Property, Stock and Business Agents Act 2002
Legislation Cited: Civil and Administrative Tribunal Act, 2013
Source
Original judgment source is linked above.
Catchwords
Civil and Administrative Tribunal Act, 2013Property, Stock and Business Agents Act 2002
Legislation Cited: Civil and Administrative Tribunal Act, 2013
Judgment (18 paragraphs)
[1]
Orders
The respondent is to pay the sum of $44,000.00 to the appellant forthwith.
The respondent is to pay the applicant's costs on an ordinary basis as agreed or assessed in matter COM 15/58139.
[2]
Background
The applicant is a company that entered into dealings with Ben Boyd Real Estate Agent Pty Ltd, a licensed real estate agent (the respondent). The respondent agreed to negotiate an option over premises at 125 Military Road Mosman in exchange for remuneration by the applicant. The parties had no instrument in writing other than the following heads of agreement signed and dated 29 August 2014 :
1. Transfer of option on 125 Military to Anthony Foresto or nominee.
2. Payment to Platino by Foresto of $20,000.00 for transfer.
3. Payment to BBRE by Foresto of $50,000.00 for putting the site together payable upon formalization of the transfer of option.
By way of background, Mr Corbett had identified a number of adjoining parcels on Military Road Mosman as a potential development site. He had sought to bring together a number of interested parties to purchase and develop the adjoining sites. That development did not transpire. Instead of brokering a multi lot development with differing stake holders, Mr Corbett negotiated the transfer of an option in respect of one property, 125 Military Road Mosman.
The negotiations spanned many months and negotiations were protracted. The following persons are either parties or relevant to the proceedings. Mr Foresto is the sole director of the applicant company Beyond 2000. Mr Corbett is a director of the respondent company (the respondent). Mr Revay is a director of Platino Properties Pty Ltd (Platino), Mr Corbett received payment from Platino, being described as a procurement fee, having secured an option over No 125 Military Road Mosman. Platino is a developer, who is not a party to these proceedings. Mr Corbett brokered a second option over No 125, this time transferring the option from Platino to the respondent. The option was exercised and Platino eventually sold 125 Military Road to the applicant.
The respondent issued an invoice and charged the respondent a fee for the transfer of the option.
On 5 September 2014 the applicant paid to the respondent the sum of $70,000.00 and 2 receipts were issued by the respondent to the applicant.
Of the $70,000.00 transferred into its accounts, the respondent retained $44,000.00 which were initially held in its trust account.
On 27 November 2014 the solicitor for the applicant requested the respondent refund the sum of $44,000.00.
On 16 December 2014 the respondent issued an invoice for $44,000.00 as a "reduced" fee for the services rendered by the respondent pursuant to the heads of agreement (the invoice).
The respondent retained $44,000.00 in fees and the moneys were released out of the respondent's trust account without authorisation of the applicant.
[3]
The first proceedings
The applicant filed proceedings COM 15/04627 on 22 January 2015. The applicant sought orders that the respondent repay to it $44,000.00 fees incurred in connection with the transfer of the option. The applicant argues that due to the respondent's failure to provide an agency agreement compliant with section 55 of the Property, Stock and Business Agents Act 2002 (the Act) the respondent is not entitled to an agency fee. In the alternative, the applicant claims that the fees were excessive and that the agent failed to disclose fees and commissions payable by it.
At the request of the respondent, the matter was set down for a preliminary hearing on the question of jurisdiction. The respondent argues, in summary, that the Act and its provisions do not apply in the instant case as the respondent's director, Mr Corbett, was not acting in his capacity as a real estate agent, but as a private commercial advisor to Mr Foresto, providing investment advice. For this reason the Act has no application, there was no reason for Mr Corbett to provide a management agreement as he was not asked to be the applicant's agent, and as he was never acting as an agent, and the Tribunal does not have jurisdiction to determine the issues between the parties.
Initially the respondent succeeded. On 19 March 2015 the Tribunal dismissed the application, finding that the Tribunal does not have jurisdiction. Specifically the Member found that there was no invoice requested by the applicant in accordance with section 36(3) of the Act.
Section 36(3) permits a party who is served with a statement of claim (emphasis added) or is provided with an itemised account to apply to the Tribunal for the determination of a consumer claim in relation to the entitlement of a licensee to the whole or any part of the amount specified in the statement of claim.
The Tribunal dismissed Beyond 2000's application for want of jurisdiction. In its reasons for decision the Tribunal relevantly found as follows:
"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. … 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 that would satisfy section 36 has been issued."
[4]
The appeal
The applicant appealed the decision. On appeal the decision as to jurisdiction was overturned. Relevantly the Appeal Panel made specific findings that the respondent's director was acting in his capacity as a licensee and that the transaction was a real estate transaction to which the Act applies.
I have set out the relevant findings of the appeal decision.
The Appeal Panel relevantly held as follows:
"[9] The invoice referred to number 2011 221 on the letterhead off the respondent under the heading particulars provided:
"Fee by successful negotiations of the amalgamation of the site of 125 to 127 Military Road Neutral Bay for Beyond 2000 Investments Pty Ltd taking over the option to purchase 125 Military Road Neutral Bay.
Fee as per agreement with A. Foresto dated 29 August 2014 and subsequently reduced to $40,000 +10% GST during lengthy negotiations
Amount due $44,000. ….
[10] 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 Road Neutral Bay."
[11] 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 on 19 December 2014 constituted a Statement of Claim within s 36 of the Act. Indeed any other conclusion would produce an odd result. Section 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.
[12] In our opinion the tribunal below erred by holding that it had no jurisdiction by virtue of a failure to comply with section 36 and erred in law and for that reason the appeal must be upheld.
…
[14] As both parties made submissions upon the applicability of section 36 to the services performed by the respondent we propose to decide this question ourselves [emphasis added] even though this is not strictly necessary for the disposal off this appeal.…
[17] … as it seems to us that there is no warrant for restricting the application of section 36 to a real estate transaction as defined. On its face the section is enlivened by all remuneration claimed by the holder of a license under the Act. There seems to be no issue as to the respondent being the holder of such a license.
[18] Even if section 36 be read down to encompass only remuneration sought by a licensee in the cause 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 paragraph 9(b) of the definition. Obviously negotiations for the grant of an option had as their objective a real estate transaction as defined. This would even be so if (as we doubt) an option in respect of real estate does not fall within the definition in section 3."
The Appeal Panel upheld the appeal and ordered that the matter be remitted for reconsideration by the Tribunal according to law and upon such as evidence as it sees fit.
It is important to note that the Appeal Panel decision was not appealed pursuant to section 83 of the Act to the Supreme Court. The respondent offered no explanation why the matter was not appealed and it is noted that at all times the respondent was legally represented.
[5]
The current proceedings
The remitted proceedings received a new file number but are not a "hearing de novo". The Appeal Panel made certain findings and these findings have not been set aside or appealed.
The respondent submits that Tribunal, on the remitter hearing, is not bound by the Appeal Panel's findings because the Appeal Panel "erred".
At the remitter hearing the applicant appeared represented by its solicitor.
[6]
The applicant's case
The applicant tendered the statements of Anthony Foresto dated 29 January 2016, the attachments to the affidavit of Brett Gilbert dated 29 January 2015. The affidavit was withdrawn and the 146 pages of annexures attached to it were tendered as a business record. The applicant relied on submissions dated 2 February 2016 and the original submissions filed in COM 15/04267.
The applicant argues that the respondent may not revisit the findings of the Appeal Panel and that insofar relevant issues have been determined these findings give rise to an issue estoppel. The issues already determined are that the respondent was acting in his capacity as a real estate agent; the grant of an option had as its objective a real estate transaction as defined in the Act; and the invoice raised by the respondent was a statement of claim as defined by section 36 of the Act. The Tribunal therefore has jurisdiction to hear and determine the issues between the parties.
These issues are binding on the parties and cannot be re litigated and to do so would be an abuse of process by reason of the principles of res judicata and issue estoppel. The applicant relies in particular on the authority of Emmet JA (Meagher JA and Ward JA concurring) in Ramsay Food Processing Pty Ltd v Tomlinson [2014] NSWCA 237 at 70 and 71.
The appropriate remedy for the respondent, on identifying an error in the appeal decision, was to file an application for leave to appeal to the Supreme Court in accordance with section 83 of the Civil and Administrative Tribunal Act 2013.There is no explanation why this was not done and throughout the proceedings, the respondent was legally represented. It is not open this Tribunal to arrive at a finding that the Appeal panel erred.
The applicant submits, in light of the Appeal Panel findings it is no longer open to the respondent to contend that it was not acting in any capacity for the respondent. If the respondent was not acting in its capacity as a real estate agent the applicant has not established an alternative entitlement to payment on any contractual basis.
The applicant submits that the evidence clearly establishes that the respondent acted at all times as an agent, and expressed as much on a number of occasions to Mr Foresto: the applicant refers in particular to the heads of agreement, as outlined above, and an email from Richard Corbett to Anthony Foresto dated 2 September 2014 confirming that upon receipt of the fees, the real estate agent transferred the money into the Ben Boyd Real Estate trust account, being the account for real estate transactions of the respondent company.
Mr Corbett emailed Mr Foresto in the following terms:
The funds you pay into our trust account are fully refundable if the transfer of the option does not proceed.
Furthermore, the respondent issued a trust account receipt to the applicant for payment for amalgamation of site, this being indicative of the fact that Mr Corbett acted at all times in his capacity as a licensed real estate agent, performing real estate transactions. It is not permissible, or at least unusual, to place funds not related to real estate transactions into the real estate agent's trust account and the Tribunal should arrive at a finding that the placing of fees into a trust account indicates these fees were received as remuneration of a transaction entered into by the licensee as agent for Mr Foresto.
Further, the respondent issued a tax invoice dated 16 December 2014 which includes the following description:
Agreement with A Foresto dated 29/8/2014… fee by successful negotiations of the amalgamation of the site of 125-127 Military Road… taking over the option to purchase 125 Military Road.
The Appeal Panel has already arrived at a finding that this tax invoice constituted a "statement of claim" for the purpose of the threshold provisions of the Act, and that the Tribunal has jurisdiction to determine the issues between the parties.
The applicant submits that the Tribunal on remitter is bound by the findings of the Appeal Panel and that a number of the issues previously litigated between the parties have been determined. The only issues that remain in dispute are whether the heads of agreement are compliant with section 55 of the Act and; in the event they are found to be not compliant, whether the Tribunal may find it can waive strict compliance with the Act by reason of the "inadvertence" of the applicant in accordance with s55A of the Act.
[7]
The evidence
The respondent relied on the statutory declaration of Mr Corbett, dated 22 December 2015, its points of defence and submissions dated 15 January 2015 (filed in previous proceedings), a statement of Richard Corbett dated 15 January 2015 and annexures filed in previous proceedings, as well as the supplementary statement of Mr Corbett dated 28 January 2016. The respondent further relies on a chronology as an aide memoire. The respondent differentiates between the evidence tendered at the original hearing and the evidence tendered now. The fresh evidence refers to the statement of Mr Corbett dated 28 January 2016, the statement of defence and submissions filed in the original proceedings but in their amended form with fresh additions marked in red.
The respondents' submissions spanned 15 pages and 77 paragraphs claiming that the Appeal Panel erred in finding that the respondent acted in its capacity as a real estate agent for the purpose of section 36.
Section 36 is relevantly set out as follows
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 Part 6A of the Fair Trading Act 1987 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.
The Appeal Panel's error may be set aside on re-consideration of the evidence and consideration of fresh evidence. The Tribunal as now constituted would arrive at a different finding, namely that Mr Corbett did NOT carry out a real estate transaction, and thus the fees received by the respondent were not fees received in connection with a real estate transaction and therefore this application is not concerned money retained by a licensee pursuant to s36(2). It must follow that the threshold requirements of section 36 have not been met and the Tribunal cannot hear the issues between the parties.
[8]
The appeal panel erred
It was submitted that the Tribunal can revisit the findings of the Appeal Panel in the event the Appeal Panel "erred in fact". It was submitted that the appeal panel erred by finding that the invoice issued by the respondent constituted a statement of claim for the purpose of the Act; the Appeal Panel further erred in finding that the respondent carried out the services in its capacity as a real estate agent. These were errors of fact, and the evidence as now tendered must be reconsidered by the Tribunal to arrive at findings based on the fresh evidence.
[9]
No agency agreement
The respondent submits that Mr Corbett never offered his services as Mr Foresto's agent and that Mr Foresto never requested the appointment of Mr Corbett in his capacity as agent. There was simply no principal agent relationship. The applicant was cross-examined at length on this issue.
During the cross examination it was put to Mr Foresto, the applicant's director that the heads of agreement constituted "just a commercial arrangement " and that at no time did he enter into an agency relationship.
The witness responded
A "it was a real estate deal".
Q What services were provided to you by Mr Corbett.
A I thought he was acting as my agent to secure the option of 125 Military Road. That's what I understood the words "transfer of option" to mean.
During another question and answer the applicant confirmed that Mr Corbett at least twice identified himself as a real estate agent and referred to himself as Mr Foresto's agent. Mr Foresto gave the following evidence:
'He [Mr Corbett] said " I can act as your agent"…he introduced himself as a real estate agent to establish a syndicate of owners …He tried to convince me to purchase No 125 and I agreed to pay $20,000 to take over the option… to pay $50,000 for his fees and $1.58m for the purchase.
The respondent submits that despite the oral evidence to the contrary, the parties did not enter an agency agreement, but some other commercial agreement that was not intended to be in the nature of an agency agreement and never understood as such. Advice was given by Mr Corbett to Mr Foresto along the lines that that it may a good investment to purchase a commercial property with a view to developing a number of adjoining sites at the same locale.
The respondent maintains that the heads of agreement further support this submission that there was no agency agreement in any form, either orally or in writing. The heads of agreement on their face could not be construed as an agency agreement under the Act but rather, the heads of agreement permitted Mr Corbett to give financial advice as an investment advisor, procuring options for developers, such as Mr Foresto, for a fee. The Tribunal therefore never had jurisdiction to hear and determine the issues in dispute between the parties because the respondent never acted in its capacity as a real estate licensee or agent.
Therefore the respondent submits that the fees paid by the applicant were not received "for or in connection with services performed by the licensee in the capacity of the licensee for or on behalf of the person" (see section 55 of the Act) and that the Tribunal, despite the Appeal Panel finding to the contrary has no jurisdiction to determine the application because the licensee, never charged the applicant a fee in connection with services performed by the licensee.
[10]
The appeal panel decision was obiter
Further it was submitted at paragraphs 49 to 62 of the solicitor's written submissions that the "appeal panel's decision in respect of s36 were only obiter" and that appeal panel erred when it treated the transaction as one where Mr Corbett was acting in his capacity as licensee. This submission was put as follows: "the appeal panel expressed doubt whether s36 should be read down to encompass only remuneration sought by a licensee in the course of carrying out business as a real estate agent…. ..there is no requirement to read down s36(3) as stated by the Appeal Tribunal and its obiter comments should not be followed".
It is submitted in paragraphs 55 and following that remuneration retained by a real estate agent can only be subject of review under section 36 if the moneys are received as fee for a transaction entered into by the applicant by or with a real estate agent acting in the capacity of a real estate agent and not in some other capacity.
It is submitted at paragraphs 63 and following that even if it is found that Mr Corbett acted in his capacity as licensee, the heads of agreement complied and constituted an agency agreement under s 55(1)(a) of the Act and were served in compliance with paragraph s 55(1)(c). Schedule 7 of the Regulations should not be applied strictly, because the respondent was not formally appointed as the applicant's real estate agent. The submissions state as follows:
The heads of agreement while technically falling within the definition of an agency agreement under s 55(1)(a) did not constitute the appointment of BBRE as F's real estate agent establishing any fiduciary duty between them.
At paragraphs 70 and following the respondent submits that the Tribunal should exercise its discretion under s 55A of the Act because Mr Foresto is an experienced developer and as a result of their experience the parties are fully conversant with the risks of associated with property transactions and should be able to minimise their own risk. Courts should take a practical view of the facts before them and that it would be unjust for the Tribunal to order a refund of the fee because Mr Foresto was an experienced investor.
[11]
Findings and Consideration
The issues to be determined are:
1. What are the findings of the Appeal Panel.
2. Is the Tribunal bound by the findings of the appeal panel.
3. If the answer to question two is in the affirmative the issues that remain to be determined are limited to:
1. The Tribunal to determine whether section 55 has been complied with.
2. If section 55 has not been complied with should the Tribunal exercise its discretion under section 55A.
1. The question of interest
2. The question of costs.
[12]
What are the findings of the Appeal Panel
The Tribunal considers itself bound by the appeal panel findings. The findings relevantly made by the appeal panel are set out as follows.
1. The Tribunal has jurisdiction.
2. The applicant received a statement of claim in the form of the invoice number 2011 221 and read in conjunction with the letter of 19 December 2014 the invoice constituted a statement of claim within the meaning of section 36 of the Act.
3. The services provided by the respondent were services carried out by a licensee in the course of carrying on business as a real estate agent and that the fee of $44,000 was received for said services.
4. The respondent was acting in its capacity as a licensee of a real estate agent.
5. The services provided were real estate services within the meaning of the Act.
[13]
Is the Tribunal as now constituted bound by the findings of the Appeal Panel.
The Tribunal as currently constituted is bound by the findings of the Appeal Panel by reason of the principle of issue estoppel.
To the extent that there has been additional fresh evidence adduced it cannot alter the findings made.
I have considered the statutory declaration of Mr Corbett of 22 December 2015 and the assertion that he transferred the fee out of his trust account on 18 December 2014. Further fresh evidence, the supplementary statement of Mr Corbett of 28 January 2016 annexes brochures outlining business ventures between the respondent and First National Real Estate agents "identifying potential commercial redevelopment sites" but bears no relevance to the parties or issues in this dispute. Mr Corbett asserts in his January 2016 statement that at no time did the respondent agree to act as a real estate agent for the applicant. This is not new evidence and this position was maintained throughout the hearing at first instance and also on appeal. There is nothing in the fresh evidence that would permit the Tribunal as currently constituted to come to different findings to those reached by the Appeal Panel.
Where the evidence of Mr Corbett and Mr Foresto differ on this issue of whether Mr Corbett was retained as an agent, I prefer the evidence of Mr Foresto. The applicant was cross-examined. During the cross examination it was put to Mr Foresto that the heads of agreement constituted "just a commercial arrangement ".
The witness responded
A "it was a real estate deal".
Q What services were provided to you by Mr Corbett.
A I thought he was acting as my agent to secure the option of 125 Military Road. That's what I understood the words "transfer of option" to mean.
On the evidence as adduced in cross-examination, I am satisfied that Mr Corbett approached Mr Foresto in his capacity as a real estate agent and that he led Mr Foresto to understand that he was acting as a real estate agent, for the purpose of the transfer of the option. In any event, the issue does require further findings because it has been relevantly determined by the Appeal Panel.
The respondent cites Hili v The Queen per Heydon J (2010) 242 CLR 520 as authority for the proposition that the Tribunal is not bound by a decision of the Appeal Panel if the Appeal Panel erred. A copy of the decision was not provided to the Tribunal and I was not taken to a specific paragraph of his Honour's decision. I have read the decision. The authority concerns parity of criminal sentencing procedure and the importance of consistency among sentencing authorities. I have had regard to the decision in full, in particular paragraph 78 which refers to two courts arriving at different sentences because the later court decides the first to have erred in relation to the identification of legal principle or because the later court thinks the earlier court erred in fact.
The decision does not assist the respondent. The decision is not authority for the proposition that the Tribunal can set aside the findings of the Appeal Panel, in circumstances where key findings, in dispute between the parties have been determined and the findings of fact stand and have not been appealed. In my view it is not open to the Tribunal to revisit those findings as outlined in paragraph 53.
I have had regard to the principles as set out by his Honour in Ramsay (see above). Meagher JA noted:
An issue estoppel will arise in relation to a state of fact or law if the state of fact or law was necessarily decided by an earlier judgment, decree or order made in proceedings between the same parties or their privies. The effect of an issue estoppel is that the parties to the earlier proceedings … will be precluded from alleging or denying the state of fact or law the existence of which was necessarily decided by the earlier judgment, decree or order."
I am satisfied that the Appeal Panel findings as set out above are findings in fact or law that have been determined and that the respondent is precluded from denying the state of fact(s) as set out in paragraph 53 above. These issues cannot be relitigated in this forum.
Even if it were open to me to revisit the findings, I am not satisfied that the Appeal Panel erred in application of legal principle, or in application of the facts.
It is said at paragraph 43 of the respondent's submissions that the appeal panel "made no ruling that Member Smith was wrong in finding that the applicant at no stage sent a written request for an itemised account to the respondent." Alternatively, it is submitted "the Appeal Panel made no ruling that Member Smith erred in finding that the invoice did not constitute an itemised account." These submissions do not constitute a fair reading of the appeal decision. At paragraph ten the Appeal Panel finds that the respondent's invoice constitutes a statement of claim. The issue of the statement of claim entitled the applicant to file a consumer claim, as it did. There is nothing in the evidence, as tendered before me that leads me to a different conclusion.
Section 36(1) permits commencement of proceedings by a licensee (emphasis added) 28 days after a statement of claim has been issued. This is not such a case. The applicant commenced proceedings, not the licensee. Section 36(4) permits (emphasis added) the applicant after being provided with a statement of claim or an itemised account of a transaction to apply to the Tribunal. Paragraph 11 of the Appeal Panel Decision finds that the November invoice constitutes the "statement of claim" for the purpose of section 36(4) entitling the applicant to commence proceedings for recovery. There is no requirement under the Act to request an itemised account when one was already provided. The relevant finding that the invoice constitutes a statement of claim for the purpose of the Act has already been arrived at and there is nothing in the respondent's evidence that would lead me to a different finding.
I reject the submission that the Appeal Panel finding was "plainly wrong". It is not the function of this Tribunal to revisit the Appeal Panel findings. In the event the Appeal Panel erred in its findings and application of section 36 it was incumbent upon the respondent to appeal the Appeal Panel's decision. The submission that the Tribunal may "depart from the decision of the Appeal Tribunal if it considers that the Appeal Tribunal erred" have been noted.
I am not satisfied that the Appeal Panel's decision was "obiter" as it is submitted, there is no legal or factual basis advanced to further this argument.
[14]
Did the transaction comply with section 55 of the Act
The applicant states that the transaction entered into requires an agency agreement within the meaning of section 36 of the Act and that due to non-compliance with section 55 of the Act, there is no entitlement to charge a fee. The heads of agreement do not constitute an agency agreement compliant with section 55 of the Act.
Section 55 relevantly provides as follows:
55 No entitlement to commission or expenses without agency agreement
(1) A licensee is not entitled to any commission or expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person unless:
(a) the services were performed pursuant to an agreement in writing (an
"agency agreement" ) signed by or on behalf of:
(i) the person, and
(ii) the licensee, and
(b) the agency agreement complies with any applicable requirements of the regulations, and
(c) a copy of the agency agreement signed by or on behalf of the licensee was served by the licensee on that person within 48 hours after the agreement was signed by or on behalf of the person.
Note: Section 55A allows a court or tribunal to order that commission and expenses are recoverable in certain circumstances despite subsection (1).
(2) The regulations may make provision for or with respect to regulating the form of agency agreements and the terms, conditions and other provisions that an agency agreement must or must not contain. Without limiting this subsection, the regulations may prescribe one or more standard forms of agency agreement.
(3) Without limiting the means by which a copy of the agency agreement may be served on a person, it may be served by means of facsimile transmission or by such other means as the regulations may allow.
Section 55 must be read in conjunction with the regulations. The services were not provided pursuant to an agency agreement issued pursuant section 55 of the Act or schedule 7 of the Regulations.
If the heads of agreement purport to be an agency agreement then they do not comply with the statutory regime:
1. The parties are not correctly named in that the respondent's corporate details are not fully identified and the applicant is not named at all.
2. Information identifying the parties are not provided, no address for the applicant, the licensee number is not identified and the respondent's business name is not correctly identified.
3. The heads of agreement do not set out the term of the agreement or that the agreement remains in full force until terminated.
4. The heads of agreement do not indicate how or when the agreement may be terminated.
5. The agreement was not served on the applicant within 48 hours of it being executed.
6. The agreement does not contain a term containing particulars of the extent of the authority of the licensee to act as agent on behalf of the person on behalf of whom the agent is acting in providing services under the agreement.
I am satisfied that the respondent did not provide an agency agreement compliant with the Act.
[15]
Should the discretion under section 55A be exercised.
Section 55 A permits the Tribunal to make an order awarding commission even if section 55 has not been complied with:
55 A Relief from disentitlement to commission and expenses
(1) A court or tribunal before which relevant proceedings are taken may order that commission or expenses are wholly or partly recoverable by a licensee who would otherwise not be entitled to the commission or expenses (under section 55) because of:
(a) a failure by the licensee to serve a copy of the relevant agency agreement on the person within 48 hours after it was signed by or on behalf of the person, or
(b) a failure of the relevant agency agreement to comply with the requirements of the regulations.
(2) A court or tribunal is not to make such an order in circumstances of a failure to serve a copy of the agency agreement within the required time unless satisfied that:
(a) the failure was occasioned by inadvertence or other cause beyond the control of the licensee, and
(b) the commission or expenses that will be recoverable if the order is made are in all the circumstances fair and reasonable, and
(c) failure to make the order would be unjust.
(3) A court or tribunal is not to make such an order in circumstances of a failure of the agency agreement to comply with the requirements of the regulations unless satisfied that:
(a) the failure is a minor failure, and
(b) no loss has been suffered as a result of the failure by the person for whom or on whose behalf the services concerned were performed, and
(c) failure to make the order would be unjust.
Section 55A cannot be engaged as a means of overcoming absence of a written agreement and the Tribunal cannot make an order under section 55A, unless satisfied that: (a) the failure is a minor failure, and (b) no loss has been suffered as a result of the failure by the person for whom or on whose behalf the services concerned were performed, and (c) failure to make the order would be unjust. In the absence of a written agreement, it is not necessary for me to consider section 55A. But in the event that I have erred and the heads of agreement constitute an agency agreement compliant with the Act, I am not satisfied that the failure to comply with the formal writing requirements of the Act are minor. The heads of agreement do not comply with any of the components as set out in the regulations.
The respondent maintains, in the alternative, that if respondent acted as agent, the heads of agreement constituted an agreement compliant with the Act.
The respondent submits that the heads of agreement were signed by the parties and "served" on 29 August 2014. There is no further elaboration on this issue (see paragraph 27 of Mr Corbett's statement) and on the evidence tendered by Mr Corbett I cannot be satisfied that the heads of agreement were served by the respondent on the applicant. The Tribunal is not entitled to circumvent the effects of s 55 unless it is satisfied that the oversight by the respondent to serve the document was inadvertent. A finding of inadvertence requires evidence as to the state of mind of the licensee. There is no evidence of inadvertence before me the statements and statutory declarations of Mr Corbett remain silent on the issue.
For the reasons set out in paragraphs 67 and 68 above I am not satisfied that the Tribunal should exercise its discretion pursuant to section 55A.
[16]
Should the Tribunal award interest
The applicant does not explain on what basis he is entitled to interest. The heads of agreement do no envisage that interest accrues, and there is no other contractual instrument under which interest payments would accrue.
Section 100 of the Civil Procedure Act does not apply to proceedings in the Commercial and Consumer Division of the Tribunal. The provisions of the Civil and Administrative Tribunal Act 2013 do not make provision for an award of interest and the applicant has not established any contractual or statutory provision which entitles it to payment of interest, accordingly the claim for interest is dismissed.
[17]
Should the respondent be ordered to pay the applicant's costs?
Section 60(1) of the NCAT Act requires parties to pay their own costs unless the Tribunal is satisfied that special circumstances warrant an award of costs: s 60(2) of the NCAT Act.
However, in proceedings in the Consumer and Commercial Division of the Tribunal, this position is modified by Rule 38 of the Rules, which states that the Tribunal may award costs in proceedings even in the absence of special circumstances if the amount claimed or in dispute is more than $30,000.00. Rule 38 applies in this case.
The purpose of making a costs order is to compensate the party in whose favour the order is made for the expense the party has been put to in prosecuting or defending legal proceedings. In general terms, a party who is successful is entitled to an order for costs in its favour, subject to certain limited exceptions generally involving misconduct on the part of that party: Latoudis v Casey [1990] 170 CLR 534 and Oshlak v Richmond River Council [1998] HCA 11).
The costs application can only be relevant to the case before me. Insofar that the applicant seeks its costs of COM 15/04627, those proceedings are separate and distinct proceedings and they were filed under a separate application number. Any application for costs in respect of those proceedings must be brought before the Tribunal as then constituted.
In this case being COM 15/58139, the applicant has been successful. The letters tendered before the Tribunal do not constitute "Calderbank letters" nor do they constitute "offers of compromise". I am not satisfied that anything in the letters of 13 February 2015 is relevant to these proceedings, It is clearly a letter sent to the respondent for the purpose of settling the earlier proceedings. The letter of 20 October 2015 makes no mention of compromise, it "invites your client [the respondent] to put forward a settlement proposal". I am not satisfied that this letter is an offer of compromise the rejection of which should entitle the applicant to an order on an indemnity basis. The last letter of 10 November 2015 invites the respondent to pay the full sum of $44,000.00 plus interests plus costs. This position has not been bettered, and does not constitute a compromise. On that basis I am not satisfied that the correspondence assists the applicant in its application for indemnity costs.
However, the current application COM 15/58139 has been determined in the applicant's favour. There is nothing in the material before me which leads me to conclude that the applicant's behaviour in the proceedings disentitles it from an order for costs in its favour.
I accordingly order the respondent to pay the applicant's costs on the ordinary basis incurred in COM 15/58139.
S Thode
Senior Member
Civil and Administrative Tribunal of NSW
15 March 2016
[18]
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: 28 April 2016