Russell John Hill v Benchmark Business Sales Pty Ltd

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Russell John Hill v Benchmark Business Sales Pty Ltd [2022] QCATA 135

PARTIES:

RUSSELL JOHN HILL

(appellant)

V

BENCHMARK BUSINESS SALES PTY LTD

(respondent)

APPLICATION NO:

APL122 -21

ORIGINATING APPLICATION NO:

MCDO5 of 2021

MATTER TYPE:

Appeals

DELIVERED ON:

13 September 2022

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member PG Stilgoe OAM

ORDERS:

1. Leave to appeal is dismissed

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – leave to appeal – minor civil dispute – where appellant sold a business – whether respondent was validly appointed as the appellant’s agent – whether respondent as agent was the effective cause of sale – whether the tribunal applied the wrong test of effective cause of sale

Queensland Civil and Administrative Tribunal Act 2009
ss 32, 142

Chambers v Jobling (1986) 7 NSWLR 1

Dearman v Dearman (1908) 7 CLR 549
Doyle v Mt Kidston Mining & Exploration Pty Ltd [1984] 2 Qd R 386
Hooper v Bradbury [1957] QWN 39
L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52
Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351

Pickering v McArthur [2005] QCA 294

APPEARANCES & REPRESENTATION:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)

REASONS FOR DECISION

Background

Russell Hill was the majority owner and a director of Truck Repair Group (NQ) Pty Ltd.[1]
[1]Appellant’s affidavit affirmed 19 February 2021, Ex RH2.
Mr Hill appointed Benchmark Business Sales Pty Ltd as his agent to sell the business by way of an executed Form 6 agency form dated 21 July 2020.[2] Commission was agreed at 3.25% plus GST of the sale price or a minimum of $25,500.00 plus GST, whichever was higher, payable at settlement.[3]
[2]T1-5, lines 36-40.
[3]Appellant’s affidavit affirmed 19 February 2021, Ex RH1, 4.
The business’ general manager throughout the relevant time, Scott Hunter, had expressed an interest in purchasing the business.[4]
[4]T1-14, lines 24-28.
On 14 September 2020, Mr Hill agreed to sell a majority of his shares in the business to Mr Hunter for $605,000.[5]
[5]Appellant’s affidavit affirmed 19 February 2021, [16].
On 01 October 2020, Benchmark issued a tax invoice for $27,500 from Mr Hill.[6]

Mr Hill refused to pay this amount. Benchmark applied to the Tribunal on 21 December 2020 seeking $25,000 plus GST.[7]
[6]Application for minor civil dispute, 4.
[7]Application for minor civil dispute.
At the hearing on 06 April 2021, Mr Hill was ordered to pay $25,000 to Benchmark Business Sales Pty Ltd within 28 days.[8]
[8]T1-28, lines 47 – 1-19, line 1.
Mr Hill wishes to appeal that decision on three grounds, the first being whether the learned Adjudicator erred in finding that Benchmark had authority to act as Mr Hill’s agent.[9] Mr Hill then argues that the learned Adjudicator applied the incorrect test of an ‘effective cause of sale’, [10] and, finally, that the learned Adjudicator erred in her application of that test. [11]
[9]Appellant’s affidavit received 14 October 2021, [4]-[8].
[10]Application for leave to appeal or appeal, 3.
[11]Appellant’s affidavit received 24 May 2021, [10].

Authority to act as agent

Mr Hill requires leave to appeal to appeal a decision of the Tribunal’s minor civil disputes jurisdiction.[12] It will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.[13]
[12]Queensland Civil and Administrative Tribunal Act 2009 ss 142(1), (3)(a)(i).
[13]Pickering v McArthur [2005] QCA 294, [3].
Mr Hill’s first ground of appeal is a question of fact.

Findings of fact by a tribunal will not usually be disturbed on appeal if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its conclusions, and there is evidence capable of supporting any inferences underlining it.[14]
[14]Dearman v Dearman (1908) 7 CLR 549, 561.
Mr Hill alleges that Benchmark was only appointed for the contemplated sale to Royan Truck and Trailer Repairs Pty Ltd.[15]
[15]Appellant’s affidavit received 14 October 2021, [5].
Mr Hill claims that the learned Adjudicator did not possess the agency form at the hearing, which provided the following limitation to Benchmark’s appointment:[16]
Section 4 *
a) The terms of this appointment only apply to the sale of the business known as Heavy Truck Repair ABN 53 627 481 921 to Royan Truck & Trailer Repairs Pty Ltd ABN 58 000 629 363.
A new Agreement will be negotiated between the Licencee/Agent and vendor/client if another buyer is to be sought.
[16]Appellant’s affidavit affirmed 19 February 2021, Ex RH1, part 4 section 4.
The learned Adjudicator acknowledged that Benchmark had included the agency form with its application.[17] As part of the applicant’s material, the form was present and considered at the hearing, although Mr Hill did not make submissions relating to it at the hearing.
[17]T1-5, lines 22-25.
Mr Hill understood his appointment of Benchmark to be for ‘an open listing’ of his business.[18] Whilst Mr Hill refrained from having the business listed on websites to the public at large, he did pay approximately $4,000 for ‘a little promo’ to advertise the business online.[19]
[18]T1-14, line 19. Confirmed in Appellant’s affidavit affirmed 19 February 2021, Ex RH1, part 6.
[19]T1-16, lines 22-29.
Benchmark’s initial correspondence to Mr Hill on 13 July 2020 outlined various marketing options for his business’ sale.[20] Mr Hill promptly responded with:[21]
[20]Respondent’s affidavit affirmed 23 November 2021, Ref Item 3.
[21]Respondent’s affidavit affirmed 23 November 2021, Ref Item 3.
All makes sense
As noted previously

Sale multipule [sic]

ROYANS and AMA specific interest
Also time of engagement

Video production, perhaps a meeting here? (address redacted)
Call when you’re free and we’ll get this rolling.
In that same correspondence, Benchmark stated that commission would be a minimum of $25,000 plus GST, or 6.5%, whichever was highest.[22] The agency form initially set commission at 6.5%, but was amended by the parties to be half that.[23]
[22]Respondent’s affidavit affirmed 23 November 2021, Ref Item 3.
[23]Appellant’s affidavit affirmed 19 February 2021, Ex RH1, part 7.
The handwritten comment on page 2 of the agency form seeks to limit the appointment’s commission:[24]
* Royans sale @ 50% if applicable (emphasis added)
[24]Appellant’s affidavit affirmed 19 February 2021, Ex RH1, part 4 section 2.
In other words, should the business be sold to Royans, Benchmark’s commission should be reduced by 50%.[25] It is therefore inferable that the parties contemplated a sale to someone other than Royans.
[25]Appellant’s affidavit affirmed 19 February 2021, Ex RH1, part 4 section 2.
Mr Hill paid for the business sale’s marketing.[26] It was to be marketed to the public, albeit Mr Hill’s ‘specific interest’ in selling to Royans. Benchmark also claim that they were never advised that they were to only negotiate with Royans, as Mr Hill now contends.[27]
[26]Respondent’s affidavit affirmed 23 November 2021, [5].
[27]Respondent’s affidavit affirmed 23 November 2021, [5]; Appellant’s affidavit received 14 October 2021, [5].
The evidence can support the learned Adjudicator’s finding that Mr Hill appointed Benchmark to sell his business.[28]
[28]Chambers v Jobling (1986) 7 NSWLR 1, 10.
This first ground of appeal is dismissed.

Effective cause of sale

Mr Hill argues that for Benchmark to be entitled to a commission, they must have been the effective cause of sale, as distinct from an effective cause of sale.[29]
[29]Application for leave to appeal or appeal, 3.
‘Effective cause of sale’ means that the sale must wholly or partially result from the efforts of the agent.[30] An agent will be entitled to commission if their work resulted in the relationship of buyer and seller, even if the actual sale was not effected by the agent.[31]
[30]L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52; (1977) 13 ALR 161, 165.
[31]L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52; (1977) 13 ALR 161, 173.
Most situations will have numerous causes of sale.[32] The test is whether the efforts of the purported agent bring about the relation between the parties of buyer and seller.[33] This is the test the learned Adjudicator applied.[34]
[32]Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351, [85], citing L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52; (1977) 13 ALR 161, 188.
[33]Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 202 CLR 351, [86].
[34]T1-28, lines 17-35.
The learned Adjudicator acknowledged that Mr Hill already knew Mr Hunter and had been negotiating the potential purchase of the business.[35] Mr Hunter had offered his house to Mr Hill as consideration for the business.[36] Mr Hill rejected this offer.[37]

Mr Hill subsequently disregarded Mr Hunter as a potential purchaser of the business.[38]
[35]T1-27, lines 42-46.
[36]T1-17, lines 9-10.
[37]T1-17, line 40.
[38]T1-27, lines 44-46.
The Tribunal found that Benchmark’s efforts in helping Mr Hunter secure adequate cash for the sale placed Mr Hunter in a position where he was able to purchase the business on mutually agreed terms.[39] Benchmark introduced Mr Hunter to a lawyer and business structuring company to facilitate this.[40] Benchmark’s efforts were a direct and significant part of, and likely induced Mr Hill’s sale.[41] Mr Hunter illustrated his gratitude of Benchmark’s role in the purchase of the business in his email dated 18 September 2020:
yourself and contacts have made this sale very seamless and I cannot thank you or recommend you enough.
[39]T1-17, line 36 – 1-18, line 1; T1-28, lines 23-29.
[40]T1-10, lines 4-10.
[41]Doyle v Mt Kidston Mining & Exploration Pty Ltd [1984] 2 Qd R 386, 393; Hooper v Bradbury [1957] QWN 39, [9].
The learned Adjudicator identified the correct test for ‘effective cause of sale’ and the evidence can support her finding that Benchmark brought about the relationship of buyer and seller, rendering it the effective cause of sale.
The second and third grounds of appeal are dismissed.

ORDERS

1. Leave to appeal is dismissed

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established