the Moncur Agreement (J [311]);

    3. (3)

       the Settlement Proposal was not binding as CAG had not provided any consideration (J [248]);

    4. (4)

       the appellants were not entitled to restitution of the $79,200 paid in respect of the Hurstville site because:

    5. (5)

       the appellants were not entitled to restitution of the amounts paid in respect of the ACT sites because:

14. [71]

    The appellants challenge each of these findings. They accepted, as they did in the Court below, that, if the Moncur Agreement was not enforceable, CAG was obliged to comply with the Settlement Proposal, even if this Court did not overturn the primary judge’s finding that the Settlement Proposal was unenforceable. Mr Walker SC, who appeared with Mr Reynolds on behalf of the appellants, indicated that the appellants would continue to rely on the Settlement Proposal to claim refunds in respect of monies already paid for sites where, ultimately, no childcare centre actually opened.

15. [72]

    The evidence before this Court does not permit a conclusion to be drawn whether the Settlement Proposal would, ultimately, lead to future net payments to the respondents because of the uncertainty regarding centres which have not yet opened and which may never open, in respect of which the first tranche has been paid.

The grounds of appeal

1. [73]

   The appellants appeal on a total of 11 grounds, which can conveniently be grouped as follows:

   1. (1)

      the primary judge erred in finding that the Moncur Agreement had been concluded and was binding, given the disparity between the particulars of the pleaded case and the primary judge’s finding (grounds 10-11);

   2. (2)

      the primary judge erred in finding that the Settlement Proposal was not binding because it lacked consideration (ground 1);

   3. (3)

      the primary judge erred in finding that White Pointer was not precluded from recovering its fees in respect of the ACT sites because it did not have a real estate licence under the ACT Act (grounds 2-5); and

   4. (4)

      the primary judge erred in finding that White Pointer was not obliged to repay monies which it had been paid (grounds 6-9), either:

2. [74]

   I propose to address grounds 10, 11 and 1 first, which relate to the pleading of the Moncur Agreement and the Settlement Proposal, before turning to the effect of the NSW Act and the ACT Act.

Grounds 10-11: whether the Moncur Agreement was binding and enforceable

1. [75]

   In its amended Commercial List Statement filed on 10 April 2022, White Pointer alleged:

2. [76]

   White Pointer made an alternative allegation in similar terms in paragraph 10A of its amended Commercial List Statement that Mr Larcombe had entered into an agreement on behalf of or for the benefit of a company or companies to be registered (which was designed to cover the SPVs).

3. [77]

   White Pointer alleged in paragraph 11 of its amended Commercial List Statement that the terms of the Moncur Agreement included the following:

4. [78]

   Mr Hedley was the only witness to give evidence in the Court below. His evidence was to the effect that an agreement was reached at or around the time of a lunch at Bistro Moncur in Woollahra in October 2017 and that subsequent correspondence (which included invoices and payments of invoices) confirmed the existence of the agreement. When he was cross-examined by CAG’s trial counsel on whether he considered that there was a binding agreement following that lunch, Mr Hedley responded by saying that there was no doubt in his mind that there was such an agreement in the terms alleged (as set out in the pleading). Although an affidavit of Mr Larcombe, who was present at the lunch, had been served, it was not read and he was not called as a witness. The respondents had served an affidavit of Mr Dumbrell. That affidavit was not read and he was not called to give evidence.

5. [79]

   CAG’s trial counsel submitted that the agreement which was reached at the Bistro Moncur lunch was that Mr Hedley would source sites for childcare centres for CAG and could claim a fee, which CAG would pay if it considered it to be reasonable, and, if there had to be negotiations about the amount, such negotiations would take place as part of the arrangement between long-standing associates. Thus, the gist of the defence was that, whether or not fees and tranches had been discussed, there was no intention to create legal relations as the discussions gave rise to no more than a loose arrangement.

6. [80]

   CAG’s trial counsel did not suggest in cross-examination to Mr Hedley that there had been no agreement at the Bistro Moncur lunch about the amounts being paid in two tranches.

7. [81]

   In the Court below no submission was made to the effect that White Pointer ought be held to its particulars that the agreement was made as a consequence of a single conversation as distinct from more than one conversation. Had such a submission been made, it can be expected that White Pointer would have applied to amend the particulars to its amended Commercial List Statement and that the amendment would have been granted unless the appellants could establish irremediable prejudice.

8. [82]

   The primary judge accepted that Mr Hedley told Mr Dumbrell (at the Woollahra Hotel but before the lunch at Bistro Moncur) that he was already sourcing sites for childcare centres on behalf of another business, Kids Club Childcare, for a fee of $2,000 per child’s place plus GST and would be happy to do the same for CAG (J [209]. Her Honour found that Mr Hedley’s actual recall of the conversation was “slight” (J [210]).

9. [83]

   The primary judge found, in accordance with Mr Hedley’s evidence, that at the Bistro Moncur lunch he, Mr Larcombe and Mr Dumbrell had discussed the sourcing of childcare centres. Her Honour also had regard to what she described as “contemporaneous documents” and, in particular the following exchange of text messages between Mr Larcombe to Mr Dumbrell of 14 June 2018, which read as follows:

10. [84]

    The primary judge also found, contrary to Mr Hedley’s evidence but on the basis of Mr Larcombe’s text message of 14 June 2018, that the agreement that the fee would be paid in two tranches and not as a single payment was made after the Bistro Moncur lunch. It is plain from her Honour’s reasons that her Honour construed the reference to $2,000 per child as something which had been agreed before the agreement about the money being paid in two tranches (which appears to have been a concession by Mr Hedley and not something which he offered to Kids Club).

11. [85]

    The primary judge concluded at J [214]:

12. [86]

    Mr Walker submitted that the primary judge’s finding that the figure of $2,000 had been agreed before there was any agreement about when it would be paid amounted to a denial of procedural fairness because the finding went beyond the case as pleaded and particularised. Mr Walker placed particular emphasis on the circumstance that the particulars, as they appeared in the Commercial List Statement as originally filed, relied on “conversations” but that the amended Commercial List Statement deleted the “s” to rely only on a single conversation which is said to have occurred “in or around October 2017” and not, for example, in June 2018 when Mr Larcombe sent his text to Mr Dumbrell. Mr Walker submitted, on this basis, that in so far as it alleged breach of the Moncur Agreement, White Pointer’s claim ought to have been dismissed.

13. [87]

    One of the purposes of a statement of claim (or in this case a Commercial List Statement) is to put a defendant and the court on notice of the way in which a plaintiff puts its claim and the material facts relied on in support of the causes of action pleaded. It must be sufficiently clear to permit the defendant to file a defence and, thereby, to indicate what matters are in issue. The pleadings define the issues and determine admissibility on the grounds of relevance: see generally, Dare v Pulham (1982) 148 CLR 658 at 664 (Murphy, Wilson, Brennan, Deane and Dawson JJ); [1982] HCA 70; Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286 (Mason CJ and Gaudron J); [1990] HCA 11. Pleadings and particulars are an important aspect of procedural fairness in the context of adversarial litigation.

14. [88]

    In the present case, the principal issue between the parties regarding the Moncur Agreement was whether there was a binding agreement between CAG and White Pointer as to the amount and timing of payment (as White Pointer contended) or whether there was a loose arrangement between them, the details of which would be worked out from time to time (as the appellants contended). Although Mr Hedley’s evidence was that both the amount and timing of the payments had been agreed at the Bistro Moncur lunch, the primary judge was entitled to prefer the inference to be drawn from Mr Larcombe’s text of 14 June 2018 (that the timing of payments was agreed after the agreement as to amount) over Mr Hedley’s recollection.

15. [89]

    That the text was sent on 14 June 2018 did not mean that the agreement as to timing of payments was not concluded until June 2018; the text was consistent with there being an agreement as to the timing of payments after the lunch but still “in or around October 2017”.

16. [90]

    Further, the timing of the payment or payments was a necessary integer in the concluding of an agreement. The Moncur Agreement, as pleaded, was only concluded when there was agreement as to that matter. In these circumstances, it is difficult to see how any denial of procedural fairness occurred as a result of the particularisation of a single conversation rather than two conversations. Although Mr Walker intimated that the decision not to call Mr Larcombe was the consequence of the reference to a single conversation in the particulars of the Moncur Agreement, the submission appeared to be no more than conjectural and may have been no more than a narration of the sequence of events. I do not accept that the minor disparity between the particular and the primary judge’s finding gave rise to any “practical injustice”: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [38] (Gleeson CJ).

17. [91]

    For the reasons given above, neither ground 10 nor ground 11 has been made out.

Ground 1: whether the Settlement Proposal was binding

1. [92]

   The primary judge made detailed findings of fact in relation to the dealings between the parties following the making of the Moncur Agreement, none of which was in serious contest on appeal. The facts germane to ground 1 are summarised below.

2. [93]

   Mr Hedley deposed in his affidavit sworn 25 March 2022:

3. [94]

   Mr Hedley accepted that he was not merely “sourcing” sites for CAG and its SPVs, but that he was also helping them to secure these sites by recommending them as tenants to the landlords/owners. He said:

4. [95]

   The first invoice issued by White Pointer was to “Wonderschool (Hurstville)” for the Hurstville site. “Wonderschool” is a business name owned by CAG. The invoice was issued on 9 November 2018 (J [61]), after the AFL had been entered into and the DA had been granted for 72 places in the childcare centre. The invoice claimed $79,200 (72 places x $2,000 x 50% plus GST) and was paid in full on 6 December 2018 (J [69]). Subsequently, in July 2020, CAG terminated the lease for the Hurstville site, with the result that the second tranche did not become payable as the proposed childcare centre did not open.

5. [96]

   Mr Hedley had a professional relationship with Guy Randell, a commercial real estate agent at Burgess Rawson in Canberra (J [15]). Mr Randell’s clients were owner/developers, some of whom were obtaining development consent and constructing or leasing sites, including for childcare centres. From 2018, Mr Randell contacted Mr Hedley, with a view to identifying potential tenancies for the childcare centres which Mr Randell’s clients were developing (J [15]). As time went on, the appellants had greater direct contact with Mr Randell and, accordingly, the benefit to them of Mr Hedley’s connections diminished.

6. [97]

   In early March 2019, Mr Dumbrell suggested to Mr Larcombe that CAG’s shareholders’ agreement be changed to provide that if he found a site, the fee that CAG would otherwise pay Mr Hedley ought be added to Mr Dumbrell’s own equity (J [104]-[105]). The primary judge found at [106]:

7. [98]

   On 20 March 2019, White Pointer issued invoices in respect of sites at MacGregor and Red Hill in the ACT, as an AFL had been exchanged and a DA granted in respect of each (J [110]-[111]). The invoice for MacGregor claimed $165,000 (150 places x $2,000 x 50% plus GST) and the invoice for Red Hill claimed $132,000 (120 places x $2,000 x 50% plus GST).

8. [99]

   In respect of each of the MacGregor and Red Hill invoices, CAG asked White Pointer to issue revised invoices for half of the amount of the first tranche, with an invoice for the remaining half of the first tranche to be rendered six weeks later. White Pointer was prepared to grant these indulgences. On 28 March 2019, Mr Hedley sent through invoices in Microsoft Word format for Mr Larcombe to amend. The revised invoice for MacGregor was for $82,500 and for Red Hill for $66,000 (being half of the first tranche). These changes were confirmed by email on 28 March 2019. Both revised invoices were paid on 29 March 2019. On 14 June 2019, CAG issued further invoices in respect of MacGregor for $75,000 and Red Hill for $60,000, both of which incorporated a 10% discount for prompt payment and which were paid on 18 June 2019 (J [146]).

9. [100]

   White Pointer, through Mr Hedley, continued to source sites in the ACT for CAG, including in Conder, Dickson, Taylor, Throsby and Woden. When the AFL was entered into and the DA granted for each site, White Pointer rendered an invoice for the first tranche. For each of these sites, CAG incorporated a wholly owned subsidiary, which operated under the name “Wonderschool” as an SPV for each childcare centre. The second to sixth appellants are these SPVs. Their names indicate the site with which each is associated. At some point CAG asked White Pointer to address its invoices to the relevant SPV instead of rendering the invoice to CAG itself.

10. [101]

    In respect of the Throsby site, White Pointer issued an invoice to Creative Academy (Throsby) Pty Ltd, dated 30 July 2019 in the sum of $121,000 for the first tranche (110 places x $2,000 x 50% plus GST) (the Throsby invoice). By email sent on 19 August 2019, Mr Larcombe asked Mr Hedley to revise the invoice to send it to the SPV for that site, Wonderschool (Throsby) Pty Ltd (the fifth defendant at first instance and the fifth appellant on the appeal). A revised invoice was sent.

11. [102]

    On 5 August 2019, White Pointer issued an invoice dated 2 August 2019 to Creative Academy (Dickson) Pty Ltd for the Dickson site in the sum of $99,000 (90 places x $2,000 x 50% plus GST), being the first tranche. On 19 August 2019, Mr Mascitelli asked Mr Hedley to issue revised invoices for Wonderschool (Dickson) Pty Ltd, the SPV for the Dickson site (the third defendant at first instance and the third appellant on the appeal). Mr Larcombe arranged for a part-payment of $90,000 to be made on 19 August 2019.

12. [103]

    On 9 September 2019 at 12.35pm, Mr Hedley sent CAG a reminder about the outstanding Throsby invoice which he described as being “a while overdue”. On 26 September 2019 at 10.19am, Mr Hedley emailed Mr Mascitelli about the Throsby invoice and said that “Simon” (Mr Larcombe) had confirmed that the invoice would be paid that day or the next.

13. [104]

    At 11.46am that day Mr Larcombe sent an email to Mr Hedley in which he said:

14. [105]

    Mr Hedley responded at 11.59am by email as follows:

15. [106]

    Later that day (26 September 2019), Mr Larcombe proposed that half of the fee for the Throsby site, $60,500, be paid forthwith with the balance to be paid at a future date. The primary judge inferred that Mr Hedley agreed to this indulgence, CAG having paid the $60,500 on 26 September 2019 (J [242]).

16. [107]

    On 4 December 2019, the lease for the Conder childcare centre commenced (J [166]). On 11 December 2019, Mr Hedley enquired of Mr Larcombe by email when he would be paid the outstanding balance of $60,500 for the first tranche for the Throsby site.

17. [108]

    In or around February 2020, the Throsby childcare centre opened, which triggered CAG’s liability to make the payment of $121,000 as the second tranche for that site.

18. [109]

    On 5 February 2020, Mr Larcombe sent Mr Hedley a text message in which he informed him that funds would only be released to him when a bank loan to CAG had been approved (J [169]). On 6 February 2020, Mr Hedley responded to Mr Larcombe by text, saying that it was “not really the text [he] was expecting.”. Mr Hedley explained in his text that he really needed a statement from CAG as to what was owing and that he “was prepared to accept just $20k today on the basis that the rest came by the end of Feb.” Mr Hedley sent a further text saying:

19. [110]

    In a subsequent text sent on the same day, Mr Hedley said in part:

20. [111]

    On 7 February 2020 (the following day), Mr Larcombe sent Mr Hedley an email in which he said:

21. [112]

    The following text messages were subsequently exchanged between the two men:

22. [113]

    At 11.08am on 7 February 2020, Mr Hedley sent an email to Mr Larcombe in accordance with his request, in which he drafted an email for Mr Larcombe to send back to him, as follows:

23. [114]

    It was common ground that the references in this draft email to “equity” related to discussions between Mr Hedley and Mr Larcombe as to the possibility that White Pointer would obtain equity in CAG instead of being paid for the second tranche. However, this possibility did not eventuate as the appellants never agreed to the respondents receiving any equity in their business.

24. [115]

    Mr Larcombe responded by email at 12.18pm that day, saying, in part, that he “could redraft” that email. However, at 12.20pm, Mr Larcombe sent the email back to Mr Hedley without variation in accordance with the latter’s draft. At 12.27pm, Mr Hedley replied by email as follows:

25. [116]

    Further text messages were exchanged between Mr Hedley and Mr Larcombe on 19 February 2020 in which Mr Hedley asked if Mr Larcombe could “pay anything today please it[’]s now critical”. Mr Larcombe assured him that when “cba finance” came through and the Red Hill and MacGregor sites became “unconditional”, funds would be released. Mr Hedley continued to press for payment and asserted that both the MacGregor and Red Hill sites were “unconditional”.

26. [117]

    The following day, 20 February 2020, Mr Hedley again raised the need for payment in text messages to Mr Larcombe. He said that he was “prepared to be creative with the overall amounts and equity” but that he “can[’]t go another week without a significant payment made.” Mr Larcombe responded that there was not much he could do. A further exchange of text messages ensued between them as follows:

27. [118]

    Mr Larcombe told Mr Hedley that he planned to meet with Mr Mascitelli on 10 March 2020 and that he wanted to meet with Mr Hedley beforehand to “sort out [their] ongoing relationship.” (J [178]). When the two men met, Mr Larcombe showed Mr Hedley a ledger of invoices that had been paid and told him that he would send him an agreement in writing as to what was owed when he had spoken to Mr Mascitelli. The two exchanged texts after their meeting.

28. [119]

    Later that day, Mr Larcombe said in a text message to Mr Hedley:

29. [120]

    After the board meeting, Mr Larcombe texted Mr Hedley and said:

30. [121]

    On 12 March 2020, the ACT Government approved the Conder site for 107 children (J [180]).

31. [122]

    There is no challenge to the primary judge’s findings as to the communications which the appellants contended, at trial and on appeal, made the Settlement Proposal a binding agreement which superseded the Moncur Agreement (assuming that agreement to be binding). It is convenient to set out her Honour’s factual findings in full:

32. [123]

    It was accepted by the parties that Mr Hedley’s words extracted in [194] of the primary judge’s reasons constituted his agreement to the Settlement Proposal. I note that although the sum of $47,650 was not paid until 16 March 2020 (rather than on 14 March 2020 as promised), no point was taken as to the enforceability of the Settlement Proposal on that basis.

33. [124]

    A summary of the amounts payable and paid in respect of each of the sites is set out in the table below.

34. [125]

    The primary judge found that, as CAG had not established that the Settlement Proposal provided any tangible benefit or advantage to the respondents, it lacked consideration and was therefore not enforceable. This finding is the subject of challenge in ground 1. The only issue is whether the Settlement Proposal was supported by consideration.

35. [126]

    The principles for determining whether an agreement is supported by consideration are well established: see Australian Woollen Mills Pty Ltd v The Commonwealth (1954) 92 CLR 424 at 456-457; [1954] HCA 20 (in which the High Court accepted the “modern” or bargain doctrine of consideration) and Beaton v McDivitt (1987) 13 NSWLR 162 at 168-169 (Kirby P) and 181-182 (McHugh JA). As was stated in Beaton v McDivitt the law is not concerned with the equality of a bargain, but in some cases the alleged consideration will be so illusory that a quid pro quo will not be found (168-169). Further, in situations where a promise contains a request by a promisor to do an act, the doing of the act by the promisee will usually constitute consideration (181-182).

36. [127]

    However in the present case, which concerns whether a new promise in the context of a pre-existing contract amounts to consideration, the applicable principles were articulated in Wigan v Edwards (1973) 1 ALR 497 in which Mason J said at 512:

37. [128]

    The new promise provided for by the Settlement Proposal as contended for by the appellants is essentially that in exchange for White Pointer giving up some of its rights under the Moncur Agreement (to be paid $2000 per child’s place at certain childcare sites and instead agreeing to receive lesser amounts) CAG and the SPVs agree to take on new obligations (namely that they would provide “advance payments” for certain sites).

38. [129]

    The question is whether CAG’s “new promises” in the Settlement Proposal were “no more [or were less] than [CAG was] bound to do under [the Moncur Agreement]”. This requires a comparison between the Moncur Agreement and the Settlement Proposal to ascertain in what respects, if any, the latter was not only different but also superior, in the sense of conferring upon White Pointer a benefit that was not available under the Moncur Agreement. In this context, the question also arises whether the Settlement Proposal amounts to a “bona fide compromise of a disputed claim” and whether CAG, by making the Settlement Proposal, was seeking “to gain an unfair advantage by threatening unscrupulously to withhold performance under a contract.”

39. [130]

    Mr Walker submitted that the primary judge erred in finding that the appellants had not provided valuable consideration to White Pointer and that, accordingly, the Settlement Proposal was not binding. He submitted that each or any of the following constituted valuable consideration flowing from the appellants to White Pointer which was sufficient at law to make the Settlement Proposal a binding and enforceable contract:

    1. (1)

       the Settlement Proposal amounted to a bona fide compromise of a disputed claim;

    2. (2)

       as the Settlement Proposal was in writing, it was more easily enforced than the Moncur Agreement, which was oral;

    3. (3)

       the promise of payment of stipulated amounts to White Pointer on execution of the AFL if it delivered “off-market market deals” not associated with Mr Randell of which the appellants were not aware would impose an obligation upon the appellants to deal with White Pointer in the future and dispensed with the requirement for DA approval;

    4. (4)

       the circumstance that not only CAG but each of the SPVs were parties to the Settlement Proposal meant that there were more parties against which White Pointer could enforce the Settlement Proposal;

    5. (5)

       the promise to pay $47,650 in respect of the Conder site (being a significantly reduced fee of $51,500 (reduced from $117,700) for that site less a credit of $3,850 for the Throsby site) on 14 March 2020, before it was due, as the Conder site was not expected to open until the end of March 2020; and

    6. (6)

       the benefit of adjusting a transaction which has become too onerous for one party in order to ensure that the transaction is sustainable for both parties.

40. [131]

    It is necessary to consider whether each or any of the matters raised by Mr Walker amounted to a new promise and, therefore, constituted consideration flowing from CAG and the SPVs, sufficient to make the Settlement Proposal binding. It is not necessary to address the several respects in which the Settlement Proposal was substantially inferior (from the respondents’ point of view) to the Moncur Agreement which included the amounts paid, the time of payment and the liability to repay monies which were classified as “advances”.

41. [132]

    Mr Walker submitted that a bona fide dispute arose as the Moncur Agreement failed to address crucial matters such as:

    1. (1)

       how the amount for the second tranche would be calculated if there was a reduction in the number of permissible child places after the payment of the first tranche but before the childcare centre opened (when the liability to pay the second tranche was triggered);

    2. (2)

       whether White Pointer would be obliged to refund the first tranche payment if the childcare centre did not open at all (in other words, whether the first tranche payments were advance payments pending opening which had to be refunded if no centre opened on the site, or whether they were unconditional payments); and

    3. (3)

       what time for completion (the opening of the particular childcare centre) would be allowed.

42. [133]

    Mr Walker submitted that, at the time of the Settlement Proposal, there was a bona fide dispute about each of these matters, and that the Settlement Proposal was a “bona fide compromise” of these disputes in the sense described by Mason J in Wigan v Edwards (see [71] above), therefore amounting to sufficient consideration. He did not press the submission put on behalf of the appellants in the Court below that the question whether the respondents could enforce the Moncur Agreement because of alleged breaches of the NSW Act and the ACT Act, which was, implicitly, resolved by the Settlement Proposal, constituted valuable consideration.

43. [134]

    Each of the matters in (1)-(3) above may be accepted. However, it does not follow from the absence of express terms in the Moncur Agreement dealing with the matters in (1)-(3) above that there was or could be a dispute between the parties which they were unable to resolve in the course of their dealings. The objective intention of the parties at the time the Moncur Agreement was made was that the value of the first tranche was to be ascertained at the time of the AFL and DA and, thus, the number of child places must be that stipulated in the DA. It followed, as a matter of construction, that the appellants would be entitled to benefit if a greater number of places were approved by the time the childcare centre at a particular site was opened and, conversely, White Pointer’s entitlement to the second tranche would not be reduced if the number of childcare places were reduced by the time the centre was opened. Indeed, in the course of their dealings, the parties appear to have agreed subsequently that there would be an adjustment in the amount of the second tranche if the numbers of places in the childcare centre were different from those stipulated in the original DA (the agreement is referred to in Mr Hedley’s email of 20 February 2020).

44. [135]

    Further, the absence of a stipulation for a time for completion fortifies the conclusion that the Moncur Agreement did not provide for any refund of the first tranche, which White Pointer was entitled to retain, if a childcare centre never opened at the site (in which event the second tranche would not become payable). This is consistent with the appellants’ consistent refusal to accede to Mr Hedley’s requests for equity in the childcare centres, which were made before the Moncur Agreement was concluded as well as afterwards when he was pressing for payment. It accorded with Mr Hedley’s understanding.

45. [136]

    There was no room for implying a term into the Moncur Agreement that the first tranche was merely an advance which the respondents would, if no childcare centre opened at a particular site, be obliged to repay, given the well-established principles for implication of contractual terms: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347 (Mason J); [1982] HCA 24. I do not accept Mr Walker’s submission that the lack of express provision either for adjustments for variations in the number of child places or for the consequences of a childcare centre not opening at a particular site amounted to a lacuna or imported any uncertainty into the Moncur Agreement. The business efficacy of the Moncur Agreement did not depend on agreement as to such matters.

46. [137]

    To the extent to which Mr Hedley was prepared to accept a lesser sum for the second tranche, this should correctly be seen as an indulgence granted to the appellants (as the primary judge found) as opposed to a recognition of a right.

47. [138]

    I accept the submission made by Mr McHugh SC, who appeared with Mr Bannan on behalf of the respondents, that the conclusion that there was no bona fide dispute about the terms or operation of the Moncur Agreement could be more readily reached in circumstances where the appellants chose not to call evidence from Mr Larcombe, who was, relevantly, the mind of CAG.

48. [139]

    Mr Walker submitted that the undoubted benefit of a written agreement is that it tends to be more readily enforced as disagreements about the terms of such an agreement tend to arise less frequently.

49. [140]

    The question whether the provision of a written agreement constitutes sufficient consideration is related to whether there is a bona fide dispute about the terms of the agreement, since it is generally only where there is such a dispute that the difference between an oral and a written agreement is material. The difficulty with the appellants’ submission is that the terms of the Moncur Agreement, though limited, were clear. The difference between the Moncur Agreement and the Settlement Proposal was not due to any attempt to clarify or resolve issues as to the meaning and scope of the Moncur Agreement which were the subject of a bona fide dispute. Rather, that difference was, again adopting the language of the primary judge at J [240], “simply another attempt to re-negotiate the oral contract on more favourable terms” to the appellants.

50. [141]

    The initial invoices were paid soon after they were rendered, following Mr Mascitelli’s query of Mr Larcombe whether they accorded with the agreement as to the commission payable to Mr Hedley. There was, as I have said above, no room for the implication of terms requiring a refund or limiting the time within which a childcare centre had to open. To the extent to which the appellants asserted otherwise, I infer that they were, at least by February 2020, endeavouring to manufacture disputes to excuse their obvious breaches.

51. [142]

    Further, it may be that the deal which its makers thought attractive in the throes of lunch at Bistro Moncur became less so, particularly to Mr Mascitelli, who had not been present at the lunch but was responsible for releasing funds to make the payments. As time went on, the appellants’ capacity to pay appears to have been adversely affected by increases in the development costs and delays in opening the centres in the context of the COVID-19 pandemic. These circumstances, rather than any dispute about what had been agreed, led the appellants to renege on payments due under the Moncur Agreement and to assert “rights” which they must have known they did not have under that agreement.

52. [143]

    For these reasons, the circumstance that the Settlement Proposal was in writing whereas the Moncur Agreement was oral did not provide any benefit or advantage to White Pointer: the terms of the Moncur Agreement were clear and enforceable and the terms of the Settlement Proposal were manifestly inferior (from White Pointer’s perspective) to those in the Moncur Agreement.

53. [144]

    Mr Walker submitted that the promise concerning off-market deals conferred a “kind of exclusivity” on White Pointer and the reference to the possibility of deals in respect of new sites (Woden, Mitchell, London Circuit, Vaucluse, Taylor and Bronte) amounted to a benefit. Further, he submitted that the deletion of the requirement for a DA or service approval for the payment of the first tranche was also a benefit since White Pointer would be entitled to the first tranche upon the AFL being executed.

54. [145]

    These changes amount to no more than a distinction without a difference since it was not only the execution of the AFL but the requirement that “terms be acceptable to [the appellants]” which triggered the appellants’ obligation to pay the first tranche in the Settlement Proposal. It could be expected that the appellants would not execute an AFL unless and until a DA approval had been granted (which stipulated the number of child places), particularly if the former (but not the latter) triggered an obligation to pay White Pointer. I reject the submission that the Settlement Proposal conferred any kind of exclusive arrangement since I do not consider this to be the effect of the words used. The reference to potential new sites was not promissory and therefore did not constitute a benefit.

55. [146]

    Mr Walker submitted that it was of benefit to White Pointer that not only CAG but also “associated companies being Wonderschool associated companies” would be parties to the Settlement Proposal and therefore liable to pay White Pointer. Thus, he contended that White Pointer would have the benefit of being able to enforce its entitlement against any or all of the SPVs, as well as their holding company, CAG, itself.

56. [147]

    Mr McHugh submitted that it was not clear how the reference to the associated companies would produce a different result from that produced by the Moncur Agreement, given that Mr Hedley had been asked to revise his invoices to include the name of the particular SPV for the corresponding site. Further, Mr McHugh relied on the fact that each of the SPVs was a wholly owned subsidiary of CAG and submitted that, accordingly, any benefit to White Pointer would be no more than illusory. Further, he submitted that the reason for the reference to the SPVs in the Settlement Proposal may be for the benefit of the SPVs themselves because the Settlement Proposal made provisions for refunds, which would be referable to particular sites, and therefore to particular SPVs.

57. [148]

    The wording of the Settlement Proposal as to this matter is somewhat opaque. It is doubtful whether it would be effective to make CAG and each of the SPVs jointly and severally liable for payments incurred with respect to a particular site, such that White Pointer could sue any one or more of them. I am not persuaded that this aspect of the Settlement Proposal would be effective to produce a different legal consequence than would apply under the Moncur Agreement (as varied by the introduction of the various SPVs for each site). Nor did the evidence establish whether any SPV was financially independent of CAG or likely to be able to make payments in circumstances where CAG was not financially able to do so. Accordingly, I am not persuaded that it would confer any benefit on White Pointer over and above that for which the Moncur Agreement provided.

58. [149]

    It was common ground that, as at 14 March 2020, the Conder site had not been opened and, therefore, White Pointer was not entitled to the second tranche until it did (which was expected to occur at the end of March 2020). Under the Moncur Agreement, the amount of the second tranche was $117,700 including GST, based on DA approval for 107 places.

59. [150]

    The appellants asserted an entitlement to a credit of $3,850 in respect of the Throsby site to reflect the fact that the number of child places, on the basis of which the first tranche had been paid, had been reduced from 110 to 80 places when the childcare centre at that site opened (J [162]).

60. [151]

    However, as at 14 March 2020, the Throsby centre had already opened and, therefore, the second tranche in respect of that childcare centre had become due. Having regard to the parties’ dealings, it was necessary to adjust the amount of the second tranche to reflect the circumstance that the number of child places had been reduced from 110 (on the basis of which the first tranche had been calculated) to 80 places. The amount owing for Throsby, as at 14 March 2020, was $115,500, calculated as follows:

61. [152]

    Mr Walker submitted that the outstanding sum in respect of Throsby was immaterial since, by agreeing to the Settlement Proposal, White Pointer had agreed to the allocation of the amount paid to the Conder site and not to the Throsby site.

62. [153]

    I do not regard the classification of the payment as being for the Conder site as anything other than a colourable attempt to rebadge a partial performance of an existing obligation (by paying less than the amount owing) as a “benefit”. I accept Mr McHugh’s submission that the acceleration of the payment for the Conder site was “completely illusory”.

63. [154]

    Mr Walker submitted that there were benefits in the parties agreeing to less onerous terms (for one party) to ensure that the agreement remained sustainable. It may be accepted that there was a real prospect that the appellants had misjudged their capacity to make the promised payments when they entered into the Moncur Agreement. Mr Hedley’s willingness to accept part-payments and to apply discounts for prompt payment indicated that he was not averse to making allowance for the appellants’ asserted cashflow difficulties.

64. [155]

    For the purposes of assessing whether there is consideration in the present case, it was not to the respondents’ benefit that the Settlement Proposal was significantly better for the appellants and therefore more likely to enable the appellants to perform it according to its terms. If it were otherwise, a promise to perform less than the extant obligation would, depending on the commercial circumstances of the promisor, amount to consideration. This possibility was excluded in the passage from Wigan v Edwards extracted above.

65. [156]

    Mr Walker emphasised the portion from the passage from Wigan v Edwards extracted above to the effect that it is not for the court to “value” consideration since this is a matter for the parties and not for judicial assessment. However, the Court is both entitled and obliged to form a view about whether the Settlement Proposal was a bona fide attempt to resolve a genuine dispute. Although there was no defence propounded that, if the Settlement Proposal was binding, it ought be set aside as unconscionable (as there might have been), the principles of the common law are sufficient to address the question, without resort to the doctrines of equity.

66. [157]

    I regard the Settlement Proposal as properly to be characterised as an attempt by the appellants “to gain an unfair advantage by threatening unscrupulously to withhold performance under a contract” (Wigan v Edwards, 512). The appellants contended that they were entitled to refunds, in circumstances where they must have known that the Moncur Agreement did not incorporate any such entitlements. Any dispute between the parties as to the terms of the Moncur Agreement had been manufactured by the appellants and was, accordingly, not bona fide. At the time they made the Settlement Proposal, the appellants knew that the respondents were cash-strapped because of Mr Hedley’s constant pleas to be paid a relatively paltry sum ($20,000 in February 2020), which was much less than was due to White Pointer, to “keep the wolf from the door”. In characterising the payment as a payment for the Conder site rather than the Throsby site, they sought to dress up their part-performance of an existing obligation as a valuable concession. It is difficult not to see Mr Larcombe’s boast to his brother (“Yes [Mr Hedley] has been smashed on fees so it’s definitely a win for us”) as consistent not only with the bad faith which imbued the Settlement Proposal but also with the appellants’ Schadenfreude that they had got away with unscrupulous conduct by procuring Mr Hedley’s “agreement” to it.

67. [158]

    I reject Mr Walker’s submissions that any of the matters referred to above amounted by itself, or in combination, to consideration. The appellants have not established any error in the primary judge’s conclusion, amply explained in her Honour’s reasons, that the Settlement Proposal, though accepted, was not binding for lack of consideration.

Grounds 2-5: whether White Pointer or Mr Hedley required a licence to perform the services which they performed under the Moncur Agreement and whether White Pointer was prohibited from bringing proceedings to recover monies alleged to be due with respect to childcare centres in the ACT

1. [159]

   It was common ground that the relevant version of the NSW Act was the historical version for the period from 7 July 2017 to 10 October 2018 and that the relevant version of the ACT Act was republication No 35, effective from 31 August 2017 to 26 February 2021. All references to the legislation will, accordingly, be to these versions.

2. [160]

   Section 3 of the NSW Act relevantly defines “real estate agent” as follows:

3. [161]

   Section 8(1) of the NSW Act prohibits a natural person from acting as or carrying on the business of, relevantly, a real estate agent unless that person is the holder of a real estate agent’s licence. Section 9(1) is the corresponding provision with respect to corporations.

4. [162]

   Section 8(2) relevantly provides that an individual is not entitled to bring any proceeding in any court or tribunal to recover any commission, fee, gain or reward for any service performed by them as a real estate agent unless they hold a real estate licence. Section 9(2) is the equivalent for corporations.

5. [163]

   The extrinsic material for the NSW Act does not particularly illuminate the purpose of these provisions, save that they are designed to regulate those who provide such services for the protection of the public. Of present relevance, the Second Reading Speech (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 9 May 2002) for the Property, Stock and Business Agents Bill 2002 said at p 1965:

6. [164]

   White Pointer accepted that it fell within par (c) of the definition of “real estate agent” in s 3(1) of the NSW Act as it introduced a prospective lessee (CAG) to another licensed agent or to the owner or agent of the owner, of land, being the Hurstville site. The primary judge held that White Pointer was acting as an “agent” for CAG in introducing the appellants as prospective lessees of the Hurstville site (J [271]), and that finding is not challenged on appeal. Thus, White Pointer was required to be licensed in respect of the services it provided for the Hurstville site.

7. [165]

   Section 8 of the ACT Act relevantly provides:

8. [166]

   Section 9 of the ACT Act, which applies to stock and station agents, is in similar terms to s 8, except that it includes, in s 9(2), the following:

9. [167]

   Section 18 provides that it is a strict liability offence for a person to carry on business as a real estate agent unless the person is licensed.

10. [168]

    Section 23 provides:

11. [169]

    Section 23 is to be compared with s 100 of the ACT Act, which applies to services provided in relation to rural land or land not intended to be used only or mainly for commercial, business or industrial purposes (s 99). Section 100 provides that a licensed agent is not entitled to a commission or expenses from a principal for services provided by the agent for the principal unless there is a written agency agreement, which “identifies the rebates, discounts, commissions and expenses that the agent may receive” and estimates their amount.

12. [170]

    The ACT equivalent of the Second Reading Speech, the Presentation speech (Australian Capital Territory Legislative Assembly, Parliamentary Debates (Hansard), 13 March 2003), serves to emphasise the purpose of public protection, such as in the following passages (pp 995-997):

13. [171]

    However, the extrinsic material (the Presentation speech and the Explanatory Memorandum) does not illuminate the question whether the services provided by White Pointer through Mr Hedley fall within the scope of s 8.

14. [172]

    An important distinction between the NSW Act and the ACT Act is that the former includes “introducing” in the definition of real estate agent, whereas the ACT Act does not include “introducing” in s 8 (for real estate agents) but does include it in s 9 for stock and station agents.

15. [173]

    It was accepted that, because of the wording of s 23, it was necessary for the appellants to establish that the services provided by White Pointer in respect of each particular ACT site for which a fee was claimed fell within s 8(2)(b) of the ACT Act and were provided by the respondents “as an agent”. Thus, it was necessary for the primary judge to make findings as to what services were provided by the respondents with respect to each of the childcare centres for which there was a claim for commission.

16. [174]

    The primary judge found that s 8(2)(b) was directed towards the conduct of an agent with respect to the vendor/lessor of the site (which was described in submissions as “outward-facing conduct”), rather than with respect to the agent’s principal, CAG (“inward-facing conduct”). Her Honour said:

17. [175]

    In the Court below and in this Court, the appellants argued that s 8(2)(b) was not limited to the respondents’ conduct with respect to potential owners and lessors but also extended to their conduct with respect to CAG and its SPVs. Mr Walker submitted that it would be artificial to regard a person as an agent when dealing with the counterparty and not when dealing with the agent’s own principal. Mr Walker submitted that the word “agent” was apt to distinguish persons who were acting for others from persons acting for themselves but was not intended to distinguish between the outward-facing acts of agents (dealing with the counterparty) and the inward-facing acts of agents (dealing with the agent’s principal).

18. [176]

    Mr Walker relied on Freehold Land Investments Ltd v Queensland Estates Pty Ltd (1970) 123 CLR 418; [1970] HCA 31 (Freehold Land) in support of this construction. In Freehold Land, the appellant/claimant asserted an entitlement to a commission from monies paid into court in respect of the purchase of a property in Queensland. The issue was whether s 4 of The Auctioneers, Real Estate Agents, Debt Collectors and Motor Dealers Act of 1922 (Qld) (the Qld Act) precluded the appellant from obtaining the commission because it fell within the definition of “real estate agent” and, as was common ground, had not complied with relevant conditions in s 23(1) of the Qld Act.

19. [177]

    Section 4 of the Qld Act defined “real estate agent” as:

20. [178]

    It was common ground that the appellant had, as agent for the respondent, negotiated with a foreign counterparty (who was located in Hong Kong) in respect of property in Hong Kong and Manila. The only negotiations it conducted in Queensland were with its principal and as such, the appellant contended it was not acting “as an agent for others”. The issue was whether these negotiations between the appellant and its principal in Queensland attracted the operation of the Qld Act. The High Court held by majority that it was necessary to look at the whole of the transaction, including the appellant’s dealings with the principal, and that the Qld Act applied to the transaction.

21. [179]

    McTiernan J said at 422:

22. [180]

    Having made the findings at J [285]-[286] set out above, the primary judge said of Freehold Land:

23. [181]

    Mr Walker further submitted that the primary judge was in error in holding that “a person” in s 8(2)(b) does not include a reference to the agent’s “principal” in s 8(1). Once again, he submitted that the primary judge’s construction of s 8 was too narrow, having regard to the language used.

24. [182]

    I agree with the primary judge’s construction of s 8(2)(b) for the reasons given by her Honour (J [285]-[286]). I reject Mr Walker’s submission that a communication between an agent for the lessee (the respondents) and the lessee (the appellants) as its principal falls within s 8(2)(b). The “person” in s 8(2)(b) is the, or a proposed, counterparty.

25. [183]

    For these reasons, ground 3 has not been made out.

26. [184]

    Further, the appellants did not seek to challenge the correctness of Guan v Lui [2021] NSWCA 65 at [46] (Meagher JA, Bell P and Basten JA agreeing), in which this Court found that s 8(2)(a) of the NSW Act did not prohibit Mr Lui, who did not hold a real estate agent’s licence, from bringing proceedings to recover a fee from Ms Guan because Mr Lui was not providing services as a real estate agent (as he did not ever communicate with the vendors or their agents but only used his connections to introduce potential investors to the sales process).

27. [185]

    In Guan v Lui, the respondent was retained by the appellant to introduce his contacts to an expression of interest process and to encourage them to make bids. However, it was held that he did not represent a principal when he was doing so and therefore was not acting as an agent. Indeed, he was not involved in any correspondence between the prospective purchaser, the mortgagee’s agents or the exclusive selling agents. He simply communicated with potential purchasers to let them know that the property was for sale and encouraged them to make bids to purchase it. This Court held that the respondent was not acting as an agent or representative for the appellant (the sole shareholder of the mortgagor), the vendor or the vendor’s agent ([55]-[61]) and was, accordingly, not in breach of s 8(2)(a) of the NSW Act because Mr Lui was not required to be licensed.

28. [186]

    The ratio of Guan v Lui was that acts which are solely between an agent and the agent’s principal and which do not include communications between the agent and the principal’s counterparty (or the counterparty’s agent) undertaken in the agent’s representative capacity do not attract the requirement for a licence pursuant to the NSW Act. In Guan v Lui, Mr Lui’s interactions with the potential bidders were not undertaken in a representative capacity, even though it was of financial advantage to Ms Guan. His services therefore lacked the representative quality inherent in the agency relationship, meaning he was not “acting as an agent” under s 8(2)(a).

29. [187]

    It follows that the appellants’ argument that White Pointer carried on business as a real estate agent within the meaning s 8(1) of the ACT Act because it negotiated with, induced or attempted to induce CAG to lease land must be rejected. For that reason, grounds 4a and 5a should be dismissed.

30. [188]

    It remains to consider whether White Pointer carried on business as a real estate agent by negotiating with or inducing or attempting to induce Mr Randell and his principals, the owners of the ACT sites, to lease those sites to CAG or its SPVs. That issue is raised by grounds 4b, c, 5b, c and d.

31. [189]

    The primary judge found that there was no evidence of any “inducing”, within the meaning of s 8(2)(b) of the ACT Act (J [305]). Her Honour found that Mr Hedley’s conduct in introducing the appellants to the owners of particular sites (through Mr Randell) did not amount to “attempting to induce”, having regard to the words of s 8, which made no reference to “introducing”, when compared with s 9, which expressly does so (J [306]).

32. [190]

    In order to address the appellants’ submissions, it is necessary to review the respondents’ conduct with respect to the owners/lessors of each site and their agent, Mr Randell, to ascertain whether Mr Hedley and White Pointer, acting as agents for CAG, negotiated, induced or attempted to induce them to grant a lease to CAG or to make an offer to do so.

33. [191]

    Her Honour’s findings regarding “attempting to induce” are as follows:

34. [192]

    The appellants relied on Mr Hedley’s admissions regarding his role (summarised above). They submitted that his recommendations to the owners’ agent that the appellants would be good tenants amounted to more than mere “introductions” and were, at least, an attempt to induce the owners into entering into leases with the appellants; and that those recommendations, in many cases, did induce them to enter into such leases. As he had made the representations as agent for the appellants, his services fell within s 8(2)(b) of the ACT Act.

35. [193]

    The appellants also relied on what this Court said in Guan v Lui that agency in this context means acting as a representative for a party in a way that may (but does not necessarily) affect legal relations.

36. [194]

    It is not critical to the concept of agency that the agent has authority to bind the principal to a contract: see, in the context of real estate agents, Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 at 313 (Lindgren J). Finding purchasers on behalf of a financier has been held to be conduct of an agent: Jenkins v Kedcorp Pty Ltd [2002] 1 Qd R 49; [1999] QCA 452 at [16] (McMurdo P, Pincus and Thomas JJA).

37. [195]

    To determine whether the respondents’ actions were merely introducing CAG or went beyond this to inducing the owners of sites to make or accept an offer to enter into a lease, the Act must be read as a whole: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69]; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315; [1985] HCA 48 (Mason J). The legislature is presumed to have used the same words when the same meaning is intended (Registrar of Titles (WA) v Franzon (1975) 132 CLR 611 at 618; [1975] HCA 41 (Mason J, Barwick CJ and Jacobs J agreeing)) and different words where a different meaning is intended (Scott v Commercial Hotel Merbein Pty Limited [1930] VLR 25 at 30). It follows that “introducing” in s 9 must mean something different from “inducing” in ss 8 and 9, since if it were otherwise there would be no need to use the word “introducing”.

38. [196]

    The word “introducing” in this context, particularly when juxtaposed with “inducing”, is apt to mean that the agent introduces, in the sense of “connects”, one person with another concerning the sale or lease of real estate. “Introducing” is merely facultative and may involve the provision of factual information, shorn of advice or recommendation, whereas “inducing” requires an act of persuasion or a representation calculated to produce a desired result. The distinction is more difficult to draw when the introducer is a person of high repute or good standing: an introduction from such a person may give rise at least to an implicit representation that the person being introduced is worthy for the purpose for which the introduction has been effected. Nonetheless, the legislature has drawn a distinction, which must in the process of construction be given content by this Court.

39. [197]

    In the present case, Mr Hedley’s reputation and contacts in the childcare industry may have meant that his introduction of CAG, without more, amounted to a representation that CAG would be a suitable lessee for a childcare centre which was likely to be taken into account by the owner’s agent or owner when considering whether to engage with CAG as a potential tenant. However, I consider that, in order to give the word “introducing” in s 9(2)(c) of the ACT Act work to do, more is required than that the putative agent introduces the putative purchaser or lessee, notwithstanding that the introducer’s reputation may add value and weight to the recommendation. I consider that the appellants’ submissions to the contrary ought be rejected for these reasons, which are, in substance, the reasons given by the primary judge.

40. [198]

    The primary judge found that Mr Hedley always dealt with the owners’ agent (Mr Randell) rather than the owners directly. Her Honour found that what he was authorised to do was informed by the terms of the Moncur Agreement, which required him to identify (source) sites for the appellants (J [289]-[290]).

41. [199]

    I do not consider it to be to the point that Mr Hedley communicated with the owners’ agents, and in particular, Mr Randell, rather than with the owners directly. Where each party is represented by an agent, courtesy, convention and protocol generally require that the agents communicate with each other rather than directly with the other’s principal. Further, agents are bound by their instructions. In this context, it is inapposite to describe an agent as a “mere conduit” since it is the nature of agency that the agent is not permitted to act outside the authority conferred by its principal, whether actual or ostensible. The expression “mere conduit” tends to be used in the context of an allegation of misleading or deceptive conduct where a person who is a “mere conduit” is regarded as not engaging in misleading or deceptive conduct because that person simply passes on information “for what it is worth” without vouching for its accuracy: Yorke v Lucas (1985) 158 CLR 661 at 666; [1985] HCA 65 (Mason ACJ, Wilson, Deane and Dawson JJ). It is not a useful expression in the context of agency.

42. [200]

    None of her Honour’s findings of primary fact regarding what Mr Hedley did for the appellants has been challenged. Accordingly I propose to summarise these findings for each of the sites (in the order in which the primary judge addressed them) regarding Mr Hedley’s conduct towards the owners and their agents before expressing my view as to whether the conduct fell within s 8(2)(b) of the ACT Act.

43. [201]

    Mr Hedley advised the appellants that offering $4,250 per place in their expression of interest for this site would put them ahead of Kids Club who were competing for the lease. He helped the appellants put together an offer and advised them how they could “put their best foot forward” to the owners. He helped arrange meetings between the appellants, Mr Randell and the owners and, after receiving Mr Randell’s response to the offer, helped the appellants with a revised offer which he forwarded to Mr Randell.

44. [202]

    I consider that in putting an offer on behalf of the appellants to the owners agent in their expression of interest at a higher figure than was put by another contender (Kids Club), Mr Hedley was, at least, attempting to induce the owners to make an offer to sell or lease the Red Hill site to the appellants within the meaning of s 8(2)(b) of the ACT Act. Thus, I consider that her Honour’s findings of primary fact lead to the conclusion that the respondents are prohibited from bringing proceedings to recover the amount of commission claimed in respect of the Red Hill site.

45. [203]

    As no part of the respondents’ primary claim included an amount in respect of Red Hill (as the first tranche was accepted as having been paid and the second tranche has not yet become payable), my view has no effect on the judgment sum, although it will preclude the respondents from recovering any amount in respect of the second tranche if a childcare centre at the Red Hill site ever opens.

46. [204]

    Mr Hedley obtained information from Mr Randell, which he provided to the appellants, that the site was for sale with 150 places. Mr Hedley told Mr Larcombe that 150 places was too many and that the site should be leased in stages or, if purchased, the number of places ought be reduced. Mr Hedley asked Mr Randell whether, if the appellants built a smaller centre with 90 places, a new DA would be required. CAG prepared an offer, which was provided to Mr Hedley, who then “forwarded” that offer to Mr Randell. At the same time, Mr Hedley suggested to the appellants that they check whether there were other obligations which they would be required to meet in respect of 150 places, notwithstanding that their offer was based on 120 places and passed on the ACT developer’s response and the appellant’s amended offer.

47. [205]

    I consider that, in communicating the appellants’ offer to Mr Randell, which was based on 120 places, Mr Hedley was “negotiating with” the owners (through their agent, Mr Randell), on behalf of the appellants, to make or accept an offer to enter into a contract to sell land within the meaning of s 8(2)(b) of the ACT Act. Thus, I consider that her Honour’s findings of primary fact lead to the conclusion that the respondents are prohibited from bringing proceedings to recover the amount of commission claimed in respect of the MacGregor site.

48. [206]

    As with Red Hill, no part of the respondents’ primary claim included an amount in respect of the MacGregor site (as the first tranche was accepted as having been paid and the second tranche has not yet become payable). Accordingly, my conclusion does not affect the judgment sum, although it will preclude the respondents from recovering any amount in respect of the second tranche if a childcare centre at the MacGregor site ever opens.

49. [207]

    The findings of the primary judge with respect to the Throsby site show that, although Mr Hedley gave advice to the appellants, the communications between the appellants and the lessors (either on their own account or through Mr Randell) or with the developers of the site were conducted by the appellants themselves rather than through Mr Hedley. For example, the primary judge found at [132]:

50. [208]

    The evidence does not establish that any communication was made by Mr Hedley to the owners or their agent (Mr Randell) in respect of the Throsby site. The appellants did not establish that the respondents were acting other than as introducers in respect of the Throsby site.

51. [209]

    As the appellants have not established that the respondents were providing a “real estate agent service” within the meaning of s 8 of the ACT Act, the respondents are not prohibited by s 23 from bringing proceedings to recover their commission in respect of the Throsby site. As the centre was opened, the respondents are entitled to $115,500 (subject to other defences addressed below), as found by the primary judge. As referred to above, this agreed figure takes account of the reduction in child places from 110 (as specified in the DA) to 80 places, as was the number when the childcare centre opened before 14 March 2020.

52. [210]

    Apart from communications between Mr Hedley and his principal (the appellants), the primary judge found that Mr Hedley did the following:

    1. (1)

       asked Mr Randell to tell him an appropriate market rate per child in the area and communicated this to the appellants (J [295]);

    2. (2)

       asked Mr Randell not to go to market as he was sure that his clients would take the site (J [90] and [295]); and

    3. (3)

       communicated the appellants’ initial offer to Mr Randell and, when informed by Mr Randell that the offer of $3,500 per child was “insufficient” (to stop the appellants from going to the market), conveyed that information to CAG and later received an amended offer from Mr Dumbrell, which Mr Hedley provided to Mr Randell (J [93]).

53. [211]

    I consider that, in asking Mr Randell not to go to market, Mr Hedley was attempting to induce the owners (for whom Mr Randell acted) to make an offer to sell or lease the land to the appellants within the meaning of s 8(2)(b) of the ACT Act. In communicating the appellants’ initial and amended offers to Mr Randell, Mr Hedley was negotiating with the owners to induce them to lease the land to the appellants within the meaning of s 8(2)(b) of the ACT Act. Thus, I consider that her Honour’s findings of primary fact lead to the conclusion that the respondents are prohibited from bringing proceedings to recover the amount of commission claimed in respect of the Taylor site (Cf. J [307]).

54. [212]

    The respondents’ primary claim included an amount of $121,000 in respect of the Taylor site (as the first tranche, which was due in March 2021, was not paid). Accordingly, this amount must be deducted from the judgment sum as the respondents were not entitled to bring proceedings to recover it. In so far as the respondents maintain a claim for a further $121,000 based on the circumstance that, since the judgment was ordered, the childcare centre at the Taylor site had opened, they are not entitled to make that claim. In conclusion, the effect of s 23 of the ACT Act is that the respondents are not entitled to bring proceedings for any of their fees in respect of the Taylor site.

55. [213]

    Apart from communications between Mr Hedley and the appellants, the primary judge found that Mr Hedley “explored [with Mr Randell] whether the owner would be open to a differently structured deal” (J [296]). However, the primary facts found by the primary judge do not indicate that there was any particular act or conduct of Mr Hedley with the owner or its agent (Mr Randell) which was designed to have that effect. Indeed, her Honour found, at [134], that Mr Hedley told Mr Larcombe and Mr Dumbrell that he “wished to explore Conder and believed they could get the deal they wanted” but then detailed the communications between Mr Larcombe (on behalf of the appellants) and Mr Randell (on behalf of the owner), which resulted in a lease and DA being granted on 12 March 2020 at the latest.

56. [214]

    In these circumstances, the appellants have failed to prove that there was any act on the part of the respondents which fell within s 8(2)(b) of the ACT Act such that the respondents are prohibited by s 23 from recovering their commission in respect of the Conder site.

57. [215]

    As the childcare centre at Conder opened at about the end of March 2020, the respondents are entitled to both tranches (totalling $235,400), from which a deduction of $47,650 is to be made (to take account of the payment attributed to that site), leaving an agreed balance of $187,750.

58. [216]

    The primary judge found that Mr Hedley saw an article in the Australian Financial Review on 4 July 2019 which indicated that Edhod, the proposed lessee of the Dickson site, was in financial trouble. He drew it to the attention of Mr Larcombe and Mr Randell, asking the latter to send it to the owners of the Dickson site (J [151]). Mr Hedley asked Mr Larcombe to draft an offer to Mr Randell but Mr Larcombe responded by email that he would leave it to Mr Hedley and Mr Randell to discuss.

59. [217]

    Mr Randell responded by saying that it was a “tight lease” and there was “zero room for negotiation”. At 10.15am on 4 July 2019, Mr Hedley replied to Mr Randell:

60. [218]

    After this communication, there is no evidence of Mr Hedley having any further communication about the Dickson site with Mr Randell. Mr Larcombe communicated with Mr Randell on and from 5 July 2019.

61. [219]

    It can be inferred that Mr Hedley’s intention in sending the newspaper article about Edhod’s financial difficulties to Mr Randell was to disparage the appellants’ competitor for the Dickson site. This intention is made even clearer by the terms of the later email in which Mr Hedley spelled out the possible consequences for the owners of proceeding to contract with Edhod, rather than dealing with the appellants with respect to the Dickson site. As such, Mr Hedley’s intention was to discourage Mr Randell’s principals from proceeding with a lease to Edhod. That raised the opportunity for the appellants to put “an offer under the owners’ nose as an alternative”.

62. [220]

    I consider that Mr Hedley’s communications with Mr Randell on 4 July 2019 constitute attempts to induce the owners (through Mr Randell) to make or accept an offer to sell or lease the Dickson site to the appellants within the meaning of s 8(2)(b) of the ACT Act. Accordingly, s 23 precluded White Pointer from recovering its commission in respect of the site.

63. [221]

    The appellants paid the respondents $90,000 for the first tranche of the commission with respect to the Dickson site (it was agreed that no more was owed for the first tranche although the invoiced amount was $99,000), which was based on 90 places. The respondents claimed a further $59,400 in the proceedings, which took account of an agreed adjustment to reflect the circumstance that the centre at the Dickson site was only for 72 child places. Accordingly, the amount of $59,400 must be deducted from the judgment sum as the respondents were not entitled to bring proceedings to recover it.

64. [222]

    The primary judge summarised her findings regarding the Woden site as follows (J [298]):

65. [223]

    The primary judge’s more detailed findings about the Woden site include that, when Mr Hedley enquired of Mr Randell on 16 April 2019 about the development of the Woden site, Mr Randell told him that the site was “on hold for Kids Club” (J [125]). However, Mr Randell also told him that “[i]f it gets a hint of going bad [Kids Club] is out” and that any offer would need to be “better than [$]4800 [per child’s place].” Mr Hedley passed on this information to the appellants and discussed what they should do. Mr Larcombe instructed Mr Hedley to “[p]ut [his] foot on it”, following which Mr Hedley texted Mr Randell that he was sending through an offer. On 23 April 2019, Mr Hedley contacted Mr Randell who told him that there was “nothing for Woden … there is a wait and see on this” (J [129]). On 29 April 2019, it was Mr Larcombe who communicated the appellants’ offer for the Woden site.

66. [224]

    In May 2019, Mr Hedley discussed the Woden site further with Mr Larcombe and Mr Dumbrell (J [134]). In June 2019, Mr Randell told the appellants that Kids Club had withdrawn from the Woden site. Mr Randell provided Mr Hedley with the latest draft plans and offer in respect of the Woden site (J [140]). On 18 June 2019, Mr Larcombe inspected sites, including the Woden site (J [148]). On 15 July 2019, Mr Larcombe provided Mr Randell with an executed offer for the Woden site (J [153]).

67. [225]

    By February 2021, the AFL for the Woden site was executed and the DA granted. Ultimately, the Woden Centre opened on 17 May 2021 with 120 places (J [199]).

68. [226]

    The appellants have failed to prove that in respect of the Woden site the respondents provided a real estate agent service within the meaning of s 8(2) of the ACT Act. Although Mr Hedley communicated on occasions with Mr Randell, none of these communications amounted to negotiations or attempts to induce the owners to make an offer to sell or lease the Woden site. The appellants have made no payments in respect of the Woden site. Subject to other defences raised by the appellants (which will be addressed below), the sum of $264,000 remains outstanding, as the primary judge found.

69. [227]

    For the reasons given above, the judgment sum needs to be reduced to take account of the reductions for the Dickson and Taylor sites. The effect on the judgment of these findings on appeal is as follows:

Grounds 6-9: whether the appellants were entitled to restitution from White Pointer of monies paid

1. [228]

   Ultimately, there were two bases for the appellants’ claim for the restitution of monies it had paid to White Pointer in respect of the ACT sites and the Hurstville site: first, as monies paid for which there had been a total failure of consideration (grounds 6 and 9); and second, as monies paid under a mistake (grounds 7 and 8). As to the total failure of consideration, it is said that the Moncur Agreement was illegal, contrary to public policy, unenforceable and inherently ineffectual, resulting in that total failure of consideration (J [313]-[314]). As to mistake, it was said that the appellants believed or assumed that White Pointer held the necessary licences legally to provide its services, was entitled to charge for its services, and that the oral contract was legal.

2. [229]

   Because of the primary judge’s finding that the respondents were not in breach of the ACT Act, it was necessary for her Honour to address only the payment of $79,200 made in respect of the Hurstville site (in respect of which the respondents accepted that they were in breach of the NSW Act because they were not licenced). Her Honour, after addressing the relevant authorities, found that the matter was to be resolved as a question of statutory construction and referred to Mason J’s observation in Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 at 429; [1978] HCA 42 as follows:

3. [230]

   The primary judge said:

4. [231]

   The primary judge concluded that the appellants were not entitled to restitution on the ground that there was a total failure of consideration (J [320]):

5. [232]

   The appellants accepted that the primary judge was correct to approach this question as one of statutory construction. However, they submitted that the primary judge erred in not finding that restitution was justified in the present case and that her Honour ought to have found that it was incongruent with public policy and the purpose of the legislation to permit an unlicensed agent to retain monies already paid (for services which required their provider to be licensed) in circumstances where the agent was not entitled to bring proceedings to recover money owed under the contract. The appellants further submitted that it would be incongruous if an unlicensed agent could retain a fee paid for work for which the agent was required to be licensed when the situation might be the result of “accident, luck or consumer ignorance”.

6. [233]

   Sections 8(2) and 9(2) make clear that an unlicensed agent, whether a natural person or a corporation, is not entitled to bring any proceeding to recover any commission, fee, gain or reward for any service performed by the person or corporation, unless he or she or the corporation was required to be and was the holder of a relevant licence. Thus, an unlicensed agent does not have the option of suing on a claim for quantum meruit since this would be prohibited by ss 8(2) and 9(2). However, the NSW Act does not provide that monies which have already been paid are recoverable.

7. [234]

   The legislature, in enacting ss 8(2) and 9(2), can be taken to have made the choice to deprive an unlicensed agent of access to a court or tribunal to enforce payment of fees otherwise payable under a contract but not to have taken the extra step of requiring the unlicensed agent to disgorge or repay monies already received for work which required a licence.

8. [235]

   Other legislative choices were available, as is demonstrated by the following examples taken from the ACT Act, the NSW Act and the Builders Licensing Act 1971 (NSW).

9. [236]

   Sections 99 and 100 of the ACT Act (summarised above) provide that a licensed agent is not entitled to commission for services provided in relation to non-commercial or rural land unless there is a written agreement setting out the integers of such commission and estimating their amount. To similar effect, s 55 of the NSW Act provides that a licensee is not entitled to commission or expenses unless the services were performed pursuant to a written contract signed by the parties which complies with the regulations.

10. [237]

    Section 45 of the Builders Licensing Act provided that a contract under which a licensed builder undertakes to perform building work was not enforceable against the other party unless the contract was in writing, signed by each of the parties and specified the building work to be undertaken. In Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5, the appellant builder sued the respondent client in quantum meruit as the contract, being oral, was not enforceable by reason of s 45 of the Builders Licensing Act. The Court (Mason, Wilson, Deane and Dawson JJ, Brennan J contra) held that s 45 did not prevent an action for the value of work done and materials supplied under an oral contract since this did not depend on the existence of an implied contract but, rather, on the basis of the principles of restitution.

11. [238]

    It is not for a court to gainsay such a legislative choice by “topping” up the extent to which the legislative purpose of protection of the public is fulfilled by the legislation: see Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at [5] (Gleeson CJ) and Gnych v Polish Club Ltd (2015) 255 CLR 414; [2015] HCA 23 at [73] (Gageler J, extracted above). For these reasons, it was not incongruent with public policy, viewed through the lens of the statute, or the purpose of the NSW Act for the Court to refuse to order White Pointer to repay the $79,200 already paid by the appellants in respect of the Hurstville site.

12. [239]

    As I have found above, White Pointer was required to be licenced in respect of the services it provided for the Taylor, Dickson, Red Hill and MacGregor sites. The appellants seek restitution of amounts they paid to the respondents referable to these sites on a similar basis to the Hurstville site, as addressed above.

13. [240]

    Section 23 of the ACT Act makes it clear that an unlicensed agent is not entitled to bring a proceeding to recover commission, fee or reward in respect of work for which the agent was required to be licensed, whatever the cause of action. Thus, an unlicensed agent does not have the option of suing on a claim for quantum meruit since this would be prohibited by s 23 of the ACT Act. However, it is telling that as in the NSW Act, the ACT Act does not provide that monies which have already been paid are recoverable.

14. [241]

    Therefore, for the reasons given above in relation to the Hurstville site, restitution is not available on the basis that the Moncur Agreement is unenforceable in respect of monies paid for the ACT sites.

15. [242]

    The appellants have not established any error in the primary judge’s analysis. For the reasons above, grounds 6a, b and d have not been made out.

16. [243]

    The appellants allege in ground 6c that the primary judge erred in failing to find that White Pointer had contravened s 9 of the NSW Act and s 18 of the ACT Act by not being licensed. This ground overlaps with grounds 2-5, which have been addressed above, and has been made out in part (in respect of the Taylor, Dickson, Red Hill and MacGregor sites and the Hurstville site), for the reasons given above.

17. [244]

    I am not persuaded that the contravention of these provisions results in the Moncur Agreement being void for illegality. In these circumstances the appellant has not established that it is entitled to restitution on that basis. For these reasons ground 6c has not been made out.

18. [245]

    Ground 9 alleges that the primary judge was in error in failing to find that the appellants were entitled to restitution of the monies they had paid White Pointer on the basis that the Moncur Agreement was unenforceable or illegal. For the reasons given above with respect to ground 6, this ground has not been made out.

19. [246]

    Ground 8 alleges:

20. [247]

    The primary judge found, at [324], that the appellants, in order to prove that they had made payments under a mistaken belief that White Pointer was entitled to enforce its claim for payment, were required to prove that they were mistaken as to whether White Pointer needed, and had, a real estate agent licence and that such a mistake was causative of payment. Her Honour was not satisfied that the appellants were relevantly mistaken or that any mistake was causative of the payment of the Hurstville fee. The primary judge referred to the absence of any mention of the issue in the contemporaneous documents as well as the circumstance that Mr Larcombe’s failure to give evidence led to the inference that his evidence would not have assisted the appellants’ case: Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8.

21. [248]

    The appellants accepted that the primary judge had stated the principle correctly but contended that her Honour had erred in failing to find that the appellants had discharged their onus of proof on this matter. Mr Walker submitted that the “only available inference” was that the appellants had paid in the mistaken belief that White Pointer could have enforced a right to payment. Mr Walker asked rhetorically: why else would the appellants have paid White Pointer except because they believed that they had to?

22. [249]

    In my view, other explanations arise from the evidence. The appellants had a strong commercial interest in using the respondents’ services and obtaining the associated benefit from the connections which the respondents enjoyed in the market for sites for childcare centres. CAG was a new entrant to the childcare industry (J [216]). Without the respondents’ connections, the appellants would have been unlikely to secure any of the sites which they ultimately leased and developed. It cannot be inferred that the appellants cared whether the respondents were, or were required to be, licensed since all the appellants either wanted or needed from the respondents was their connections, a circumstance which may explain why there is no evidence that the respondents’ licence status was ever mentioned. The appellants, as the evidence in respect of later sites established, were commercially sophisticated and capable of negotiating on their own account and communicating with Mr Randell, without the respondents’ having any further involvement beyond introducing them to the owners of the sites.

23. [250]

    In these circumstances, even if the appellants were in a state of ignorance (or were actually mistaken), they still needed to prove causation. In other words, the appellants were required to prove that they would not have paid the respondents if they had known, at the time of payment, that the respondents were required to be licensed, were not licensed and could not bring proceedings for their outstanding fees: Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349 at 411 (Lord Hope of Craighead). Apart from the payment of $47,650 on 16 March 2020 (which the appellants endeavoured to present as consideration for the Settlement Proposal), the last payment made by the appellants to White Pointer was made on 26 September 2019. At that time, the appellants were still using the respondents’ contacts to connect them with owners of potential sites. I do not accept that they would have jeopardised their future business by not paying the respondents on the grounds that the respondents were required to be, and were not, relevantly licensed.

24. [251]

    The appellants have failed to establish any error in the primary judge’s finding at J [324]. Accordingly, ground 8 has not been made out.

25. [252]

    This ground need not be addressed as the appellants have, for the reasons given with respect to ground 8, failed to prove that they were actually mistaken. The alleged illegality has been addressed above in the consideration of grounds 6 and 9.

Conclusion

1. [253]

   For the reasons given above, the appeal ought be allowed in part to reduce the judgment sum to reflect the appellants’ partial success regarding amounts which were otherwise owing with respect to the Taylor site ($121,000) and the Dickson site ($59,400) and which were included in the judgment sum ordered by the primary judge. Although the childcare centre at the Taylor site has now opened, White Pointer is not entitled to the second tranche of $121,000 because of its conduct falling within s 8(2)(b) of the ACT Act because it is prohibited by s 23 of the ACT Act from recovering its commission in a proceeding.

Costs

1. [254]

   The parties have not been heard on costs. There does not appear to be any reason why the reduction in the judgment sum ought affect the costs in the Court below. The appellants have had only modest success in this Court and have failed on most of their grounds. In these circumstances I consider that they ought be ordered to pay 75% of the respondents’ costs of the appeal. If any party seeks a different order, an application ought be made pursuant to r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW).

Proposed orders

1. [255]

   For the reasons given above I propose the following orders:

   1. (1)

      Allow the appeal in part.

   2. (2)

      Set aside the judgment in order (1) of the orders made by Rees J on 25 July 2023 and, in lieu thereof order judgment against the first defendant in the amount of $567,250, together with interest under s 100 of the Civil Procedure Act 2005 (NSW).

   3. (3)

      Otherwise dismiss the appeal.

   4. (4)

      Order the appellants to pay 75% of the respondents’ costs of the appeal.