Cheung v Yang

The Application

1. Mr Pluznyk made an application at the hearing that Dean Senior, as a witness in the respondent's case, should be absent from the hearing room whilst the applicants and their witnesses gave evidence. The tribunal acceded to the request.
2. Given the respondent's director was presenting the case without legal representation, the Tribunal was mindful of its obligation generally for self-represented litigants. Section 38(5) of the Act provides: The Tribunal is to take such measures as are reasonably practicable: (a) to ensure that the parties to the proceedings before it understand the nature of the proceedings, and (b) if requested to do so-to explain to the parties any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceedings, and (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings.
3. Dean Boskovic Junior was unfamiliar with the Tribunal process. He said that this was the first time there had been a complaint made against the respondent, and therefore he had not appeared before the Tribunal on any other occasion. In Cheung v Yang [2013] NSWSC 1694 at [48]: Harrison J considered an argument that the CTTT had an obligation to ensure that an unrepresented litigant, Mr Cheung, understood the procedural aspects of the case so that he received a fair hearing.
4. The Tribunal provided guidance to Mr Boskovic Jnr as to the process, including the manner in which the applicants would give their evidence. The respondent may then cross examine the applicants witnesses on any matters before the Tribunal.
5. The process would also apply in respect of Dean Boskovic Junior when giving his evidence as a witness in the respondent's case. Mr Pluznyk would be given an opportunity to cross examine each Mr Boskovic on any matter in cross examination. The Tribunal also attempted to explain that there may be opportunity to challenge evidence by a re-examination of that witness.
6. Although cross examination is an art form and whilst guidance can be given, initially, the respondent attempted to give its own narrative of events whilst attempting to cross-examine the witnesses. During the course of the hearing, Dean Boskovic Junior, became somewhat more confident in his technique, though certain concessions were made when he deviated from this pathway, and commenced his own narrative.
7. Each respondent, during the course of the hearing, had difficulty locating materials that the applicants had served on the respondent company. Dean Boskovic Junior indicated that business was particularly busy in the week prior to the hearing. There was no issue that the respondent was served with the applicants' documents.
8. Mr Pluznyk, where possible, provided additional copies of materials to assist Dean Boskovic Junior's cross examination of the applicants' witnesses.

The Evidence

1. Mrs Dalli, one of the applicants, was called to give evidence first. Mrs Dalli gave her evidence under oath and relied upon her affidavit sworn on 27 April 2017. This was tendered in the applicants' case, as was the exclusive agency agreement dated 12 September 2016. As far as the tribunal is aware, there is no issue that the exclusive agency agreement was in writing and that a copy was provided to the applicant within 48 hours of the execution of the agreement on 12 September 2016.

The Exclusive Agency Agreement

1. Although the Act permits the Tribunal to review the commission and any fees charged despite the terms of the Management Agency Agreement, it may be helpful to recite some parts of the agreement at this moment.
2. The Commission referenced in clause 5 (i) was 3.5%. There was an arrow on the same line as the percentage commission reference. Next to the arrow, the following words appeared: You will pay the agent whatever you believe ..is fair
3. The event of completion entitled the defendants to receive commission under the terms of the agency agreement dated 12 September 2016. The agents' opinion as to the estimated current market value of the property as at
4. 12 September 2016 was between 2.8M - 3 M.
5. The respondent provided a copy of the consumer's guide "Agency Agreements for the sale of Residential property". Residential property is as defined in Division 8, Part 4, of the Conveyancing Act, and is as follows: Meaning of "residential property" 66Q Meaning of "residential property" (1) For the purposes of this Division, "residential property" is: (a) land on which are situated (or in the course of construction) not more than two places of residence, and no other improvements, or (b) vacant land on which the construction of a single place of residence alone is not prohibited by law, or (c) a lot or lots (including a proposed lot or lots) under the Strata Schemes Development Act 2015 , comprising not more than one place of residence alone, whether constructed or in the course of construction, and including any place used or designed for use for a purpose ancillary to the place of residence. (2) Residential property does not however include: (a) land or a lot that is used wholly for non-residential purposes, or (b) land that is more than 2.5 hectares in area (or such other area as may be prescribed). (3) For the purposes of this section, "place of residence" means a building or part thereof used, or currently designed for use, as a single dwelling only, and includes outbuildings or other appurtenances incidental to any such use.
6. The applicants signed the agreement which was in identical terms to that of the respondent EXCEPT that Clause 5 (v) of the Agency Agreement did not disclose the commission expressed as a dollar value, allegedly in breach of regulation 9, schedule 7. [of the regulations].

The Contract For Sale of Land

1. The Contract for Sale of land was tendered in the applicants' case, without opposition. The property was described as lot 9, DP 2200205, being all of the land located at 165 Lee & Clarke Rd, Kemps Creek, in the state of New South Wales. According to the property search, the property was encumbered by a first mortgage to the Commonwealth bank.
2. The section 149 certificate referenced that the zoning was for RU4 Primary production small lots. Extensive agriculture, as well as home occupations, may be carried out without the need for development consent. The dimensions of Lot 9 were 2.077 hectares.
3. The tax information regarding whether the sale was a taxable supply [for the purpose of GST] was left blank on the contract.
4. There was no controversy that the property was sold by auction on 22 October 2016 and that the respondent was the agent referenced in the Contract. The sale price recorded was $ 2,460,000.00.

Mr Jakovic

1. Mr Lee Jakovic, an employee of Richardson and Wrench in Hoxton Park, provided an affidavit to the Tribunal sworn on 5 December 2017.
2. His evidence was that in around early June 2016, he sent a letter to the applicants' solicitor seeking a copy of the Contract for Sale of the property. The letter confirmed his engagement for the proposed sale. It is unclear from his evidence whether Mr Jakovic had entered into an exclusive agency agreement to sell the premises prior to September 2016.
3. Mr Jakovic said that Richardson and Wrench dealt with residential property sales, as well as the sale of small acreages. The commission charged was 1.5% for the sale of either holding. He said words to the effect: "that was enough".
4. As an employee of Richardson and Wrench, there may have been policy issues restricting any flexibility in the percentage charge for commission between the residential property and the small acreages.
5. Notwithstanding Mr Jacovic's engagement for the marketing campaign in around June 2016, the property was still on the market unsold in September 2016.
6. Mr Jakovic conceded in cross examination that Dean Boskovic Junior "was a better salesman than me" in bringing about a sale of the property at auction on 22 October 2016.
7. Joseph Dalli Junior swore an affidavit on 26 April 2017. His evidence made no reference to the Dalli's acquaintanceship with Lee Jakovic prior to 11 September 2016. He said: on 11 September 2016, my mother advised that Lee Jakovic from Richardson and Wrench was selling the property and charging 1.5%.
8. The applicants' son, Joseph Jnr, gave evidence that he had contacted the respondent on 11 September with a view to engaging its services. The son's affidavit evidence was in "like-kind" to that of his mother limiting any commission payable to a percentage no greater than 1.5%.
9. The son's view was the applicants would be disinclined to pay a greater percentage commission to the Boskovics than the commission that Mr Jakovic proposed, without charge for any additional fees.
10. In their evidence, neither Mrs Dalli nor her son raised any previous dealings with Mr Jakovic of Richardson and Wrench during the period prior to September 2016. In contrast, Mr Jacokic's evidence was that he had instructions to market the property as early as June 2016.

The Respondent Agency

1. Dean Boskovic Junior saw himself as offering a different product to that offered by R & W. Dean Jnr is a director of the respondent company. His father, Dean Boskovic Senior, is his employee and auctioneer. The evidence was that the Boskovics offered "a package deal" styled service. The presentation of the product and its badging was smart and targeted the sales of boutique acreages. The respondent's market specialised in acreage sales rather than the duplicity of market that R & W serviced.
2. Dean Boskovic Junior said that his database was expansive. He wrote a regular newsletter keeping the target market informed of current acreage sales, specific to the team's area of expertise. The database included wealthy Asian clientele. The product allowed Dean Boskovic Junior to say with confidence to the Dallis that his commission was 3.5%. There was no departure from the standard commission of 3.5% chargeable on the realisation of a sale at the current estimated value of between 2.8 and 3 million dollars as at the date of signing the agreement on 12 September 2016.
3. Mr Boskovic Junior said that he went through the agreement before Mrs Dalli signed the agreement on 12 September 2018. Mrs Dalli agreed she had signed the agreement on 12 September 2016 but may not have read the whole of the agreement before she signed it.
4. As the Tribunal understood the evidence at hearing, Mrs Dalli said at the time of signing the agreement, Boskovic Snr inserted the following words at clause 5 (i) "you will pay the agent whatever you believe is fair"
5. Mrs Dalli thought that Boskovic Snr was crossing out 3.5%, and instead, inserting the figures 1.5% for the commission. Mrs Dalli's evidence was that her understanding of the insertion of the words: "you will pay the agent whatever you believe is fair" meant we would pay 3.5% commission if the property sold for
6. 3 Million or more. Words to that effect did not appear in the agency agreement. The commission of 3.5% was stated clearly in the agreement.
7. In contrast, in his written evidence dated 19 May 2017, Dean Boskovic Snr says that he apprised the applicants that the commission of 3.5% equated to approximately $ 90,000. No commission was payable if there was no sale. Boskovic Snr said that the insertion of the words: you will pay the agent whatever you believe is fair, only applied if the reserve is not met.

The Attendees at the meeting held on 12 September 2016

1. Mrs Dalli said that when she met with the Boskovics on 12 September 2016. Her son, Joseph Junior, and her brother, Mr Sharp, were also at the property. There was an issue raised whether all four people at the property were present at the time the applicants discussed the proposed sale and the rate of commission payable to the Boskovics upon a successful auction.
2. Neither applicant proffered any reason for Mrs Dalli's brother being in attendance at the property on 12 September. Mr Sharp provided a fairly formulaic affidavit sworn on 27 April 2016, in terms resonating the evidence of the applicants and their son, Joseph Jnr.
3. Mr Sharp said that he heard Dean Boskovic Snr allegedly say words to the effect: we will do it for 1.5%. But if we go over 3 million, we will discuss it
4. Both Boskovic Junior and Senior confirmed that the attendees at the meeting held at the property around the kitchen bench were confined to both applicants and the Boskovics.
5. The agency agreement was pre-completed for the greater part [including the 3.5% commission payable]. The terms finalised before the applicants executed the agreement.
6. The Tribunal enquired whether Mr Sharp recalled where the meeting had taken place. He responded "on the veranda". The Boskovics, both Junior and Senior, denied that they had ever met Mr Sharp at the property on the day that the agreement was executed. Boskovic Junior saying words to the effect somewhat impassionedly to Mr Sharp: I've never seen you before in my life

The Sale of the Property

1. The feedback after the marketing campaign commenced indicated that the value of the property was less than the estimate given on 12 September 2016. For the auction, the respondent sought instructions for the reserve to be set at a lesser amount than the estimate given on 12 September 2016. The Dallis gave written instructions for the reserve at auction to be set at 2.4M
2. The applicants sold the property at auction on 22 October 2016. The applicant's entered into a Contract for Sale for $2,460,000, some $60,000 over the reserve of 2.4 million. The realised value reflected feedback during the agency's marketing campaign.

The Breach of the Regulation

1. The applicants' position was that Clause 5 (v) of the agreement was allegedly left blank because the commission payable depended on the outcome of the sale.
2. In contrast, Mr Boskovic Junior said that it was an oversight. Later, Mr Boskovic Senior inserted the dollar value of the commission referrable to the 3.5 % commission, being somewhere in the vicinity of $90,000.

Payment of the Commission

1. After the successful auction sale on 22 October, 2016, Mr Boskovic Junior sent a sales confirmation advice by express post to the Dallis' lawyer informing him that the commission and fees charged totalled $ 92,200. The respondent confirmed that it held a deposit of $246,000 from which the commission monies would be drawn.
2. This is to be contrasted with Mrs Dalli's position that she was unaware of the amount of the commission until around 9 December 2016. Somewhat belatedly on settlement, Mrs Dalli raised the issue about the amount of commission payable. Mr Boskovic Junior was somewhat taken by surprise.
3. The initial order on the agent confirmed the settlement on 9 December 2016, entitling the agent to account to the vendors for the balance of the settlement monies.
4. Mrs Dalli's lawyers sent a second letter whereby the amount of commission payable was limited to 1.5% or $37,000. The figure does not appear to take into account any fees that may be payable pursuant to the agency agreement.

The Findings

1. The applicants' affidavits, and those of its witnesses, were somewhat formulaic in their drafting and provided little evidence about matters that pre-dated the meeting with the Dallis and the Boskovics on 12 September 2016. More particularly so, the Dallis' engagement of Richardson & Wrench as the marketing agent in June 2016, and the previous meeting with the Boskovics in August 2016, where Boskovic Jnr says that he disclosed to Mary Dalli that his commission was 3.5%.
2. Boskovic Junior's evidence was that he had completed a greater part of those details prior to his attendance at the property on 12 September 2016, having already disclosed to the applicant's son, Joseph Jnr, in around 11 September 2016, that 3.5% commission was payable on a sale.
3. The son, Joseph Jnr, notwithstanding his affidavit evidence, conceded that there may have been some discussion about a 3 % commission charge made during a telephone conversation with Boskovic Junior the day before the meeting held on 12 September 2016.
4. The pre-completed details of the agency agreement referencing a 3.5% commission, does not sit comfortably with the evidence that Boskovic Jnr was prepared to match Lee Jakovic's commission of 1.5%.
5. Even after Mrs Dalli raised some issue about the rate of commission, there was no amendment of the agency agreement to reduce the commission from 3.5% to 1.5%. Instead, the words: you will pay the agent whatever you believe is fair. The applicants and the respondent each having a different view about the circumstances that enlivened its application.
6. The applicants and their son make no mention of Lee Jakovic's prior engagement for the marketing and sale of the property in early June 2016. From the evidence, Mr Jakovic had failed to achieve an outcome. The Boskovics had no real incentive to match any commission that Jakovic may charge.
7. It was more likely, that the Boskovics knew that another agent [allegedly being considered for appointment] had been unsuccessful in achieving a sale since the marketing campaign commenced in June 2016. The Boskovics' experience in the boutique acreage market, and knowledge of the area, were a drawcard for the appointment as the preferred agent, notwithstanding that the commission charge was 3.5% for the boutique agency.
8. The Boskovics marketed and sold the property within about 5 weeks from the agency's appointment.

The Fees

1. The fees payable, over and above the commission, were set out in the agreement. Those fees were payable to third parties and totalled $ 6,100. The applicants made endeavours to seek further particulars of the amounts paid to those third providers. A summons was drawn and served on the respondent to satisfy that enquiry.
2. The respondent produced no evidence by reference to a simple ledger account statement that the respondent has paid those monies to third party providers for disbursements related to the sale.

Overview

1. The tribunal is satisfied that the agreement was in a form to comply with section 55 of the Act. The applicants raised an issue regarding non-compliance with a requirement pursuant to regulation 9 of schedule 7, based on a failure to complete the amount of commission and fees expressed in writing, as set out at clause 5 (v) of the agreement.
2. The regulation applies to the sale of residential premises. Notwithstanding that the zoning of land is for small lots, and the land use is for agriculture and dwellings, the size of the acreage being less than 2.5 hectares, comes within the definition of residential land [as set out in Division 8 of the Conveyancing Act.
3. Section 55 A of the Act, provides relief from forfeiture of the entitlement to commission and fees, if there is a breach of a regulation and

• The failure is a minor failure; and
• No loss has been suffered as a result of the failure by the person for whom or on whose behalf the services concerned were performed; and
• Failure to make the order would be unjust.

1. As far as the tribunal is aware, there is no definition in the Act of a "minor failure", though the matter of any loss occasioned to the applicants, and any injustice to the respondent, must be also taken into account.
2. In their evidence, prior to the execution of the agreement, the Boscovics disclosed orally [at the meeting held on 12 September 2016] that the estimate of fees payable was in the order of $ 90,000. On that basis, there being no loss occasioned to the applicants mindful that the agreement stated the commission was 3.5%, the tribunal finds that the absence of the written dollar estimate of commission and fees was a minor failure.
3. The tribunal considers that it would be unjust for the respondent not to be rewarded for its commercial endeavours based on what appears to be an oversight in completing clause 5 (v) of the agency agreement. The tribunal makes a finding that the respondent is entitled to relief from forfeiture pursuant to section 55 A of the Act.
4. Having made that finding, the tribunal now considers the review of the commission and fees payable to the respondent pursuant to section 36 of the Act.

Review of Commissions and Fees Payable

1. The Dallis were on notice from August 2016 that the respondent's commission was greater than that charged by R & W. This did not seem to deter the Dallis who were hopeful of the sale to fund their retirement. Mr Jakovic's marketing of the property, as early as June 2016, had not achieved an outcome [as at September 2016].
2. The Dallis called in the services of a "boutique" operation. The commission charged for the specialist services could not be "benchmarked" against the non-specialist services that Mr Jacovic provided.
3. The tribunal is satisfied that the respondent's 3.5% commission charged was consonant with the respondent's agency's specialising in the sale of small acreages, its superior marketing strategies, as well as its access to a larger client base. The tribunal confirms that the respondent is entitled to its commission based on 3.5 % of the sale price being an amount of $ 86,100.

The Fees Charged

1. The respondent has produced no relevant documents in answer to the summons served for the supply of documents. As well, the respondent has not provided any evidence to support a finding that it was obliged to pay third party providers for disbursements set out in the agency agreement, or has in fact paid those monies.
2. The tribunal has reviewed the respondent's entitlement to those fees. The tribunal makes a finding that the respondent is to pay to the applicant the sum of $ 6,100 by way of refund on or before 21 May 2018.

Order

1. On or before 21 May 2018, the respondent is to pay to the applicant the sum of $ 6,100 by way of refund.

Costs

1. Section 60, Civil and Administration Act, provides that each party is to pay its own costs, unless there are exceptional circumstances.
2. The applicants' counsel has asked that he be given an opportunity to address on the issue of costs.
3. The tribunal directs that the applicants written submissions are to be provided to the tribunal and the other party on or before 11 May 2018.
4. The tribunal directs that the respondents written submissions are to be provided to the tribunal and the other party on or before 19 May 2018.
5. Having given the parties an opportunity to provide written submission, the tribunal proposes to deal with the issue of costs dispensing with any need for a further listing date.

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I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 August 2018