Cellmore Real Estate Pty Ltd v Funston [2025] VCC 1205

You would have been wise to say out of this but you decided to get involved -

My instructions to you are -- Woodards have acted on the own behalf against my instructions to find a buyer for my property.

Now that you have acted as my agent even without my authority you are legally obliged to follow through the offer as you have represented to the buyer that you have my property for sale.

I instruct you to forward a copy of the purchasers signed copy of the contract and advise the purchaser Woodards do not have authority to sell my property.

If you choose not do this then you will be held responsible for not carrying out my instructions.

It's highly likely you will not receive any commission but believe that will be the least of your problems -- you will be up for huge legal bills.

I think once this blows up the OIEC will blame your for everything - that's his style he doesn't like accepting he is

So send me the contract or if you don't make sure you get your own legal advice direct from a solicitor of your choosing -- you are now up to your ears in all this crap.

If your solicitor wants to call me then might be a good idea.

I am not going to be treated by Woodards the way I have been and let them get away with it

Ps do you realise Woodards is a trading name that is not connected with an estate agency....so when I sue I will be suing everyone who uses that name Woodards".

In the same email, Mr Funston enclosed his email to Mr Way, copying in Ms Mazur, dated 9 October 2017 at 12.10pm.

1. On 10 November 2017 at 12.42pm, Mr Wheeler replied to Mr Funston:

I presume from your email below that you are not interested in accepting or agreeing to the offer Mark has discussed with you.

1. On 10 November 2017 at 2.51pm, Mr Funston replied to Mr Wheeler, copying in Mr Way and Mr Johnstone:

My email to you yesterday states quite clearly "....send me the contract'

How can I make decision about accepting the offer without seeing contract and all the conditions and terms.... your presumption that I am not interested shows you have little understanding of estate agency practice.

The OIEC sending me a copy of your email and my email shows he has little understanding of estate agency practice

Estate Agents (Professional Conduct) Regulations 2008 S.R. No. 46/200811

Unless otherwise instructed in writing by a principal, an estate agent must communicate to the principal all offers to purchase, sell or lease real estate or a business, made to the estate agent/whether those offers were made verbally or in writing, as soon as possible after the offer has been made.

24 Communication of offers by agent's representative

Unless otherwise instructed in writing by his or her principal, an agent's representative must communicate to the principal all offers to purchase, sell or lease real estate or a business, made to the agent's representative, whether those offers were made verbally or in writing, as soon as possible after the offer has been made.

I believe they regulations are very clear -must communicate..... as soon as possible.

Mark Johnstone phoned me yesterday morning and advised he has written offer on a contract from a buyer and I instructed him to email me the contract.

I requested Mark comply with regulation 24.

I advise you to read, take notice and follow the above regulations

Your failure to follow the instructions will make you liable to the consequences of breaches of these regulations by CAV.

1. On 10 November 2017 at 5.16pm, Mr Wheeler emailed Mr Way and Mr Johnstone:

"I just got off the phone to "the purchaser" and felt I was asked questions that probably shouldn't have been asked

1. On 10 November 2017 at 6.57pm, Mr Way replied to Mr Funston's email:

You have lived up to my expectations and some, You need to get some help!

PS With your vast legal knowledge do you know anything about class actions or restraining orders? I suspect there would be a very long list of plaintiffs.

1. On 14 November 2017 at 3.46pm, Mr Way replied again to Mr Funston's email:

"Hey Rick, I have had some very interesting conversations with a long list of your past agent's, You really do have an atrocious track record in dealing with agents and I see you were an agent as well!

Neither my staff or myself will tolerate your bullying, intimidation and offensive behavior. So I'm going to ask you one last time to pay your advertising account, if you continue to refuse to do so I will hand the file over to our solicitors for recovery and costs..."

1. On either 14 or 15 December 2017, the Sheehans Road Property[11] went to auction and was passed in.
2. By ESA dated 2 January 2018, Mr Funston signed an ESA in relation to the Property with Le & Co Estate Agents, including a vendor's price of $1.65m.
   1. On 13 March 2018, Cellmore initiated proceedings against Mr Funston at the Magistrates' Court of Victoria, claiming $3,519, interest and costs for failing and/or refusing to pay the marketing expenses incurred by Cellmore in the course of the alleged authority.
   2. On 31 March 2018, Mr Funston signed an ESA with First National Real Estate Lindellas, including a vendor's price of $1.65m.
   3. On 14 May 2018, Mr Funston signed an ESA with Stockdale & Leggo, including an agent's estimate of selling price between $1.5m and $1.6m.
   4. On 23 June 2018, the Property went to auction with Stockdale & Leggo and was passed in on a vendor's bid for $1.425m. The reserve amount was above $1.425m.
   5. On 11 July 2018, Cellmore lodged a caveat over the Property.
   6. On 23 July 2018, Mr Funston made a counter-offer of $1.53m to a potential purchaser, Ms Wee Yan, through Stockdale & Leggo.
   7. On 6 August 2018, Mr Funston signed an ESA with Biggin & Scott Glen Waverley, including 'TBA' as the vendor's price.
   8. On 23 October 2018, Mr Funston signed an ESA with ET Edgar Bundoora, including 'TBA' as the vendor's price.
   9. In November 2018, a GSA was prepared with Austrump Boxhill Pty Ltd, without recording a vendor's sale price.
   10. On 2 November 2018, Mr Funston signed a GSA with Ivy Real Estate, including a vendor's price of $1.6m.
   11. On 5 November 2018, Mr Funston signed an ESA with LLC Real Estate Pty Ltd, including a vendor's price of $1.6m.
   12. On 12 December 2018, Mr Funston sent a letter to Mr Wheeler. Mr Wheeler claimed that the letter was delivered by Mr Funston in person in the late afternoon, while Mr Funston claimed it was delivered via registered post.[12] The letter stated the following:

Are you are up to date on the dispute between Cellmore and myself?

If not then you need to be because It now concerns you In a very big way.

Did Cameron tell you that he has now lodged a caveat on Strabane Ave based on the charge condition added to the REIV Authority to Sell that you are responsible for?

Cameron had previously taken out a summons for payment of the advertising schedule you prepared and emailed to me. Note It is not agreement to pay.

You were seeking my approval for the places the advertising was to be placed.

I was expecting when this was done for you to then prepare a new Authority to sell to comply with Sect 50 and 49A of the Estate Agents Act. You failed/forgot to do this.

The summons is not an issue that not directly affects you other than you will have to give evidence

in court that why you choose to put the marketing allowance on a separate document and not on the authority to sell.

What should concern you is the Caveat - the Caveat as you can see attached it relies on the agreement between Cellmore and myself (the exclusive authority to sell) dated 7 July 2017.

Where you aware that by using an Authority to sell with a Charge condition that you had a conflict of interests?

Did you realise the legal consequences of what you were doing?

You were responsible for the Authority -you prepared It, you signed it, you emailed it and your name is on it.

Were you aware it is breach of Section 55 of the Estate Agents Act to obtain a beneficial interest in a vendor's property?

Never mind what Cameron might have told you -go and ask your own solicitor -someone independent of Cellmore.

You were/are Cameron's representative and could very well end up as Cameron's scapegoat.

This Is not a Consumer Affairs matter where they could put some of the responsibility on the Officer in Effective Control this Is an Australian Consumer Law matter where you will be seen as responsible for Cellmore.

You are required by the Estate Agents (Professional Conduct) Regulations 6 as an agent's representative to have working knowledge of -

(a) the Act and any regulations made under the Act; and

(b) any other laws relevant to the functions performed by the estate agent and agent's representative.

Cameron is a loose cannon -1 have numerous emails from him to prove that he doesn't want to accept any responsibility for his action towards me. He may have loaded the bullets but you fired the gun.

Were you made aware by Cameron of the consequences of engaging a vendor In an authority to sell with the charge clause?

After agency expired and I was overcharged marketing expenses I asked Sarah to ask Cameron what the meaning and intent was of the charge condition.

I was told it "means that we (Cellmore) have the ability if required to lodge a "caveat" on the property for all monies payable (outstanding) pursuant to this authority".

Sect 55 of the Estate Agents Act states an estate agent must not obtain a beneficial interest in principal's real estate that they have been commissioned to sell.

Note the penalty -1 would say it's very severe 240 penalty units ($38K approx.) and or 2 years

Any agent is playing with fire when you don't comply with the most sacrosanct section in the Estate agents Act.

In 14 Sept 2017 Cameron emailed me when I asked why the charge condition was added.

"HI Rick, we have been including the ability to lodge a caveat for decades and is good business practice as it safe guards my business on bad debts. Other agents collect the advertising money "up front" so don't need it, either way if all parties stick to the contract there is never a problem and Its fair on all parties. And yes the objective is to sell the property because unless we do we work for nothingl"

All I can say about his reply is - did he not realise Section 55 was amended on 24 August 2011 to stop agents obtaining a beneficial interest In vendor properties -many other agents knew law was changed.

I suggest you should seek your own legal advice and look at getting the caveat removed - that way you will not end up in the Supreme Court witness box.

You have been part of a scam which I have been told has all the indications of being fraudulent.

At this stage I am prepared to accept you have been naive and been used by Cellmore but if I don't hear from your solicitor with seven (7) days and see you are doing something positive about getting the caveat withdrawn I will assume you not working in my best interests as you are legally required to do.

With the help of your solicitor I may be able to help you save yourself.

If I was you I would be speaking to your solicitor before you speak to Cameron about this.

Ps do you know the real reason why the charge condition is there -it's to threaten vendors with a caveat when they dispute the advertising expenses?

Cellmore's advertising invoice was $3951 they could only provide supplier's invoices for $3312 that's $639 overcharge.

In Cellmore's invoice the floor plan redraw was charged at $90 the supplier's invoice was for $70.

Cellmore's Invoice for Admin layout and design was $200 and for the suppliers invoice I received some cut and paste job which showed $132 no suppliers name -it's not a supplier invoice Its looks like a scam invoice.

Cellmore failed to provide supplier's invoices for $551 for internet expenses.

I just happen to know my legal rights very well and I don't like being ripped off.

Cameron refused to back down I pointed his wrongdoings and he then made a big issue out of it and it appears your reputation is at risk."

1. On 23 March 2019, Mr Funston signed an ESA with LLC Real Estate Pty Ltd, including a vendor's price of $1.5m.
2. On 4 April 2019, Mr Funston signed a GSA with Inline Real Estate Pty Ltd.
3. On 10 April 2019, Mr Funston signed a contract of sale with Ying Zhang and Yan Yan Li for $1.3m.
4. On 21 June 2019, the caveat over the Property was removed.
5. On 28 June 2019, settlement of the Property occurred.

1. The issues to be determined are set out in the parties' second further revised joint statement of issues dated 21 November 2024, which is annexed to these reasons for decision.

(1) Did Cellmore comply or fail to comply with s49A(1)(c)(i), s48B(1), and/or s49A(2) of the Act? If it failed to comply, does s50(1) of the Act prohibit Cellmore from seeking payment of its marketing expenses?

1. Mr Goldblatt, on behalf of Mr Funston, submitted that Mr Funston is not liable to pay the marketing invoice by reason of the following alleged breaches of the Act:

(a) Cellmore's failure to specify the marketing expenses it was going to incur in the ESA as required by s 49A(1)(c)(i);

(b) Cellmore seeking to recover outgoings beyond the sum incurred from Mr Funston, contrary to s 48B; and

(c) Cellmore's failure to retain the documents required by s 49A, in contravention of s 49A(2).[13]

1. As a result of its non-compliance, Cellmore is prohibited from recovering the marketing expenses pursuant to s 50 of the Act_._

Section 49A(1)(c)(i)

1. Mr Funston contended that s 49A(1)(c)(i) requires the advertising costs to be set out in the ESA itself. The "TBA" annotation in the box next to marketing expenses on the ESA together with the subsequent signed reduced advertising schedule was non-compliant with the requirements of the Act.
2. The Act does not define "engagement or appointment" however the ESA is the relevant "engagement or appointment" in this case. It is the same document that is referred to in s 49A(1)(a) and (b). As the "engagement or appointment" is the ESA itself and it did not contain any details of marketing expenses, rather "TBA," it was non-compliant.
3. Mr Funston relied on Advisory Services Pty Ltd (trading as Ray White St Albans) v Augustin,[14] in which the Court of Appeal held that particular notices required to be given by estate agents to clients must be in the relevant engagement or appointment.[15] This indicates an intention that the client have an opportunity to read the statement before rather than after signing the engagement or appointment[16] and supports a construction that the details of the outgoings have to be contained in the one document.
4. Strict compliance is required by s 49A of the Act. In Oliver Hume (Australia) Pty Ltd v Land Source Australia Pty Ltd,[17] the Victorian Supreme Court stated that it was:

"...clear from the plain and ordinary meaning of the words of the Estate Agents Act that the legislation is intended to have a strict operation. There is no scope, on that plain reading, for distinguishing between sophisticated parties or those who may be commercially inexperienced."[18]

1. The interpretation contended for is consistent with the strong and consistent theme of consumer protection that courts have held runs through Part IV of the Act.[19] These provisions are directed towards both standards of conduct and transparency in respect of estate agents' dealings with clients and third parties.[20]

Section 48B(1)

1. Mr Funston submitted that Cellmore cannot satisfy the requirement in s 48B(1) in respect of the sum of $132, a component of the advertising account provided to Mr Funston.[21] The sum of $2,531 for "Internet Listing Feature Credit & E-Brochure" included the $132. The only information provided to Mr Funston regarding the charge of $132 was a single line. Mr Way described this single line entry as a charge "on another internet portal" for the Property. No other information about the charge was made available, including the entity which invoiced Cellmore for the charge. Although Mr Goldblatt acknowledged that "it's small potatoes" in the scheme of things, nevertheless, Mr Funston was not in a position to verify the charge or what it was for.

Section 49A(2)

1. In his affidavit of documents, Mr Way identified "Funston's exclusive sale authority original." The original was called for and not produced, breaching Cellmore's obligation to not destroy any document required by the section and to retain any such document for the prescribed period.

1. Cellmore submitted that on a proper construction of s 49A(1) of the Act, Cellmore's advertising costs were not required to be set out in the same document as the ESA:

(a) Whilst s 49(1)(b) of the Act states that the agent is required to inform the client that commission and outgoings are negotiable before obtaining the client's signature, no temporal requirement is imposed by s 49(1)(c) of the Act.

(b) Rather, the provision requires the engagement or appointment to contain details of the commission and outgoings "that have been agreed**.**" Where outgoings have not been agreed at the time of the signing of the ESA, it is not possible for the ESA to specify those outgoings nor is it necessary for it do so.

(c) Section 49(1)(c) does not require that the engagement or appointment be contained in one document, nor does it preclude subsequent agreement (or amended agreements as to outgoings). In Advisory Services, the Court of Appeal noted that the authority then under consideration "did not exclude the possibility that... the client could pay for additional services of that nature".[22]

(d) Mr Funston's contrary construction does not accord with the plain meaning of the words of that provision. Further, a construction to that effect would not accord with commercial common sense:

(i) whenever there is an amendment to the expected advertising cost or a client requests a further marketing expense, a further ESA would have to be executed (or the original ESA would have to be amended and re-signed);

(ii) that would result in there being reduced flexibility in an advertising campaign, which would not be in the interests of consumers or consistent with the purpose of the legislation;

(iii) Mr Funston's legalistic proposition that the issue could have been satisfactorily addressed by amending and initialling the ESA places undue emphasis on form rather than substance. There is no additional consumer protection offered by the construction contended for by Mr Funston, as distinct from the construction relied upon by Cellmore, as well as Cellmore's practice of obtaining Mr Funston's signed agreement to the advertising costs.

1. Mr Way gave evidence that the expenses the subject of the claim were actually incurred including the amount of $2,399 invoiced by realestate.com and $132 invoiced by realestateview.com, both of which related to the Property.[23] The document sent to Mr Funston to support the $132 charge was an extract from the tax invoice of the relevant supplier (being realestateview.com).
2. It was not a breach of that provision for the advertising costs, once subsequently agreed, to be set out in the reduced advertising schedule and signed.
3. Cellmore submitted that, substantial compliance is sufficient. Cellmore relied on Funston v CCSS Pty Ltd,[24] another instance in which Mr Funston refused to pay an estate agent's outgoings.

(a) Mr Funston appealed a Magistrates' Court's judgment in favour of a estate agent for outgoings claimed in relation to an authority to sell the Sheehans Road Property. On appeal, Mr Funston raised a number of issues including that contrary to s 49A(1)(b) of the Act, the estate agent did not inform him before entering into the authority that any money to be paid in respect of outgoings was subject to negotiation.

(b) Mr Funston's appeal was dismissed. Quigley J held that where information is required to be provided to assist a party to understand the basis and likely amount due to the agent as a result of the services provided, substantial compliance will be sufficient as long as the information contained is accurate and not misleading.[25]

1. Cellmore contended that there has been substantial compliance with the s 49A:

(a) Mr Wheeler had previously emailed Mr Funston a proposed schedule of advertising costs which Mr Funston had rejected, instead negotiating for the removal of certain advertising costs.

(b) Mr Funston specifically agreed to and signed the reduced advertising schedule for a reduced amount.

(c) Mr Way and Mr Wheeler gave evidence to the effect that all such expenses were incurred after the signing of the reduced advertising schedule.

Section 48B(1)

1. Cellmore contended that the evidence supports a conclusion that the expenses the subject of the claim were actually incurred.
2. Cellmore did not concede that the "internal" charge for $200 for typesetting and production was not an outgoing nevertheless, Cellmore abandoned its claim to the $200 to save costs.
3. Cellmore submitted that it is unclear on what basis Mr Funston suggests that the charges of $2,399 and $132 cannot be recovered by Cellmore:[26]

(a) Mr Way gave evidence that the expenses the subject of the claim were actually incurred;

(b) it was not put to Mr Way that this was incorrect, and nor is there any contrary evidence;

(c) in any event, there was no requirement in the Act (or the ESA) for standalone invoices to be generated for the Property by these two suppliers; and

(d) s 48B(1) only applies to the practice of an agent retaining rebates.[27] It is therefore not relevant.

Section 49A(2)

1. Cellmore submitted that it could not be said that Cellmore failed to retain documents and accordingly is not entitled to sue for or recover moneys for outgoings. There is no evidence that Cellmore destroyed or else did not retain any such document, as there is no evidence that Mr Funston gave the original signed ESA to Cellmore. Rather, he emailed it a signed copy, which Cellmore retained both electronically and in hard copy.

1. Section 50 of the Act states:

"(1) An estate agent is not entitled to sue for or recover or retain any commission or money in respect of any outgoings for or in respect of any transaction unless -

(a) at all material times in relation to the transaction he or she is the holder of an estate agent's licence; and

(b) the agent has complied with section 49A(1) with respect to the engagement or appointment to undertake the transaction and is not in breach of section 49A(2) with respect to the engagement or appointment; and

(c) the agent has complied with sections 48A and 48B with respect to the engagement, appointment or transaction."

1. Section 4(1) of the Act defines "outgoings" to mean "any monies spent by an estate agent on his principal's behalf for which the estate agent is at common law entitled to be reimbursed."
2. Section 49A of the Act states:

"(1) An estate agent must not obtain, or seek to obtain, any payment from a person in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent unless -

(a) the agent holds a written engagement or appointment that is signed by the person (or the person's representative); and

(b) before obtaining the person's signature to the engagement or appointment, the agent (or an agents' representative employed by the agent) informed the person (or the person's agent or representative) that the commission to be paid to the agent under the engagement or appointment and any money to be paid by the person in respect of outgoings were subject to negotiation; and

(c) **the engagement or appointment contains - **

(i) details of the commission and outgoings that have been agreed; and

(ii) if a fee is to be calculated on a percentage basis, a statement of that fee expressed as both a percentage and as the dollar amount that would be payable on the reserve price or any other relevant amount set out in the engagement or appointment; and

(iii) a rebate statement that complies with subsection (4); and

(iv) a statement in a form approved by the Director as to where a complaint concerning any commission or outgoings in the engagement or appointment can be made; and

(v) anything else required by the Director; and

(d) the agent (or an agent's representative employed by the agent) give the person a copy of the signed engagement or appointment.

(2) An estate agent or agent's representative must not destroy any document required by this section and must retain any such document for the prescribed period.

1. Section 48B(1) of the Act states:

"(1) An estate agent must not seek to obtain from the client an amount for any outgoings or proposed outgoings (the expenses) that is more than the amount paid, or payable, by the agent for those expenses.

(2) In determining the amount paid, or payable, by the agent, any amount of rebate received or receivable by the agent in respect of the expenses must be taken into account by the agent.

(3) If it is not possible to determine the final amount paid, or payable, for the expenses at the time the agent seeks payment for those expenses, the agent may estimate the amount."

1. In Advisory Services, the Court of Appeal stated in respect of Part IV of the Act:

"A strong and consistent theme of consumer protection runs through pt IV. Its provisions are directed to the conduct of estate agents in their dealings with both clients and third parties such as prospective purchasers. The provisions are concerned with standards of conduct and transparency as to that conduct. As has been seen, s 50 provides for significant sanctions for breach of some of the provisions and s49A(1) itself provides for a penalty. It is evidence that these provisions are directed to the general protection of persons, including clients, dealing with estate agents."[28]

1. In Oliver Hume v Land Source, Cameron J stated in respect of the operation of the Act:

"It is clear from the plain and ordinary meaning of the words of the Estate Agents Act that the legislation is intended to have a strict operation. There is no scope, on that plain reading, for distinguishing between sophisticated parties or those who may be commercially inexperienced. Given the construct of the legislation, harsh consequences may follow from a failure to comply with its terms...

The legislation is clear, in its plain and ordinary terms. It operates strictly. So, if on the proper construction of the Sale Agreements...the formal requirements of the Estate Agents Act are not met, then Oliver Hume is not entitled to charge for or retain its commission."[29]

1. In relation to the task of statutory construction, in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory),[30] Hayne, Heydon, Crennan and Kiefel JJ observed that:

"This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy."[31]

1. In HFM043 v Republic of Nauru,[32] Kiefel CJ, Gageler and Nettle JJ stated that:

"The constructional task remains throughout to expound the meaning of the statutory text, not to remedy gaps disclosed in it or repair it."[33]

1. Section 35(1) of the Interpretation of Legislation Act 1984 (Vic) provides that in the interpretation of a provision of an Act or subordinate instrument:

"A construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object."

1. In Equipment Investments Pty Ltd v M. J. Dowthwaite & Co Pty Ltd,[34] Gibbs J observed the following in relation to substantial compliance with statutory form:[35]

"... a statement is 'in accordance' with the form [within the meaning of that Act] if it is substantially in accordance with it and does not depart from it in any material respect. A divergence from the form would be substantial or material if it caused the statement to convey less information than the form requires or to confuse or mislead the prospective hirer as to the matters which the form is designed to bring to his notice."[36]

1. I am satisfied that Cellmore failed to comply with the requirements of s 49A(1)(c)(i) of the Act. Although unnecessary to determine, I would not have been satisfied Cellmore failed to comply with ss 48B and 49A(2) of the Act.
2. Having regard to Cellmore's failure to comply with s 49A(1)(c)(i) of the Act, Cellmore is not entitled to recover the unpaid advertising invoice as outgoings under s 50 of the Act.

1. The text of s 49A(1) supports the construction contended for by Mr Funston. The text evinces an intention that "the engagement or appointment" (in the present case, the ESA) is the one document in respect of which the obligations imposed by that section relate. This is evident by the consistent use of the expression "the engagement or appointment" throughout the text of the section:

(a) "the engagement or appointment" referred to in s 49A(c) is a reference to the written engagement or appointment which the agent must hold pursuant to subsection 1(a); and

(b) which, pursuant to subsection (1)(b), the agent must inform the person of their right to negotiate commission and outgoings before obtaining the person's signature.

1. Although s 49A(1) does not in its terms require the engagement or appointment be contained in one document, a natural reading of the text as set out above makes it clear that that is what is intended.
2. I do not consider that the absence of the words "before obtaining the person's signature to the engagement or appointment" at the beginning of subsection (1)(c), together with the presence of those introductory words to subsection (1)(b), indicates an intention that the details of the commission and outgoings that have not yet been agreed may be recorded at some later time after obtaining the person's signature.

(a) It is unnecessary for those introductory words to be repeated because, read in context of the section as a whole, subsection (1)(c) may be understood as requiring the commission and outgoings that have been agreed (i.e. the outcome of any negotiations) to be recorded in the document which the agent must hold pursuant to subsection (1)(a). That follows logically from the requirement that the person be informed that the commission and outgoings are subject to negotiation before signing.

(b) Understood in that way, the words "that have been agreed", reflect an intention that the details of the commission and outgoings be agreed before signing and be contained in the engagement or appointment rather than an intention that it is only those outgoings that have been agreed at the time of signing that must be contained in "the engagement or appointment".

1. This construction is supported by the Court of Appeal's decision in Advisory Services. In that case, the respondent defended a claim for commission by a real estate agent including on the basis that the applicant was not entitled to sue for commission by reason of s 50 of the Act because the authority under which the agent was appointed did not comply with s 49A(1) of the Act. Specifically, the authority was said not to contain a 'rebate statement' as required under s 49A(4)(c). In its decision, the Court of Appeal referred to the trial:

(a) at which the defendant contended that the authority did not contain a 'rebate statement' stating that the agent was not entitled to retain any rebate and must not charge the client an amount for any expenses that was more than cost as required under s 49(4)(c). Accordingly, s 50 of the Act was engaged; and

(b) the trial judge found that the Act required that consumers be advised of their rights including that agents are not entitled to retain any rebate, before entering into the contract.[37] The trial judge found that the applicant had not complied with s 49A(1) of the Act and that the authority was therefore unenforceable pursuant to s 50 of the Act.

1. After considering the strong theme of consumer protection which runs through Part IV of the Act, the Court of Appeal held in respect of the rebate statement required under s 49A(4)(c) and in respect of s 49A(1)(c)(iv) that:

"...the requirement that the statement be contained in the engagement or appointment can be seen as ensuring that the client is advised as to the existence of the prohibitions...

It is significant that the notice is required to be in the engagement or appointment which is itself required to be signed by the client under s49A(1)(a). This indicates an intention that the client have an opportunity to read the statement before, rather than after, signing the engagement or appointment. Section 49A(1)(b) calls for the agent to have informed the client before signature that the commission and payment in respect of outgoings are subject to negotiation. It is apparent that Parliament intended that the client be aware of the existence of the prohibitions in the context of being able to negotiate the terms of commission and payments in respect of outgoings."

1. By parity of reasoning and recognising that the relevant engagement or appointment in this case is the ESA:

(a) The agent must inform the person before signing that the commission to be paid under the ESA and any money to be paid by the person in respect of outgoings are subject to negotiation.

(b) The details of the commission and outgoings that have been agreed must be contained in the ESA which is itself required to be signed by the client under s 49A(1)(a).

(c) This indicates an intention that the details of the commission and outgoings be agreed before signing the ESA.

1. It would be contrary to the text of s 49A(1) to construe subsection (1)(c)(iv) as requiring the rebate statement to be contained in the engagement or appointment before signing but not the details of the commission and outgoings that have been agreed pursuant to subsection (1)(c)(i).
2. Cellmore submitted that a construction requiring the advertising costs to be agreed before signing and recorded in the ESA itself (either at the time or later) as opposed to being contained in a signed schedule, would not accord with commercial common sense and would result in reduced flexibility in an advertising campaign.
3. Cellmore's submission that Mr Funston's construction places an emphasis on form over substance would carry some force if the focus of the enquiry was confined to advertising costs.

(a) This is particularly so in the present circumstances where Mr Funston was provided with a proposed advertising schedule, negotiated the advertising costs, was provided with a reduced advertising schedule which complied with his requirements with which he agreed and indicated his agreement by signing the reduced advertising schedule.

(b) It is further highlighted by Cellmore's submission that there is no additional consumer protection offered by Mr Funston's contention that the issue could have been addressed by amending and initialling the ESA, especially having regard to Cellmore's practice of obtaining Mr Funston's signed agreement to the advertising costs on the reduced advertising schedule.

1. However, s 49A is not so confined to advertising costs, and whether any additional consumer protection is offered cannot be determined by reference to the circumstances of a particular case.

(a) Section 49A(1)(c)(i) is concerned with commission and outgoings. It is readily apparent that to advance the consumer protection purpose of the Act and of s 49A(1) in particular, the commission (either fixed or expressed as a percentage together with an estimated dollar amount) to be charged by the estate agent must be contained in the ESA before signing. Recording "TBA" for the commission would defeat the purpose of the section.

(b) Requiring the details of commissions and outgoings that have been agreed to be contained in the ESA before signing reflects Parliament's intention to protect consumers. It enhances consumer protection because it ensures that consumers understand and are advised not only of their rights but also of their obligations before signing an engagement or appointment.

1. In relation to Cellmore's submission that substantial compliance is sufficient, in my view, Quigley J's finding in Funston v CCSS, that where information is required to be provided to assist a party to understand the basis and likely amount due to the agent as a result of the services provided, substantial compliance will be sufficient as long as the information contained is accurate and not misleading, does not assist Cellmore in the present circumstances. Quigley J found that:

"In my view, there is an obligation on the agent to inform the person of his or her right to negotiate. The manner in which this is communicated is not stated...It is clear from the transcript that Mr Funston was aware of his right to negotiate and such negotiations took place."[38]

1. The question there was whether the person had been informed of their right to negotiate before signing. It was not concerned with the information that must be contained in the engagement or appointment before signing. As the manner in which a person may be informed is not specified in the Act, the focus was on the evidence upon which the court could conclude that Mr Funston was so informed.
2. It is unnecessary for me to determine whether substantial compliance is sufficient. Even if substantial compliance with the Act is sufficient, I would not have been satisfied that Cellmore substantially complied with the Act. The "engagement or appointment" in this case, the ESA did not contain details of the advertising expenses either before or at the time of signing or at any time afterwards.
3. As Cellmore failed to comply with s 49A(1)(c)(i) of the Act, Cellmore cannot sue for or recover the unpaid advertising expenses under s 50 of the Act.[39]

1. I am satisfied that the advertising expenses sought by Cellmore were actually incurred.[40] There is no evidence that Cellmore sought an amount that was greater than the amount paid, or payable, by Cellmore for those expenses. Although not apparent on the face of the one line document produced to support the $132 charge, Mr Way gave evidence that the document was an extract from the tax invoice of realestateview.com and that the amount of $132 was invoiced by realestateview.com. "That's what we pay our accounts from." It was not put to him that he was incorrect, nor is there any evidence to the contrary. Mr Way gave evidence that the amount of $2,399 invoiced by realestate.com was incurred by Cellmore. Mr Funston accepted in cross-examination that the amount of $2,399 was validly incurred.
2. I would not in any case have been satisfied that Cellmore breached s 48B of the Act. As was stated by Quigley J in Funston v CCCS:

"...s48B is directed to remedying the mischief which previously occurred whereby agents retained rebates and typically did not pass these savings on to the vendor. It is quite clear on a plain reading of the whole of s48 that this provision is directed to that practice. It is not a fair reading of s48B to draw any other conclusion."[41]

1. There is no allegation that Cellmore failed to pass on any rebate.

1. Mr Funston's un-pleaded allegation that Cellmore is not entitled to recover the outstanding advertising expenses because it breached s 49A(2) of the Act is rejected:

(a) There was no evidence that Mr Funston returned the original signed ESA to Cellmore. Rather, he emailed it a signed copy.

(b) There was no evidence that the original had been destroyed.

(c) Cellmore retained the signed copy that Mr Funston emailed to it both in hard copy and in its electronic records.

1. There is no requirement under the Act that Cellmore obtain the original signed hard copy from Mr Funston in circumstances where the signed ESA was returned by email.

(2) Did Cellmore represent to Mr Funston that the ESA he signed was a REIV standard form contract (Standard Form Representation)? If yes, was the Standard Form Representation false?

1. Mr Funston submitted that Cellmore and Mr Way represented to Mr Funston that the ESA was a REIV standard form contract by:

(a) providing Mr Funston with the ESA, which included the REIV logo as a watermark at the top of the document; and

(b) failing to bring Mr Funston's attention to the charging clause. The charging clause is not included in the REIV standard form.

1. Mr Funston gave evidence that he did not see the charging clause when he read the ESA, that Cellmore's agents did not bring it to his attention, and that had it had been brought to his attention, he would not have signed the ESA. He considered the presence of the REIV logo to indicate that it was a standard form REIV authority.
2. Mr Goldblatt disputed that it was not put to Mr Wheeler in cross-examination that, contrary to his evidence, Mr Wheeler did not discuss the charging clause with Mr Funston. It was put to Mr Wheeler during cross-examination that he did not ask Mr Funston to initial the charging clause. The implication of that line of questioning was that Mr Wheeler did not in fact raise the charging clause with Mr Funston.

1. Cellmore submitted that the Standard Form Representation was not made to Mr Funston. Even if made, it was not relied upon by him.

(a) Mr Funston was familiar with REIV standard contract forms.

(b) Mr Wheeler gave evidence that he discussed the charging clause in the GSA with Mr Funston. Further, he discussed the charging clause in the ESA with Mr Funston at the 6 July 2017 meeting. It was not put to Mr Wheeler that he did not do so and accordingly, Mr Funston cannot now submit that the charging clause was not bought to his attention.

(c) With his extensive industry knowledge, including as an Estate Agents Board compliance officer, Mr Funston had knowledge of similar charging clauses and previously had a dispute with an estate agent about a charging clause.

1. In my view, it is conceivable that replacing or overwriting the copyright logo with a charging clause could constitute a misrepresentation as to the relevant GSA or ESA being a standard form REIV document. However, in the circumstances of this case and for the following reasons, I am not satisfied that the Standard Form Representation was made.[42]
2. I prefer the evidence of Mr Wheeler that the charging clause was discussed at the 18 May 2017 meeting. I reject Mr Funston's evidence that the charging clause was not discussed with him. It is improbable that the presence of the charging clause was not discussed:

(a) On Mr Funston's own account, at the 18 May 2017 meeting, Mr Funston told Mr Wheeler about a dispute he had previously had with Fletchers:

"Fletchers had embedded - added two pages to the REIV authority and in that two pages was a charge clause that was embedded. They didn't advise me, and I didn't see it when I signed the authority and the Fletchers didn't sell it, and sent me an advertising account..."

(b) It is inherently unlikely that Mr Funston related the Fletchers experience out of the blue, unprompted by the presence of the charging clause in Cellmore's authorities. This is supported by Mr Wheeler's evidence that:

(i) he took a pad of blank sales authorities to the meeting; and

(ii) they discussed Mr Funston signing a GSA. Mr Funston wanted to sign a GSA at that point but did not want to pay for advertising. Rather, he wanted Cellmore to sell the Property to their existing client base.

(c) That Mr Wheeler discussed the charging clause with Mr Funston is consistent with Mr Way having instructed his agents to draw clients' attention to the charging clause as they were going through the authority.

(d) In that context, it is improbable that Mr Wheeler said nothing in response to Mr Funston's recount of the Fletcher's experience having regard to the charging clause in the Cellmore authorities. Mr Wheeler's evidence that Mr Funston raised the issue of the charging clause himself is consistent with Mr Funston having recounted the Fletcher's experience to Mr Wheeler, albeit Mr Wheeler did not recall that the Fletcher's experience was in relation to a charging clause.[44]

(e) Indeed, one might infer that the topic of charging clauses was front of Mr Funston's mind because the issue was important to him.

(i) According to Mr Funston, had Mr Wheeler mentioned that their authorities contained a charging clause, he would have said "Forget it, I am not interested. Why don't you leave now and stop wasting my time and your time...it is an insidious practice."

(ii) Mr Wheeler's evidence that Mr Funston said he disagreed with it and wanted it out is consistent with Mr Funston's stated position on charging clauses.

(f) That the discussion about charging clauses was in the context of the presence of a charging clause in the Cellmore authorities is supported by Mr Funston's evidence that charging clauses are an "insidious practice."

1. Even if, as Mr Funston gave evidence, the issue of the Cellmore charging clause was not discussed at the 18 May 2017 meeting, it is inconceivable that, having related the Fletchers experience to Mr Wheeler at that meeting, Mr Funston received, read, signed and sent back the GSA to Mr Wheeler without noticing the charging clause:

(a) Mr Funston would likely have been on high alert for the presence of a charging clause because he had previously missed the Fletchers charging clause.

(b) Mr Funston is "very pedantic" about what he wants.

(c) When he received the GSA, he printed it off and "...looked at all the - as I do, I looked at all the handwriting and everything."

(d) Mr Funston looked at the document carefully. He changed the Vendor's price from $1.52m to $1.6m.

1. Mr Funston's denial that he read the charging clause at the bottom of the page is inconsistent with his approach and his evidence that he is "very pedantic." Further, his signature was placed on the bottom of the document, just above the charging clause giving him every opportunity to see it.
2. Even if Mr Funston missed seeing the charging clause on the GSA, I find it was discussed during the 6 July 2017 meeting in the context of Mr Funston signing the ESA:

(a) Mr Wheeler took the pad of ESAs to the meeting as the purpose of the meeting was to get the ESA signed, get a sale price, put the property on the market, conduct open for inspections and ultimately sell the property.

(b) According to Mr Wheeler, the ESA "would have been written on the spot".

(c) It is also consistent with Mr Wheeler's description of the charging clause being "a bit of a bugbear" of Mr Funston. This rings true having regard to Mr Funston's evidence of his view that their inclusion is an "insidious practice."

(d) That it was a "bit of a bugbear" of Mr Funston supports the probability that the topic was raised again at the meeting on 6 July 2017 as described by Mr Wheeler.

1. Even if the charging clause was not raised and discussed at the meeting on 18 May 2017, Mr Funston missed seeing it on the GSA, and it was not discussed at the 6 July 2017 meeting, I consider Mr Funston would have seen the charging clause when signing the ESA.

(a) Mr Funston described himself as "an experienced property player" who likes to "play it straight...according to the law."

(b) Having had the Fletchers experience, it is likely that in looking at the ESA on 6 July 2017, he looked carefully at the document, with the possibility of a charging clause in mind and that he would have seen the charging clause.

(c) That Mr Funston would have read the entire document carefully and seen the charging clause is supported by his evidence that:

(i) he was familiar with the standard form REIV exclusive sale authority;

(ii) he is a "...stickler for doing it the right way"; and

(iii) he has a detailed knowledge of the Act.

(d) Again, Mr Funston signed the ESA in the signature box immediately above the charging clause. That the line of words "didn't stand out to me" is inconceivable in the circumstances.

1. I reject Mr Funston's evidence that it was in the cool, calm light of the day when he went back to have a look at the authority to check when it was going to end at about the time Mr Wheeler finished, that he noticed the charging clause at the bottom of the page. Mr Funston is not a "fool", as he gave evidence he thought he had been for not seeing it:

(a) Mr Funston was a compliance officer with the Estate Agents Board. He worked in the investigation and compliance department.

(b) He was previously an estate agent.

(c) Mr Funston has experience as a property developer.

(d) Mr Funston is "a very technical person" who has been in the property industry for a long time.

1. Had Mr Funston noticed the charging clause in the cool, calm light of day in early August for the first time, and were it the case that he would not have entered into the ESA had he known it was there, one would have expected him to have raised it immediately with Mr Wheeler. I consider he would have drawn Cellmore's attention to and raised his position in respect of the charging clause in good faith at the time he said he noticed it. Rather, Mr Funston said nothing to Cellmore until well after the end of the ESA, at a time when the Property had not sold and when Cellmore sought payment of the outstanding Advertising Invoice.
2. In my view, Mr Funston signed the ESA with knowledge of the charging clause because he knew that if pursued, he would dispute liability to pay the advertising costs down the track. As he stated in an email to Mr Way on 9 October 2017:

"I have a good deal of knowledge of charge clauses since Fletchers tried this little trick on me some time ago...I did not know much about charges, caveats and Section 55 when they took action but I soon learned the law in that area..."

1. Mr Funston's disingenuous approach towards Cellmore is further evident in his email to Ms Mazur on 4 September 2017 in which he asked "could you please obtain from your OIEC what the intent and meaning of" the charging clause was. Mr Funston well knew from the Fletchers experience and his extensive knowledge and experience in the real estate industry what the charging clause meant. Mr Funston gave evidence his question to Ms Mazur was "a very well crafted" one as he was wanting to ascertain Cellmore's intent and meaning of charging clause. It was nevertheless disingenuous when Mr Funston knew well what charging clauses are about.
2. Rather, it was after Cellmore persisted in its efforts to recover the outstanding Advertising Invoice that Mr Funston emailed Mr Way on 13 September 2017 in which Mr Funston stated "I doubt very much if you realise the position you have put yourself in by the caveat approach - as you said I am an experienced property player."
3. Even if the Standard Form Representation was made, for the reasons set out above, Mr Funston did not rely on it when entering into the ESA. It did not induce Mr Funston to enter into the ESA. Rather, I am satisfied Mr Funston was well aware of its presence and entered into the ESA knowing it was there.

1. I consider that Mr Funston's dealings with Cellmore were disingenuous as set out above in relation to his knowledge and awareness of the charging clause.
2. Further, I consider Mr Funston's evidence that he would have paid the advertising account in September 2017 if he was given all of the invoices to be disingenuous. Had that been Mr Funston's genuinely held position, he:

(a) would have raised the issue of itemisation of the various internet advertising platforms at the time he considered the advertising schedule and reduced advertising schedule; and

(b) informed Cellmore that he would require individual tax invoices for each separate advertising cost before he would be prepared to pay it.

1. On his own evidence, Mr Funston was of the view that it was "impermissible" to package the advertising in this way. So much is clear from Mr Funston's email to Mr Way on 15 September 2017 in which he stated:

"I am happy to test my knowledge about the laws of Estate Agency with any including your solicitor...You have not been able to supply evidence for the $555 internet charge that complies with the Estate Agents Act definition of Outgoings - Sect 4...What you have described below does not identify for the $555 as outgoings but rather it identifies "overheads"..."

1. That Mr Funston's dealings with Cellmore over the advertising costs was disingenuous is supported by Mr Funston's email to Mr Way on 26 September 2017 in which he stated in relation to paying the advertising account, "Friday is ok I should have it all sorted by then - if you have the extra invoices that will be even better" in response to Mr Way's request for payment (less the disputed $555).

(a) When the Friday passed with no payment, Mr Way emailed Mr Funston on 9 October 2017:

"I note your promise on 26th September in the below email to pay your outstanding advertising by Friday 29 September..."

"I said it should be ok - that's not a promise. Don't you know the difference between "should" and "promise" they are two totally different words."

1. Mr Funston well understood the basis on which the internet advertising would be charged (i.e. as a package) and the likely amount due to the agent:

(a) The proposed advertising schedule listed the various internet advertising platforms under the heading "Internet Package and E-Brochure."

(b) By email on 25 May 2017, Mr Wheeler told Mr Funston that "[t]he internet is the package we offer".

(c) At the meeting on 6 July 2017, Mr Funston and Mr Wheeler discussed paid advertising.

(d) The reduced advertising schedule listed the various internet advertising platforms under the heading "Internet Package and E-Brochure".

(e) Mr Funston read the reduced advertising schedule and gave evidence, "I signed it and accepted it."

(f) Mr Funston gave evidence that he was careful with each invoice.

1. According to Mr Funston, he does not "pay any advertising fees that don't comply with the law". However, rather than drawing his concerns about Cellmore's approach to its attention, on 12 July 2017, Mr Funston said to Mr Wheeler "[j]ust get them to hold off on the invoice until its sold or the end of the agency, whichever comes first."
2. Mr Funston maintained in cross-examination that, despite the presence of clause 10.1 in the ESA,[45] Mr Wheeler did not tell him that in discussion before he signed the ESA. When it was put to Mr Funston that Mr Wheeler would be giving evidence to that effect, Mr Funston said "[w]ell, he'd be committing perjury". Mr Funston later abandoned his position that he was not informed that the commission and marketing expenses were negotiable.

1. I consider Mr Wheeler was an honest witness with significant challenges with memory of events which occurred after he suffered a heart attack in August 2017.
2. I accept that he had cause to remember particular conversations with Mr Funston given Mr Funston's general demeanour towards him. Mr Wheeler gave evidence Mr Funston was "a vulgar bully" who constantly told him he was "fucking useless". Although Mr Funston said he could not recall using vulgar language to Mr Wheeler, and he denied that he swore at and abused Mr Wheeler, Mr Wheeler's evidence was not challenged in cross-examination.

1. I consider Mr Johnstone was an honest witness whose memory was impacted by the passage of time. His lack of recollection of detail including of what Mr Funston said at the 18 May 2017 meeting is unsurprising as Mr Wheeler was the primary agent; it was Mr Wheeler's listing. Mr Johnstone had little involvement in the initial meeting.
2. Mr Goldblatt put to Mr Johnstone that his evidence that on the morning of 6 November 2017 after he received a phone call from Mr Senaratne, he rang Mr Funston and said "[w]e have a verbal offer, an expression of interest if you like, of $1,350,000" to which Mr Funston replied "[y]ou know what I fucking want," was a recent invention.

(a) Mr Johnstone sent an email to Mr Funston at 12.51pm in which he stated "Good afternoon Rick, I have a buyer who like to make a written offer of $1.35 million. Would you entertain that figure?".

(b) There is no reference in that email to a conversation about a verbal offer having just occurred. Had that conversation occurred, it was put to Mr Johnstone that he would have referred to it.

1. I do not consider that Mr Johnstone's evidence of the phone call with Mr Funston on 6 November 2017 is a recent invention and a basis on which to reject his evidence as untruthful having regard to the following:

(a) Although to the best of his recollection, the phone call occurred before he sent the email to Mr Funston, Mr Johnstone also acknowledged difficulty with his recollection given the events occurred seven years ago. Further, Mr Johnstone had no recollection of the conversation with Mr Funston on 9 November 2017 in which he informed Mr Funston of receipt of the written offer.[46]

(b) Mr Funston gave evidence that supports that the phone call with Mr Johnstone on 6 November 2017 occurred. Mr Funston gave evidence that "Senaratne's offer was a verbal offer that I was told that they were going to have it in writing and then it doesn't turn up...it was a verbal offer for well...I presume he made the verbal offer on the 6th..." He agreed that when he was told about the verbal offer, it's the case that he didn't email any other agents to tell them about it and ask them if they had a better offer;

(c) Mr Senaratne gave evidence that he put in a verbal offer although he could not remember the exact date, it was in November 2017.

(d) That a conversation to that effect took place is likely as Mr Funston's response was consistent with the response he provided to Mr Wheeler when Mr Wheeler told him that Cellmore had one person who expressed an interest at $1.3m. According to Mr Wheeler, Mr Funston said it was "a fucking ridiculous price and go and get me a decent fucking offer....you know what I want."

(e) I do not consider that Mr Funston's instruction to Mr Johnstone to get it signed up on a contract is inconsistent with Mr Johnstone's evidence of the phone call on 6 November 2017. Mr Funston expressed the view that verbal offers do not go anywhere as it is easy to make a verbal offer. Mr Funston gave evidence that "...if you are an agent, you cannot give much weight to verbal offers, otherwise you will be - go demented at the end of the day."

(f) This is consistent with Mr Wheeler's evidence that Mr Funston told him that a verbal offer is "fucking useless". Mr Wheeler had cause to remember those particular conversations as he had never had a client that had spoken to him like that, "...not in 25 years of investment banking."

(3) Did Cellmore represent after the expiry of the ESA on about 21 August 2017 that they were acting as Funston's agents, on his behalf as vendor of the Property, and impliedly represent that as his agents they would pass on to him the terms of all offers from interested purchasers as soon as possible, and that they would facilitate the sale of the Property (Agency Representations)? If yes, were the Agency Representations false?

1. Mr Funston submitted that Cellmore continued listing the Property online, making it accessible to the general public, and held itself out as the selling agent following the end of the engagement between Mr Funston and Cellmore.

(a) The period of exclusivity under the ESA ended on 21 August 2017 and at that point in time, the Property had not yet been sold. Mr Way stated in his email of 15 September 2017 that Cellmore's engagement with Mr Funston was now at an end.

(b) Between August and 18 December 2017, Mr Funston made repeated requests for Cellmore to remove the Property from its advertising.

(c) Notwithstanding his 15 September 2017 email, Mr Way emailed Mr Funston again on 21 September 2017, stating that upon payment of outstanding advertising charges, Cellmore would "remove the property from the internet and cease all attempts to sell the property."

(d) Mr Funston submitted that he did not pay the amounts claimed, as he was not required to and Cellmore continued to advertise the Property online until April 2018.

(e) Although Mr Way gave evidence that the Property was "hidden", no document or further evidence was produced to substantiate this claim.

(f) Mr Johnstone accepted that, notwithstanding Mr Funston's request that the internet advertising for the Property cease, Cellmore continued to advertise.

(g) Mr Way told Mr Funston that until Mr Funston paid the claimed marketing expenses, the internet advertising for the Property would continue.

(h) Enquiries continued to be made to Cellmore regarding the Property until March 2018.

(i) Mr Way gave evidence that the Property was not removed from the internet until April 2018, when he was approached by another agent who had listed the Property.

1. By continuing to engage with prospective purchasers and hold the Property out for sale, Mr Funston claimed that Cellmore represented that it was acting for and on behalf of Mr Funston, would facilitate the sale of the Property, and would pass on the terms of all offers made.
2. The Agency Representations were false in that Cellmore did not have authorisation to act on behalf of Mr Funston and Cellmore failed to pass on the terms of relevant offers to Mr Funston or otherwise to facilitate the sale of the Property.
3. Mr Funston further submitted that Cellmore, in making the Agency Representations, engaged in conduct that was contrary to s 42 of the Act. Section 42 provides that:

"[a]ny person who wilfully and falsely advertises or in any way wilfully and falsely represents that as an estate agent he has a particular property or business for sale shall be guilty of an offence."

1. Cellmore submitted that Mr Funston authorised Cellmore (via Mr Johnstone) to conduct inspections of the Property after 21 August 2017.
2. There is no evidence that Cellmore did not communicate offers to Mr Funston. The evidence is clear that when Cellmore received an offer from Mr Senaratne, it communicated that offer to Mr Funston. It was in Cellmore's interests for the Property to be sold so that it could be paid its advertising costs.
3. Mr Way's evidence that the listing of the Property was hidden in mid-September 2017 was consistent with Cellmore's inspection report, which records no online enquiries between 13 September and 12 December 2017. In this respect, Mr Funston conceded that internet listings could leave historical imprints and that on the internet "you can't get rid of everything".
4. Although Mr Johnstone accepted that Cellmore continued to advertise after the ESA expired and Mr Funston wanted the advertising taken down, he stated that it was his recollection that it was taken down and that "we could hide the listing without actually exposing it", which was consistent with Mr Way's evidence.
5. It is clear that Mr Funston liaised with Cellmore and approved of its efforts to attempt to sell the Property after the expiry of the ESA up until 9 November 2017. Mr Funston relied upon two emails from Mr Way stating that Cellmore would remove internet advertising upon payment (sent at a time when Mr Funston was in breach of contract by not paying advertising expenses), the last such email from Mr Way was on 21 September 2017, which is not inconsistent with Mr Way's evidence as to hiding the listing.
6. In any event:

(a) an internet listing by Cellmore did not prevent other agents from listing the Property, particularly as Cellmore's entry was hidden; and

(b) the assertion that Cellmore breached s 42 of the Act is irrelevant.

1. It is not pleaded or alleged that any breach of the provisions of the Act or Regulations founds any civil right of action.

1. I am satisfied that between the end of the exclusive agency period on 21 August and 9 November 2017, Cellmore made the Agency Representations at various times. However, I am not satisfied that the Agency Representations were false.
2. I am not satisfied that Cellmore held itself out as Mr Funston's agent or took steps to facilitate the sale of the Property without liaising with Mr Funston and without his approval.
3. At various times throughout that period, Mr Funston gave instructions to Cellmore to act as his agent:

(a) Although the period of exclusive agency ended on 21 August 2017, Mr Funston was "quite happy for [Mr Johnstone] to have it open" for inspection the following week. Mr Funston gave evidence that Mr Johnstone "asked me could he have it open for inspection and I agreed."

(b) In his email of 21 August 2017 to Mr Johnstone, Mr Funston stated that "Woodards will keep the internet advertising continuing".

(c) Mr Funston was happy for Mr Johnstone to "keep working on it" because he considered Mr Johnstone to be a better salesperson than Mr Wheeler.

(d) Mr Funston instructed Mr Johnstone to keep the internet advertising continuing.

(e) Mr Funston was content for another Cellmore agent, Ms Demi Li, to open the Property on 9 September 2017 for a private inspection for one of her buyers. Although Mr Funston emailed Mr Way on 6 September 2017 saying he had instructed Mr Johnstone "to take the listing down on Saturday and Monday," he also stated that "if it's still up you can have [the house] open on Sat with Demi."

(f) Mr Johnstone would ring Mr Funston after the inspections and discuss the number of groups through the Property and the number of contract of sale requests.

(g) On 13 September 2017, Mr Funston suggested Mr Way "...come around to my place and we can discuss auctioning the property the sooner the better."

(h) By email to Mr Way on 18 September 2017, despite directing Mr Way to "Please remove all the internet listings for my property forthwith", Mr Funston also said "with luck [Mr Johnstone's] buyer will buy the [P]roperty and we will all be satisfied."

(i) In response to an email from Mr Johnstone on 22 September 2017 that he had a potential buyer who wanted to inspect the Property, Mr Funston permitted Mr Johnstone to take the buyer through the Property.

1. I accept Mr Way's evidence as set out below that the Property was "hidden" by mid-September 2017 to accommodate Mr Funston's changes of position.

(a) Cellmore "hid" the listing by removing the address and ticking a button "behind the scenes" which is a different process from deleting the listing from realestate.com.

(b) "Hiding" the listing meant that if a person searched on realestate.com, the Property would not come up in the list, however, if one searched the address in Google, "it would find all activity" over the previous period of time. "That's a google thing".

(c) You can never remove a property from the internet once it's on the internet: it leaves a fingerprint. Mr Funston conceded that internet listings could leave an historical imprint and that on the internet, "you can't get rid of everything";

(d) Cellmore "hid" the listing in case Mr Funston changed his mind again about selling the Property so that Cellmore would not have to re-subscribe the Property to the internet and incur new advertising costs.

1. Whilst that meant electronic enquiries might still be able to be made, there is no evidence of online enquiries having been made between 13 September and 12 December 2017. There is no evidence that any electronic enquiry led to an occasion for interaction between a Cellmore agent and an enquirer.
2. I am not satisfied that Cellmore failed to pass on "relevant offers" to Mr Funston such as to render the Agency Representations false:

(a) Mr Johnstone "passed on" the November Offer to Mr Funston. He communicated the November Offer to Mr Funston by telephone on 6 November 2017. I do not consider that Cellmore's request that Mr Funston sign a seven-day authority before providing him with the written offer renders the Agency Representations false.

(b) There is no evidence of any other offer that Mr Funston contends was made and not passed on to him.

1. I accept Cellmore's submission in respect of Mr Funston's allegation of breach of the Regulations. The Act and the Regulations provide a comprehensive statutory framework by which alleged breaches of the Act and Regulations is dealt. Pursuant to s 94 of the Act, every person who contravenes or fails to comply with any provision of the Act or the Regulations shall be guilty of an offence against the Act.[47] Proceedings for an offence against the Act or the Regulations may only be brought by the Director or a person authorised by the Director.[48]
2. In oral closing submissions, Mr Goldblatt accepted that no finding of breach in respect of a civil penalty provision or in respect of a provision giving rise to criminal liability ought to be made. Consistent with that position, Mr Tesarsch submitted that alleged breaches of the Act or Regulations are regulatory issues and not matters where the Court could or should entertain making findings in relation to any potential contravention.
3. Consistent with the scheme of the Act and the Regulations and the parties' positions, I have not made findings in respect of alleged breaches of the Act and Regulations.

(4) On about 10 November 2017, did Cellmore represent to a potential purchaser who had made an offer to purchase the Property (November Offer) that Funston had rejected it (Rejection of Offer Representation)? If yes, was the Rejection of Offer Representation false?

1. Mr Funston alleged that on 10 November 2017, Cellmore represented to Mr Senaratne, as a potential purchaser who made the November Offer, that Funston had rejected the November Offer.
2. Mr Funston relied on Mr Senaratne's evidence in the following exchange:

""Did you receive a phone call from anyone at Woodards in response to your written offer?---I believe I did. I received a call after I had submitted the offer and I believe that the offer - I understood the message was that the offer was - was not - yeah, it was not accepted.

To the best of your recollection what words did the agent use to you when the agent called you up?---I can't recall the exact words that were used."

1. Mr Goldblatt submitted that in the following circumstances, the Rejection of Offer Representation was false, untrue and misleading as Mr Funston had not rejected the November Offer.

(a) Mr Funston emailed Mr Johnstone on 6 November 2017 and instructed him to "...get it signed up on a contract with a deposit then I will be in a position to entertain it."

(b) Mr Senaratne provided a signed contract on 8 November 2017 accompanied by a signed credit/debit authorisation form.

(c) Mr Funston replied to Mr Wheeler's email on 9 November 2017 requesting a signed new authority for the Property, stating "My instructions to you are - Woodards have acted on the [sic] own behalf against my instructions to find a buyer for my property...I instruct you to forward a copy of the purchaser's signed copy of the contract...".

(d) On 10 November 2017, Mr Wheeler replied to Mr Funston sating "I presume from your email that you are not interested in accepting or agreeing to the offer Mark has discussed with you. Accordingly, we will advise the buyer the same."

(e) Mr Funston replied to Mr Wheeler's email including stating "My email to you yesterday states quite clearly "...send me the contract' How can I make decision about accepting the offer without seeing contract and all the condition and terms...".

(f) Mr Senaratne was advised by telephone that his offer was not accepted.

1. Cellmore submitted that the Rejection of Offer Representation claim must fail because Mr Senaratne's understandable lack of recollection of the actual words spoken must of itself mean that the Court cannot be satisfied that the words used were misleading in the circumstances.
2. Even if the Court were to accept Mr Senaratne's understanding that the offer was not accepted, if such words were used by Mr Wheeler, they were not misleading. Rather, they were accurate, as the offer had not in fact been accepted. Mr Funston did not give any evidence that he told Cellmore that he would accept the offer.

1. In Watson v Foxman & Ors,[49] McClelland CJ in Eq observed that:

"Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience."[50]

1. I find it more likely than not that Mr Wheeler told Mr Senaratne that Mr Funston had not accepted his offer.

(a) When Mr Senaratne's evidence as to his understanding of the message from the words spoken is taken together with Mr Wheeler's email to Mr Funston on 10 November 2017 in which he stated "I presume from your email below that you are not interested in accepting or agreeing to the offer Mark has discussed with you. Accordingly, we will advise the buyer of same" the better inference is that Mr Wheeler told Mr Senaratne that his offer was not accepted.

(b) That it was Mr Wheeler who spoke to Mr Senaratne is consistent with:

(i) Mr Wheeler's stated intention in his email to Mr Funston that he would "advise the buyer the same."

(ii) Mr Johnstone's recollection that Mr Wheeler phoned the buyer, although Mr Wheeler could not recall sending the email to Mr Funston or speaking to Mr Senaratne or discussing his offer with him.

(iii) Mr Wheeler's email to Mr Way and Mr Johnston on 10 November 2017 in which he said "I just got off the phone to "the purchaser"...".

1. Even if the representation was incorrect however, I am not satisfied that Mr Wheeler knew it to be false, or was reckless or negligent as to whether it was true or false. This is so having regard to the contents of the 9 November 2017 email in which Mr Funston told Mr Wheeler to advise the purchaser that Cellmore did not have his authority to sell the Property and in context of the following matters:

(a) Mr Funston's committed price expectation being much higher. Before Mr Funston sent the signed GSA to Mr Wheeler by email, he increased the vendor's price from $1.5m to $1.6m. Mr Funston accepted that this was his figure.

(b) The ESA recorded the vendor's price as being $1.49m.

(c) Mr Funston agreed he never told Cellmore that he would accept anything like $1.35m. This was consistent with Mr Funston's response when Mr Wheeler communicated an earlier verbal offer to Mr Funston of $1.3m, to which Mr Funston said that it was a "fucking ridiculous price and go and get me a decent fucking offer...you know what I want."

1. Even if the Rejection of Offer Representation was made and was false, Mr Funston suffered no loss or damage for the reasons set out below.

(5) Did Cellmore represent to potential purchasers that the Property was not currently available for sale and was 'on hold' (On Hold Representation)? If yes, was the On Hold Representation false?

1. Mr Goldblatt submitted that from at least late August 2017, Mr Funston represented to prospective purchasers of the Property that it was not available for sale.

(a) Mr Johnstone admitted that from December 2017 until March 2018, he was instructed to tell people who made enquiries about the Property that it was on hold and not for sale.

(b) It is likely that Mr Way so instructed Mr Johnston because Mr Way formed the view that the price Mr Funston was prepared to accept was not achievable.

1. The On Hold Representation was false because Mr Funston did not have any discussions with Cellmore or its employees or representatives about the Property being on hold.

1. Cellmore submitted that there is no admissible evidence that any statement that the Property was on hold was made to any specific prospective purchaser.

(a) Mr Johnstone could not recall receiving or responding to any enquiries from December 2017 to March 2018. To the best of his memory, they didn't do open for inspections, they were email enquiries. There was no evidence as to any response to those enquiries.

(b) Apart from the automatic electronic responses, Mr Way did not have, and was not aware of his staff having, any contact with those enquirers.

1. I am not satisfied that the On Hold Representation was made.

(a) Whilst Mr Johnstone gave evidence that he was instructed to tell prospective purchasers that the property was "on hold", there is no evidence that he in fact did so. Mr Johnstone was not asked whether he ever told any prospective purchaser that the property was on hold. His evidence in relation to the list of electronic enquiries was that he did not recall receiving any or responding to any of them.

(b) Although the list indicates enquiries were made in relation to the Property between December 2017 and March 2018, there is no evidence those enquiries led to an occasion for interaction between a Cellmore agent and the enquirer.

(i) Mr Way gave evidence that those listings may have been automated ones that came through the internet. According to Mr Way, the last open for inspection at Mr Funston's request was 13 September 2017. The rest are emails or online enquiries that came in and to which an automated response was sent.

(ii) There is no evidence from Mr Johnstone or any other Cellmore agent that they had contact with any of those enquirers.

1. Even if I had found that the On Hold Representation was made and was false, there is no evidence of any loss or damage being suffered by Mr Funston by the making of the On Hold Representation. There is no evidence that prospective purchasers were deterred from making an offer on the Property or that any such statement affected the purchase price that Mr Funston would have obtained for the Property.

1. Mr Funston contended that the Court should find that Mr Way was not a credible witness.

(a) Mr Way gave self-serving evidence as to Cellmore "hiding" the Property listing. There are no discovered documents that show that the listing was "hidden".

(b) Mr Way gave self-serving statements that were contradicted by documentary records as to Cellmore continuing to hold the Property open in September and October 2017. Mr Way gave evidence that his agents had a conversation with Mr Funston that Mr Funston was not going to accept the November Offer, however, neither Mr Wheeler nor Mr Johnstone gave that evidence. Mr Way denied that he made the On Hold Representation and could not recall instructing his agents to make the On Hold Representation, yet Mr Johnston gave evidence he was so instructed.

(c) Mr Way provided Mr Senaratne with a document for his signature which included a statement that Mr Senaratne had been advised that he was not the only buyer submitting an offer for the Property, which was incorrect.

(d) Mr Way conducted his business in a manner that contravened the Act. For example, Mr Senaratne provided a credit debit card authorisation payment form when he submitted his written offer, which was not deposited into Cellmore's trust account. Mr Way also did not comply with his obligations under the Act when it came to identifying the Property's estimated sale price in statements of information it prepared under s 47A of the Act.

1. Cellmore submitted that no adverse finding ought to be made by Mr Way not having a detailed recollection of the events which occurred more than seven years ago. The present case relates to the everyday activities of Cellmore. It is therefore understandable that Mr Way did not have a detailed recollection of certain matters. In relation to the specific assertions made by Mr Funston,
2. Cellmore contended that:

(a) there is no objective evidence adduced by Mr Funston to the effect that Mr Way's evidence of hiding the listing was incorrect. Mr Johnstone supported Mr Way's evidence that the listing was hidden and it was not put to Mr Johnstone that this was incorrect;

(b) when considered properly in context, Mr Way's evidence that his agents had a conversation with Mr Funston to the effect that he was not going to accept the offer from Mr Senaratne was a reference to evidence he previously gave as to his understanding of Mr Funston's response to Mr Senaratne's offer;

(c) it is not correct that Mr Way accepted that Cellmore drafted and had Mr Senaratne sign a document that was false;

(d) as to Cellmore failing to process Mr Senaratne's deposit, it was clear that Cellmore was no longer Mr Funston's agent and therefore was not in a position to bank any monies on his behalf; and

(e) Mr Way did not accept that Cellmore breached s 47A of the Act concerning the Property's estimated sale price. He was not involved in its preparation. Mr Wheeler was and it was not put to Mr Wheeler that the statement was incorrect.

1. In my view, Mr Way did his best to recall matters to the extent to which he was involved in them. For the most part, Mr Wheeler and Mr Johnston dealt with Mr Funston, until Mr Way became involved over non-payment of the Advertising Invoice. It is hardly surprising that Mr Way's memory, as is understandably the case with all of the witnesses, has been impacted by the passage of time.
2. Many of the matters raised in relation to Mr Way's credit are dealt with in context of the substantive issues. To the extent the pro forma document given to Mr Senaratne incorrectly stated that he had been advised that he was not the only buyer submitting an offer on the Property, I do not consider it is a basis on which to reject Mr Way's evidence generally. For the most part, Mr Way's evidence is supported by emails sent and received at the time.
3. In relation to Mr Funston's reliance on Mr Way's evidence that his agents had a conversation with Mr Funston to the effect that Mr Funston was not going to accept the offer from Mr Senaratne, in circumstances where his agents did not give that evidence, a fair reading of Mr Way's evidence does not provide a basis for an adverse credit finding.

(a) Mr Way gave evidence of the basis of his understanding of Mr Funston's response to Mr Senaratne's offer:

"Quite objectionable. Mark [Johnstone] came to see me after he'd spoken to Funston verbally about the offer. Mark was quite upset at the time and Mr Funston had used certain language about. 'He should know what I want', in terms of the price. That was the first part. And the second part was from Russell the next day, where he advised me that he couldn't - or Funston refused to meet up with him to discuss the offer and get a new authority. So two separate events."

(b) Mr Johnstone gave evidence of the phone call with Mr Funston on 6 November 2017 in which Mr Funston said "you know what I fucking want". Whilst Mr Johnstone did not recall telling Mr Way about the phone call, he recalled telling Mr Wheeler.

1. I otherwise accept Cellmore's submissions regarding Mr Way's credibility.

(6) Did Cellmore owe Funston any duty of care? If yes, what was the scope of the duty of care?

1. Mr Goldblatt contended that Cellmore owed Mr Funston a duty of care to:

(a) act on and consistently with the lawful instructions of Mr Funston;

(b) in so far as Cellmore was required to market the Property, act with due skill, care and diligence in performing the functions of an estate agent and facilitating the sale of the Property;

(c) act in Mr Funston's best interests in pursuing his objectives in marketing the Property and obtaining offers to purchase the Property;

(d) comply with the law, including the statutory duties and prohibitions imposed on agents and their representatives under the Act, and rules of professional conduct in the Regulations; and

(e) convey the terms of offers to purchase the Property to Mr Funston as soon as possible after the offer was made and in sufficient detail to enable him to consider accepting the offer, albeit the admission purports to extend only to the period during which the ESA was operable.

1. Cellmore's duty of care arose from the relationship between Cellmore on the one hand, and Mr Funston on the other hand, pursuant to which Cellmore was providing Mr Funston with professional services.
2. Mr Goldblatt contended that this duty of care must have, as a matter of law and common sense, continued throughout the period where Cellmore was continuing to market and seeking to sell the Property.

1. Cellmore submitted that the alleged duty of care pleaded in paragraph [23] of Funston's counterclaim is defective, insofar as it alleges anything other than a duty by Cellmore to exercise reasonable care and skill in the performance of its retainer.[51]
2. In this respect, courts are reluctant to impose an obligation on a contracting party that goes beyond or is inconsistent with that party's contractual obligations,[52] so that any duty of care ordinarily is concurrent with the contractual duty.[53] It follows that, ordinarily, if a contractual duty is at an end, so too is the concurrent duty of care.
3. Cellmore accepted that having regard to the email exchange between Mr Johnstone and Mr Funston on 6 November 2017, Mr Funston gave Cellmore his authority to act for him for the purpose of getting the offer in writing and accordingly, at that point, Cellmore was his agent and owed a duty of care to Mr Funston.
4. However, Cellmore's retainer was terminated by Mr Funston at the latest on 9 November 2017 when he emailed Mr Wheeler, refusing to sign an authority and stating that Cellmore did not have his authority.
5. The Court ought not find that Cellmore owed a continuing duty that was inconsistent with the termination of its contractual duty.

1. The text Law of Agency[54] provides:

"As a general rule, rights and duties in tort and contract end with the termination of the relationship that gives rise to those rights and duties. So, once an agency relationship no longer exists, the agent no longer owes the principal any tortious duty of care as agent. Similarly, where the agency is, as is most commonly so, constituted by contract, the contractual duties owed by agent to principal, and the powers and rights conferred on the agent by contract, will come to an end."[55]

1. It is unnecessary for me to determine the question of the existence and scope of any duty of care or breach of any alleged duty. For a claim in negligence to succeed, there must be proof of loss or damage.[56] For the reasons set out below, even if Cellmore breached a duty of care, I am not satisfied that Mr Funston suffered any loss or damage.
2. Had I needed to determine the question, I would have found that any duty of care owed by Cellmore to Mr Funston was a duty to exercise reasonable care and skill in the performance of Cellmore's services.[57]
3. I would have found that the relationship giving rise to a duty to take reasonable care in the performance of Cellmore's services was terminated by Mr Funston at the latest on 9 November 2017 when Mr Funston emailed Mr Wheeler stating that Cellmore:

(a) had acted against his instructions to find a buyer for the Property;

(b) had acted as his agent even without his authority; and

(c) was to "...advise the purchaser Woodards do not have authority to sell [his] property"; and

(d) Mr Funston refused to sign a new authority.

1. Cellmore thereby had no authority to act for Mr Funston further in relation to the November Offer. Accordingly, Cellmore was no longer under any contractual or concurrent tortious duty of care at that time. To hold otherwise would be to impose duties on Cellmore that extend beyond the scope of any contractual duties.[58]

1. Mr Funston submitted that Cellmore breached its duty of care to Mr Funston by making the Representations.

(a) The Agency Representations were breaches of the duties of care owed to Mr Funston because in making them, Cellmore:

(i) acted inconsistently with Mr Funston lawful instructions, including that he wanted Woodards to take down online advertising for the Property;

(ii) pursued their own interests to the disadvantage of Mr Funston, including by refusing to pass on the written November Offer to him unless he signed a further authority in favour of Cellmore; and

(iii) acted without good faith and fidelity.

(b) The Rejection of Offer Representation breached the duties of care owed by Cellmore because in refusing to show Mr Funston the written November Offer and misrepresenting to Mr Senaratne that Mr Funston had refused his offer, Cellmore:

(i) failed to act on and consistently with Mr Funston's instructions, including his instruction that they send him the written November Offer;

(ii) acted without good faith and fidelity, and indeed represented to Mr Senaratne a state of affairs that was not consistent with what they knew to be Mr Funston's position;

(iii) engaged in conduct that diminished the interest of potential purchasers in the Property; and

(iv) acted contrary to their obligations under the Regulations.

(c) The On Hold Representation were breaches of the duties of care owed to Mr Funston because in making them, Cellmore:

(i) failed to act on and consistently with Mr Funston's instructions, including the instruction that he wanted to see the signed contract provided by Mr Senaratne;

(ii) acted without good faith and fidelity;

(iii) pursued their own interests to the disadvantage of Mr Funston's interests; and

(iv) engaged in conduct that diminished the interest of potential purchasers in the Property.

1. Mr Funston further alleged that Cellmore breached r 16(1) of the Regulations by refusing to provide Mr Funston with the November Offer, as r 16(1) required Cellmore (unless otherwise instructed) to:

"communicate to the principal all offers to purchase, sell, or lease real estate or a business, made to the estate agent or agent's representative, whether those offers were made verbally in or writing, as soon as possible after the offer has been made".

Although Mr Senaratne initially made a verbal offer, this was superseded by the written November Offer, which was not provided to Mr Funston at the time it was made.

1. The Court ought to reject Cellmore's position that it was seeking to protect its legitimate commercial entitlement to commission by requesting Mr Funston to sign a seven day authority. Cellmore would have been entitled to commission under cl 1.4 of the ESA. Mr Senaratne gave evidence that he approached Cellmore about the Property in June 2017. Mr Senaratne was introduced to the property during the period of the ESA. Mr Senaratne's evidence was not challenged in cross-examination.

1. Cellmore contended that Mr Funston's counterclaim contains a large number of rolled-up allegations and it is unclear precisely what is alleged. Many of the allegations do not appear to sound in any loss or damage but instead read as a series of alleged regulatory breaches and other grievances.
2. Cellmore denied that it breached any retainer, duty of care or fiduciary duty allegedly owed to Mr Funston:

(a) Although Mr Funston's essential complaint that Cellmore did not provide him a copy of Mr Senaratne's written offer is not a matter that lends itself to a claim for negligence,[59] nevertheless Cellmore passed on the November Offer to Mr Funston:

(i) Cellmore received the unsolicited verbal offer from Mr Senaratne on around 6 November 2017, being after the expiry of the ESA;

(ii) Mr Johnstone gave evidence that on the morning of 6 November 2017, he telephoned Mr Funston to advise him of the offer and that Mr Johnstone:

"said that 'We have a verbal offer, an expression of interest if you like, of $1,350,000' and my recollection is that Mr Funston said, 'You know what I fucking want'."

(iii) Mr Johnstone also informed Mr Funston of the offer by email on that date; and

(iv) Mr Funston never indicated in writing that he had any intention of accepting the offer.

(b) In accordance with Mr Funston's direction to "[g]et it signed up on a contract with an [sic] deposit then I will be in a position to entertain it", by which he authorised Cellmore to continue to act as his agent for that limited purpose, Cellmore obtained a written offer from Mr Senaratne on 8 November 2017.[60]

(c) It was not a breach of duty of care for Mr Wheeler to request Mr Funston to provide Cellmore with his authority by signing a seven-day ESA before Cellmore provided him with the written offer. It was entirely legitimate for Cellmore, in light of Mr Funston's allegations that it had acted without his authority and his threats, to seek a seven-day authority before taking any further steps.[61] Mr Wheeler did not refuse to provide Mr Funston with the written offer.

(d) As Mr Funston failed and refused to sign the new authority to enable Cellmore to act further for him in respect of the November Offer and instead asserted that Cellmore had acted without his authority, including that: "It's highly likely you will not receive any commission but believe [sic] that will be the least of your problems..." any authority ended as did any duty of care.

(e) Mr Funston cannot complain that Cellmore ceased to act by reason of his own decision to refuse to agree to a new authority.

(f) For the Court to hold otherwise would call into question the basis upon which any professional may take legitimate steps to protect its own interests. For instance, it would call into question whether a law firm may refuse to continue to act for a client who refuses to agree to its proposed retainer letter and says that they will not pay it for its services.

1. Had it been necessary to determine, I would not have been satisfied that Cellmore breached any duty of care as alleged.
2. In relation to Mr Funston's allegation that Cellmore breached its duty of care to Mr Funston by making the On Hold Representation, for the reasons set out above, I am not satisfied that the On Hold Representation was made. In respect of the Agency Representations, I am not satisfied that they were false.
3. In respect of the Rejection of Offer Representation, having regard to my findings above including that Mr Wheeler's conduct was not inconsistent with a reasonable understanding of Mr Funston's position, his conduct would not have amounted to a failure to take reasonable care in the provision of Cellmore's services to Mr Funston.
4. I would not have been satisfied that Cellmore breached any duty of care by "hiding" the internet listing or continuing to inform Mr Funston of interest in the Property in circumstances where Mr Funston:

(a) gave conflicting instructions to remove all the internet listings for the Property whilst continuing to accept potential buyers introduced through Cellmore; and

(b) instructed Cellmore, "[y]ou sell the property and you'll get your money" and that "There is one easy way to resolve this matter [the Advertising Invoice] and that is for me to get the property sold as soon as possible."

1. In that context, I consider that Cellmore's decision to "hide" the listing was reasonable in the circumstances for the reasons given by Mr Way:

"...if Mr Funston changed his mind again about selling the property and maybe put a reasonable price on it, we didn't have to advertise or -re-subscribe the property to the Internet and incur a whole lot of other - a new lot of advertising costs...if he changed his mind again, we could just put the address back on it and move forward without incurring an additional internet cost."

1. I would not have been satisfied that any duty to take reasonable care in the provision of services was breached by Cellmore requesting Mr Funston to sign a seven-day authority before providing him with the written offer. I would not have been satisfied that by doing so, Cellmore pursued its own interests to the disadvantage of Mr Funston as alleged. Rather, Cellmore took reasonable steps to protect its position:

(a) Cellmore's concern to protect its position was well founded. Mr Funston himself gave evidence of his view that Cellmore would not be entitled to commission or outgoings until the authority was signed.

(b) Mr Funston's view at the time Mr Wheeler sent him an authority to sign, was that "they [Cellmore] don't have an authority. They are not entitled to any commission at that stage. They are not entitled to any commission and I wanted him to know that."

(c) Mr Funston had engaged other agents to assist in the sale of the Property.[62]

1. There is an inherent tension in Mr Funston's case that Cellmore was not authorised to act as his agent from 22 August 2017, but at the same time relying on duties arising from Cellmore acting as Mr Funston's agent for the purpose of alleging breach of duty.
2. Whether or not Cellmore would have been entitled to commission having regard to cl 1.4 of the ESA is not to the point.[63] In the absence of a signed ESA and in the context of Mr Funston's changing and conflicting instructions, I accept Mr Tesarsch's submission that it was reasonable for Cellmore, in view of Mr Funston's allegations that it had acted without his authority, and his threats, to seek a seven-day authority before taking any further steps.
3. Even if I had found that Cellmore ought to have passed on the written offer to Mr Funston despite the 9 November 2017 email, and that in not doing so Cellmore breached a duty of care, I am not satisfied Mr Funston suffered any loss or damage as set out below.

(8) Did Cellmore owe Funston any fiduciary duty? If yes, what was the scope of the fiduciary duty?

1. Mr Goldblatt submitted that Cellmore owed Mr Funston a fiduciary duty which required it to act in Mr Funston's best interests and to cease acting if doing so would place their interests in conflict with those of Mr Funston.[64] This duty also required Cellmore to convey to Mr Funston any offers which it received,[65] and to keep him informed of all material matters in relation to the Property.[66]
2. The Court should find that even after the expiration of the ESA on 21 August 2017, Cellmore continued to owe duties to Mr Funston in light of their conduct of representing to the world at large that it was and continued to be Mr Funston's agent.

1. Cellmore submitted that Mr Funston's formulation of the alleged fiduciary duty is defective, insofar as it alleges anything other than a duty to act in good faith and to avoid acting in a conflict of interest without informed consent.[67]
2. Cellmore did not dispute that it owed Mr Funston certain fiduciary duties during the term of the ESA. However, there was a watershed moment on 9 November 2017 when Mr Funston emailed Mr Wheeler and stated "[y]ou don't have my authority". That is the point at which any agency relationship terminated. Those fiduciary duties did not continue once Mr Funston refused to sign a new authority and sent the email on 9 November 2017.
3. There are only limited circumstances in which a fiduciary's duties extend beyond the termination of its retainer, and the present is not such a case.[68] In the present case, there was no conflict of interest as was the case in Oliver Hume v Investa. Rather, by not providing Mr Funston a copy of Mr Senaratne's offer, Cellmore took the position that it could not act for him any further until Mr Funston provided it with an authority. That is precisely the position that Mr Funston now contends that Cellmore should have adopted: to cease acting if doing so would place its interests in conflict with those of Mr Funston.

1. In George T Collings (Aust) Pty Ltd v H.F. Stevenson Pty Ltd,[69] Nathan J held that:

"The relationship of principle and agent is one of the few definitely recognized categories where fiduciary duties arise between the parties. The relationships of real estate agent and client is a traditional category and fiduciary relationship...Fundamental to a fiduciary relationship is the obligation for both parties to act upon the basis mutual trust and confidence and the duty of disclosure is vital to this..."[70]

1. In that case, in relation to periods during which the real estate agent continued to search for a purchaser in the absence of an exclusive agency agreement, Nathan J was satisfied that:

"...the relationship revived thereafter for those intermittent periods when Collings had been authorized by Capuano to continue to search for a purchaser. In March 1989 Mr Cini enquired whether the property was still for sale. The only feasible inference from this enquiry is that he thought the relationship had lapsed, possibly because of his inaction. Mr Vinci also enquired after the emergence of another agent. Both these events revived the fiduciary duty and obliged Collings to be frank with Mrs Capuano in asserting a right as a general agent..."[71]

1. In Grimaldi v Chameleon Mining NL (No 2),[72] it was held that a person will likely owe a fiduciary duty in the following circumstances:

"...when and insofar as that person has undertaken to perform such a function for, or has assumed such a responsibility to, another as would thereby reasonably entitle that other to expect that he or she will act in that other's interest to the exclusion of his or her own or a third party's interest".[73]

1. In relation to the question whether fiduciary duties continue after termination of the relationship giving rise to those duties in Victoria, fiduciary duties "may survive termination of the relationship that first called those duties into being."[74]
2. In Schmidt v AHRKalimpa Pty Ltd,[75] the court acknowledged that:

"...there is authority in jurisdictions outside Victoria to the effect that a fiduciary duty does not survive the termination of the relationship that gave rise to it. However, in our view, in the absence of a contrary decision by the High Court, the law in Victoria is as stated by this Court in Edmonds. That is, depending on the circumstances of a particular case, fiduciary duties may survive the termination of the relationship that first called those duties into being."[76]

1. In _Edmond_s, the fiduciary duty arose before the director's resignation and that resignation was prompted or influenced by the desire to obtain a corporate opportunity to which the director was led by reason of his participation in the fiduciary relationship.
2. In Oliver Hume v Investa, a director of a real estate agency entered into an agreement for profit sharing from the sale of a particular lot without disclosing his conflict of interest to the client. In that decision, Greenwood J (with whom White J agreed) determined the question whether Oliver Hume had breached its fiduciary duty (in circumstances where its retainer had been terminated) by reference to whether it had breached fiduciary obligations before its retainer was terminated.[77]

1. It is unnecessary for me to determine this question as even if a fiduciary duty was owed and Cellmore breached it as alleged, for the reasons set out below, Mr Funston has suffered no loss or damage.
2. Had it been necessary to determine, I would have been satisfied that Cellmore was in a fiduciary relationship with Mr Funston during the periods it performed the functions of his real estate agent. However, the relationship of principal and agent was terminated on 9 November 2017, as was any fiduciary relationship.[78]
3. Fundamental to a fiduciary relationship is an obligation for both parties to act upon the basis of mutual trust and confidence. As evidenced by the 9 November 2017 email and the correspondence from Mr Funston leading up to that email, Mr Funston dealt with Cellmore with distrust and a lack of confidence.

1. Mr Funston submitted that Cellmore breached its fiduciary duty to Mr Funston by:

(a) refusing to remove the Property from online advertising until Mr Funston paid the disputed marketing expenses;

(b) refusing to provide Mr Funston with the November Offer unless Mr Funston provided them a further authority;

(c) engaging in the Agency Representations;

(d) making the Rejection of Offer Representation, in circumstances where Cellmore knew that Mr Funston had not in fact rejected the November Offer; and

(e) making the On Hold Representation, while knowing them to be untrue.

1. Cellmore submitted that it cannot reasonably be alleged that Cellmore acted in a conflict of interest, or preferred its interests to those of Mr Funston, in circumstances where Mr Funston had told it in effect that its retainer was at an end, and all that it had done was seek his further authority. Put simply, from at the latest 9 November 2017, Cellmore was no longer his agent.
2. All that Cellmore was doing was seeking to protect its legitimate professional interests and its entitlement to be paid for its work. It would be a big step for the Court to find that that is a breach of fiduciary duty.

1. Had it been necessary to determine, for the reasons set out above I would not have considered that by taking steps to obtain an authority in writing from Mr Funston before passing on the written offer, Cellmore acted in a conflict of interest or otherwise breached any fiduciary duty.
2. I would have accepted Cellmore's submission that it was not a breach of fiduciary duty for Cellmore to seek a lawful authority to protect itself from Mr Funston's ongoing assertions that Cellmore did not have his lawful authority.
3. For the reasons set out above, I would have rejected Mr Funston's other allegations of breach of fiduciary duty.

(10) Has Funston suffered any loss or damage as a result of any breach of duty of care or fiduciary duty?

1. Mr Funston submitted that the above breaches of duty owed by Cellmore were causative of his loss. Firstly, they prevented him from fully considering the terms of the November Offer and therefore caused him eventually to accept an offer that was $50,000 lower than the November Offer approximately two years later. Had Cellmore passed the written offer onto Mr Funston, he would have accepted it.
2. Secondly, the breaches deterred prospective purchasers from making an offer on the Property.
3. Had Cellmore not made the Representations, Mr Funston would have had the opportunity to consider the November Offer and other offers that may have been made on the Property by prospective purchasers who contacted Cellmore in relation to the Property.

1. Mr Tesarsch submitted that even if the written offer had been passed on to Mr Funston, he would not have accepted it. His price expectations for the Property were and remained far in excess of the November Offer.
2. The Court ought to reject Mr Funston's self-serving statements given with the benefit of hindsight years after the event, that he would have accepted the written offer if it had been provided to him. There is no supporting contemporaneous evidence, rather the objective evidence is to the contrary.
3. There is no evidence that any of the other alleged breaches caused Mr Funston to suffer any loss or damage.

1. Even if Cellmore breached a duty of care or fiduciary duty owed to Mr Funston, I am not satisfied that Mr Funston suffered any loss or damage.
2. There is no evidence:

(a) that any prospective purchasers were deterred from making an offer on the Property;

(b) that Mr Funston could not sell the property with another real estate agent until Cellmore deleted the internet listing or that it failed to sell because Cellmore "hid" the advertising as opposed to "deleting" it;

(c) that the listing being "hidden" impeded Mr Funston's ability to sell the property or the price he achieved for it. To the contrary, the evidence shows that Mr Funston signed authorities with many other agents or gave verbal authorities to sell the property as set out below;

(d) of any lost commercial opportunity or that any prospective purchaser had any interest in making an offer at a level that Mr Funston would have dad any interest in accepting; and

(e) that anything Cellmore said or did affected the marketing of the Property by other agents that Mr Funston retained.

1. I reject Mr Funston's evidence that had he been provided with the signed contract for $1.35m, he would have accepted it. The observations of Sackville AJA in Stealth Enterprises Pty Ltd v Calliden Insurance Ltd are apposite:[79]

"Courts have repeatedly warned about the dangers of evidence as to likely conduct in hypothetical situations where the evidence is given through the 'prism of hindsight'. These warnings have generally been given in the context of evidence by injured plaintiffs as to what they would have done had they known of a particular risk which in fact eventuated...Evidence of this kind needs to be assessed not simply on the basis of the credit of the witness but also by reference to the objective probabilities."[80]

1. The November offer was well below Mr Funston's committed price expectation for the Property which remained consistent over a long period of time:

(a) When Lijiao Zhang made an offer for $1.35m on 28 November 2016, that amount was crossed out and Mr Funston wrote "vendor accept" $1.525m.

(b) Before Mr Funston sent the signed GSA to Mr Wheeler by email on 10 June 2017, he increased the vendor's price from $1.5m to $1.6m. Mr Funston accepted that this was his figure.

(c) The ESA dated 7 July 2017 recorded the vendor's price as being $1.495m.

(d) By email on 5 September 2017, Mr Way told Mr Funston that his asking price of $1.499m as "stretching buyers too far" and suggested revising the price to $1.395m or close to. Although Mr Funston gave evidence he said he would think about it, he agreed he never told Cellmore that he would accept anything like $1.35m.

(e) On 6 October 2017, Mr Funston signed a GSA with Raine and Horne. The vendor's price was stated to be $1.5m and that was Mr Funston's figure.

(f) Even in December 2017, when the Property had been on the market for a significant length of time, Mr Funston was holding out for offers around $1.45m. Although Mr Funston said "I don't negotiate by telling them my bottom line", in context of the evidence of Mr Funston's committed view of the value of the Property, the best inference is that even in December 2017, Mr Funston was not prepared to sell at below $1.45m.

(g) Mr Funston signed an ESA with Le & Co Estate Agents on 2 January 2018. In cross-examination, Mr Funston accepted that the Vendor's price of $1.5m was subsequently crossed out and a figure of $1.6m was added in its place. Mr Funston agreed that he "stipulated" that price.

(h) In March 2018, Mr Funston wrote to Cellmore's lawyers stating that when Cellmore agreed to purchase his property for $1.7m, this matter would be at an end.

(i) On 23 July 2018, Wei Yan made an offer to purchase for $1.23m which was subsequently increased to $1.31m. In response, Mr Funston counter-offered to accept $1.53m.

1. Although Mr Funston said he wanted to know the terms of the offer to "make me interested", and told Cellmore to "[g]et it signed up on a contract with an [sic] deposit then I will be in a position to entertain it", I am satisfied that Mr Funston would not have accepted the offer at that level:

(a) I do not consider that Mr Funston's response to Mr Johnstone in his email of 6 November 2017 ("Get it signed up on a contract with an [sic] deposit then I will be in a position to entertain it") supports an inference that he was willing to accept the offer.

(i) Mr Funston had previously given a similar response in relation to an earlier verbal offer by Mr Senaratne of $1.3m which Mr Funston would not have and did not accept.

(ii) On other occasions when Mr Funston received a written offer, he rejected that offer and amended the document to make a counter-offer. When Lijiao Zhang made an offer for $1.35m on 28 November 2016, Mr Funston crossed out the amount and wrote "vendor accept" $1.525m.On 23 July 2018, Wei Yan made an offer to purchase for $1.23m which was subsequently increased to $1.31m. Mr Funston counter-offered to accept $1.53m.

(b) The offer was open for two days with a special condition that it was subject to legal review. Mr Funston had previously rejected conditional offers.

(c) Had Mr Funston been prepared to accept that price subject to consideration of the other terms and conditions, one would have expected him to have:

(i) signed the authority and received the contract so that he could consider the other terms and conditions. It was a limited seven-day authority. The commission percentage that was noted on the authority was the same at that sale price as on the original ESA with no expenses; and

(ii) responded to Mr Way's email of 10 November 2017 in which Mr Way said he would "pass on this one".

1. Further, I do not accept Mr Funston's evidence that in a phone call with Mr Johnstone on 9 November 2017, in response to Mr Johnstone informing him of receipt of the written offer, Mr Funston said "[t]hat's great." Had that been Mr Funston's sentiment in respect of the November Offer, I consider it would have been reflected in his email to Mr Wheeler the following day. Instead, Mr Funston stated:

"Mark Johnston phoned me yesterday morning and advised he has a written offer on a contract from a buyer and I instructed him to email me the contract. I requested Mark comply with regulation 24."

1. Rather, I consider that Mr Funston did not want to give Cellmore a signed authority because there was no prospect he would accept the November Offer and he was 'hedging his bets' with other agents whom he had authorised to sell the property:

(a) On 6 November 2017 at 12.02pm, Jessica See of Enrich Realty emailed Mr Funston thanking him for giving Enrich Property the opportunity to assist him in the marketing and selling of his property.

(b) Later on the same day at 8.38pm, Mr Funston told Mr Johnstone to get the November Offer signed up on a contract.

1. That Mr Funston used multiple agents with a view to maximising the price to be obtained for the Property is evidenced by his email on 23 December 2017 to "Eric" from Ascend, another real estate agency in which Mr Funston stated:

"As I mentioned to you the other day I have a buyer that is very interested in Strabane Avenue, she has now made a verbal offer of $1,425,000 on 30 day settlement. I am now very keen to sell it so when it's in writing I think I will accept it.

So if you or Yi or any other buyer who offers something better than that I will sell it. You can inspect any time just call me."[81] (emphasis added)

1. Had Mr Funston had even the slightest interest in the November Offer, he would likely have contacted another agent to see whether they could do any better. I consider he did not because the November Officer was simply too low.
2. Mr Funston continued to engage multiple agents to sell the Property into 2018, all with a vendor's price significantly higher than the November Offer:

(a) On 2 January 2018, Mr Funston signed an ESA with Le & Co Estate Agents, which included a vendor's price of $1.65m.

(b) On 31 March 2018, Mr Funston signed an ESA with First National Real Estate Lindellas in which the vendor's price was recorded as $1.65m.

(c) On 14 May 2018, Mr Funston signed an Exclusive Auction Authority with Stockdale & Leggo (Blackburn) in which the Agent's estimate of selling range was $1.5 and $1.6m and the Vendor's reserve price was "To Be Advised".

(d) On 23 June 2018, the Property was auctioned by Stockdale & Leggo (Blackburn) and it was passed in on a vendor's bid of $1.425m. Mr Funston agreed that that meant that the vendor's reserve price was above that.

(e) On 6 August 2018, Mr Funston signed an ESA with Biggin & Scott Glen Waverley in which the agent's estimate of selling price was noted as being $1.6m. The vendor's price was noted "TBA".

(f) On 23 October 2018, Mr Funston entered into an ESA with RT Edgar Boroondara with an agent's estimate of $1.4 to $1.54m and a vendor's price noted as "TBA".

(g) On 2 November 2018, Mr Funston entered into a GSA with Ivy Real Estate with the vendor's price stated as being $1.6m.

(h) On 5 November 2018, Mr Funston entered into an ESA with LLC Real Estate with the vendor price stated as $1.6m. Mr Funston accepted he agreed with that price.

(i) On 28 March 2019, Mr Funston entered into an ESA with LLC Real Estate with the vendor's price stated at $1.5m.

(j) On 4 April 2019, Mr Funston entered into a GSA with Adele Jung of Inline Real Estate with the vendor's price stated as $1.5m.

1. I reject Mr Funston's claim that he would have accepted the November Offer had the written offer been sent to him because he was in financial distress as evidenced by his need to borrow funds from his friend, Mr Brian Smith, and from Mr David Cheong.

(a) Mr Funston agreed in cross-examination that the purpose of the loans from both Mr Smith and Mr Cheong were for the purpose of making a contribution into his superannuation fund and not to alleviate financial distress.

(b) There is no evidence that any monies from them was paid into his personal account.

1. I am not satisfied that Mr Funston was in financial distress at the time of the November Offer such that he was motivated to sell the Property at a 'low' price:

(a) In Mr Funston's email to Mr Yeoh of Enrich Realty on 23 December 2017, he stated "I have decided ...I definitely want to sell Strabane asap and I have prepared to look at offers around $1,450,000." This email indicates not only a shift in his attitude towards or motivation to sell the Property but also that he was still holding onto offers around $1.45m.

(b) That email to Mr Yeoh was sent after the auction of the Sheehans Road Property, after which it was passed in on around 14 or 15 December 2017.

(c) Mr Funston accepted he did not tell Cellmore that he needed to sell the Property urgently.

(d) There is an absence of documentary evidence to support Mr Funston's assertion that he was being given a "hard time" by the National Australia Bank (NAB). It is implausible that the NAB would have placed pressure on him without that being evidenced in writing.

1. Even when Mr Funston delivered a detailed and forceful letter of complaint to Mr Wheeler dated 12 December 2018, more than a year after the event, he did not complain that he did not receive the written offer or say that he would have accepted it. Had that been Mr Funston's genuinely held position at the time, he would have said so.
2. Even if made, there is no evidence of any lost opportunity to sell the Property consequent on the making of the On Hold Representation.
3. I would not have been satisfied that Mr Funston suffered any loss or damage resulting from the Cellmore caveat lodgement. It was removed prior to the settlement of the Property when it eventually sold and settled on 28 June 2019. There is no evidence that the lodgement of the caveat affected the price paid for the Property.

F. Misleading or deceptive conduct - s 18(1) ACL

(11) Did Cellmore contravene s 18(1) of the ACL by making the Representations?

a. Were the Representations made in trade or commerce?

1. No issue was taken that if the Representations were made, they were made in trade or commerce.
   1. Were the Representations misleading or deceptive or likely to mislead or deceive?

1. Mr Funston submitted that Cellmore engaged in misleading or deceptive conduct and therefore contravened ss 18(1) and 30(1) of the ACL by making:

(a) the Standard Form Representation. It was false and misleading because:

(i) although the ESA looked like the REIV standard form contract and contained a REIV watermark, the form had been altered by Cellmore to include a charging clause;

(ii) deleting or obscuring the copyright logo and warning at the bottom of each page of the standard form document;

(iii) Cellmore knew that the ESA included the charging clause; and

(iv) the charging clause provided Cellmore with the right (which it exercised) to lodge a caveat against the Property. Mr Funston relied on Cellmore's representations to him in respect of the ESA. Had the charging clause been brought to his attention, Mr Funston claimed that he would not have signed the ESA.

(b) the Agency Representations. Mr Funston submitted that they were misleading or deceptive as they represented to the world at large that Cellmore had Mr Funston's approval and authorisation to sell the Property.

(i) By reason of the Agency Representations, Mr Funston was inhibited in his ability to sell the Property.

(ii) As Cellmore did not have authority to act as Mr Funston's agent in respect of the Property during the relevant period, members of the public still approached Cellmore, as opposed to other agents actually engaged by Mr Funston.

(iii) Cellmore was aware of the authority issue, as evidenced by Mr Funston's email to Mr Wheeler on 9 November 2017, in which he stated that Cellmore's role in advertising the Property had ceased.

(c) No written submissions were made in respect of the Rejection of Offer Representation and the On Hold Representation.

1. Cellmore submitted that the Representations were either not made, or if made, were not false.

1. Section 18(1) of the ACL provides that a person must not in trade or commerce engage in misleading or deceptive conduct or conduct that is likely to mislead or deceive.
2. Conduct is likely to mislead and deceive if "it has a tendency to lead a person into error".[82]
3. The test for determining whether conduct is misleading is an objective one: whether the conduct in question is reasonably capable of misleading.[83]
4. Where the conduct at issue is directed at identified persons, whether the conduct is misleading must be assessed by reference to the circumstances of the individual applicants. In Campbell v Backoffice, French CJ held:

"In the case of an individual it is not necessary that he or she be constructed into a hypothetical "ordinary person". Characterisation may proceed by reference to the circumstances and context of the questioned conduct. The state of knowledge of the person to whom the conduct is directed may be relevant, at least in so far as it relates to the content and circumstances of the conduct."[84]

1. Barrett JA (with Bathurst CJ and Beazley P agreeing) in Traderight (NSW) Pty Ltd v Bank of Queensland Ltd:[85]

"It is the quality of the conduct in terms of capacity or tendency, objectively ascertained, that must be judged, not its actual impact on a particular person. Where ... the conduct consists of a representation actively made to a particular person in a one-on-one situation, the quality of the conduct is to be ascertained by reference to the context in which the parties are situated, including such matters as their respective states of prior knowledge and understanding. It is within the whole of that context that the court must address the question whether the representation consists of a representation actively made to a particular person in a one-on-one situation, the quality of the conduct is to be ascertained by reference to the representee**.** The question whether the representee relied or acted upon the representation is irrelevant to that inquiry."[86]

1. I am not satisfied that Cellmore engaged in misleading or deceptive conduct by the making of the alleged Representations.
2. I have found that the Standard Form Representation was not made.
3. Even if it was made and was capable of leading a person in the position of Mr Funston with his state of knowledge into error such as to constitute a contravention s 18 of the ACL, for the reasons set out above, Mr Funston did not rely on the alleged Standard Form Representation and he was not induced to enter into a contract with Cellmore by signing the ESA. Even if made, and considered to be misleading or deceptive, Mr Funston did not suffer any loss because of the Standard Form Representation.
4. In relation to the Agency Representations, I have found they were not false or untrue. In any case there is no evidence that Mr Funston was inhibited in his ability to sell the Property because of the making of the Agency Representations.
5. No written submissions were made in respect of the Rejection of Offer Representation and the On Hold Representation. Mr Goldblatt indicated he would rely on his oral submissions, however no oral submissions were made in respect of these alleged representations in the context of misleading or deceptive conduct. That is perhaps not surprising as neither of the representations were alleged to have been made to Mr Funston. For the reasons set out below, I find that even if they were made and were false, Mr Funston suffered no loss.

G. Making false or misleading statements - s 30(1) ACL

(12) Did Cellmore contravene ss 30(1)(a) and/or 30(1)(c) of the ACL by making the Representations?

1. No, for the reasons set out above in respect of the alleged misleading or deceptive conduct and in respect of the Representations.

(13) Did Cellmore engage in conduct in trade and commerce in connection with the supply of services to Funston that was, in all circumstances, unconscionable and contrary to s 21 of the ACL by:

b. harassment for payment of the outstanding marketing invoice?

1. The allegations of breaches of ss 21, 23 and 50 of the ACL were not addressed in Mr Funston's written closing submissions at all, including in reply to Cellmore's written submissions. In final oral submissions, despite the issues not having been addressed in written submissions, Mr Funston pressed them.
2. In relation to s 21 of the ACL, Mr Goldblatt relied on the decision of Collings v Stevenson in support of the proposition that Cellmore's conduct was unconscionable. In particular Mr Goldblatt submitted that the Court ought to find that Mr Way abused Mr Funston, swore at him, wrote emails that were sarcastic, insulting and hurtful.

1. Cellmore submitted that there was no unconscionability for the purposes of s 21 of the ACL, given (inter alia) that:

(a) there was no disparity of bargaining power;

(b) Mr Funston was able to understand the ESA;

(c) no undue influence or pressure was exerted and no unfair tactics were used; and

(d) otherwise, Mr Funston was not suffering any disability and was very experienced in dealing with estate agents. As noted above, he engaged many other agents to sell the Property, and if he was not content with the terms of Cellmore's ESA, he did not have to sign it.

1. There was no harassment or improper conduct by Cellmore as it was taking legitimate steps to recover payment of agreed outgoings. Rather, the documents and correspondence themselves demonstrate that Mr Funston adopted a highly aggressive and confrontational approach.

(a) Mr Funston sent threatening communications: for example, a lengthy email he sent to Mr Way on 9 October 2017, alleging that Cellmore had breached s 55 of the Act for which the penalty was 2 years' imprisonment, offering Cellmore the choice to mediate (and purchase the Property), and stating that otherwise, he would take the matter to Consumer Affairs Victoria and the press.

(b) In another email on 19 March 2018, Mr Funston required Cellmore to purchase the Property at a price of $1.7m.

(c) Mr Funston also delivered a threatening letter to Mr Wheeler some time around 12 December 2018, which Mr Wheeler deposed was hand-delivered.

(d) Mr Wheeler deposed that Mr Funston was constantly abusive to him, telling him that he was "fucking useless" and that he had never experienced anything remotely close to this level of abuse in his 25 years' experience in investment banking.

1. Mr Way denied that he was abusive to Mr Funston in a phone call in September 2017. The Court ought to prefer the evidence of Mr Way.
2. In relation to s 55 of the Act, Cellmore submitted:

(a) s 55 is a penalty provision, which does not found a civil cause of action; and

(b) to Cellmore's knowledge, courts have not yet determined whether a charging that secures payment of a real estate agent's expenses would be "an interest in land" for the purposes of s 55. That would be an issue that requires detailed consideration of the terms and legislative purpose of s 55 (and the Act overall). In this respect, that s 55 is headed "Restriction on agent purchasing property", and that the numerous circumstances listed in s 55(3) do not extend to charging clauses, the present case is not an appropriate vehicle for the Court to determine the issue, given (inter alia) that:

(i) s 55 does not state that a charging in favour of an estate agent is void; and

(ii) in his counterclaim, Mr Funston accepts at [32] that Cellmore's charging clause was effective to allow for a caveat (and in any event, it was removed).

1. In determining whether conduct is unconscionable conduct under s 21 of the ACL, the Court may have regard to the following matters:

(a) the relative strengths of the bargaining positions of the supplier and the customer;[87]

(b) whether, as a result of conduct engaged in by the supplier, the customer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier;[88]

(c) whether the customer was able to understand any documents relating to the supply of the services;[89] and

(d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against the customer by the supplier.[90]

1. What constitutes an unfair tactic so as to amount to unconscionable conduct will be informed by the surrounding context, including whether the transaction is between a business and consumers or between two businesses.[91]
2. In Collings v Stephenson, the plaintiff real estate agent sued for its unpaid commission in reliance on a clause in a standard form non-residential property sole agency agreement of the Real Estate and Stock Institute of Victoria (RESI). The defendant appointed Collings as a sole agent using a RESI pro forma document. Almost three months after the expiration of the last sole agency agreement, Collings produced a willing and able purchaser, but Stevenson declined to sell. The plaintiff claimed commission based on a clause embedded in the authority which created a general agency of indeterminate duration.
3. Nathan J found that:

"It was unconscionable to imbed in a pro forma contract, a term inconsistent with its stated purpose. In my view, it is also unconscionable to impose upon a vendor a contingent liability to pay commission for an indeterminate period after the expiration of the exclusive term."

It affronts justice and equity to embed in a contract, purporting to create an exclusive agency for a limited term a condition which subverts that objective and creates a general agency of indeterminate duration. Added to that burden is the contingent financial obligation of a vendor, arising out of circumstances where the activities of the agent may have accounted for nought."[92]

1. In Productivity Partners v Australian Competition and Consumer Commission & Anor,[93] the High Court provided the following in respect of the features of unconscionable conduct:

(a) Conduct will not be characterised as unconscionable unless it is "outside societal norms of acceptable commercial behaviour [so] as to warrant condemnation as conduct that is offensive to conscience."[94]

(b) "[M]oral obloquy" or "some form of moral turpitude, remains an important measure of unconscionable conduct."[95]

1. While almost all contractual relationships involve inequalities, Keane J in Paciocco & Anor v Australia and New Zealand Banking Group Ltd[96] stated the following:

"While a disparity in bargaining power may be necessary to attract the operation of the provision, the mere existence of the disparity is not sufficient to do so. The existence of a disparity in bargaining power, which is an all-pervading feature of a capitalist economy, does not establish that the party which enjoys the superior powers acts unconscionably by exercising it."[97]

1. There must be direct evidence of some deliberate misuse of the bargaining positions between the parties in a way that offends good conscience.[98]

1. I am not satisfied that the inclusion of the charging clause in the ESA constituted unconscionable conduct in the circumstances of this case having regard to the findings made in respect of the alleged Standard Form Representation.
2. There was no disparity of bargaining power in favour of Cellmore,[99] Mr Funston well understood the ESA and the presence of the charging clause and no unfair tactics by Cellmore were used.
3. Central to the finding of unconscionable conduct in Collings v Stevenson were the following factual findings:

(a) The agent led the principal's representative to believe its entitlement to commission expired with the exclusive period.

(b) The obligation to pay commission was of an indefinite nature and thereby was onerous and unfair.

(c) The principal was enticed to enter into the agreement by the assurance of the agent that no other onerous provisions obtained.

(d) The agent knew that the principal was relying on them to be utterly frank and honest with her and with the assurances made in mind, she placed herself in an unequal position with the agent.

(e) The agent placed itself in a superior position which enabled it to extract notional agreement to the unconscionable term.

1. Those circumstances are not present here. Mr Funston was well able to protect himself. In various emails to Cellmore between 15 September and 9 November 2017, Mr Funston claimed:

(a) "My experiences in the property industry includes having been employed, because of my industry knowledge and experience, in the compliance and investigation section of the Estate Agents Board under the direction of the Attorney General of Victoria";

(b) "I have a good deal of knowledge of charge clauses since Fletchers tried this little trick on me some time ago following the same overcharging deceit they uses";

(c) "I advised you, I was a former compliance officer with the Estate Agents Board so I find it hard to understand why you would think bullying me was an effective way to resolve our dispute. I am more than happy to fight with you through the courts as I am extremely confident I know the law in this area very well";

(d) "I am a former compliance officer and estate agent for many years - I know the laws of the industry very well;"

(e) "I am a former compliance officer with the Estate Agents Board, I have a very good knowledge of estate agency laws and laws of evidence;" and

(f) "I previously told you about my issues with Fletcher and their use of a similar clause. You are going to be toast with the OIEC - it will be all over the newspapers and TV...trust I know what I am doing and trust me your OIEC is nothing but talk he has no idea of the law."

1. Mr Funston was at liberty to not engage Cellmore. Albeit I have found that Mr Funston was well aware of the charging clause, on his own evidence, he would not have signed the ESA had he known it contained the charging clause. As demonstrated by the evidence, he was prepared to deal with and did deal with many other agents.
2. For the reasons set out above, I am not satisfied that:

(a) Cellmore's attempts to enforce what it considered to be its contractual right to payment for the outstanding advertising account[100] amounted to harassment constituting unconscionable conduct in the circumstances as found above.[101]

(b) Cellmore's conduct is not of "... such a high level of moral impropriety that it could properly be described as 'unconscionable'"[102] despite the evident frustration on the part of Mr Wheeler and Mr Way in some of the correspondence.

(i) I prefer the evidence of Mr Way as to the tone of the phone call with Mr Funston.[103] In his email to Mr Way copying in Ms Mazur on 9 October 2017, Mr Funston stated that Mr Way "left a voicemail messages [sic] of threats". The only voicemail message in evidence which was left after a phone call between Mr Way and Mr Funston was not of that character and supports Mr Way's version of the phone call.

(ii) Mr Way's email to Mr Funston on 10 November 2017 in which he stated that "You have lived up to my expectations and some, You need to get some help! PS With your vast legal knowledge do you know anything about class actions or restraining orders? I suspect there would be a very long list of plaintiffs" is likely one of those emails that Mr Way considers he ought to have written but not sent.

(iii) Nevertheless, considered in context, it was not more than an inappropriate response borne out of frustration, not harassment in the context of the ACL.

(c) Cellmore informing Mr Funston that it would lodge a caveat if the outstanding advertising account was not paid or that the lodgement of the caveat constituted unconscionable conduct. I consider Cellmore was simply providing notice to Mr Funston of the steps it was intending to take in circumstances where I have found the charging clause was discussed with Mr Funston, he was well aware of its presence and went ahead and engaged Cellmore.

(d) Cellmore's lodgement of the caveat. Informed by the surrounding context addressed in these reasons, I do not consider lodgement of the caveat was an unfair tactic amounting to unconscionable conduct. Further, I am not satisfied that Mr Funston suffered any loss or damage by the lodgement of the caveat.

(14) Was the charging clause an unfair term pursuant to s23 of the ACL and therefore void?

1. Mr Funston did not address this issue in written submissions and barely addressed it in oral submissions. Mr Goldblatt submitted that, although Mr Funston's evidence was that he wasn't told about the charging clause, Mr Wheeler's evidence was to the effect that when he told Mr Funston about the charging clause and Mr Funston objected to it, Mr Wheeler said "take it or leave it". That's an unfair contract term.

1. Cellmore submitted that s 23 of the ACL does not apply in these circumstances. Cellmore's charging clause:

(a) did not result in a significant imbalance in the parties' rights and obligations;

(b) was transparent (and Mr Funston was well aware of its effect, and had previously litigated in relation to a charging clause); and

(c) is not of a kind which falls within the examples provided in s 25 of the ACL.

1. Section 23(1) of the ACL renders void an unfair term of a consumer contract or small business contract. In summary, a term is unfair for the purposes of the regime is found in s 24(1), which provides that a term will of a consumer contract or small business contract will be "unfair" if it:

(a) would cause significant imbalance in the parties' rights and obligations arising under the contract;

(b) is not necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and

(c) would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

1. The time at which unfairness is to be assessed is the time at which the contract is formed.[104]
2. In determining whether a contract term is unfair, a court may consider:

"... such matters as it thinks relevant, but must take into account the following:

1. In Pasion v Creative Realty Pty Ltd (Civil Claims),[106] Member Forde considered a similar clause in a real estate agent's authority to the effect that the vendor charged the Property with the payment of all commission and marketing expenses properly incurred and payable to O'Brien Real Estate, which remain unpaid 30 days after the issue of any invoice." Member Forde was not satisfied:

"...that the clause itself is an unfair contract term. If the commission were not paid, Creative had the right to sue Mr and Mrs Pasion. Giving Creative a right to lodge a caveat for an unpaid commission does not in my opinion cause a significant imbalance to the parties' rights and obligations."[107]

1. It is unnecessary for me to determine this question. Having regard to my findings on the interpretation of s 49A(1) of the Act, Cellmore's claim fails. Since Cellmore's claim has failed there is no question of enforcing the ESA against Mr Funston.
2. Had I needed to determine the question, even if the term was an unfair term and as such Cellmore contravened s 23 of the ACL, such a finding renders the term void. For the reasons set out below, it could not be said that Mr Funston suffered any loss or damage because of Cellmore's conduct. Mr Funston did not rely on the charging clause when entering into the ESA for the reasons set out above. The caveat was removed before settlement.

(15) Did Cellmore engage in undue harassment or coercion in connection the supply of services or payment for services, contrary to s50 of the ACL by:

1. refusing to remove the Property from its advertising unless and until Funston paid a disputed marketing invoice?
2. repeatedly and excessively contacting Funston to demand payment of the disputed invoice, including by way of communications that were derogatory, offensive and abusive?

c. threatening Funston that Cellmore would take him to Court?

1. threatening Funston that Cellmore would lodge a caveat on the Property unless Funston paid the disputed invoice?

1. Mr Funston claims that he suffered anxiety, distress, humiliation, financial pressure and stress as a result of Cellmore's conduct, in particular:

(a) harassing and abusing Mr Funston, including by calling him crazy and a dickhead;

(b) refusing to remove the Property from its advertising unless and until Mr Funston paid disputed sums for marketing expenses to Cellmore; and

(c) threatening to and placing a caveat on the Property.

1. Cellmore contended there was no harassment or improper conduct by Cellmore. Cellmore took legitimate steps to recover payment of agreed outgoings. It was Mr Funston who adopted a highly aggressive and confrontational approach.

1. Section 50 of the ACL provides that a person must not use physical force, or undue harassment or coercion, in connection with the supply of services.
2. There is no definition of "undue harassment or coercion" in the ACL. In Australian Competition and Consumer Commission v Maritime Union of Australia,[108] Hill J explained "undue harassment" to mean:

"persistent disturbance or torment. In the case of a person employed to recover money owing to others...it can extend to cases where there are frequent unwelcome approaches requesting payment of a debt...where the frequency, nature or context of such communications is such that they are calculated to intimidate or demoralize, tire out or exhaust a debtor, rather than merely convey the demand for recovery, the conduct will constitute undue harassment...

It is clear that the word "undue" suggests that what is done must, having regard to the circumstances in which the conduct occurs, extend beyond that which is acceptable or reasonable...The words "undue" when used in relation to harassment, ensures that conduct which amounts to harassment will only amount to a contravention of the section where what is done goes beyond the normal limits which, in the circumstances, society would regard as acceptable or reasonable and not excessive or disproportionate."[109]

1. In the same case, Hill J explained "coercion" as follows:

""Coercion" on the other hand carries with it the connotation of force or compulsion or threats of force or compulsion negating choice or freedom to act... A person may be coerced by another to do something or refrain from doing something, that is to say the format is constrained or restrained from doing something or made to do something by force or threat of force or other compulsion. Whether or not repetition is involved in the concept of harassment, and it usually will be, it is not in the concept of coercion."[110]

1. For the reasons set out above, I do not consider that Cellmore engaged in harassment or coercion in connection with the supply of services.
2. Albeit I have found against Cellmore on the construction of s 49A(1) of the Act and accordingly Cellmore is precluded from recovering the advertising costs under s 50 of the Act, Cellmore's conduct did not go beyond the normal limits which, in the circumstances, society would regard as acceptable or reasonable in seeking to recover what it considered to be a contractual entitlement. The circumstances include that Mr Funston signed the reduced advertising schedule and accepted the costs in the form in which they appeared in the reduced advertising schedule.
3. There were undoubtedly firm emails sent by Mr Way pressing payment from Mr Funston, which revealed a level of frustration with Mr Funston's somewhat confrontational and confusing approach. For example, even after Mr Way left the voicemail for Mr Funston on 25 September 2017, informing him that he would hand the file over to his solicitor if the advertising account was not paid by the end of the week, Mr Funston replied by email the following day, stating that "Friday is ok I should have it all sorted then - if you have the extra invoices that will be even better. In the meantime a sale would be great."
4. As to the content of the telephone conversation between Mr Way and Mr Funston on 25 September 2017, I prefer Mr Way's account.

(a) Mr Funston's account of Mr Way's conduct in the phone call in which he alleges Mr Way lost his cool and called him a "dickhead" and "a fucking idiot", is inconsistent with the firm but measured manner adopted by Mr Way in the voicemail left shortly afterwards. Although Mr Way may well have calmed down before leaving the voicemail as suggested by Mr Funston in evidence, Mr Way's account is supported by Mr Funston's email to Mr Way the following day on 26 September 2017. Mr Funston said that he should have the Advertising Invoice sorted by Friday, in the meantime a sale would be great. Mr Funston said nothing about what he later alleges Mr Way said to him during the phone call.

(b) Mr Funston's allegation that Mr Way said "you are a dickhead" and "you are crazy and everyone knows it" appears in an email to Ms Mazur some days later on 6 October 2017. This email was sent after Mr Way sent Mr Funston two further emails following up on the unpaid advertising invoice, which Mr Funston had indicated should be ok to pay and "have it all sorted" by the end of the previous week.

1. I do not consider that the absence of a response to Mr Funston's email of 6 October 2017 constitutes an admission that what was said in the email was true:

(a) Mr Way's response is in short compass and focussed on informing Mr Funston the matter would be referred to Cellmore's solicitors for debt collection. Mr Way did not otherwise engage with the many allegations made by Mr Funston.

(b) Later that day, Ms Mazur emailed Mr Funston Cellmore's complaint and dispute resolution procedures, providing Mr Funston with information including that if his complaint could not be resolved, he may refer it to the Department of Consumer Affairs or VCAT. There is no evidence that Mr Funston followed any such process.

1. Albeit Mr Way emailed Mr Funston on 21 September 2017 indicating he would remove the Property listing upon payment of the outstanding advertising account, the approach taken by Cellmore in "hiding" the advertising and requesting payment for its outstanding advertising costs does not constitute undue harassment or coercion. Rather, it was a reasonable response by Cellmore in the circumstances addressed above.
2. For the reasons set out above, I do not consider that Cellmore informing Mr Funston that a caveat would be lodged on the Property unless Mr Funston paid the advertising invoice constitutes undue harassment or coercion.

(16) Was Way involved in the alleged contraventions of s18, s21, s30(1) and/or s50 of the ACL?

1. Having regard to my findings, it is unnecessary for me to determine this issue.

(17) Has Funston suffered any loss within the meaning of s236(1) of the ACL by reason of any contravention of the ACL?

(a) a person (the claimant) suffers loss or damage because of the conduct of another person; and

(b) the conduct contravened a provision of Chapter 2 or 3 the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention."

1. Mr Funston claims that he has suffered the following loss and damage:

Loss arising from Rejection of Offer Representation

Damages - interest claimed on A, B and C at penalty rate

Legal costs reasonably incurred from the date of issue of counterclaim

1. Mr Funston's claim fails. Even if I had found that Cellmore breached the ACL, I would not have been satisfied that Mr Funston suffered any loss because of any contravention of the ACL.

(a) Even if the Agency Representations were false or misleading, there is no evidence that the sale of the Property was adversely impacted by the internet listings. Even if some of the advertising was not hidden, there is no evidence that this caused Mr Funston any loss. In fact, the evidence is to the contrary. Mr Funston engaged other agents with their retainers overlapping and entertained and rejected other offers as set out above.

(b) Even if the Rejection of Offer Representation was false or misleading, I have found that Mr Funston would not have accepted the November Offer. The contemporaneous, objective evidence overwhelmingly supports that inference.

(c) Even if the On Hold Representation was made, there is no evidence of any adverse impact on the sale of the Property. The evidence supports an inference that the Property did not sell because Mr Funston's price expectations were too high and it was only after more than two years on the market that Mr Funston lowered his price expectations, and the Property eventually sold for $1.3m on 10 April 2019.[111]

(d) Even if the caveat lodgement was unconscionable under s 21 of the ACL, there is no evidence that the presence of the caveat affected the purchase price that Mr Funston would otherwise have obtained for the Property. As noted above, the caveat was removed before the sale and settlement of the Property.

1. Mr Funston is not entitled to exemplary or aggravated damages. Proof of loss is a necessary component to Mr Funston's claims for such damages. Accordingly, exemplary damages cannot be awarded in the absence of loss as they can only be parasitic on compensatory damages.[112]
2. Exemplary and aggravated damages cannot be awarded for misleading or deceptive conduct under the ACL.[113]
3. There is no evidence supporting the assertion that Mr Funston suffered anxiety, distress, humiliation, financial pressure or stress as a result of any conduct of Cellmore or Mr Way. Further, there is no evidence that Mr Funston has suffered significant injury and therefore any such claim (other than possibly under Federal Law) would be barred by s 28LE of the Wrongs Act 1958 (Vic).[114]

1. There be judgment for the defendant on the claim.
2. There be judgment for the defendants by counterclaim on the counterclaim.
3. I invite the parties to prepare proposed orders to reflect my findings and reasons for judgment.
4. Subject to any matters that the parties bring to my attention on the question of costs, I propose to order that:

(a) the plaintiff pay the defendant's costs of the claim on the standard basis in default of the agreement; and

(b) the plaintiff by counterclaim pay the defendants by counterclaim's costs of the counterclaim on the standard basis in default of agreement.

I certify that these 353 paragraphs are a true copy of the judgment of her Honour Judge Brimer delivered on 25 August 2025.

SECOND FURTHER REVISED JOINT STATEMENT OF ISSUES DATED 21 NOVEMBER 2024

Cellmore Real Estate Pty Ltd is a real estate agency trading as Woodards Blackburn (Cellmore).

Cameron Way (Way) is and was at all relevant times a director of Cellmore.

Richard Arthur Funston (Funston) was at all relevant times the vendor of a property at 76 Strabane Avenue, Mont Albert North (the Property).

1. The issue for the Court to determine is whether Cellmore complied or failed to comply with s48B(1), s49A(1)(c)(i) and/or s49A(2) of the Estate Agents Act 1980 (Vic) (Estate Agents Act) and, if it failed to comply, does s50(1) of the Estate Agents Act prohibit Cellmore from seeking payment of its marketing expenses.[115]

1. Did Cellmore represent to Funston that the Exclusive Sale Authority he signed was a REIV standard form contract (REIV Standard Form Representation)?[116] If yes, was the REIV Standard Form Representation false?
2. Did Cellmore represent after the expiry of the Exclusive Sale Authority on about 21 August 2017 that they were acting as Funston's agents, on his behalf as vendor of the Property, and impliedly represent that as his agents they would pass on to him the terms of all offers from interested purchasers as soon as possible, and that they would facilitate the sale of the Property (Agency Representations)?[117] If yes, were the Agency Representations false?
3. On about 10 November 2017, did Cellmore represent to a potential purchaser who had made an offer to purchase the Property (November Offer) that Funston had rejected it (Rejection of Offer Representation)?[118] If yes, was the Rejection of Offer Representation false?
4. Did Cellmore represent to potential purchasers that the Property was not currently available for sale and was 'on hold' (On Hold Representation)?[119] If yes, was the On Hold Representation false?

1. Did Cellmore owe Funston any duty of care?[120] If yes, what was the scope of the duty of care?
2. Did Cellmore breach its duty of care?

1. Did Cellmore owe Funston any fiduciary duty?[121] If yes, what was the scope of the fiduciary duty?
2. Did Cellmore breach its fiduciary duty?

1. Has Funston suffered any loss or damage as a result of any breach of duty of care or fiduciary duty?

Misleading or deceptive conduct - s18(1) Australian Consumer Law (ACL)

1. Did Cellmore contravene s18(1) of the ACL by making the Representations?
   1. Were the Representations made in trade or commerce?
   2. Were the Representations misleading or deceptive or likely to mislead or deceive?

Making false or misleading statements - s30(1) ACL

1. Did Cellmore contravene ss30(1)(a) and/or 30(1)(c) of the ACL by making the Representations?

Unconscionability - s21 ACL

1. Did Cellmore engage in conduct in trade and commerce in connection with the supply of services to Funston that was, in all the circumstances, unconscionable and contrary to s21 of the ACL[122] by:
   1. the insertion of a term into the Exclusive Sale Authority stating that "the vendor charges the property with the due payment of all monies payable pursuant to this agreement" (Charging Clause)?
   2. harassment for payment of the outstanding marketing invoice?
   3. threats to lodge a caveat?
   4. lodging a caveat?

Unfair term - s23 ACL

1. Was the Additional Term an unfair term pursuant to s23 of the ACL and therefore void?[123]

Undue harassment or coercion - s50 ACL

1. Did Cellmore engage in undue harassment or coercion in connection with the supply of services or payment for services, contrary to s50 of the ACL[124] by:
   1. refusing to remove the Property from its advertising unless and until Funston paid a disputed marketing invoice?
   2. repeatedly and excessively contacting Funston to demand payment of the disputed invoice, including by way of communications that were derogatory, offensive and abusive?
   3. threatening Funston that Cellmore would take him to Court?
   4. threatening Funston that Cellmore would lodge a caveat on the Property unless Funston paid the disputed invoice?
2. Was Way involved in the alleged contraventions of s18, s21, s30(1) and/or s50 of the ACL?[125]

1. Has Funston suffered any loss within the meaning of s236(1) of the ACL by reason of any contravention of the ACL?[126]

[2] The completed ESA is attached as Annexure B.

[3] In April 2020, orders were made transferring the proceeding to this Court.

[4] In final submissions, Mr Goldblatt clarified and confirmed that the claim against Mr Way is for accessorial

liability in respect of the alleged breaches of the Competition and Consumer Act 2010 (Cth) sch 2 (ACL) only, by Mr Way being involved in the alleged contraventions of the ACL.

[5] Mr Johnstone began working at Cellmore in January 2013.

[6] Mr Wheeler gave evidence that no advertising expenses were payable under the GSA because at that stage, Mr Funston did not want to incur any expenses.

[7] The floor plan was prepared when the property was previously listed for sale.

[8] The photos had been taken when the property was previously listed for sale.

[9] Mr Senaratne was the prospective purchaser who inspected the Property and made an offer of $1.3m

[10] The offer is subject to a legal review of the contract by the purchasers chosen legal representative within 5 business days from the day of sale. If the legal parties are unable to resolve any matters arising from this contract the purchaser may end this contract and all deposit monies will be refunded.

[11] The property in which Mr Funston was living at the time.

[12] Nothing turns on the mode of delivery.

[13] Mr Funston did not press his claim that Woodards did not comply with the obligation in s 49A(1)(b),

which is pleaded in paragraph 3(b) of the Further Amended Defence and Further Amended Counterclaim.

[14] [2018] VSCA 95 (Advisory Services)

[15] Advisory Services at [44]. See also Director of Consumer Affairs v Johnson (Review and Regulation)

[2019] VCAT 1063 at [64] (applying Advisory Services).

[17] [2015] VSC 77 (Oliver Hume v Land Source)

[18] Oliver Hume v Land Source at [38].

[21] Mr Funston challenged an amount claimed by Cellmore included an internal expense of $200

for "Administration Layout & Design 2". As an internal charge, this is not an "outgoing" within the meaning of the Act. Without conceding the issue, Cellmore abandoned its claim to the $200

[22] Services being for advertising and marketing. See Advisory Services at [52].

[23] The $555 charge the subject of invoices from domain.com that was not property specific was deleted

from the amount invoiced to Mr Funston in January 2018.

[24] [2021] VSC 24 (Funston v CCSS).

[26] Asserted in [19]-[20] of Mr Funston's closing submissions.

[27] Funston v CCSS at [80]-[82].

[29] Oliver Hume v Land Source at [48].

[30] [2009] HCA 41; (2009) 239 CLR 27 (Alcan).

[31] Alcan at [46]-[47] (omitting citations).

[32] [2018] HCA 37; (2018) 359 ALR 176 (HFM043).

[34] (1969) 16 FLR 23 (Dowthwaite). See also Westpac Banking Corporation v Donald-Murrell [1992]

[35] Dowthwaite was also cited in Funston v CCSS at [37] and St Kilda Estates (No 2) Pty Ltd v Melbourne Property Investments Real Estate Pty Ltd & Anor [2021] VSCA 92 at [27].

[36] Dowthwaite, 31, cited in Advisory Services Pty Ltd v Augustin & Anor [2017] VCC 1195 at [37]- [39]

[37] Advisory Services at [57]-[61].

[39] VCC Advisory Services at [73].

[40] The claim for $2,399 for realestate.com expenses was not challenged in final submission.

[42] For the reasons set out below, even if I had found that the Standard Form Representation was made,

having regard to my findings as to Mr Funston's awareness of the presence of the charging clause, I would not have found that Mr Funston relied on the representation or was induced into signing the ESA by the representation.

[43] Fletchers lodged a caveat and made a VCAT claim against Mr Funston. Approximately 10 months later

and the day before the VCAT hearing, Fletchers' solicitor rang Mr Funston and informed him that they were withdrawing the caveat.

[44] I address challenges with Mr Wheeler's memory below.

[45] Clause 10.1 of the ESA states: "the vendor acknowledges being informed by the agent the commission

[46] This is evident from an email from Mr Funston dated 10 November 2017.

[49] [1995] NSWCA 497; (1995) 49 NSWLR 315 (Watson v Foxman).

[51] A Abadee, B Zipser, G Sirtes and R O'Keefe, Professional Liability in Australia (Lawbook Co, 4th ed,

2023. at [1.480] and the authorities referred to therein. See also Rickard Constructions Pty Ltd v Rickard

Hails Moretti Pty Ltd & Ors [2006] NSWCA 356 at [183] (Rickard Constructions).

[52] Abadee et al_,_ n 53, [1.300] - [1.310].

[54] G E Dal Pont, Law of Agency (LexisNexis, 4th ed, 2020).

[56] Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525.

[57] Rickard Constructions at [183].

[58] "Where there is a contract of retainer with a professional person, it is the contract that defines the

relationship of the parties so that, ordinarily the presumed intention of the parties is that any duty in tort is limited or excluded": Townsend v Roussety & Co (WA) Pty Ltd [2007] WASCA 40; (2007) 33 WAR 321 at [116].

[59] Rather, it is a question of whether Cellmore was contractually required to provide him a copy of that

[60] Mr Senaratne's written offer was open for two days, with a special condition stating that it was subject

to legal review, and stating that it was his "highest and best" offer.

[61] Providing for the same commission for a sale at $1.35 million as in its previous authority.

[63] This point was not pleaded and arose for the first time when the trial resumed in October 2024 after Mr

Senaratne had given evidence and had been cross examined. Had it been necessary to determine, I would not have been satisfied on the balance of probabilities that Mr Senaratne was relevantly introduced to the Property by Cellmore within the ESA period. Although it was not put to Mr Senaratne that he did not have contact with Mr Wheeler (the issue not having be pleaded or raised at that time), given the generality of his evidence, lack of support in the surrounding evidence, and the evidence that Mr Senaratne was first introduced to the property through Ray White Real Estate, I could not be satisfied that Mr Senaratne was relevantly introduced to the Property within the meaning of clause 1.4 of the ESA by Cellmore within the ESA period.

[64] Oliver Hume South East Queensland Pty Ltd v Investa Residential Group Pty Ltd [2017] FCAFC 141 at [107], [164] (Oliver Hume v Investa).

[65] Oliver Hume v Investa at [164].

[66] Oliver Hume v Investa at [356]-[357], [359].

[68] In J D Heydon, M J Leeming and P G Turner, Meagher, Gummow & Lehane's Equity: Doctrines &

Remedies (LexisNexis, 5th ed, 2014) at [5-020], the authors state that: "Generally, fiduciary obligations

do not survive the ending of the fiduciary relationship" (while observing that duties of confidentiality arising out of a fiduciary relationship do survive its ending).

[69] (Supreme Court of Victoria, Nathan J, 11 December 1990) 1-25 (Collings v Stevenson).

[72] [2012] FCAFC 6; (2012) 200 FCR 296 at [107] (Grimaldi), quoted in Oliver Hume v Investa at [155].

[73] Grimaldi at [107], cited in Oliver Hume v Investa at [155].

[74] Edmonds v Donovan [2005] VSCA 27; (2005) 12 VR 513, [56] (Edmonds).

[75] [2020] VSCA 193 (Schmidt).

[76] Schmidt at [142] (citations omitted).

[77] Oliver Hume v Investa at [361].

[78] For the reasons set out above in relation to the alleged duty of care.

[79] [2017] NSWCA 71 (Stealth v Calliden).

[82] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [39]

and Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [25] (Campbell v Backoffice),

both cited with approval in J Paterson and S G Corones, Corones' Australian Consumer Law (Lawbook

[84] Campbell v Backoffice at [26], cited in Paterson and Corones, n 84, 92.

[85] [2015] NSWCA 94 (Traderight).

[92] Collings v Stevenson, 12-13 and 15-16.

[93] [2024] HCA 27 (Productivity Partners).

[94] Productivity Partners at [60] (Gageler CJ and Jagot J); at [101] (Gordon J); at [289] (Steward J), citing

Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1 at 40 [92] and Stubbings v Jams 2 Pty Ltd [2022] HCA 6; (2022) 276 CLR 1 at 26-27 [58].

[95] Productivity Partners at [302] (Steward J).

[96] [2016] HCA 28 (Paciocco).

[99] See findings in respect of Mr Funston's knowledge and experience above at [161] and [165] of these

[100] Where Mr Funston had negotiated the costs, agreed to and approved the advertising costs, and signed

[101] Leveraged Equities Ltd v Goodridge [2011] FCAFC 3; (2011) 274 ALR 655 at [416]- [417].

[102] Canon Australia Pty Ltd v Patton & Anor [2007] NSWCA 246; (2007) 244 ALR 759 at 771 [55].

[103] This is further addressed below.

[104] Ferme v Kimberley Discovery Cruises Pty Ltd [2015] FCCA 2384 at [58].

[106] [2020] VCAT 404 (Pasion).

[108] [2021] FCA 1549 (ACCC v Maritime Union).

[109] ACCC v Maritime Union at [62]-[64].

[110] ACCC v Maritime Union at [61].

[111] Settlement occurred on 28 June 2019.

[112] Fatimi Pty Ltd v Bryant [2004] NSWCA 140 at [72]-[76].

[113] Geneva Laboratories Limited v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63 at [79], referred

to in Krishnan v Estee Lauder Pty Ltd [2022] FCA 273 at [119].

[114] Thomas v Powercor Australia Limited [2011] VSC 586 at [107], [116].

[115] Cellmore submissions [10] - [40] and reply submissions [3] - [7]; Funston submissions [4] - [21] and reply submissions [3] - [5]; Funston defence [3] - [9]; Cellmore reply [3] - [9].

[116] Funston submissions [5] - [6], [50] and reply submissions [13]; Cellmore submissions [64] - [65] and reply submissions [3] - [4]; Funston further amended counterclaim [3] - [10], [29] - [32]; Cellmore defence [3] - [10], [29] - [32].

[117] Funston submissions [24] - [26], [38], [51] and [60] - [61] and reply submissions [7]; Cellmore submissions [66] and reply submissions [8]; Funston further amended counterclaim [11] - [15] and [29] - [31]; Cellmore defence [11] - [15], [29] - [31].

[118] Funston submissions [27] - [30] and [60] and reply submissions [9]; Cellmore submissions [42], [46] - [49] and reply submissions [9] - [10]; Funston further amended counterclaim [17] - [19] and [29] - [31]; Cellmore defence [17] - [19], [29] - [31].

[119] Funston submissions [31] - [32], [54] and [60]; Cellmore submissions [59] and reply submissions [11] - [12]; Funston further amended counterclaim [20] - [21]and [29] - [31]; Cellmore defence [20] - [21], [29] - [31].

[120] Funston submissions [33] - [43]; Cellmore submissions [43] - [47], [60] - [63], [71] - [73] and reply submissions [13] - [17]; Funston further amended counterclaim [23] - [25]; Cellmore defence [23] - [25].

[121] Funston submissions [44] - [46] and reply submissions [6] - [8]; Cellmore submissions [44] - [48] and reply submissions [21] - [22]; Funston further amended counterclaim [26] - [28]; Cellmore defence [26] - [28].

[122] Funston submissions [5] - [7], [50] and [64] and reply submissions [13]; Cellmore submissions [67], [69] - [70], [74] and reply submissions [24]; Funston further amended counterclaim [4] - [10], [16], [22], [32] and [37] - [38]; Cellmore defence [4] - [10], [16], [22], [32] and [37] - [38].

[123] Funston submissions [50] and reply submissions [13]; Cellmore submissions [68]; Funston further amended counterclaim [5] - [6], [9] - [10], [37] and [38] - [39]; Cellmore defence [5] - [6], [9] - [10], [37], [38] - [39].

[124] Funston submissions [24], [64]; Cellmore submissions [69] - [70], [74] and reply submissions [24]; Funston further amended counterclaim [11] - [12], [16], [40] and [40A];

[125] Funston submissions [5] - [8], [24] - [26], [28], [30] - [40], [49] - [51], [60] and [64] and reply submissions [14] - [15];Cellmore submissions [84] - [85]; Funston further amended counterclaim [12] - [22], [29] - [31], [36A] - [37A] and [40] - [40A]; Cellmore defence [12] - [22], [29] - [31], [36A], [37A] and [40] - [40A].

[126] Funston submissions [42] - [43] and [57] - [64]; Cellmore submissions [50] - [59], [86] - [87] and reply submissions [1], [18] - [20], [29] - [31]; Funston further amended counterclaim [42] - [45]; Cellmore defence [42] - [46].