APPEAL ALLOWED - question of law - whether the Tribunal correct to find no jurisdiction because s 36 of the Property Stock and Business Agents Act 2002 had not been complied with
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APPEAL ALLOWED - question of law - whether the Tribunal correct to find no jurisdiction because s 36 of the Property Stock and Business Agents Act 2002 had not been complied with
Judgment (3 paragraphs)
[1]
REASONS FOR DECISION
This is an appeal against a decision by the Tribunal below (Mr P Smith) dismissing an application by the appellant on the ground that the Tribunal had no jurisdiction to deal with it.
The orders and reasons furnished by the Tribunal on 19 March 2015 were as follows:
"1. The application is dismissed because:
The Tribunal has no jurisdiction to determine the application.
2. Reasons for decision:
The applicant and respondent entered an agreement for the respondent to perform services as set out in a document "Heads of Agreement" dated 29 August, 2014
This document provided as follows:
"Transfer of option on 125 Military Road from Platino to Anthony Foresto or nominee.
Payment of Platino by Foresto of $20,000 for transfer.
Payment to BBRE by Foresto of $50,000 for putting site together, payable upon formalization of transfer of option."
A further clause provided for the respondent's company to be appointed as exclusive marketer of the project at an agency fee of 2.2%.
On 5 September, 2014 the applicant paid to the respondent the sum of $70,000.00 and 2 receipts issued by the respondent.
The option to purchase 125 Military Road, Neutral Bay was transferred from Revor Pty Ltd to Beyond 2000 Investments Pty Ltd at a cost of $80,000.00.
On 27 November, 2014 the Solicitor for Beyond 2000 Investments Pty Ltd requested that Ben Boyd Real Estate refund the sum of $44,000.00
On 16 December, 2014 Ben Boyd Real Estate issued an invoice for $44,000.00 as the varied price for the services rendered by the respondent pursuant to the agreement of 29 August, 2014. The invoice was not addressed to anyone and was marked paid as this amount had been retained by the respondent company.
The applicant seeks an order that this fee be reviewed pursuant to Property Stock and Business Agents Act, Section 36.
The applicant submits that the invoice forwarded on 16 December, 2014 would satisfy the requirements of Section 36(3) as a prerequisite.
The Tribunal finds that there was no request by the applicant for an itemised account. This invoice which does not specify to whom it is issued and the only details provided are that the fee is for the transfer of the option to purchase in accordance with the agreement of 28 August, 2014.
These parties had scant regard for acceptable business practices during the negotiations and the preparation of documents that support the transaction.
The respondent appears to choose at which point in time and which parts of the Act which he chooses to apply in the transaction and relies on a clause in the agreement of 28 August, 2014 which apparently has been orally varied during negotiations to $40,000.00 plus GST.
The applicant then requests the amount retained to be refunded to him only after the option was successfully assigned to the company and the respondent only provides an invoice for the transaction upon the request for the refund.
The Tribunal makes no findings on the submissions on whether the fees for the actual services supplied by the respondent can be the subject of review pursuant to Property Stock and Business Agents Act S. 36 as the Tribunal is not satisfied that the prerequisites for a review of the fees or commission have been complied with. No statement of claim or itemised account issued that would satisfy Section 36 has been issued.
The Tribunal has no jurisdiction."
The original application filed on 22 January 2015 sought:
Review of entitlement and reasonableness of fees pursuant to Section 36 of the Property Stock and Business Agents Act 2002.
The grounds specified for seeking such an order were:
1. No Agency Agreement in compliance with section 55.
2. Fees charged are not reasonable.
3. Agent failed to disclose fees and commissions payable by other party to the transaction.
As can be observed the learned Member below based his decision on the fact that the account which the appellant seeks to review did not comply with S 36 of the Property Stock and Business Agents Act 2002 (the Act). The section provides:
36 Review of commission and fees
(1) An action or other proceedings cannot be commenced by a licensee for the recovery of remuneration or any sum as reimbursement for expenses until the expiration of 28 days after a statement of claim has been served personally or by post on the person to be charged with the remuneration or expenses.
(2) The statement of claim must be in writing, set out the amount claimed and contain details of the services performed by the licensee in respect of which the remuneration or expenses are claimed.
(3) If money has been paid to or is or has been retained by a licensee (out of money received by or paid to the licensee) in respect of any transaction by or with the licensee as a licensee and has been so paid or retained as remuneration or as reimbursement for expenses in connection with the transaction, the person paying the money or the person who would be entitled to the money had the money not been retained, may require the licensee to furnish the person with an itemised account of the transaction in accordance with the regulations.
(3A) A requirement by a person under subsection (3) must be in writing.
(4) A person who is served with a statement of claim under this section or is provided with an itemised account of a transaction as provided by this section may apply to the Tribunal for the determination of a consumer claim within the meaning of Consumer Claims Act 1998 in relation to:
(a) the entitlement of the licensee to the whole or any part of the amount specified in the statement of claim or the itemised account, or
(b) whether the whole or any part of the amount is reasonable,
or both.
(5) For the purpose of the application of the Consumer Claims Act 1998 to that person, a reference in that Act to a consumer is taken to include a reference to that person.
(6) The Tribunal has jurisdiction to hear and determine any such consumer claim despite:
(a) the terms or conditions of any agreement or contract entered into between the licensee and the applicant, and
(b) the amount being more or less than the maximum amount (if any) of remuneration to which a licensee is entitled under this Act.
(7) This section does not limit the Consumer Claims Act 1998.
(8) In this section:
expenses means expenses or charges incurred in connection with services performed by a licensee in his or her capacity as a licensee.
remuneration means remuneration by way of commission, fee, gain or reward for services performed by a licensee in his or her capacity as a licensee.
Section 36 has been the subject of judicial decision including Coolangatta Property Pty Ltd v Dyason [2011] NSWSC 884 where Ball J cited and followed Oades v Ewart [1961] NSWR 45 where it was held that the details required by the section depended upon the nature of the transaction. Oades indicated that identification of the property, the vendor, the purchaser and the basis of the charge would comply.
In this case although the invoice relied on was not addressed to anyone it did in fact name the entity intended to be changed and identified with some particularity the basis of the charge.
We have not been provided with a transcript of the proceedings below. However the statements in the appellants submissions on the appeal dated 15 April 2015 have not been challenged:
"5. Because section 36 was not in issue as between the parties there was no evidence before the Tribunal member directly with that point, although there was a tax invoice issued by the Respondent dated 16 December 2014 (see annexure A6 attached to the Applicant's Submissions on Jurisdiction).
6. There was also in "evidence" a letter from the Respondent dated 19 December 2014 (annexure A7) in which the Respondent (at paragraph 9) confirms that it "accounted" to itself for the fee of $44,000."
The invoice referred to Number 2011 221 on the letter head of the respondent under the heading Particulars provided
PARTICULARS AMOUNT
Fee by successful negotiations of the amalgamation of the site of 125-127 Military Rd, Neutral Bay for Beyond 2000 Investments Pty Ltd taking over the option to purchase 125 Military Road, Neutral Bay. $44,000
Fee as per Agreement with A Foresto dated 29/8/2014, and subsequently reduced to $40,000 + 10% GST during the lengthy negotiations
E. & O.E. TOTAL $44,000
AMOUNT DUE (Incl. GST)
[2]
The letter of 19 December 2014 recited in some detail the negotiations between the parties and the basis upon which the respondent had applied the sum of $50,000 paid to it on 5 September 2014 as "payment for amalgamation of sale - Military Rd Neutral Bay".
Having regard to the authority of Oades and Coolangatta Property we have no doubt that the respondents invoice 2011 221 particularly if read in conjunction with the letter of 19 December 2014 constituted a Statement of Claim within s 36 of the Act. Indeed any other conclusion would produce an odd result. s 36 is obviously intended to be beneficial to consumers. It would be strange if an agent could frustrate its purpose by failing to render invoices according to a technical form.
In our opinion the Tribunal below by holding that it had no jurisdiction by virtue of a failure to comply with s 36 erred in law and for that reason the appeal must be upheld.
Annexed to the appellants' submissions in this appeal are the submissions of the respondent in respect of the hearing below. They include these paragraphs
"It is contended by the respondent that the Act does not apply to the services rendered by BBRE as they were for advising and providing real estate consulting services to in respect of the potential development of 125 and 127 Military Rd Neutral Bay ("the Post office Site") and not received "for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person" (S55 of the Act).
The question to be answered is whether the commission was for or in connection with services performed by BBRE in the capacity of a "real estate agent" licensed under the Act."
As both parties made submissions upon the applicability of s 36 to the services performed by the respondent we propose to decide this question ourselves even though it is not strictly necessary for the disposal of the appeal (s 37 Civil and Administrative Tribunal Act).
The respondent summarised its submissions thus:
"1. both parties understood that the fee was for making it possible for 2000 to develop 127 and 125 Military Rd
2. this service greatly increased the value of 2000's land as a sale or development proposition.
3. there was no "disposal" of land or any change in "the ultimate control over or ultimate beneficial interest in the Land" (Hudson Investment Group Limited v Australian Hardboards Limited & Ors [2005] NSWSC 716 @p 360).
4. The granting of an option by the owner of the land gives the grantee an "interest in land" which is able to be protected by the lodgement of a caveat but it does not change the beneficial interest in the land until the option is exercised (Beneficial Finance Corporation Ltd v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510, 522 - 532; Young J). Therefore even if the fee was payable in connection with the assignment of an option over 125 Military Rd it would not be in connection with a change in the control over or of the beneficial interest in 125 Military Rd which could remain with the owner until (or if) the option was exercised.
5. Accordingly the fee to BBRE is not governed by the provisions of the PSBA and the NCAT has no jurisdiction."
In support of its submissions the respondent referred to the definitions of real estate agent and real estate transaction in s 3 of the Act:
3 Definitions
(1) In this Act:
real estate agent means a person (whether or not the person carries on any other business) who, for reward (whether monetary or otherwise), carries on business as an auctioneer of land or as an agent:
(a) for a real estate transaction, or
(b) for inducing or attempting to induce or negotiating with a view to inducing any person to enter into, or to make or accept an offer to enter into, a real estate transaction or a contract for a real estate transaction, or
(c) for the introduction, or arranging for the introduction, of a prospective purchaser, lessee or licensee of land to another licensed agent or to the owner, or the agent of the owner, of land, or
(d) collecting rents payable in respect of any lease of land and otherwise providing property management services in respect of the leasing of any land, or
(e) for any other activity in connection with land that is prescribed by the regulations for the purposes of this definition.
but does not include a person who carries on business as an auctioneer or agent in respect of any parcel of rural land unless the regulations otherwise provide.
Note. This definition is not limited to the selling of land and extends to an agent acting on behalf of the buyer of land (a buyer's agent).
As noted in section 168 of the Retirement Villages Act 1999, a selling agent acting on the sale of residential premises in a retirement village must be licensed as a real estate agent under this Act.
real estate transaction means the purchase, sale, exchange, lease, assignment or other disposal of land, whether or not an auction is involved.
However as it seems to us there is no warrant for restricting the application of s 36 to a real estate transaction as defined. On its face the section is enlivened by all remuneration claimed by the holder of a licence under the Act. There seems to be no issue as to the respondent being the holder of such a licence.
Even if s 36 be read down to encompass only remuneration sought by a licensee in the course of carrying on business as a real estate agent in our view it can hardly be argued that the respondent was doing otherwise. It seems plain to us that the respondent in agreeing for a specified reward to negotiate with owners of the properties mentioned in the invoice with a view to amalgamation was acting in its capacity as a real estate agent. Indeed such negotiations seem to fall squarely within para (b) of the definition. Obviously negotiations for the grant of an option had as their objective a real estate transaction as defined. This would be so even if (as we doubt) an option In respect of real estate does not fall within the definition in s 3.
Costs are governed by s 60 of the Civil and Administrative Tribunal Act. In our view there is no special circumstance to justify departure from the provisions of s 60 (1) in respect of this appeal.
We make these orders:
1. Appeal Allowed.
2. Decision of the Tribunal below quashed.
3. Remit matter for reconsideration by Tribunal according to law and upon such evidence as it thinks fit.
4. No order as to costs of appeal.
[3]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 14 October 2015