Reid v David Gilmour Real Estate Pty Ltd

Procedural

1. The applicant appeared at the hearing and prosecuted her claim.
2. Leave was granted by the Tribunal for the respondent to be represented by Geoffrey Pickering, a sales representative of the respondent.
3. On 15 April 2019 the Tribunal made directions about the filing of the documents that the applicant and the respondent were to rely on at the hearing.
4. The Tribunal directed that the applicant file and serve her documents on or before 6 May 2019. The applicant filed with the Tribunal a bundle of documents on 31 May 2019 on which she relies. Notwithstanding the failure of the applicant to file her documents in accordance with the directions of the Tribunal, the Tribunal grants leave for the applicant to rely on those documents. Those documents are admitted into evidence as Exhibit A1.
5. The respondent was directed to file and serve any documents it relied upon by 27 May 2019.The respondent filed the documents on which it relies on 21 June 2019. Notwithstanding the failure of the respondent to file its documents in accordance with the directions of the Tribunal, the Tribunal grants leave for the respondent to rely on those documents. Those documents are admitted into evidence as Exhibit R1
6. The applicant gave sworn oral evidence at the hearing. The Tribunal gave Mr Pickering the opportunity to ask the applicant questions about her evidence.
7. Mr Pickering gave sworn oral evidence at the hearing. The Tribunal gave the applicant the opportunity to ask Mr Pickering questions about the respondent's evidence.

Facts and evidence

1. The facts found from the evidence of this application are set out in relevant detail.
2. The applicant is the registered proprietor of strata lot within a strata scheme at Dee Why. On or about 15 November 2016 she received an unsolicited letter from Ryals Real Estate Pty Ltd trading as LJ Hooker Dee Why advising they represented a company looking to purchase strata lots within the strata scheme in which the applicant's lot is located (called throughout these reasons for decision "prospective purchaser"). The letter informed the applicant that the prospective purchaser had acquired at least 3 other lots in the strata scheme and "are offering over market value for your property. Also long settlements up to 6 months if required."
3. In May 2018 the applicant had telephone discussions with LJ Hooker Dee Why about selling her lot to their prospective purchaser.
4. On or about 23 October 2018 the applicant contacted the director of the prospective purchaser by email to determine if there was interest from that prospective purchaser in the applicant's lot. The prospective purchaser replied that she was overseas, that she remained interested and suggested that the applicant discuss the intended sale of her lot with an agent of her choice and find out the lots value and then continue discussions with the prospective purchaser.
5. The applicant had discussions with 2 local agents about the value of her lot and obtained written advice about the market value of her lot from one local agent on 23 October 2018 and then the respondent on 24 October 2018 that the lot would attract interest in the vicinity of between $520,000 and $550,000.
6. On 24 October 2018 the respondent, represented by Mr Pickering, visited the applicant at her lot with a Sales Inspection Report and Auction Agency Agreement ("Agency Agreement") partially completed, signed by Mr Pickering and dated 23 October 2018. Mr Pickering discussed the intended methods of selling the lot with the applicant. Mr Pickering left the applicant's lot without the applicant signing the Agency Agreement and took it with him.
7. On 26 October 2018 the applicant telephoned Mr Pickering to confirm that she wished to appoint the respondent as her agent and to proceed with the respondent acting as her selling agent for the sale of the property. Mr Pickering advised the applicant that he was not working that day and that he would send another agent from the respondent, Jaxon. Jaxon, attended the applicant's lot. Jaxon amended the term of the exclusive Agency Agreement from 24 October 2018 to 24 January 2019 in response to the applicant's comment that the dates were wrong. The applicant requested for a 4 week exclusive agency period which was ignored by Jaxon; the applicant signed the Agency Agreement. It is noted that the date shown on the Agency Agreement that the applicant signed states 24 October 2018 although the evidence supports it being signed by the applicant on 26 October 2018. Jaxon returned a copy of the signed Agency Agreement to the applicant about an hour after it had been signed by the applicant.
8. On 27 October 2018, the applicant's evidence is that she looked carefully at the Agency Agreement given to her by Jaxon. It had not had the alteration to the term of the agreement initialled by the respondent, the date the applicant signed it was incorrect and on the last page the date had been changed from 23 October 2018 to 24 October 2018, but should have been 26 October 2018. The applicant also interpreted the agreement had no cooling off period as prescribed by the PSBA because of the date errors.
9. It is conceded by the respondent that the Agency Agreement was signed on 26 October 2018 and came into effect on that day.
10. The respondent invoiced the applicant for marketing costs in the sum of $5571.00 on 29 October 2018. The applicant attended the respondent's office and paid the amount of the invoice to Mr Pickering in cash. Mr Pickering acknowledged receipt of the payment by endorsing on the invoice by hand writing "Paid-G Pickering (signature) 29/10/18".
11. On 30 October 2018 the applicant sent an email to the director of the prospective purchaser to inform her that the lot would be auctioned and the first open house would be on 3 November 2018 at 10:30am.
12. On 1 November 2018 the respondent uploaded the advertisement for the lot to the internet. Included in the advertisement prepared by the respondent was a statement that the strata levies were $1029.10. The applicant says that this amount is incorrect and called Mr Pickering to let him know of the error at 10:23am. By the afternoon the internet advertisement had been changed to show the strata levies were $649.50, which the applicant maintains is still incorrect and should have been $647.95.
13. On 3 November 2018 Mr Pickering left a brochure for the sale of the lot with the applicant. The brochure showed the strata levies incorrectly as $1029.10 and that the unit area had been incorrectly described as 62.2sqm and with its carport it should have been 65.2sqm.
14. The applicant complained to Mr Pickering at 12:41pm on 3 November 2018 about the errors. It is the applicant's evidence that Mr Pickering told her in that conversation that the figures had been supplied by the strata managing agent for the strata scheme and that he would remedy the error by calling potential buyers and correct the information. The applicant's evidence is that her enquiry to the Strata Managing Agent about who gave the information to Mr Pickering resulted in a reply from the Strata Managing Agent that it does not supply information about a strata scheme without being authorised by the appropriate person and they did not hold that authority.
15. Mr Pickering reported to the applicant on 5 November 2018 that only 1 group of people went through the property at the open for inspection on 3 November 2018 and provided price feedback for the value of the lot in the range of between $530,000 and $540,000 and that he had contacted the prospective purchaser and sought instructions for putting an offer to the prospective purchaser.
16. On 5 November 2018 at 5:11pm Mr Pickering advised the applicant that the prospective purchaser had offered $560,000. The applicant responded by advising that the offer was not accepted as she wished to wait until the marketing campaign had run further to elicit the "full price". The applicant also asked for a receipt for her the payment of the marketing costs.
17. The applicant visited the respondent's office on 7 November 2018 and saw that no brochures were displayed for her lot.
18. On 7 November 2018 Mr Pickering reported to the applicant that at another open house one party had inspected. He confirmed that the prospective purchaser was "ready to move forward" with their offer of $560,000 and that they were reluctant to increase the offer. The closest next interest (but not an offer) was $530,000.
19. On 10 November 2018 while the lot was open for inspection, the applicant visited the respondent's office and again saw that no brochures for her lot were on display. At 10pm that night the applicant looked up the marketing material on the internet and saw that on realestate.com.au that the area of the lot was stipulated to be 9.29sqm and on domain.com.au the area was stipulated as 7sqm.
20. On 12 November 2018 the applicant telephoned the respondent's office to tell the respondent that the applicant would pick up the keys to her lot and the receipt she had not received for the marketing invoice payment.
21. The applicant attended the respondent's office at about 9am on 12 November 2018. Her keys were returned to her. She was handed a receipt incorrectly showing that $1251.00 was still owning by her to the respondent. The respondent amended the receipt to incorrectly again show that the amount of $1251.00 was paid on 12 November 2018. At the same time the applicant spoke to Jaxon about there being no display of brochures for her lot in the respondent's office. Jaxon appeared with a brochure. It still had the errors on it from when it was first printed despite the applicant being informed by Mr Pickering by email that the brochures had been amended to correct the errors on 5 November 2018. The respondent emailed the applicant with a copy of the receipt, still incorrectly saying that the applicant had paid $1251.00 on 12 November 2018. At about 1:45pm the applicant again attended the respondent's office and spoke to Jaxon who gave the applicant another incorrect receipt and pressed her to take $320.00 in cash as a refund for an overpayment for the sign board for which the applicant had been charged $550 when the cost had only been $230.00. The applicant returned to the respondent's office at 2:45pm and spoke to Mr Pickering and again he gave the respondent an incorrect receipt and pressed the applicant to take the $320 refund. Mr Pickering gave the applicant a receipt for the correct amount invoices, but that an incorrect amount paid on 29 October 2018 of $5251.00 and not $5571.00 paid by the applicant.
22. The applicant's evidence includes a statement by Kristy Dickson dated 6 February 2019 stating that she picked up a brochure for the applicant's lot from the respondent which continued to contain incorrect information on 13 November 2018.
23. The schedule of open house times given to the applicant by the respondent when entering into the Agency Agreement have been changed by the respondent without reference to the applicant.
24. On 13 November 2018 the applicant gave notice by email to Mr Pickering that she intended to rescind the Agency Agreement because the respondent had failed in its obligations to exercise the provision of the service of selling the applicant's lot with due care and skill. The applicant requested that all marketing material be removed and the sign board be removed. Mr Pickering response ignored the applicant's intention to rescind the Agency Agreement and her instructions and replied to her by email at 17:44 on 13 November 2018 saying that "…this Purchaser was introduced to the property by (the respondent) during our agency period and because of my past history with this buyer, I have been able to achieve you an offer at this level ($560,000)…(m)y suggestion is that you seriously consider this offer, move forward and exchange".
25. On 14 November 2018 by email to the applicant Mr Pickering attempted to confirm with the applicant that an open home would be held at 10am that morning. The applicant replied by email that the Agency Agreement was to be rescinded and all signs removed concerning her property. Mr Pickering sent a further email urging the applicant to continue with the open house as there were a number of other prospective purchasers wishing to view the property.
26. At about 11 am on 14 November 2018 the applicant had a discussion with the director of the prospective purchaser who told her that Mr Pickering had told the prospective purchaser by text that the applicant would accept an offer of $580,000. The prospective purchaser sent a copy of the text to the applicant. The applicant's sworn evidence is that she had not told Mr Pickering any price she would accept.
27. Mr Pickering has continued to send to the applicant numerous emails and texts about continuing the marketing of the applicant's lot.
28. On 15 November 2019 Mr Pickering sent the applicant another email which states "Raine & Horne will not be rescinding our Exclusive Agency Agreement. We will refund you the cost of the Brochures. All other marketing fees apply."
29. On 16 November 2018 Mr Pickering sent another email to the applicant confirming that an open home was booked again for 17 November 2018 and asking for final instructions. In response the applicant confirmed by email to Mr Pickering that her intentions were clearly set out in her emails of 13 and 14 November 2018 to rescind the Agency Agreement and no further action was to take place marketing the lot.
30. On 17 November 2018 Mr Pickering sent another email to the applicant stating "You are able to withdraw the property from sale, however (the respondent) will not cancel the agency agreement. The agreement stays as an exclusive agreement till (sic) it expires and you cannot use another agent during this exclusive period. If any buyers who have submitted offers through (the respondent) purchase the apartment we are entitled to our fee and will be claiming same."
31. The applicant's evidence is that despite her instructions the respondent continued to advertise her lot on the internet up to 19 November 2018 including the incorrect information and the sign containing errors remained in place on 20 November 2018.
32. The applicant's evidence is that Mr Pickering persisted to contact the director of the prospective purchaser attempting to invite the prospective purchaser to buy the applicant's lot as late as 27 November 2018 despite the applicant having rescinded the Agency Agreement.

Findings

1. The PSBA mandates that for an agent to be entitled to commission or expenses there must be an agreement in writing (an agency agreement) between the agent and the principal. The Tribunal is satisfied that there was an agreement in writing appointing the respondent as the applicant's agent for the sale of the applicant lot. Although addressed by the applicant with some contention, the evidence is that the Agency Agreement commenced on 26 October 2018.
2. The applicant seeks an order that the Agency Agreement entered into between the applicant and the respondent be declared null and void.
3. The powers of the Tribunal are derived by legislation. It does not have inherent jurisdiction.
4. In respect of a consumer claim arising from a claim under the PSBA the Tribunal's power is limited to determining a consumer claim in relation to : 1. The entitlement of the licensee (of a real estate agency) to the whole or any part of the amount specified in the statement of claim (pursuant to section 36(4) of the PSBA) or the itemised account for a reimbursement in connection with a transaction; or 2. Whether the whole or any part of the amount invoiced by the licensee is reasonable.
5. The Tribunal has no other power or jurisdiction under the PSBA. That is, the Tribunal has no power to give declaratory relief in the nature sought by the applicant under her head of claim seeking a declaration that the Agency Agreement is null and void.
6. No sale of the applicant's lot was achieved as a result of the respondent performing its obligations under the Agency Agreement or, at the date of the hearing, at all.
7. The Tribunal's power is limited to a review of whether the disbursements charged, as marketing expenses, by the respondent in performance of its duties under the Agency Agreement are reasonable and if found not to be reasonable then the Tribunal may order the repayment of part or all of those expenses. No sale was achieved, so the Tribunal has no review function of an event that has not occurred. Section 79N of the FTA provides that in determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to this Division, make an order that requires a respondent to pay to the claimant a specified amount of money,

Unilateral rescission of Agency Agreement

1. The applicant's language used in her communication to the respondent is couched in terms wanting to "rescind this contractual agreement" on the grounds of "breach of conduct", "false and misleading advertising" and "not acting in my best interest" (email from applicant to Mr Pickering of 13 November 2018). "as stipulated yesterday the contract is to be rescinded and all signs removed concerning my property" (email from the applicant to Mr Pickering of 14 November 2019) and "I have stipulated and instructed for the contractual agreement to be terminated, and that there would be no action, and , the signs on the building to be removed. Why has this not been done? Instead since then I have had to endure a tirade of pushy emails from yourself which made me feel intimidated, harassed and anxious. What has happened is that this whole episode has shown 'False and Misleading Advertising', 'Not acting in My Best Interest' and 'Breach of Coduct (sic) and the Law'".
2. To obtain relief of rescission of a contract there must be serious or fundamental mistake. While there are various views on the restrictions on cases where rescission is only available where fraud, misrepresentation, common misapprehension of facts or as to their relative and respective rights if the misapprehension was fundamental and the party seeking relief was not at fault themselves. (JLR Davis, Contract: General Principles- The Laws of Australia (2nd Edition 2012 , Thomson Reuters at 7.2.580).
3. It appears that the applicant was seeking to terminate the Agency Agreement. The Agency Agreement makes no provision in its terms for the termination of it during its term. Termination of the contract may have been available to the applicant had there been a breach of the contract. The applicant alleges that the respondent has engaged in false and misleading advertising of her property, not acting in her best interests and breaching conduct and the law. There is evidence of errors made by the respondent in preparation of the marketing material produced by the respondent and failure to remedy the errors despite promises to do so. That evidence may support a contention that the respondent was negligent in the preparation of the material and failed to use its due care and skill in doing so.
4. Although the applicant perceives that the respondent was not acting in her best interests, the respondent continued to conduct open houses and report to the applicant what interest was in the market place for her property. The applicant has not particularised with sufficient clarity how she alleges the respondent breached its conduct, assuming the applicant is referring to some code of conduct, and the law.
5. By purporting to rescind the Agency Agreement it may be interpreted that the applicant has engaged in an act repudiating the contract. If there is no justification for such repudiation, such as a breach of contract by the agent, then the contract should not automatically end. The agent would then have an option whether to insist upon continuation of the contract or accept the repudiation and seek the appropriate remedy: G H L Fridman, The Law of Agency (Seventh Edition, 1996, Butterworths) at page 396.
6. The Agency Agreement grants to the respondent at paragraph 1 "In consideration of the Agent promising to use their best endeavours to sell the subject Property, the Principal grants to the Agent exclusive selling rights of the Property for a period from24 October 2018 to 24 January 2019".
7. The applicant contends that the respondent's attempts at marketing the applicant's property contain a number of errors and the respondent's response to be made aware of those errors was to not display the brochures to the property and failed to rectify the error on the sign board. The errors remained on the internet marketing until at least 20 November 2018. On consideration the errors of property size on the brochures, internet advertising and the sign board by a reasonable person, they would identify that those errors were obvious. Mr Pickering's explanation was that when he handed a brochure in response to an enquiry about the property he pointed out the error and told the enquirer of the actual strata levies and area of the lot. The Tribunal is not satisfied that the applicant has established that the errors were intentional on the part of the respondent and as such cannot establish that the errors were intended to mislead or deceive buyers of the property. There is no evidence that the errors caused a limitation of the number of inspections of the property at the open houses.
8. The respondent was within its contractual right to not accept the applicant's repudiation of the contract immediately on the applicant's purported and unilateral rescission of the Agency Agreement. Mr Pickering efforts to offer the property in the market place continued. His persistence in contacting the applicant is a common methodology of real estate agents to secure the sale of properties on behalf of their principal. The applicant's perception of this persistent contact was that she was being harassed by Mr Pickering after she regarded the Agency Agreement as at an end.
9. Mr Pickering's email dated 20 November 2018 acknowledges that the applicant may withdraw her property from sale/auction, but he advises her that there are no grounds or agreement to terminate the Agency Agreement and asserts his reliance on the terms of the exclusivity of the agreement until 24 January 2019.
10. As referred to in these reasons for decision the Tribunal has no power under the PSBA or the FTA to declare the Agency Agreement null and void.
11. The Tribunal is satisfied that the evidence supports the applicant's contention that the prospective purchaser was known to the applicant and that she had discussed the sale of her lot to that prospective purchaser before entering into the Agency Agreement with the respondent. The Agency Agreement at Clause 5(ii) provides that "The Agent shall be entitled to a fee at the agreed amount is at any time following the expiration of the Exclusive Agency Period the Principal enters into a contract for the sale of the Property with a purchaser effectively introduced to the Principal or the Property during the Exclusive Agency Period by the Agent, by any other agent or by the Principal". The prospective purchaser was not effectively introduced to the applicant by the respondent during the Exclusive Agency Period as the prospective purchaser's interest was known to the applicant before that period.

Reasonableness of marketing expenses

1. The findings of fact by the Tribunal disclose a number of mistakes and errors by the respondent in marketing the applicant's lot compounding to the point where the applicant purported to rescind the Agency Agreement by giving notice of her intention to rescind the Agency Agreement on 13, 14 and 16 November 2019 and to cease marketing the property.
2. The only remedy available to the applicant in these proceedings before the Tribunal is for the Tribunal to review the marketing costs pursuant to section 36(4)(a) and (b).
3. The applicant claims that the respondent charges made for marketing made by the respondent are unreasonable when considered in the light of the lack of care and skill brought by the respondent to their obligations under the Agency Agreement.
4. Those marketing costs were: 1. Pre-marketing: 100 x High Gloss Brochures $150.00; 2. Pre-Marketing: 6 x 4 Illuminated Signboard $550.00; 3. Pre-Marketing: Auctioneer-Vic Lorusso $880.00; 4. Pre-Marketing: Campaign Track Fee $30.00; 5. Internet Marketing: Domain Premium Plus $950.00; 6. Internet Marketing: REA Audience Maximiser $399.00; 7. Internet Marketing: REA-Premier Property x 45 Days $2090.00 8. Photos/floorplan/video: Floor Plan-Apartment $140.00 9. Photos/Floorplan/Video: Photos x 6 professional $382.00 10. Total $5571.00
5. The evidence supports the contention that the errors on the high gloss brochures caused them to be rendered useless without amendment. It can be inferred that the respondent realized this after the applicant drew their attention to the errors. Rather than amend and reprint the brochures, the respondent simply removed them from public access in their reception area where such brochures would normally be available. The Tribunal finds that the charge to the applicant for the high gloss brochures containing errors and mistakes was unreasonable and the whole of the cost of the brochures is to be refunded to the applicant.
6. Similarly, the cost of the signboard was charged to the applicant as an illuminated signboard at $550. The signboard was a plain signboard with a cost of $230.00. The respondent has overcharged the applicant in the amount of $320.00 and this amount is to be refunded to the applicant
7. The property did not proceed to auction the charge of $880 for the auctioneer is unreasonable when the service has not been provided. The amount of $880.00 is to be refunded to the applicant.
8. The internet advertising contained errors caused by the information supplied to the website by the respondent. As late as 13 November 2018 the internet advertisements were showing incorrect inspection times and significant errors in the area of the lot. The original errors included an error about the amount of the strata levies. The errors may have been detrimental to the marketing of the property. The respondent's attention was drawn to the errors. While the strata levies error was corrected, the other errors remained. For the respondent to fail to act to rectify the errors displayed a failure by the respondent to use its due care and skill in managing the internet marketing of the applicant's property. The value of the internet advertising was diminished to the point where it have significant reduction in its effectiveness. The Tribunal is satisfied that the charges made by the respondent for internet advertising were unreasonable when considered against the failure by the respondent to exercise due care and skill. The Tribunal orders that the total amount paid by the applicant to the respondent for internet advertising is to be repaid to the applicant, that is the Pre-Marketing: Campaign Track Fee $30.00, Internet Marketing: Domain Premium Plus $950.00, Internet Marketing: REA Audience Maximiser $399.00 and Internet Marketing: REA-Premier Property x 45 Days $2090.00, total $3,469.00.
9. There is no evidence before the Tribunal of any deficiency with the photo, floorplan or video. The Tribunal is satisfied they are reasonable charges and are not refundable to the applicant.

Orders

1. The Tribunal orders the respondent, David Gilmour Real Estate Pty Ltd to pay to the applicant, Julianne Reid to sum of $4,819.00 immediately.

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: 26 November 2020