An Ascot seller has escaped payment of sales commission on her $2.65 million home to the agent who introduced the buyer to the property even though he was duly appointed by a signed form 22a.
Frank Massinello listed Karen Jager’s Oriel Rd family home and signed up Susannah Sherlock and David Reid in March 2010 with a $50k deposit, subject to the sale of their home in Tasmania, building inspections and finance.
The deal fell through due to unsatisfactory building reports concerning the absence of a pool fence and termite traps which the seller declined to rectify.
That ended agent Massinello’s involvement. Jager – exasperated with the demands of the Hobart couple – moved the listing to Harcourts Ascot instead.
Just two months after the deal was crashed, Sherlock dropped a note in Jager’s letterbox re-introducing herself as one of the charming buyers from Hobart who had made the earlier offer, telling her that they had sold their apple isle home and could now proceed unconditionally, if she were still willing to sell.
The note concluded: “We do not think that you need to engage your current agent and are not sure whether you are still contracted to Ray White, which may save you some money, but we’ll leave that to you.”
Lance Jager, the seller’s husband, made contact with Sherlock and a new contract was signed on 6 August with a non-refundable 100k deposit but with an obligation on the seller to obtain Council approvals for a non-compliant “guesthouse” in what had formerly been a garage on the property. This sale also included a “very expensive refrigerator” that was not part of the earlier contract.
The sale settled in October 2010 and when the former agent learnt the identity of the buyer, he approached the parties for a share of the commission.
Jager resisted these overtures and was put to defending a Magistrates Court claim by Ray White Ascot on the basis that agent Massinello had not “effectively introduced the property to the buyer during the agency” – the commission threshold as specified in clause 7.3 of the ADL form 22a agent appointment.
The magistrate agreed. There had been no effective introduction because the contract entered into bore no relationship to that which Massinello had negotiated. There was no suggestion that the earlier termination was a contrivance.
The second contract was “so different in important respects” that Massinello could not be considered “the effective cause of the sale” and had therefore not “effectively introduced” the purchasers to the property.
On appeal, the District Court noted that agent Massinello “had not been able to find a buyer that was ready willing and able to buy the property” especially not when considered against the seller’s refusal to rectify the pool fence or do termite treatment.
Massinello’s confession that the Taswegians “were not the right buyers for the property” worked against the contention, so held the court, that he had “effectively introduced” them as buyers.
Especially given that it was the purchasers themselves who “re-established communication” with the seller, the circumstances represented a definitive (and ultimately fatal) “break in the necessary causal relationship between the agent’s actions and the sale that eventually took place”.
The former agent’s claim fell flat, “despite the relatively brief period between the termination of the first contract” and its revival. Although the District Court hints that it may have come to a different conclusion, it was not prepared to rule that the magistrate’s decision was unjustified. “His findings, which are findings of fact, are to be given respect”.
The result no doubt is a blow for the first agent and he is entitled to feel aggrieved.