QUYD P/L v Marvass P/L [2008] QCA 257

SUPREME COURT OF QUEENSLAND

CITATION: QUYD P/L v Marvass P/L [2008] QCA 257

PARTIES: QUYD PTY LTD ACN 065 993 991 (plaintiff/respondent) v MARVASS PTY LTD ACN 104 356 827 (defendant/applicant)

FILE NO/S: Appeal No 5342 of 2008 / Appeal No 5343 of 2008 / D227 of 2007

DIVISION: Court of Appeal

PROCEEDING: Applications for Leave s 118 DCA (Civil)

ORIGINATING COURT: District Court at Cairns

DELIVERED ON: 5 September 2008

DELIVERED AT: Brisbane

HEARING DATE: 20 August 2008

JUDGES: McMurdo P, Fraser JA and Philippides J / Separate reasons for judgment of each member of the Court, each concurring as to the order made

ORDER: Both applications are refused with costs

CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – PRACTICE AND PROCEDURE – QUEENSLAND – WHEN APPEAL LIES – BY LEAVE OF COURT – GENERALLY – where the defendant applied for summary judgment dismissing the plaintiff’s claim in the District Court – where the primary judge dismissed the application – where the defendant applied pursuant to s 118(3) of the District Court of Queensland Act 1967 (Qld) for leave to appeal to this Court – where leave will usually be granted only where there is a reasonable argument that the primary judge erred and an appeal is necessary to correct a substantial injustice caused by that error – whether in the circumstances leave to appeal should be granted / STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – INTERPRETATION ACTS AND CLAUSES – PARTICULAR ACTS AND ORDINANCES – QUEENSLAND – where s 134 of the Property Agents and Motor Dealers Act 2000 (Qld) required that the appointment of a property agent must be made in “the approved form” – where version 1 of form 21a was used to purportedly appoint the property agent – where at the time of the purported appointment version 2 of form 21a was the approved form – where the only difference between the forms was a telephone number for the Office of Fair Trading – where, when dialled, the telephone number printed on version 1 diverted to the number printed on version 2 of the form – where the defendant contended that by failing to use version 2 of the form the appointment was not made in “the approved form” and therefore the plaintiff was precluded from claiming commission under s 133 of the Act – whether the appointment was made in “the approved form” to the satisfaction of s 134 of the Act – meaning of “the approved form” for the purposes of s 134 / STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – INTERPRETATION ACTS AND CLAUSES – PARTICULAR ACTS AND ORDINANCES – QUEENSLAND – where s 49(1) of the Acts Interpretation Act 1954 (Qld) stated that if a form is prescribed or approved under an Act strict compliance with the form is not necessary and substantial compliance is sufficient – where s 4 of the Acts Interpretation Act 1954 (Qld) stated that the application of the Acts Interpretation Act 1954 (Qld) to another Act may be displaced where a contrary intention appears in the other Act – where the defendant postulated that a contrary intention was evinced by ss 133, 134 and 140 of the Property Agents and Motor Dealers Act 2000 (Qld) – whether those provisions revealed such a contrary intention / Acts Interpretation Act 1954 (Qld), s 4, s 14A, s 49 / Body Corporate and Community Management Act 1997 (Qld), s 213 / District Court of Queensland Act 1967 (Qld), s 118(3) / Property Agents and Motor Dealers Act 2000 (Qld), s 10, s 133, s 134, s 140 / Adams v Lambert (2006) 228 CLR 409; [2006] HCA 10, cited / Arnold Electrical & Data Installations P/L v Logan Area Group Apprenticeship/Traineeship Scheme Ltd [2008] QCA 100, cited / Bluestone Holdings Pty Ltd v Juniper Property Holdings / No 14 Pty Ltd [2006] QSC 219, followed / Bernstrom v National Australia Bank Ltd [2003] 1 Qd R 469; [2002] QCA 231, cited / Coster v Bathgate [2005] 2 Qd R 496; [2005] QCA 210, cited / Deputy Com of Taxation v Salcedo [2005] 2 Qd R 232; [2005] QCA 227, cited / Di Carlo v Dubois & Ors [2002] QCA 225, cited / Equipment Investments Pty Ltd v M J Dowthwaite & Co Pty Ltd (1969) 16 FLR 23, cited / Hamilton v Min for Immigration (1994) 53 FCR 349, cited / Jessup v King's Transport & Ors [2006] QCA 289, cited / Jones v Knobel & Davis Property Services P/L [2008] QCA 105, cited / Minister for Immigration and Multicultural Affairs v Li (2000) 103 FCR 486; [2000] FCA 1456, cited / MNM Developments P/L v Gerrard [2005] 2 Qd R 515; [2005] QCA 230, distinguished / Monte Carlo Caravan Park P/L v Curyer & Curyer [2007] 2 Qd R 57; [2006] QCA 363, cited / Pfeiffer v Stevens (2001) 209 CLR 57; [2001] HCA 71, followed / Programmed Solutions P/L v Dectar P/L [2007] QCA 385, cited / Queensland University of Technology v Project Constructions (Aust) P/L (In Liq) & Anor [2003] 1 Qd R 259; [2002] QCA 224, cited / Rigato Farms P/L v Ridolfi [2001] 2 Qd R 455; [2000] QCA 292, cited / Smits v Tabone; Blue Coast Yeppoon Pty Ltd v Tabone [2007] QCA 337, cited / Wu v Minister for Immigration and Ethnic Affairs (1996) 64 FCR 245, cited

COUNSEL: K C Fleming QC for the defendant/applicant / M A Jonsson for the plaintiff/respondent

SOLICITORS: Connolly Suthers for the defendant/applicant / Preston Law for the plaintiff/respondent

McMURDO P: The applications for leave to appeal should be refused for the reasons given by Fraser JA.

Were the applicant's contentions successful, it would be an absurd triumph of form over substance and one completely inconsistent with the commendable objects of the Property Agents and Motor Dealers Act 2000 (Qld) set out in s 10. As Fraser JA demonstrates, the applicant has failed to establish judicial error warranting the interference of this Court.

FRASER JA: The plaintiff sued in the District Court to recover commission pursuant to a written contract made on 3 July 2006 by which the defendant appointed the plaintiff as its agent to sell land owned by the defendant. The defence admitted that the plaintiff and the defendant executed the “written appointment” in or about July 2006, but the defendant denied that it owed the plaintiff any commission.

One ground of defence was that the appointment was not in the form required by the Property Agents and Motor Dealers Act 2000 (“PAMDA”). In reliance on that point the defendant applied pursuant to UCPR r 293 for summary judgment dismissing the plaintiff's claim.

The judge refused that application and ordered that the defendant pay the plaintiff's costs of and incidental to the application to be assessed on an indemnity basis. The defendant now applies pursuant to s 118(3) of the District Court of Queensland Act 1967 for leave to appeal against both orders.

Numerous authorities establish that leave to appeal will usually be granted only where there is a reasonable argument that the primary judge erred and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.¹ The refusal of the defendant’s application for summary judgement did not determine any substantive rights. The defendant remained free to repeat and elaborate upon its arguments at trial. Accordingly, if the primary judge erred that error was not productive of any substantial injustice. That is a sufficient basis to dispose of the application for leave to appeal against the refusal of the defendant’s application for summary judgment.² However I would refuse both applications on the further ground that both of the proposed appeals lack merit.

Statutory and factual background

The appointment of real estate agents is dealt with in division 2 of chapter 5 of PAMDA. Subsection 133(1) makes it an offence for a real estate agent to act as a real estate agent for a person (“client”) to perform an activity (“service”) for the client unless the client has first appointed the real estate agent in writing, or a previous appointment is “assigned” to the real estate agent. Subsection 133(7) requires the appointment to be signed and dated by the client and the agent, or someone authorised or apparently authorised to sign for the agent. Subsection 133(8) obliges the agent to give a copy of the signed appointment to the client.

Subsection 133(3) specifies some required contents of the appointment. It provides:

“(3)The appointment must, for each service—

(a)state the service to be performed by the real estate agent and how it is to be performed; and

(b)state, in the way prescribed under a regulation, that fees, charges and commission payable for the service are negotiable up to any amount that may be prescribed under a regulation; and

(c)state—

(i)the fees, charges and any commission payable for the service; and

(ii)the expenses, including advertising and marketing expenses, the agent is authorised to incur in connection with the performance of each service or category of service; and

(iii)the source and the estimated amount or value of any rebate, discount, commission or benefit that the agent may receive in relation to any expenses that the agent may incur in connection with the performance of the service; and

(iv)any condition, limitation or restriction on the performance of the service; and

(d) state when the fees, charges and any commission for the service become payable; and

(e)if the service to be performed is the sale or letting of property or the collecting of rents and commission is payable in relation to the service and expressed as a percentage of an estimated sale price or amount to be collected, state that the commission is worked out only on the actual sale price or the amount actually collected; and

(f)if the appointment is for a sole or exclusive agency, state the date the appointment ends.

Note—

For additional requirements for an appointment for a sole or exclusive agency, see section 135.” ³

Section 134 provides:

“134****Form of appointment

(1)The appointment must be in the approved form.⁴

(2)The approved form must include a prominent statement that the client should seek independent legal advice before signing the appointment.

(3)An appointment that does not comply with subsection (1) is ineffective from the time it is made.”

The defendant did not contend that the appointment failed to comply in any respect with s 133 or s 134(2). Rather, the defendant contended that the appointment was not in the approved form because it stated a telephone number of the Office of Fair Trading that differed from the number in the approved form.

The appointment of the plaintiff comprises eight sequentially numbered pages. The first page is headed “PAMD Form 21a”. It and the following three pages are endorsed “Form 21a V.1 2004”. That is the designation of the form approved by the chief executive on 12 April 2004 (“version 1”).

The last four pages of the appointment comprise a two page schedule headed “Appointment of Real Estate Agent” and two pages of terms and conditions. Those pages (“the REIQ form”) are not endorsed with any text indicating that they are part of an approved form but instead contain references to the Real Estate Institute of Queensland. However, an affidavit by the defendant's solicitor deposed that an exhibited copy of the appointment comprising all eight pages was a copy of the written appointment referred to in the statement of claim and the defence “being in particular a PAMD Form 21a (V1 2004)”.

On 1 July 2005 the chief executive approved another form, “Form 21a V.2” (“version 2”). An affidavit by the plaintiff's solicitor deposed that an eight page exhibited document was a true copy of version 2 of the form. Again, the last four pages comprised a REIQ form. It is in very similar terms to the REIQ form in the executed appointment. The plaintiff’s counsel referred the Court to one difference between the two REIQ forms: a clause authorising the agent to assign the benefit of the appointment in the version 2 REIQ form was not in the executed appointment. The defendant did not contend that this was relevant and its senior counsel abandoned the written argument which had contended that there were other material differences between the REIQ forms.

Both version 1 and version 2 were approved forms until the chief executive revoked version 1 on 1 October 2005. Version 2 remained an approved form from 1 July 2005 until it was revoked on 19 March 2007. Thus the only approved form when the appointment was executed in July 2006 was version 2.

The defendant’s contention before the primary judge was that the executed appointment did not comply with s 134(1) because it was made in version 1 rather than in version 2. The only differences between version 1 and version 2 identified by the defendant are the endorsements identifying them as different versions (upon which the defendant did not rely) and a change in the last paragraph of the introductory section. In the signed appointment that paragraph reads:

"For more information before signing this form or to obtain a copy of the Code of Conduct contact your local Office of Fair Trading on 1300 658 030, www.fairtrading.qld.gov.au, or see the White Pages."

In version 2 the telephone number is instead “13 13 04”. An affidavit filed on behalf of the plaintiff established that shortly before the summary judgment hearing the plaintiff's solicitor telephoned the number shown on the executed appointment (version 1 of the form), 1300 658 030, and his call was transferred to the Office of Fair Trading. The primary judge inferred that when the appointment was made in July 2006 anybody telephoning the number shown on version 1 would reach the Office of Fair Trading. The defendant does not challenge that finding.

The defendant nevertheless contended that this misstatement of the telephone number produced the result that the appointment was not “in the approved form” within the meaning of s 134(1). The defendant also invoked s 140, which provides:

“140****Restriction on recovery of reward or expense—no proper authorisation etc.

(1)A person is not entitled to sue for, or recover or retain, a reward or expense for the performance of an activity as a real estate agent unless, at the time the activity was performed, the person—

(a)held a real estate agent’s licence; and

(b) was authorised under the person’s licence to perform the activity; and

(c)had been properly appointed under division 2 by the person to be charged with the reward or expense.

(2)A person who sues for, or recovers or retains, a reward or expense for the performance of an activity as a real estate agent other than as provided by subsection (1) commits an offence.

Maximum penalty for subsection (2)—200 penalty units.”

In summary, the defendant contended that because of the misstatement of the telephone number the appointment was not “in the approved form” within the meaning of s 134(1); that the appointment was therefore rendered ineffective by s 134(3), so that the plaintiff’s action was not maintainable; and that s 140(1)(c) expressly destroyed the plaintiff’s entitlement to sue upon the appointment.

Reasons of the primary judge

The primary judge referred to s 49(1) of the Acts Interpretation Act 1954 (Qld):

“49(1)If a form is prescribed or approved under an Act, strict compliance with the form is not necessary and substantial compliance is sufficient.”

His Honour acknowledged that s 4 of the Acts Interpretation Act 1954 (Qld) provides that its application may be displaced by a contrary intention appearing in any Act, but his Honour considered that PAMDA did not evince an intention to displace the application of s 49(1). His Honour was satisfied that the appointment was in substantial compliance with the approved form despite the misstatement of the telephone number. Accordingly, his Honour refused the defendant’s application for summary judgment.

Discussion

Each case depends on the proper construction of the statute in issue, but expressions similar to those in s 134(1) of PAMDA have been held to be satisfied where the form used was substantially in accordance with and did not depart from the prescribed form in any material respect.⁵

Here, the apparent purposes of requiring the appointment to be made in the approved form were all fulfilled. All of the information required by the relevant sections of PAMDA was included in the form. The misstatement of the telephone number produced no consequence adverse to the defendant’s interests. In fact it produced no consequence at all. On any reasonable view the appointment was in substantial compliance with the approved form.

The defendant contends, however, that strict compliance with the form was essential. It contends that the prima facie rule of construction expressed in s 49(1) of the Acts Interpretation Act 1954 (Qld) was displaced by a contrary intention appearing in PAMDA.

The defendant’s senior counsel argued that such a contrary intention was demonstrated by the use of the word “must” in s 134(1). I reject that argument. PAMDA does not provide that an appointment is valid “if and only if” it is made in the approved form: that might have demanded strict compliance.⁶ Subsection 134(1) simply mandates the use of the approved form. The prescription of a form will normally be expressed in language of obligation rather than of permission: that raises the question whether a provision in the form of s 49(1) is excluded but it does not answer it. ⁷

That s 134(1) requires the appointment to be “in” the approved form does not of itself necessarily justify the conclusion that PAMDA insists upon pedantically strict compliance with that form as a pre-condition of a valid appointment. As Gleeson CJ and Hayne J said of the different interpretative provision considered in Pfeiffer v Stevens⁸:

“The purpose of such an interpretative provision is to permit economy of language. Like an interpretative provision to the effect that the singular includes the plural, it means that to employ the language of singularity does not indicate an intention to deny plurality. If such an intention exists, it must be found elsewhere.”

The defendant also relies upon the mandatory terms of s 133 and the provision in s 140(1)(c) that penalises non-compliance by depriving the agent of the reward it has earned for fulfilling the terms of its appointment. Section 133, with which the plaintiff complied, does not advance the argument and s 134(3) and s 140 are opposed to the defendant’s construction. The consequence of excluding the application of an interpretative provision such as s 49(1) is a weighty factor to be taken into account in deciding whether a particular Act evinces an intention to exclude it.⁹ Sections 134(3) and 140 have a draconian effect, destructive of common law rights, where an appointment is not in the approved form. It seems most unlikely that the legislative purpose extended to visiting such extreme consequences for a trivial departure of the kind that occurred here.

The defendant also contends that an intention to exclude s 49(1) is revealed by the consumer protection purpose of PAMDA. That is an accurate description of the broad statutory purpose and it should of course be taken into account,¹⁰ but it does not follow that the object of s 134(1) was to condition the validity of an appointment upon “an incantation whose words had significance for their own sake, and of which no syllable might be altered without destroying its value”.¹¹

The Court was referred to statements in MNM Developments Pty Ltd v Gerrard¹² to the effect that certain provisions in PAMDA tell against a liberal interpretation, but those provisions are in a different part of the Act and they bear no resemblance to those in issue here. That decision has no bearing upon the questions that arise in this application.

The “main object” of PAMDA is expressed in s 10(1). So far as concerns real estate agents it is:

“… to provide a system for licensing and regulating persons as … real estate agents … that achieves an appropriate balance between –

(a)the need to regulate for the protection of consumers; and

(b)the need to promote freedom of enterprise in the market place.”

The reference to maintaining an “appropriate balance” suggests that protection of consumers was not intended to be achieved at the cost of destroying a contractual appointment merely because of an inconsequential departure from the approved form of appointment. I would respectfully adopt here the Chief Justice’s reasoning in Bluestone Holdings Pty Ltd v Juniper Property Holdings No 14 Pty Ltd concerning the proper construction of s 213(6) of the Body Corporate and Community Management Act 1997.¹³

In my opinion the departure from the approved form upon which the defendant relied before the primary judge did not produce the consequence that the appointment was not “in the approved form” within the meaning of s 134(1). The primary judge did not err in refusing the defendant’s application for summary dismissal of the plaintiff’s claim.

In oral submissions in this Court the defendant’s senior counsel abandoned a new argument that had been put in the written outline (concerning supposed differences between the relevant REIQ forms) but he sought to argue yet another point. The proposition, as I understood it, was that the chief executive’s approval of the REIQ form as part of the approved form was not authorised by PAMDA. If so, on the defendant’s argument it would seem that there was no validly approved form.

The consequences for the plaintiff’s claim of acceptance of this proposition were not developed in argument: at first glance it would seem a startling conclusion that the legislative intention was to deprive an agent of its commission when the agent had contracted on an approved form that was later found to be invalid. However it is not necessary to consider the argument further. It is by no means clear that it is even available to the defendant on the pleadings. It was not advanced before the primary judge. That the argument is raised for the first time on the application for leave to appeal is a factor militating against the grant of leave.¹⁴ In my opinion it would not be just to grant leave to appeal to allow this new argument to be advanced.

Indemnity Costs

The defendant does not seek to challenge the order that it pay the plaintiff’s costs of the defendant’s unsuccessful application for summary judgment. Rather, it contends that it should not have been ordered to pay those costs on the indemnity basis.

An order for indemnity costs is ordinarily not justified merely because a case fails, but such an order may be made where, for example, the losing party’s case is “wholly without any arguable merit”.¹⁵ Although the primary judge did not characterise the defendant’s application in those particular terms, his Honour did express the view that, not only was there a serious issue to be tried,¹⁶ but that, unless some additional evidence emerged at trial, there was no doubt that the defendant would fail on the issue. It is evident that his Honour’s perception that the application lacked any merit influenced the form of the costs order. I am not persuaded that such a view was not open to his Honour.

Orders

I would refuse both applications, with costs

PHILIPPIDES J: I have had the advantage of reading the reasons for judgment of Fraser JA. I agree with the reasons of his Honour and with the proposed orders.

Footnotes

1. Arnold Electrical & Data Installations Pty Ltd v Logan Area Group Apprenticeship/Traineeship Scheme Ltd [2008] QCA 100 at [5]. ↩

2. Ridolfi v Rigato Farms Pty Ltd [2001] 2 Qd R 455 at 459, 460; [2000] QCA 292; Coster v Bathgate [2005] 2 Qd R 496 at 501; [2005] QCA 210 at [27]; Jessup v King's Transport & Ors [2006] QCA 289; Programmed Solutions Pty Ltd v Dectar Pty Ltd [2007] QCA 385 at [11] – [12]. ↩

3. Sections 133(3)(f) and 135 did not apply here because the appointment was not for a “sole or exclusive agency”. ↩

4. Section 598 provides that the relevant form may be approved for use by the chief executive. ↩

5. Bluestone Holdings Pty Ltd v Juniper Property Holdings No 14 Pty Ltd [2006] QSC 219; Equipment Investments Pty Ltd v M J Dowthwaite & Co Pty Ltd (1969) 16 FLR 23; cf Hamilton v Minister for Immigration (1994) 53 FCR 349 at 357F-359C; 361D. ↩

6. See, for example: Wu v Minister for Immigration and Ethnic Affairs (1996) 64 FCR 245; Minister for Immigration and Multicultural Affairs v Li (2000) 103 FCR 486; [2000] FCA 1456; but compare the decisions cited by R D Nicholson J in Wu v Minister for Immigration and Ethnic Affairs at 279B. ↩

7. Adams v Lambert (2006) 228 CLR 409 at 414; [2006] HCA 10; see also Formosa v Secretary, Department of Social Security (1988) 46 FCR 117 at 121-124, per Davies and Gummow JJ. ↩

8. Pfeiffer v Stevens (2001) 209 CLR 57 at 65 per Gleeson CJ and Hayne J; [2001] HCA 71. ↩