Hudson Conway Ltd v Colliers Jardine (Vic) Pty Ltd [1995] VSC 172; [1995] VICSC 172 (11 July 1995)

SUPREME COURT OF VICTORIA

HUDSON CONWAY LTD. v. COLLIERS JARDINE (VIC.) PTY. LTD.
No. 2189 of 1992
Number of pages - 14
Contract

COURT

IN THE SUPREME COURT OF VICTORIA
COURT OF APPEAL
BROOKING(1), PHILLIPS(2) AND CHARLES(3) JJA

CATCHWORDS

Contract - Agency - Real estate agent engaged by developer to obtain tenant for city building before construction commences - Identity of parties to engagement - Commission agreed as payable should tenant "lease" space - Whether payable upon agreement to lease, though agreement later repudiated - Conditions in agreement to lease - Date from which commission attracts interest in judgment - Supreme Court Act 1986 s.58.

HEARING

MELBOURNE, 13-14 June 1995
11:7:1995

Counsel for the Appellant Mr A.J. Myers QC and

Mr D. Collins

Solicitor for the Appellant Corrs Chambers Westgarth

Counsel for the Respondent Mr J.E. Middleton QC and
Mr M.D. Wyles

Solicitors for the Respondent Arnold Bloch Liebler

ORDER

Appeal dismissed with costs

DECISION

BROOKING JA In my opinion this appeal should be dismissed for the reasons about to be published by Mr Justice Phillips.

2. The order of the Court is, appeal dismissed with costs.

PHILLIPS JA In this proceeding, the plaintiff, which carries on business as a real estate agent, sued the defendant, which is a property developer, for commission which was said to be payable under an agreement reached between them in October 1989 in respect of the letting of a building which the defendant was proposing to construct at the corner of Spring and Latrobe Streets, Melbourne. After trial in the Commercial List, judgment was entered for the plaintiff for the amount of the commission (which was agreed at $1,950,811) and damages by way of interest in the sum of $291,557.67. The interest was calculated from 26 August 1992, that being the date when the proceeding was commenced. The defendant now appeals against that judgment claiming in brief, first, that the plaintiff was no party to such agreement as was made in October 1989; secondly, that in any case the event upon which commission became payable under that agreement had not occurred, in that commission was payable thereunder only upon the premises being leased and all that had been procured was an agreement for lease; and, finally, that interest should not have been awarded from a date before 19 November 1992, the date upon which that agreement for lease became unconditional.

2. The respondent to this appeal, Colliers Jardine (Vic.) Pty. Ltd. (which I shall continue to refer to as "the plaintiff"), was until 3 May 1991 called Colliers International Property Consultants Pty. Ltd. It was, apparently, one of a group of companies and, although the relationship is by no means clear, it was common ground that Colliers International Ltd. was a "holding company" in the group. Colliers International Property Consultants Pty. Ltd. was, within the group, the company which was carrying on business as a real estate agent and licensed valuer; and, as the holder of an estate agent's licence under the Estate Agents Act 1980 (Vic.), it is capable of suing for and recovering any commission payable to it. Not so Colliers International Ltd. which holds no such licence and, if it be the party entitled to commission payable under the agreement made in October 1989, could not sue to recover that commission. Hence the point taken below: that Colliers International Ltd. was party to the October 1989 agreement and not the plaintiff.

3. The appellant, Hudson Conway Ltd. (which I shall continue to refer to as "the defendant"), was in 1989 proposing to construct a multistorey office block and hotel on the land already mentioned, at 299 Spring Street. That land was owned by a company called Gleem Pty. Ltd, which was trustee of a unit trust in which each of Hudson Conway and Fosters Brewing Group Ltd. (by itself or by one or more subsidiaries) held half the units. It was formally admitted at trial by the defendant that "Gleem was the vehicle utilised by (it) and Fosters Brewing Group Ltd. in respect of their interest in the Capital Plaza project", that being the name given to the proposed redevelopment of the land at 299 Spring Street.

4. The plaintiff's claim to commission was based essentially upon the terms of a letter from Hudson Conway dated 9 October 1989. That letter was addressed to one Douglas Cleine of "Colliers International" and was signed by Greville Hay for Hudson Conway. Mr. Cleine was the plaintiff's director of commercial leasing and Mr. Hay was then employed by the defendant as its General manager - Real Estate/Marketing. The letter read as follows:-

"I refer to our telephone conversation on Thursday, and confirm
that Hudson Conway Limited recognise the introduction of the
gas and fuel Corporation of Victoria as a prospective tenant
for our Capital Plaza site.

I also confirm our agreement that should the Gas and Fuel lease
accommodation in this development, and in consideration of
Colliers International providing ongoing consultancy advice
in respect to this leasing transaction, Colliers International
will be paid a leasing fee equivalent to the R.E.I.V. scale
or $2 million, whichever is the lesser.

I also confirm that we would be pleased to give Colliers
International sole agency to lease the balance of the space
in the building, should the Gas and Fuel not take all the premises
on completion, based on a mutually agreed exclusivity period
and of course performance.

I would appreciate confirmation of your acceptance of these
terms."

5. This letter evoked the following response by letter dated 11 October 1989, written on the letterhead of the plaintiff (with the then name of the plaintiff in full at the foot) and signed by "Douglas Cleine, Director":-

"GAS AND FUEL CORPORATION OF VICTORIA 'CAPITAL PLAZA'
299 SPRING STREET, MELBOURNE

I am in receipt of your letter dated October 9, 1989 in
relation to the prospective tenancy of the Gas and Fuel
Corporation of Victoria within your 'Capital Plaza' office
project.

I confirm that should the Gas and Fuel proceed to lease
accommodation in the 'Capital Plaza' development, and in
consideration of Colliers International providing ongoing
consultancy advice in respect to this leasing transaction,
Colliers International will be paid a leasing fee equivalent
to the REIV scale or $2,000,000.00 which ever is the lesser.

I further confirm that Colliers International will be pleased
to be appointed 'Exclusive Sole Leasing Agents' for the
remainder of the space in the building, should the Gas and
Fuel not take all the premises on completion. Such appointment
will naturally be based upon a mutually agreed exclusivity
period and of course performance.

Both David Hodgson and myself look forward to assisting you
in your endeavours to secure the tenancy of the Gas and Fuel
Corporation of Victoria in the 'Capital Plaza' office
development."

6. It was the plaintiff's contention (and the trial Judge so found) that these letters evidenced an agreement by Hudson Conway to pay the plaintiff commission of $2 million or the R.E.I.V. scale fee, whichever was the lesser, should the Gas and Fuel, which was then in contemplation as a tenant, "lease accommodation" in the Capital Plaza Project. It was also the contention of the plaintiff (and again it was so found at trial) that in this letter the reference to the Gas and Fuel's leasing accommodation included its entering into a binding agreement for lease - which is what came about, although not immediately.

7. In December 1990, the Gas and Fuel Corporation executed a document entitled "Agreement to Lease"; but that document was delivered only in escrow and the conditions precedent to its operation were never satisfied. Then, on 20 May 1992, the Corporation entered into a further agreement to lease and that agreement became unconditional, according to the findings of the trial Judge, on about 19 November 1992. As already indicated, the plaintiff commenced this proceeding against the defendant on 26 August 1992. On 21 May 1993, the Gas and Fuel Corporation wrote to the defendant saying that the Corporation had determined not to proceed with the project and giving formal notice that it would not proceed with the agreement to lease. The defendant, treating that letter of 21 May 1993 as repudiation of the agreement for lease, accepted the repudiation and instituted proceedings in this Court against the Corporation for damages for breach of contract. That proceeding is defended and is presently awaiting trial.

8. As already indicated, while the plaintiff's case depends upon an agreement reached in October 1989, the defendant denies that the plaintiff was party to such agreement; rather, it says, the contracting party in October 1989 was Colliers International Ltd. This argument derives from earlier events in which Colliers International Ltd. was apparently named as a contracting party, and the history of the matter must therefore be set out. The following statement of facts is taken largely from the judgment under appeal.

9. Early in 1989, Mr. Cleine, as the director of commercial leasing of the plaintiff (which was then called Colliers International Property Consultants Pty. Ltd.) discussed the Capital Plaza Project with Mr. Greville Hay, then the defendant's General Manager - Real Estate/Marketing. Hay told Cleine that the defendant was interested in securing a leasing pre-commitment for a substantial proportion of the office component of the proposed development; without that precommitment, it appears, the defendant was not intending to embark upon the development. After some discussion, Cleine told Hay that having regard to the amount of work that would be involved in cultivating prospective tenants for the project, the plaintiff would be prepared to undertake the task only if it were appointed the defendant's sole agent for the project.

10. On 28 February 1989 David Hodgson, then the plaintiff's Manager, Commercial Leasing, sent to Hay as Hudson Conway's General Manager - Real Estate, the following letter, which was on the letterhead of "Colliers International Property Consultants" and signed by Hodgson under the name "Colliers International":-

"Further to your recent conversations with our Leasing Director,
Mr. Doug Cleine, we are pleased to provide an 'Exclusive Sole
Agency Agreement for Letting' relating to your re-development
of the former Commonwealth Centre.

Colliers International are most enthusiastic at the prospect
of being appointed as your marketing agents for the Capital
Plaza project and look forward to submitting our marketing
recommendations to your Board in due course.

You will note from the attachment to the Authority form we
have endeavoured to be as specific as possible with regard to
the amount and method of payment of leasing fees. Should any
point require further clarification, we would be pleased
to discuss any areas of concern at your convenience.

Greville, in order to confirm our Agency arrangements, would
you kindly sign the enclosed authority forms and return one
copy to our office at the earliest opportunity. Upon receipt
of your instructions we shall arrange a meeting to discuss
the marketing of the project, specific prospects, rents,
incentives and other matters relating to our involvement
in the project.

It is with much confidence that we look forward to committing
our expertise to the successful conclusion of the Capital
Plaza Project.

We await your instructions."

11. This letter makes reference to two enclosures - the attachment to the Authority and the Authority itself. The first was a document entitled "SUBMISSION FOR APPOINTMENT OF MARKETING AGENCY" and stating, on the face sheet, "prepared by Colliers International, March 1, 1989". That document read thus:-

"CAPITAL PLAZA 299 SPRING STREET, MELBOURNE
BASIS OF COLLIERS INTERNATIONAL APPOINTMENT

1. Colliers International are to be appointed sole marketing
agents for the Capital Plaza project at 299 Spring Street,
Melbourne.

2. 100% of the R.E.I.V. scale fee shall be payable on all
lease commitments and Agreements to Lease.

3. Prior to 'practical completion' fees shall be payable
upon execution of the Agreement to Lease.

On all commitments following the date of 'practical completion',
fees shall be payable upon the execution of the lease document,
payment of rent or occupation whichever is the earlier.

4. Fees shall be payable at R.E.I.V. scale over the average
annual net rental and carparking licence fees according to
the sliding scale as set down by the Real Estate Institute
of Victoria.

5. Rent free incentives shall not be deducted from the rental
payable for the purposes of calculating leasing fees.

6. It is not proposed that Colliers International seek the
active co-operation from other leasing agents during the
development period. If, however, an outside agent can
demonstrate that he has absolute control over a potential
prospect, then it is proposed that the fee structure be
increased to 150% of the R.E.I.V. scale with 100% of the
fee payable to the introducing agent and the balance of 50%
payable to Colliers International."

12. Thus far, there is nothing to indicate that the contracting parties were other than the plaintiff and the defendant, albeit that the plaintiff was being referred to as "Colliers International" without more. But the defendants case turns more particularly upon the terms of the Authority itself which was a standard, printed form headed "Exclusive Sole Agency Agreement for Letting" and requiring completion by the insertion of, inter alia, the names of "lessor" and "agent". In very broad terms, this form, once completed as in this case, evidenced an agreement between the "lessor" and the "agent" which conferred an exclusive agency for 120 days and promised to the "agent" commission (to be calculated according to the rental achieved, but not exceeding the scale commission) if, within that period of 120 days, the premises were let by the "agent" or the "lessor" or anybody else; or if within the next 60 days the premises were let to a person who had been introduced to the premises within that initial period of 120 days (or, if introduced by the agent, before the signing of the Authority). This was subject to a proviso that no commission should be payable if "the person to whom the property/business is let fails to become the occupier of the property/business other than by virtue of default of the lessor". Letting was expressly defined in such a way as to include an agent's obtaining an enforceable agreement to lease, binding upon the tenant.

13. According to the evidence, this standard form was filled in first by Mr. Hodgson, and then, having been dispatched under cover of the letter dated 28 February, it was completed and returned, executed, on behalf of the "lessor". When dispatched, there had been typed in the names "Hudson Conway Ltd" as lessor and "Colliers International Ltd" as agent; when returned, the first of these had been removed and the name "Gleem Pty Ltd" had been substituted and the document had been signed purportedly "for and on behalf of Gleem Pty Ltd". According to the findings below, at some subsequent point the document was executed by the managing director of the plaintiff - one McHarg - and his signature appears on the form against the words in handwriting "for and on behalf of Colliers International". It is by reference to this standard form, completed as I have just described, that the defendant contended below, successfully, that an agreement for commission in relation to the letting of premises in the Capital Plaza Project was made in about March 1989 and that that agreement was between Gleem Pty. Ltd. on the one hand and on the other hand Colliers International Ltd., not the plaintiff.

14. But the history of the matter continues. in March 1989, the Gas and Fuel Corporation of Victoria advertised in the newspapers for expressions of interest from owners and developers who could provide a purpose-built building for its then proposed new head office. Mr. Hodgson passed a copy of the advertisement to Mr. Hay, and there were discussions involving Mr. Cleine, Mr. Hodgson, Mr. Hay and other employees of Hudson Conway over the making of a submission in response to the advertisement. Thus, in April 1989, Mr. Hodgson worked with Mr. Hay and another employee of Hudson Conway on the preparation of a submission and the submission was made to the Gas and Fuel Corporation in that month. The letter which accompanied that submission said:

"Hudson Conway is pleased to offer through its agents, Colliers
International, the Capital Plaza project to the Gas and Fuel
Corporation of Victoria for its national headquarters".

15. Shortly before 13 June 1989, Mr. Hay spoke to Mr. Cleine and told him that Hudson Conway was not very happy with the progress then being made in obtaining a pre-commitment to the Capital Plaza development and that accordingly it wanted to "open the field to other agents". Mr. Cleine said that the plaintiff wanted to continue to deal exclusively on behalf of the defendant with those prospective tenants which it had already introduced to the development and Mr. Hay said that that would be acceptable to Hudson Conway. On 13 June 1989, Mr. Hodgson wrote to Mr. Hay giving him a list of prospective tenants that the "Colliers International Leasing Division" had introduced to the Capital Plaza project. That list included the Gas and Fuel Corporation. Although in the correspondence at about this time there is some suggestion by one or other of the parties that the March 1989 agreement had already expired, that seems to have been a mistake; the 120 days mentioned in the exclusive Authority did not end until about 30 June. Be that as it may, the correspondence just described appears to be a modification of any arrangement otherwise in place - and that may therefore be treated as the second phase of the matter.

16. Then, on 15 June 1989, Mr. Cleine was told by consultants acting for the Gas and Fuel Corporation that the Hudson Conway proposal was one of four projects being considered by the Corporation. On 20 July, the Corporation asked Hudson Conway to prepare and lodge a detailed submission for the new head office in accordance with the design brief that had been prepared. On 9 October 1989, Mr. Hay wrote to the Corporation, again on behalf of Hudson Conway, submitting the response to the design brief. And on the same day, Mr. Hay wrote to Mr. Cleine the letter dated 9 October 1989 earlier set out and upon which the plaintiff relied in this proceeding to recover commission.

17. As Mr. Hay's letter dated 9 October 1989 indicated, that letter had been preceded by a conversation between Hay and Cleine. Mr. Hay gave evidence of that conversation to the effect that he had told Cleine that if Colliers wanted commission from the Capital Plaza project they would have to reduce their fees. He said he had told Cleine that the costs of the project, including commission, were too high and that Hudson Conway could not successfully compete for the Gas and Fuel tenancy unless the commission and other costs were reduced. After some discussion about the amount of the reduction that was being sought, Mr. Hay told Mr. Cleine that he expected Colliers to reduce the fee to $2 million or scale, whichever was the lesser; and that in addition Hudson Conway expected Colliers to provide further advice and information on a number of matters. According to Mr. Hay (whose evidence the trial Judge accepted in this respect), Mr. Cleine rang back a few days later accepting the position that Mr. Hay had put on behalf of Hudson Conway. Hence, no doubt, the letters of 9 and 11 October 1989 - and that is the third phase of the matter.

18. On 1 December 1989 Mr. Hay resigned from Hudson Conway. What followed in 1990 was described thus, by the learned trial Judge:-

"In January 1990 the plaintiff submitted a report to Hudson
Conway answering various questions that had been raised by
Hudson Conway about two other projects that were competing
for the Gas and Fuel Corporation head office.

On 8 March 1990 a letter on the letterhead of Gleem Pty. Ltd.
was sent to the 'Directors, Colliers International Ltd.' under
the heading 'Capital Plaza - 299 Spring Street, Melbourne'.
It said:

'As you are no doubt aware, our respective companies had
certain discussions and exchange of correspondence last year.

I desire to confirm that any authority which your company may
have had in relation to the above has been terminated.'

The letter was signed Nigel Hutchinson-Brooks, Director, under
the subscription 'Yours faithfully, Hudson Conway Ltd.'. The
next day, on 9 March 1990, Cleine, together with the Managing
Director of the plaintiff, McHarg, and Hodgson attended a
meeting at Hudson Conway's offices with the Chief Executive
of Hudson Conway (Lloyd Williams), Peter Barraclough, a project
manager employed by the Hudson Conway Group, and Anthony Edgar,
another employee of Hudson Conway. The only accounts of these
conversations given in evidence were given by McHarg, Cleine
and Hodgson. The defendant called no oral evidence. At this
meeting Williams said that he wanted to discuss the fee issue,
that the fee was too high and that he wanted to pay a fee on
the basis of work done. McHarg said that agents were not paid
on a fee for hours of work done but according to whether they
succeeded in their retainer. Williams said that he wanted
Colliers' fees reduced in order that Hudson Conway's bid for
the Gas and Fuel Corporation tender might be more competitive
. McHarg more than once asked Williams whether he was satisfied
with the work that Colliers had done and on each occasion
Williams said that he was.

The meeting broke up after Williams or Barraclough asked the
Colliers' representatives to respond to the request that had
been made to set the fee according to the amount of work that
had been done.

Within a very short time of this meeting (perhaps even on the
same day) Hudson Conway was told by Gas and Fuel that its
proposal for a new head office for the Corporation was the
preferred tender. On 14 March there was publicity in the
newspapers of this fact and, perhaps not surprisingly, McHarg
wrote to Williams on 16 March 1990 saying that he did not
believe that any reconsideration of the fee should be necessary.
Barraclough responded on behalf of Gleem Pty. Ltd. denying
that the plaintiff had or ever did have any proper appointment
to act on its behalf and asserting that Colliers had made no
material contribution 'to the considerable negotiations that
(had) occurred and (were) continuing to occur between the
Gas and Fuel Corporation and Hudson Conway Ltd.'. There the
matter rested as between the plaintiff and Hudson Conway but
Hudson Conway continued to negotiate with Gas and Fuel
Corporation."

19. The consequences of this further negotiation have already been mentioned: first, the agreement for lease executed by the Gas and Fuel Corporation in December 1990, which never became operative, and then the agreement for lease entered into on 22 May 1992 on conditions that were fulfilled on about 19 November 1992, but which agreement, it is alleged, the Corporation wrongfully repudiated in May 1993.

20. The foregoing may be summarised as showing an agreement on commission made on or about 1 March 1989, an agreement reached in June 1989 (modifying and perhaps extending existing arrangements) and a third agreement reached in October 1989. As already mentioned, the trial Judge found that the first of these was made between the parties named in the document headed "Exclusive Sole Agency Agreement for Letting" that is, Gleem Pty. Ltd. as "the lessor" and Colliers International Ltd. as "the agent". But his Honour went on to find that the agreement made in October 1989 was nonetheless made between the plaintiff and the defendant - although, as defendant's counsel pointed out on the appeal, it was not explained how the agreement of October 1989, if indeed it was a new agreement between different parties, operated to discharge the earlier agreement made in March 1989. No point was taken on behalf of the defendant, either at the trial or on appeal, that, if and insofar as Gleem Pty. Ltd. had been party to the agreement made in March 1989, the wrong defendant may have been sued by the plaintiff; but what the defendant did contend, both at trial and on appeal, was that the only party on the other side to any agreement for the payment of commission was Colliers International Ltd., and not the plaintiff.

21. Consistently with this, defendant's counsel did not contest the finding below that the agreement made in March 1989 had been with Colliers International Ltd.; rather, counsel built upon that finding and argued that accordingly the agreement of October 1989, which he submitted was only a "fee-capping agreement", was also not made with the plaintiff.

22. In my view, the case for the defendant is built upon an unsure foundation. It is true that the critical document of March 1989, headed "Exclusive Sole Agency Agreement for Letting" names "Colliers International Ltd" as "agent". But, as counsel for the defendant conceded, that is the only reference to Colliers International Ltd. contained within the documents and, it must be said, the witness statements filed on behalf of the plaintiff all proceed upon the footing that the contracting party was at all material times Colliers International Property Consultants Pty. Ltd., and not Colliers International Ltd. After all, the plaintiff was the company which held the real estate agent's licence under the Estate Agents Act; the defendant, either on its own behalf or on behalf of Gleem. Pty. Ltd., was apparently seeking to establish a significant leasing pre-commitment before it undertook the building work; and the defendant was offering to pay a commission, presumably to a company which was capable of retaining it when paid, or recovering it if not paid: cf. Estate Agents Act s.50. Put shortly, the evidence revealed negotiations between the plaintiff and the defendant both before and after the signing of the "Exclusive Sole Agency Agreement for Letting". Mr. Hodgson gave evidence that he filled in the relevant form and, although that step must have included inserting the name "Colliers International Ltd", he was not cross-examined about it, notwithstanding that both before and after this passage in his witness statement, Mr. Hodgson referred to the relevant arrangements as made with "the plaintiff". In all the circumstances, and notwithstanding that the learned trial Judge concluded otherwise, it seems to me that "Colliers International Ltd." in the standard engagement form was a misdescription of the plaintiff, albeit a misdescription in an important document signed on behalf of Gleem Pty. Ltd. Everything else points to a common intention that the plaintiff be engaged as letting agent - and as exclusive letting agent for 120 days - and I do not think that this one mention of "Colliers International Ltd" in the otherwise standard form should be regarded as dictating the contrary.

23. When this was put to defendant's counsel in the course of the appeal, the reponse was that mistake in relation to the document had not been pleaded. But that is scarcely to the point. The plaintiff sues upon the agreement of October 1989; it does not rely directly upon the agreement of March 1989. In answer to the plaintiff's claim under the agreement of October, the defendant contends that the plaintiff was no party to that agreement, largely because it was no party to the agreement reached in the previous March. The defendant submits that Colliers International Ltd. was the contracting party in March 1989 and that there is nothing in the judgment below to justify the conclusion that that agreement of March 1989 was in truth discharged or supplanted. Rather, says the defendant, the agreement made in October 1989 was "a fee capping" arrangement, made in relation to a fee otherwise contracted for - and the only fee hitherto contracted for was as arranged in March 1989 and modified in June 1989. Thus, the question whether the plaintiff was party to the March 1989 agreement is the defendant's point, rather than the plaintiff's.

24. As I have said, the learned trial Judge found that the plaintiff was party to the October 1989 agreement. His Honour found that that agreement was a new agreement and not a variation of the old agreement. On the appeal, the plaintiff took the stand that it did not matter either way; that in either event the plaintiff was party to the agreement made in October 1989 - and I agree. In my view, the defendant has not succeeded in showing the contrary. Indeed, if as I have suggested the plaintiff was also party to the agreement in March 1989, the way is open to conclude that the agreement of October 1989 was in truth a variation of the earlier agreement, at least so far as the plaintiff was concerned. It is true that Gleem Pty. Ltd. was party to the agreement of March 1989 and the plaintiff did not seek to contend otherwise. But the defendant had been the negotiating party in March 1989 and it was the negotiating party in October 1989. It may be that Gleem Pty. Ltd. became the party liable to pay the commission under the March 1989 agreement but, if so, it appears that in October 1989 the plaintiff accepted the defendant in lieu. There is ample evidence to justify the conclusion that at all times those who were negotiating had the authority to do so on behalf of Hudson Conway and that Hudson Conway became bound in October 1989. As earlier stated, the defendant takes no point that Gleem Pty Ltd should have been sued; it says only that Gleem Pty. Ltd. was the contracting party in March 1989, whereas the plaintiff claims that the defendant was the contracting party in October 1989. As no point is made that the wrong defendant has been sued, it is enough that in October 1989 the plaintiff accepted the defendant as the promisor in respect of commission - although the precise terms of that promise remain to be defined.

25. That brings me to the second point, which is to identify the event upon which commission was payable according to the October agreement. Here, the defendant contended that the only event upon which commission became payable under the arrangements made was the leasing of the premises (or part of the premises) and that a mere agreement for lease was not that event. This was disputed by counsel for the plaintiff, who relied upon a number of factors which, he submitted, pointed to the October agreement's being a new agreement and one under which commission would be paid upon the Gas and Fuel Corporation's entering into a binding agreement for lease. Thus, he said, by late September, the Corporation had selected the Capital Plaza as one of four possible developments in which to relocate its head office; without the pre-commitment of a substantial tenant, Hudson Conway was not willing to commence construction work on the project; so far as the plaintiff was concerned, the Gas and Fuel Corporation was the most likely tenant by which it might secure the fee being offered to the agent; Hudson Conway was looking to cut the costs of the agent's fee in order to ensure, if possible, that it did secure the Gas and Fuel Corporation as a tenant; and finally, Hudson Conway was looking to the plaintiff to provide further advice and assistance which went beyond any previous engagement. It is true, I think, that the evidence justifies the conclusion that in September and October 1989, Hudson Conway and the plaintiff were negotiating over a fee which might otherwise become payable to the plaintiff - a fee which was suggested as possibly amounting to as much as $4 million. Hudson Conway was concerned, I think, to "cap" this fee - and hence the agreement of October 1989. The plaintiff agreed to this "capping" in the end, and agreed also to provide the further expertise and assistance which Hudson Conway was seeking. And all this is encapsulated in the exchange of letters that occurred on 9 and 11 October.

26. In the circumstances, I agree with plaintiff's counsel that it does not ultimately matter whether the agreement reached in October 1989 was an altogether new agreement or whether it should be regarded as a variation on earlier arrangements made with the plaintiff. The promise to pay the fee is explicit and the amount of the fee is quantified. Defendant's counsel pointed to the fact that in Hudson Conway's letter of 9 October reference is made to the fee being payable "should the Gas and Fuel lease accommodation" and that the plaintiff, in its letter of 11 October, speaks of the fee being payable "should the Gas and Fuel proceed to lease accommodation" in the Capital Plaza development. This was to be read, said counsel, in the context of the earlier correspondence which specifically distinguished between an agreement for lease and a lease. It is true that the earlier documents did draw that distinction, but then they were made in a very different context, in which the plaintiff was directing attention to agreements made before and those made after "practical completion". As the plaintiff submitted, by the end of September 1989, the parties were dealing with the position of the Gas and Fuel Corporation specifically, and Hudson Conway was concerned in particular to secure the Corporation as a tenant before construction work commenced. In that context, the term "lease" as used in the letters of October 1989 can only be understood, sensibly, to include an agreement for lease.

27. In the course of the argument, some attention was given to the third paragraph of Hudson Conway's letter of 9 October. That has already been set out, but attention is now directed to the indication contained in that paragraph that Hudson Conway would be willing "to give Colliers International sole agency to lease the balance of the space in the building, should the Gas and Fuel not take all the premises on completion". On behalf of the defendant, it was submitted that this was to come into play only if, when the building was completed, the Gas and Fuel Corporation did not go into occupation of all of the premises; but that seems to me to be an unlikely construction. It is more probable, I think, that Hudson Conway was here confirming that the plaintiff should have the agency to seek other tenants, if the Corporation did not now commit itself to take the whole of the premises, once constructed. To my mind, it is more likely than not that the parties were discussing an agency for the letting of the balance of the building, once the Gas and Fuel Corporation made known its present intention - and, if that be correct, it simply confirms that the letter was looking to a commitment from the Corporation which would be satisfied by an immediately enforceable agreement for lease, binding upon the prospective tenant.

28. Plaintiff's counsel took the Court to a number of cases to support the submission that the court might properly find that commission was in this case payable notwithstanding that the Gas and Fuel Corporation repudiated its agreement to lease accommodation in Capital Plaza Project (the construction of which has still not commenced). I refer to Scott v. Willmore and Randell [1949] VicLawRp 21; (1949) VLR 113, Trotter v. McSpadden [1986] VicRp 32; (1986) VR 329, Latter v. Parsons (1906) 26 NZLR 645 at 655, Sheggia v. Gradwell (1963) 3 All ER 114. Defendant's counsel submitted, however, that there was no special rule governing agreements to pay commission, and in particular no general rule that the fee was payable upon a binding and enforceable agreement being procured, even if never completed; and the Court was referred in this respect to Luxor (Eastbourne), Ltd v. Cooper (1941) AC 108 at 119-121, 124 and 130, Caffery v. Montano (1968) 2 NSWR 182 and L.J. Hooker Ltd. v. W.J. Adams Estates Pty, Ltd. [1977] HCA 13; (1977) 138 CLR 52 at 66-67. Although it was submitted that this Court should perhaps reconsider the decision in Scott v. Willmore and Randell in the light of the comments of the Court of Appeal in Caffery v. Montano, there is no call for that; for both counsel accepted, in the end, that each case must depend upon its own facts. It was agreed that there was no absolute rule that commission was - or was not - payable in circumstances where an agreement is procured by the agent and is apparently binding and enforceable but in the end is not carried through, for one reason or another, to completion. That that was the case with the Gas and Fuel Corproration is clear enough now, although the rights and wrongs of its apparent repudiation of its agreement to lease remain to be determined. However that may turn out, it is enough that as a matter of construction the parties agreed, in my opinion, upon a fee should the Corporation enter into a binding and enforceable agreement to become a tenant, and as the defendant did not contend that the Corporation had not done so, it follows that the plaintiff was entitled, as the trial Judge held, to payment by the defendant of the fee which was agreed upon in October 1989.

29. It is on the face of it somewhat curious, if I may say so, that the defendant, the property developer concerned to obtain pre- leasing commitments, seeks now to avoid payment of the commission to the letting agent. When asked about the fairness of this, defendant's counsel submitted that the real question was at whose risk lay the work which was done. He pointed out that, on the evidence led at trial, the plaintiff resisted all attempts to have payment according to work done, preferring instead to have a fee payable "according to results", as defendant's counsel put it. Discussions about the alternative took place, however, well after the making of arrangements in October 1989 and so the significance of such discussions to the interpretation of the October agreement is perhaps less than that attributed to them by defendant's counsel. In the end, whether commission is payable or not must be determined solely upon the agreement that was made and in my view the agreement was in this case for payment upon an event which encompassed the entry by the prospective tenant into an agreement for lease that was binding and enforceable upon it.

30. That leaves only the question of interest. This is a short point and both sides accepted that the award of interest in this case was governed by s.58 of the Supreme Court Act 1986. Defendant's counsel submitted that the formal Agreement for Lease, which was dated 29 May 1992, became unconditional only on 19 November 1992 and that on that account interest could not be awarded under s.58 from before that date because the commission or fee due to the plaintiff could not be said to have become payable before the agreement for lease became unconditional.

31. But that submission turned upon clauses 4C.1 and 4C.8 of the agreement for lease - clauses which were introduced by formal Deed of Variation of even date with the Agreement for Lease itself. It was contended that clause 4C.1 in particular created "conditions subsequent" to be satisfied by the lessor and that until they were satisfied there was no unconditional agreement for lease. But the term "unconditional" is ambiguous. The relevant question is whether the agreement to take a lease was in such terms as to render the commission payable upon that agreement's being entered into and without the need to see if the conditions attached (and more particularly attached by clause 4C.1) were satisfied by the lessor. Clause 4C.1 imposes certain "conditions" which must be complied with by the lessor on or before 25 November 1992 (or such later date as may be allowed by the lessee under clause 4C.3). Now, it is clear that this clause does not contain a condition which must be fulfilled before any binding agreement arises; and it is also clear that the conditions imposed by it are not ones which, if not fulfilled, would cause the agreement automatically to come to an end and be of no effect. The conditions are in principle commonplace ones in that they imposes certain obligations upon the lessor and go on to provide that, if these obligations are not performed, the lessee may, unless it chooses to extend the time for performance or waive the relevant condition, elect to bring the agreement to an end, in which event (as clause 4C.8 of the agreement expressly provides) the lessor is to be liable to the lessee for damages for breach of the condition. It seems to me to be beyond serious argument that an agreement containing a condition having this effect is a binding and enforceable agreement for a lease immediately upon its being entered into and as such rendered the commission contemplated by the October agreement payable without further delay.

32. Clauses 4C.1 and 4C.8 therefore did not constitute a reason why interest might not have been awarded under s.58 as from the date on which the agreement was entered into - that is, 29 May 1992. The trial Judge awarded interest only from a later date, 26 August 1992 that being the date upon which the proceeding was instituted but the plaintiff makes no complaint on that score. The complaint of the defendant, that interest could not be awarded under s.58 from a date earlier than 19 November 1992, is rejected.

33. For these reasons, the appeal should in my opinion be dismissed.

CHARLES JA I agree with Mr Justice Phillips and have nothing to add.