Soft Technology Jr Limited v Jones Lang Lasalle Limited - [2022] NZCA 353

Date of Judgment

04 August 2022

Decision

Soft Technology Jr Limited v Jones Lang Lasalle Limited (PDF 378 KB)

Summary

Appeals allowed.  Costs orders in the High Court set aside.  Respondent must pay the appellant costs on a 2B basis and usual disbursements in the High Court.  Respondent must pay the appellant costs for a standard appeal on a band A basis and usual disbursements in this Court. 

In September 2015 the appellant, Soft Technology JR Ltd (Soft Tech), signed an agency agreement with Jones Lang Lasalle Ltd (JLL).  The agreement gave JLL authority to seek out leasing opportunities for property owned by Soft Tech.  JLL did not sign the agreement until late December 2015.  Despite this, a signed copy of the agreement was never provided to Soft Tech.

JLL worked together with another agency to market Soft Tech’s property to Auckland Tourism, Events and Economic Development Ltd (ATEED), which was looking to attract international film production projects to Auckland.  On 15 December 2015, Soft Tech entered into a short-term lease with Manu One Ltd, a subsidiary of Warner Brothers.  JLL invoiced Soft Tech for its commission on this lease, which Soft Tech duly paid. 

Discussions about future use of the property took place between Soft Tech and ATEED directly in March 2016.  In November they entered into a memorandum of understanding reflecting Soft Tech’s preparedness to commit capital to build additional film facilities and ATEED’s preparedness to lease the property to enable sequential use of the property for film production projects.  Soft Tech and ATEED thereafter entered into two leases in February 2017 (the first ATEED lease) and May 2018 (the second ATEED lease). 

JLL became aware of these subsequent leases.  In April 2017 it claimed commission from Soft Tech in respect of the first ATEED lease.  When Soft Tech refused, JLL commenced proceedings in the High Court claiming commissions in respect of both leases.

In three different judgments, the High Court found that:  JLL was entitled to commissions in respect of both ATEED leases; JLL’s commissions could include amounts calculated on turnover rents; and JLL was entitled to interest from the dates of demand for payment, and indemnity costs. 

Soft Tech appeals against all three High Court judgments. 

Real estate agents — agency agreements — commission.  Should the appeals be allowed? 

Held:  Yes.  JLL was not entitled to commission in respect of the first and second ATEED leases unless the agency agreement it entered into with Soft Tech complied with the requirements of s 126 of the Real Estate Agents Act 2008.  Section 126 relevantly required JLL to have provided Soft Tech with a copy of the agency agreement signed by JLL within 48 hours of Soft Tech signing it, before performing the work for which JLL would eventually claim a commission. 

The plain meaning of s 126, the purpose of the Real Estate Agents Act (to protect the interests of consumers of real estate services), the surrounding context and relevant secondary legislation all support this interpretation.  Given the agency agreement was not signed by JLL until late December 2015, and a copy of it was never provided to Soft Tech, JLL was not entitled to commissions for the agency work it undertook in respect of the first and second ATEED leases. 

Alternatively, the omission by JLL to provide a copy of the agreement to Soft Tech could not be considered to be inadvertent, such that the omission could be saved by s 126(2) and (3) of the Real Estate Agents Act.  “Inadvertence” in the context of s 126 is limited to a minor administrative slip or unforeseen disruption caused by third parties or sources.  It does not capture the situation on appeal, in which there were reasonable opportunities for JLL to sign the agreement at the same meeting in which it was signed by Soft Tech, or in the period after JLL became aware the agreement had never been signed by it or provided to Soft Tech.  Instead, the signed copy of the agreement was only provided to Soft Tech during discovery in the High Court proceedings.