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Gavin v Lend Lease Realty Pty Ltd[2016] QCAT 10

Gavin v Lend Lease Realty Pty Ltd[2016] QCAT 10

CITATION:

Gavin & Lien v Lend Lease Realty Pty Ltd & Ors [2016] QCAT 10

PARTIES:

Michael Gavin and Michelle Lien

(Applicants)

v

Lend Lease Realty Pty Ltd

Arthur Ilias

Nicholas Yacoel

Simon Brook

Simon Pagett

Kenneth Leslie James

Michael Peters

Catherine Price

(Respondents)

APPLICATION NUMBER:

GAR026-15

MATTER TYPE:

General administrative review matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Guthrie

DELIVERED ON:

11 January 2016

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The application for an extension of time to bring a claim against the claim fund under the Agents Financial Administration Act 2014 is refused.

CATCHWORDS:

CLAIM FUND – PROPERTY AGENT – APPLICATION TO EXTEND TIME  TO MAKE CLAIM AGAINST THE FUND - where claim of false representations by real estate agent – where claim of contravention of marketeering provisions – where claim not lodged within time – whether time should be extended to make claim – where extension of time refused

Agents Financial Administration Act 2014 (Qld), ss 82, 84, 85, 86, 88, 110, 111, 122

Property Occupations Act 2014 (Qld), ss 207, 208, 209, 212

Property Agents and Motor Dealers Act 2000 (Qld) (repealed), ss 470, 472, 472A, 473A, 488B, 573A, 573B, 573C, 574

Blacket and Anor v Wight and Anor [2012] QCAT 158

White & Foo v Tuxford & Hutchinson [2010] QCAT 51

APPEARANCES:

APPLICANT:

Mr Michael Gavin for the applicants

RESPONDENT:

Mr Michael Peters for all of the respondents

REASONS FOR DECISION

Background

  1. [1]
    On 25 May 2011, Michael Gavin and Michelle Lien signed a contract to purchase a vacant lot that was within a precinct known as Whitehaven at Beachside. The land is adjacent to what was, at the time, known as the Hyatt Coolum Resort. The applicants built a large, high specification home on the land in which they continue to reside. Lend Lease Realty Pty Ltd through its sales agent, Ms Catherine Price, negotiated the sale. The contract was completed on 25 January 2012.
  2. [2]
    On 20 November 2014, the applicants lodged, with the Office of Fair Trading (‘OFT’), a claim against the claim fundunder the Agents Financial Administration Act 2014 (‘AFA Act’). By letter dated 29 January 2015, the OFT notified the applicants that their claim had been lodged out of time because more than three years had passed since the contract was entered into.
  3. [3]
    On 11 February 2015, the applicants applied to the Tribunal for it to extend the time for making a claim against the claim fund.

Preliminary matters

  1. [4]
    On 4 November 2015, the Tribunal conducted a hearing for the parties to make oral submissions, without any oral evidence, to determine the application for an extension of time. It became apparent during the hearing that the respondents did not have a complete copy of the material filed by the applicants. Further, the applicants had not provided any response to the submissions of the Chief Executive, OFT upon which the respondents rely. Mr Gavin explained that while the Chief Executive’s submission appeared to be in the material provided to him by the respondents, he had failed to discuss it with the solicitor from whom he had sought assistance in preparing his case.
  2. [5]
    The oral hearing proceeded to the extent that it could and the Tribunal made directions for the filing and exchange of further written submissions. The Tribunal also directed that it would determine the application upon receipt of those additional submissions on the papers without a further oral hearing. The parties agreed with those directions.
  3. [6]
    At the hearing, the respondents provided to the Tribunal, with Mr Gavin’s consent, a chronology of events and a full copy of a letter from Fox Mildwaters Solicitors to Freehills lawyers dated 8 December 2011. Mr Gavin  referred to that letter in his oral submissions and an excerpt from it is set out in the respondent’s response to the application.[1]
  4. [7]
    The Tribunal has determined the application taking into account all of the written submissions and material filed by the parties both before and after the oral hearing on 4 November 2015 as well as the oral submissions made at the hearing.

Issues

  1. [8]
    At the time the applicants lodged their claim against the fund, 20 November 2014, the relevant legislative provisions in force where those contained in the Property Agents and Motor Dealers Act 2000 (Qld) (‘PAMDA’).  Similary that Act was in force at the time the alleged representations were made. By the time the applicants lodged their application to the Tribunal to extend time for making a claim against the fund, the AFA Act and the Property Occupations Act 2014 (Qld) (Property Occupations Act) had commenced operation. The provisions of the PAMDA and the AFA Act/Property Occupations Act are substantially similar. Throughout these reasons the Tribunal has referred to provisions in both the PAMDA and the AFA/Property Occupations Act.
  2. [9]
    As Mr Gavin argued at the hearing that his claim against the fund was lodged within the prescribed time, the Tribunal must determine:
    1. Whether the applicants lodged their claim against the fund within time; and
    2. If not, whether the time for lodging their claim should be extended.

Background facts

  1. [10]
    There are a number of background facts that are not challenged by the applicants. They are mostly supported by documents in the respondents’ material and the statement of evidence, dated 28 May 2015, of Mr Christopher Blue, legal adviser to Lend Lease Development Pty Limited in relation to matters relating to the “Hyatt Coolum Resort” and the development of certain land including the land purchased by the applicants[2]. The Tribunal does not have the agreement between Mr Clive Palmer’s entities and Sekisui House and Lend Lease Development Pty Ltd in relation to the acquisition of shares. However, it is clear that on 6 July 2011 Lend Lease Communities (Australia) Pty Ltd informed the applicants that the resort had been sold to Mr Palmer. That letter is before the Tribunal. Accordingly, the Tribunal is satisfied that the chronology of events in this case is:
    1. On 9 August 1985, Hyatt Regency Corporation Pty Ltd and Coeur De Lion Investments Pty Ltd (‘CDLI’) executed a management agreement.
    2. In 1987 the resort opened.
    3. In 2004, Lend Lease Development Pty Limited (‘LLD’) purchased all the shares in Coeur De Lion Holdings Pty Ltd (‘CDLH’).
    4. CDLH owned and operated Hyatt Coolum Resort through its 100% ownership of all the shares in CDLI and Coolum Resort Pty Ltd (‘CRPL’).
    5. In September 2010, SH Coolum Pty Ltd (‘Sekisui House’) purchased some of the development lands from CDLI in the vicinity of the resort including the land on which the applicants’ property is situated.
    6. In September 2010, Sekisui House also purchased 50% of the shares in CDLH from LLD.
    7. In September 2010, LLD was appointed by Sekisui House as the development manager for the development lands and Lend Lease Realty Pty Ltd was appointed as selling agent for the development lands.
    8. On 25 May 2011, the applicants signed a contract for the purchase of land from Sekisui House for $780,000.
    9. In about July 2011, Mr Clive Palmer’s entities acquired the shares in CDLH from Sekisui House and LLD therefore commencing control of Hyatt Coolum Resort.
    10. By letter dated 6 July 2011 Lend Lease Communities (Australia) Pty Ltd informed the applicants that the resort had been sold to Mr Palmer.
    11. By letter dated 17 November 2011, Lend Lease Communities (Australia) Pty Ltd informed the applicants that the properties in the area in which the applicants had purchased would be known as “The Coolum Residences”.
    12. By letter dated 24 November 2011, Lend Lease Communities (Australia) Pty Ltd rejected Mr Gavin’s request to terminate his contract of sale.
    13. By letter dated 8 December 2011 the applicant’s solicitors informed the respondents’ solicitors of a number of matters.[3]
    14. On 25 January 2012, the applicants’ contract was completed.
    15. On 29 March 2012, the Hyatt’s management of the resort ended following settlement of Supreme Court litigation between Mr Palmer’s entitites and Hyatt.
    16. On 20 November 2014, the applicants made a claim against the claim fund.
    17. On 29 January 2015, the notice from the Office of Fair Trading is sent to the applicants.
    18. In March 2015, Mr Palmer closes the resort.

Have the applicants lodged their claim against the fund within time?

  1. [11]
    Section 85(2) of the AFA Act[4] provides that a person may make the claim against the claim fund for financial loss for the ‘happening of an event’ only if the person makes the claim within the earlier of:
  • one year after the person becomes aware that the person has suffered loss; or
  • three years after the happening of the event.
  1. [12]
    Mr Gavin says that he made his claim within time as he lodged his claim with the OFT on 20 November 2014 and that date is within three years of 29 March 2012, the date from which Hyatt no longer managed the Hyatt Coolum Resort. He says that was the event that caused the loss.
  2. [13]
    He says further that 20 November 2014 is within a year of when he and his partner became aware that they had suffered financial loss. Mr Gavin argues that he became aware of his loss in May 2014 when blocks of vacant land adjoining his property sold for much less than he paid for his land. He said that a block sold for $465,000 when it was listed for $795,000. Another that had been listed for $830,000 was sold for $550,000.
  3. [14]
    For the purposes of s 85(2) of the AFA Act, the ‘happening of the event’ is the happening of any of the events listed in s 82 of that Act.[5] It is those events which can found a claim against the fund. The applicants rely on s 82(1)(g)[6] to argue that they have suffered financial loss because of a contravention by the respondents of ss 207, 208, 209 and 212 of the Property Occupations Act.
  4. [15]
    Sections 207, 208 and 209 of the Property Occupations Act are the marketeering provisions. Section 207 relates to misleading conduct by a marketeer. Section 208 relates to unconscionable conduct by a marketeer and section 209 relates to false representations and other misleading conduct relating to residential property. Similar provisions were contained in the PAMDA, namely ss 573A, 573B and 573C.
  5. [16]
    Section 212 relates to false or misleading representations about a property by a real estate salesperson relating to the sale of real property. Section 574 of PAMDA was substantially similar.
  6. [17]
    The cessation of Hyatt’s management of the resort on 29 March 2012 is not a relevant event within s 82 of the AFA Act and so cannot be relied on to found a claim against the fund. There is no basis on which the time for lodging a claim could run from that date.
  7. [18]
    It is clear from the wording of s 212 of the Property Occupations Act that only representations made by a real estate agent up until the contact of sale was signed can found a claim against the fund. The section refers to representations ‘relating to the sale of real property’ and the section specifically includes representations that are false or misleading relating to ‘the value of the real property at the date of sale’. Further, the wording of section 212(6) of the Property Occupations Act supports the tribunal’s view that it is the date the agreement is entered into as opposed to when the contract is completed.[7]
  8. [19]
    In this case, the contract was signed on 25 May 2011. Therefore, even accepting for present purposes, that the applicants did not become aware of their financial loss until mid-2014, if a contravention of s 212 is relied upon to found the claim, the claim was required to be lodged by 24 May 2014 as that would be the earlier date under s 85(2) of the AFA Act.
  9. [20]
    In relation to the applicants’ reliance on s 212 of the Property Occupations Act, the claim was lodged out of time.
  10. [21]
    Mr Gavin argues that representations made between 25 May 2011 and 25 January 2012 (the date the contract was completed) by both Ms Price and Mr Peter Boulton-Hall, Project Director of Lend Lease Communities (Australia) Pty Ltd contravened ss 207, 208 and 209 of the Property Occupations Act.
  11. [22]
    Section 84(2)(g) of the AFA Act[8] provides that a person who suffers financial loss because of a marketeering contravention relating to the purchase by the person of a residential property other than a non-investment residential property cannot make a claim against the fund.
  12. [23]
    Section 86 of the AFA Act makes it clear that a person may make a claim against the fund for capital loss because of, or arising out of a marketeering contravention relating to the person’s purchase of a non-investment residential property only if s 86(1)(a) and (b) are satisfied.[9] The Chief Executive, OFT says that the applicants did not give the Chief Executive, within one year after the contract date, or at all, notice in the approved form as required by s 86(1)(a) of the AFA Act or s 473A(1)(a) PAMDA. In relation to the equivalent marketeering provisions in the PAMDA, the claim was required to be made to the Chief Executive in the approved form and state the realised capital loss.[10] Section 473A of PAMDA provided that a claim that does not substantially comply with those requirements is of no effect. The Chief Executive also submits that the applicants did not lodge their claim in the approved form for such a claim. They lodged a PAMD Form 50 but not a PAMD Form 50-1.[11]
  13. [24]
    Mr Gavin has not provided any submissions to contradict those of the Chief Executive. Mr Gavin submitted at the hearing that he completed the form he understood to be the correct one. Mr Gavin does not say that s 86(1)(a) and (1)(b) of the AFA Act are satisfied. The Tribunal finds they are not. Further, it is clear that s 86(3) of the AFA Act[12] prevents the Tribunal extending time to permit those things to be done. The Tribunal finds that the applicants have not lodged a claim in reliance on the marketeering provisions which complies with the requirements of s 86(1) of the AFA Act or s 472A and 473A of the PAMDA.

Should the application to extend time be granted?

  1. [25]
    Section 122 of the AFA Act provides that the Tribunal may extend the time within which to make a claim, if it is satisfied of certain matters. There is no dispute in this case that the requisite notice under s 88(5)(b) of the AFA Act was given to the applicants so s 122(1)(a) is satisfied. It is for the Tribunal to then consider whether it is appropriate to extend time having regard to the matters in s 122(1)(b) which are:
  • the reasons for not making the claim or seeking the review within the time allowed; and
  • the application generally; and
  • for a claim, the relative hardship that an extension of time or a refusal to extend time would place on the claimant or respondent; and
  • the justice of the matter generally.

The reasons for not making the claim within the time allowed

  1. [26]
    Mr Gavin says that he and Ms Lien did not make the claim at an earlier time as they were unaware of the existence of the fund. As soon as they became aware of the fund, in November 2014, they took steps to make the claim.[13]
  2. [27]
    While the applicants say that their move from Melbourne to the Sunshine Coast, personal health and other issues including the birth of their third child meant that their focus was elsewhere, they do not claim that they were aware of the fund but those circumstances prevented lodgement of the claim.
  3. [28]
    The respondents say that by signing the Form 30c on 14 May 2011, the applicants acknowledged they had been notified of the existence of the fund.[14] Mr Gavin said that he did not read the documents connected with the contract of sale. He said he simply signed where his lawyer indicated.
  4. [29]
    The respondents rely upon White & Foo v Tuxford & Hutchinson [15]. The Tribunal said in that case:[16]

Form 30c is provided to potential purchasers specifically for the purpose of giving them information about their rights. Unless there is an intervening factor, such as illness or the applicants receiving and relying upon erroneous advice from their lawyer (see, for example, Bain v Ferrantino [2008] QCCTPAMD 13) it is difficult to see how an applicant’s ignorance of a right is sufficient reason for not making the claim.

  1. [30]
    The Tribunal agrees with that reasoning. The applicants do not argue that they received any incorrect legal advice or that ill health prevented lodgement of the claim. The applicants’ ignorance of their right to make a claim, through their failure to read information directed to that issue, is not sufficient reason for not making the claim.

The application generally

  1. [31]
    Consideration of ‘the application generally’ requires the Tribunal to consider the merits of the claim.
  2. [32]
    It is clear that, in relation to any alleged marketeering contravention relating to a non-investment residential property, not only have the requirements of s 86 AFA[17] not been met but the Tribunal has no power to extend the time for compliance. Further, at the current time, there is no realised capital loss, the only financial loss that can be claimed for such a contravention. Sections 110 and 111 of the AFA Act[18] make it clear that a capital loss is a realised capital loss only once the on-sale of the property has been completed.
  3. [33]
    The Tribunal finds that to the extent that the applicants’ claim against the fund relies upon a contravention of ss 207, 208 and 209 of the Property Occupations Act or the equivalent provisions in PAMDA it must fail.
  4. [34]
    The applicants say that Ms Price made a number of false and misleading representations in relation to the sale, which contravene s 212 of the Property Occupations Act which is in substantially the same terms as the former s 574 of PAMDA. A representation is taken to be false or misleading if it would reasonably tend to lead to a belief in the existence of a state of affairs that did not in fact exist, whether or not the representation indicates that the state of affairs does exist. Further, if a person makes a representation relating to a matter and the person does not have reasonable grounds for making the representation, the respresentation is taken to be misleading. The onus of establishing the person had reasonable grounds for making the representation is on the person.[19]
  5. [35]
    The applicants say that representations were made about the location, prestige and prices of the residential lots at Whitehaven. 
  6. [36]
    The respondents submit that Ms Price would have used words to the effect that the properties were situated on premium blocks, were north facing, situated near the park, were close to beach access and were among the largest blocks at Beachside. They say that these representations were true at the time and based on her experience and her work in the area she had a reasonable basis for making those representations. Given the location of the block of land purchased by the applicants, there is a strong argument that at the time such representations were made the state of affairs existed and Ms Price had reasonable grounds for making the representation.
  7. [37]
    The applicants say:[20]

…Cathie Price, stated that the land prices were to be maintained and the houses in Whitehaven, Beachside were high end and commanded over the $2million price range. Furthermore, she stated the Whitehaven Stage 2 park blocks, that we bought into, were premium blocks as they were the largest, with north facing park views and direct access to the park, communal facilities and beaches and expected these houses to be accordingly the largest and most extravagant of the Whitehaven houses.

…Cathie Price stated that the land prices were to be maintained and the houses in Whitehaven, Beachside were high-end and commanded over the $2m price range.

The marketing led us to believe that the houses in Whitehaven, Beachside commanded over the $2m price range (refer to list below and advertised flyers).

  1. [38]
    The applicants also say that it was represented to them that house and land properties in Whitehaven commanded prices in excess of $2,000,000 and that that was untrue having regard to the prices for which such properties sold some years later. They rely on brochures annexed to their application. They state:[21]

Fall in House Prices

The marketing had led us to believe that houses in Whitehaven, Beachside commanded over the $2 million price range (refer to list below and sales flyers). As a result, properties in Whitehaven were built with high quality specifications and finishes with upgraded inclusions in keeping with the perceived high property values and returns and the Hyatt resort. However, this impression of $2million+ homes in Whitehaven was misleading, as only one house achieved this price range.

With the departure of the Hyatt Resort in March 2012, the house values in Whitehaven, Beachside fell significantly, refer below:

Lot 1 – advertised for $2,950,000; sold for $725,000 in late 2012 incomplete

Lot 2 – advertised for $2,175,000; sold for $1,140,000 in late 2012

Lot 7 – advertised for $2,400,000; sold for $1,975,000 in late 2009

Lot 8 – advertised for $2,225,000; sold for $1,250,000 in 2013

Lot 12 – advertised for $2,250,000; sold for $1,020,000 in 2013

Lot 13 – advertised for $2,195,000

Lot 25 – advertised for $2,695,000; sold for $1,350,000 in late 2012

Lot 20 – advertised for $2,250,000

(refer to RP Data for sales results)

Fall in Land Prices

During the period of the Hyatt Resort, the land prices at Beachside were at a premium. After the loss of the Hyatt in March 2012, the land remained unsold until after a significant price reduction of approximately 25% in Belle Mare and 35-40% in Whitehaven Stage 2, Beachside in September 2013; after which the majority of land were sold refer to the pricing schedules for Belle Mare and Whitehaven Stage 2 at Beachside in between Nov/Dec 2010 and Sept 2013.

  1. [39]
    The applicants’ submission above links the reduction in value to the ‘loss of the Hyatt’. They say that they spent in total including the purchase price of the land, stamp duty ($30,000) and the build and associated costs ($1,400,000) approximately $2,200,000 in 2013.[22] The applicants says that the current value of their home is between $1,300,000 and $1,550,000 based on the market valuations they have obtained from local real estate agents.[23] They say that in 2014 an adjoining block of the same size to theirs which they purchased for $780,000 sold for $550,000.
  2. [40]
    The respondents submit that the advertisements relied upon by the applicants make no representation about the value of the properties. Rather they identify the list price of the properties. It is a statement of the price at which each vendor has listed his or her property for sale.
  3. [41]
    The respondents further submit that included in the applicants’ material is one advertisement that discloses a sale price of a house and land property at Whitehaven. The autumn 2010 edition of ‘Resort Life’ has an advertisement that lot 14 Whitehaven was sold for $1,650,000. The respondents say that the applicants’ assertion that the advertisements in the brochures represented that the lots were valued at more than $2,000,000 conflicts with the applicants’ own evidence.
  4. [42]
    Ms Price says that she would have said words to the effect that properties were priced at up to $2.9 million with homes starting from under $1 million and that although Lend Lease would endeavour to maintain land prices, changing market conditions would mean that prices may change.[24] The respondents submit that the representations made by Ms Price at the time were true.
  5. [43]
    The applicants say that the only property that had sold for in excess of $2,000,000 was one sold off the plan in December 2008. They say the median house price between 2008 and 2011 was $1,420,000. In support of their case, the applicants have stated that other residents of the estate say that they were told by Ms Price:
  • that most homes in the At Home at Hyatt Whitehaven development would be multi-million dollar homes with most fetching over $2,000,000[25]
  • all dune blocks were all over $2,000,000 and other house and land packages would be over or near the $2,000,000 price.[26]
  1. [44]
    Section 82(1) of the AFA Act (s 470 of PAMDA) makes it clear that the financial loss suffered by the person must be because of the happening of the relevant event, in this case the claimed contravention of s 212 of the Property Occupations Act/ s 574 of PAMDA.
  2. [45]
    Accepting for present purposes that Ms Price told the applicants that all houses in Whitehaven would be worth in excess of $2,000,000, the applicants purchased a vacant lot. While there were obliged to comply with  building covenants the market value of their home could only be ascertained once it was completed.
  3. [46]
    Perhaps the applicants argue that the representation regarding the final value of their home affected what they were prepared to pay for the land, so that they say they paid too much for it. The Tribunal considers that it would be difficult for the applicants to prove any financial loss caused by that representation as at the time the contract was entered into.
  4. [47]
    The Tribunal also considers it would be difficult for the applicants to prove any claimed financial loss caused by the claimed representation that their home would essentially always be worth more than $2,000,000. Time has passed and a number of other subsequent events have potentially affected the value of the land and the applicants’ home. Hyatt ceased managing the resort and the resort has since closed. Market factors generally are also likely to have had an impact.
  5. [48]
    Further, the Tribunal does not consider that, at the substantive hearing, a tribunal would be persuaded that flyers and pricing schedules themselves disclose anything more than the list price for the advertised property as opposed to the market value or future market value.
  6. [49]
    The applicants also say that representations were made about the approved heights of the buildings in the vicinity of the residential lots:[27]

All properties on Beachside were to be low-rise (i.e. two storeys) with a maximum of 4 storeys within the designated Beach Club precinct.

At the time we were looking at buying properties at the site, we were told that the remaining development site was intended and approved for two storey houses except in the designated Beach Club precinct where the proposal was for 3-4 storey apartments. In 2014, we have discovered that the owners of this development site, Sekisui House, are proposing to build 15 high rise buildings (7 to 10 storeys high) in the remaining site which was markedly in contrast to what we were previously told.

  1. [50]
    The respondents accept that such representations were made but say that, at the time they were made the representations were true and the respondents had a reasonable basis for making them. The Beachside Covenant Documents/Style Manual, which was supplied to the applicants around the time they entered into their sales contract, provides that the maximum height for residential developments is two storeys.
  2. [51]
    Based on the contents of the Beachside Covenant and Style Manual, the Tribunal considers it would be very difficult for the applicants to successfully argue that the respondents had no reasonable grounds for making the representation.[28]
  3. [52]
    The applicants say that the respondents should have informed them when negotiations were taking place with Mr Palmer and also when the resort was sold to him. They say:[29]

In the months preceding our contract sale date, when we were looking to purchase a property on this site, we were not informed that the owners, Lend Lease and Sekisui House (in 50-50% ownership), were intending to sell off the Hyatt resort, nor that the potential buyer was Clive Palmer. Had we been informed…, we would have acted differently.

  1. [53]
    The change of ownership of the resort occurred through Sekisui House and LLD selling shares in CDLH. While it is accepted by the respondents that the applicants were not told about this prior to the sale contract date, the respondents says that they owed no duty to the applicants to inform them of the change in the shareholding. They say that the existing contractual arrangements that were in place, including those by CDLI and CRPL (for example, the resort facilities’ licence) continued or were otherwise expected to continue notwithstanding the transfer of shares in CDLH. They also say that strict confidentiality arrangements were in place with the potential purchaser of the shares in CDLH.[30]
  2. [54]
    Ms Price was not, and nor was Lend Lease Realty Pty Ltd, a party to the contract for the sale of shares to Mr Palmer’s entities. The Tribunal considers that at a substantive hearing it would likely be accepted that confidentiality provisions applied to the negotiation and contract between those parties. That would be usual in such commercial transactions.
  3. [55]
    The Tribunal considers it would be very difficult for the applicants to establish that there was an obligation on the part of the respondents to inform the applicants of the proposed transfer of shares to Mr Palmer’s entities.
  4. [56]
    The applicants’ claim that Ms Price represented that the Hyatt brand would not change, that the Hyatt had been there for 20 years and that it had a further 20 or 30 year option to extend its agreement at the resort. The applicants say that they were shown material that demonstrated an ongoing relationship between Hyatt and the resort and between their land and the Hyatt managed resort. The applicants also say that Ms Price said that Yatt’s “lease” could not be broken for at lease 20 years[31]. The applicants rely on the advertising material and the marketing events promoted by the respondents in the lead up to their purchase of the land. The link between the land and the Hyatt managed resort featured prominently. The slogan used in the marketing campaign was ‘At home at Hyatt Coolum’. The applicants were informed that ultimately they would be able to use the resort facilities and take advantage of other services connected to the resort including child minding, yard maintenance and security services.
  5. [57]
    They also say that Ms Price told them that that it in the event that the Hyatt did not continue its association with the resort it would be replaced by another five-star International hotel brand.[32]
  6. [58]
    The Tribunal considers that it would be extremely difficult to establish that Ms Price knew about or could foresee the end of Hyatt’s association with the resort prior to 25 May 2011. The Hyatt Management agreement is before the Tribunal.[33] It is clear that at the date of the contract, Hyatt had options to continue to manage the resort until 2035. Mr Gavin says that Ms Price showed him this document as a basis for her representation. Ms Price denies having done so. In any event, the Hyatt continued to manage the resort after Mr Palmer entities acquired the shares and thereby took control of the resort. Hyatt did not exit the resort until 29 March 2012, after the applicants’ contract of sale was completed.
  7. [59]
    The Tribunal considers it likely that at a substantive hearing a Tribunal would find that the state of affairs, i.e., Hyatt’s connection with the resort, was in existence prior to the contract being entered into. Further, there is also a very strong argument that Ms Price, based on the Hyatt Management agreement, had reasonable grounds for representing that Hyatt would be connected with the resort into the future.
  8. [60]
    The applicants say that it was represented that the residential lots were within the Hyatt Coolum Resort. They say:[34]

The real estate agent and their misleading marketing claimed that these properties were…within a five-star resort and included the resort address.

…our property, and the properties at Beachside, Vantage and Visage, changed in characteristic and location. They were no longer regarded as a “…property at Hyatt Coolum” nor “at Home at Hyatt” nor living with an exclusive five-star resort. They no longer had the “exclusive…Hyatt Coolum address” or brand. Instead these properties became residential estates that were “adjacent to Hyatt Regency Coolum” and had “links to the Hyatt Regency Coolum” and were renamed “The Coolum Residences. We were led to believe that the properties were within and part of the resort and not separate estates from the resort, hence the news came as a great shock to us.

  1. [61]
    The change of name of the applicants’ residence to ‘The Coolum Residences’ did not occur before the sales contract date.
  2. [62]
    The respondents say that at the time representations were made in the marketing material CDLI, CRPL and Hyatt had a development agreement in place permitting the owners of the nearby residential lots to access the resort and the resort privileges through a resort facilities’ licence that was granted to them by CDLI and CRPL.[35] The respondents say that the agreement contained clauses that owners of the residential lots in the Beachside development area were to be provided with access to the resort and all of its facilities so that they could be characterised as part of the resort. Further, they say Hyatt consented to the use of the “come home to Hyatt” marketing campaign and to the association of Hyatt with the residences. The respondents say that the “Coolum Hyatt Resort – Master Plan” document developed in January 2010 contemplated that the residences would be part of the resort, and were to be developed together with the resort.[36]
  3. [63]
    The Tribunal considers, based on the documents relied upon by the respondents, that it would be difficult to argue that the state of affairs prior to the date of the contract was not as represented in the marketing material or that there were not reasonable grounds for making the representations alleged by the applicants.
  4. [64]
    The applicants say:[37]

The real estate agent and their marketing material claimed… that the resort had five-star facilities that included: an 18-hole PGA Championship golf course, one of the largest day spas in the southern hemisphere, gymnasium and fitness classes, nine swimming pools, a year-round patrolled beach, restaurants and café, tennis courts, child minding, Camp Hyatt for kids, canoeing, archery, Beach Club…

That guests and residents had personal access to all the resort services and amenities (including room service, transport service, home and garden maintenance, invitation to resort events, pool towels etc) and access to 24 hour security on site….

The access to all the resort amenities/facilities were exclusive to resort guests and residents at the Hyatt was considered a private resort.

  1. [65]
    The applicants also say that by 2014 many of the facilities were no longer available. They says that by 2012 they continued to have access to the resort but did not have access to services such as room and laundry service, transport services and other services. They say that in 2012/2013 the resort facilities were no longer exclusive but opened to the public. By the applicants’ own admission they had access to the resort facilities for a period after they entered into the contract and even after the contract was completed. 
  2. [66]
    The respondents say that access to resort facilities was made available to all purchasers of residential lots in three tiers. Tier 1 provided access to all of the main resort facilities and the subsequent tiers provided access to certain facilities at no additional cost. The respondents say that the applicants were given tier 1 and tier 2 access shortly after the date on which their property was constructed and approved as being covenant compliant by Sekisui House through the grant of a resort facilities licence by CDLI and CRPL and the facilities referred to by the applicants were available at the time the representations were made. The respondents rely on the Resort Facilities Licence between CDLI, CRPL and the applicants signed by them on or around 6 December 2011.[38]
  3. [67]
    Based on the documents relied upon by the respondents, the Tribunal considers that there is a strong argument that the state of affairs represented by the respondents in relation to the access to the resort facilities existed at the time the representations were made and that there were reasonable grounds for making the representations.
  4. [68]
    The respondents submit that it is not now possible to determine the financial loss caused by any claimed representations as so much time has passed. The respondents submit that, assuming the reliance on the use of the name Hyatt in advertising had some merit, it is impossible to assess the value attributable to the Hyatt name. The respondents say that to do so it would be necessary to also assess a value to the property had the other contractual arrangements remained in place (such as access to all the facilities) but in the absence of Hyatt. The respondents say this is also not now possible.
  5. [69]
    Even if the representations as claimed by the applicants were accepted as being false or misleading, the Tribunal considers that the calculation of the particular financial loss caused by each of the alleged representations is likely to be very difficult.  The impact on the property’s value of the change in management of the resort, changes made by the new ownership to the resort and the subsequent closure of the resort would have to be calculated. Further, since the time of the contract, there have been changes in the conditions of the property market generally. The impact of those changes would also have to be considered in determining any loss.
  6. [70]
    For those reasons, the Tribunal concludes that the claim has limited prospects of success.

The relative hardship that an extension of time or a refusal to extend time would place on the claimant or respondent

  1. [71]
    The applicants say they would suffer significant hardship if the Tribunal refuses to extend time. They point to their claimed financial loss. Mr Gavin said at the hearing that he cannot borrow money for business opportunities and cannot sell his home, as this would realise his loss. He said that he and Ms Lien are essentially ‘stuck there’.
  2. [72]
    Mr Gavin also says that they have suffered hardship by moving from Victoria to the Sunshine Coast away from family support in reliance on the provision of the resort services such as child minding, home maintenance and security services, which they did not receive.
  3. [73]
    The applicants rely on the Tribunal decision of Blacket and Anor v Wight and Anor[39] and argue that if they were to sell now they would likely lose $800,000 based on what they say they spent on the house and its current value. They say that that potential loss means that they would be unable to proceed with their life plans.[40]
  4. [74]
    In Blacket and Anor v Wight and Anor the Tribunal accepted that if the land was sold by the applicants would not clear enough to pay their mortgage and they had been unable to proceed with their life plans.
  5. [75]
    The respondents argue that where the financial loss is also the hardship relied upon by the applicants, White & Foo v Tuxford & Hutchinson is authority for the proposition that the applicant should provide a statement of assets and liabilities or a statement of income and expenses as evidence of the financial loss. In that case the Tribunal said:[41]

The applicants claim that the loss of the deposit would create hardship for them. The male applicant states that he has five children and that the recovery of $50,000 would be “of great benefit to” his family. There is no material before me as to whether all of the male applicant’s children are dependent upon him, there is no statement of assets and liabilities, nor of income and expenses.

  1. [76]
    The respondents say that if the extension of time were granted, hardship would be placed on the respondents in defending the claim. Mr Peters submitted that it would not be possible to properly determine the loss now as so much time has passed.
  2. [77]
    The Tribunal accepts that the move from Victoria to the Sunshine Coast has meant that the applicants and their young family have little family support and this has placed a strain on family relationships. The estimated loss is substantial and such a loss would cause financial hardship to many people but in this case, there is no material before the Tribunal of the applicants’ overall financial position. They have not realised the claimed loss, they retain their home.
  3. [78]
    The Tribunal considers that there would be some prejudice to the respondents by extending the time in terms of defending the claim given the events that have occurred since the date of the contract.

The justice of the matter generally

  1. [79]
    The Tribunal understands that the applicants’ current situation does not reflect the future they envisaged for themselves and their family  when they signed the contract in 2011. Their dream of living in a home on the beach with use of resort facilities has been mostly unrealised. They have their home on the beach but the resort is currently closed. They say that, as Hyatt did not manage the resort from 29 March 2012 just a couple of months after their contract settled, they ‘did not get one day of living at the Hyatt’.
  2. [80]
    The respondents have expressed their empathy with the applicants’ position but say that in 2011 they had not and could not have foreshadowed what would occur after the ownership of the resort changed.
  3. [81]
    While the applicants consider that someone is to blame for what has occurred, the Tribunal can only consider the limited application before it.
  4. [82]
    Taking into account the reasons for the applicants not making the claim within time, the merits of the case and the relative hardship that an extension of time would place on the applicants and the respondents, the Tribunal is not persuaded that the discretion in s 122 of the AFA Act should be exercised in favour of the applicants.
  5. [83]
    The application for an extension of time is refused.

Footnotes

[1]Paragraph [8].

[2]Statement of evidence of Christopher Blue dated 28 May 2015, in particular at  [6], [7] and [8].

[3]This letter is referred to later in these reasons.

[4]PAMDA, s 472(2).

[5]Ibid, s 470.

[6]Ibid, s 470(1)(a).

[7]Ibid, s 574(6).

[8]Ibid, s 471(2)(h).

[9]Ibid, s 472A(1)(a) and (b).

[10]Ibid, s 473A(2).

[11]Chief Executive’s submission dated 4 June 2015, [3].

[12]PAMDA, s 472A(3).

[13]Attachment to applicants’ application to the Tribunal Part B [1], Applicants’ submission 15 July 2015 at pp. 2 and 3 under heading, “Extension of Time – reason why a claim was not made within time”.

[14]The signed Form 30c is at ‘LL-2’ of the respondents’ “Additional Material and Submissions”.

[15][2010] QCAT 51.

[16][2010] QCAT 51 [15].

[17]Or the former s 472A of the PAMDA.

[18]PAMDA, s 488B.

[19]PAMDA, s 212(5) / s 574(5).

[20]Attachment to the applicants’ application to the Tribunal, p. 3, Part A, [7].

[21]Attachment to the applicants’ application to the Tribunal, “Statement of Claim” Part B [8].

[22]Applicants’ submission 15 July 2015, p 4.

[23]Letter PRD Nationwide to the applicants on 25 June 2015 and email from Rock Real Estate Noosa to the applicants on 23 June 2015.

[24]Statement of Catherine Price dated 27 May 2015 at [18].

[25]Attributed to Ms Michelle Wilson in the applicant’s submission 15 July 2015.

[26]Attributed to Dieter and Christena Klein in the applicant’s submission 15 July 2015.

[27]Attachment to the applicants’ application to the Tribunal “Statement of Claim” B [7].

[28]Respondents’ Additional Material and Submissions ‘LL-12’.

[29]Attachment to the applicants’ application “statement of claim summary” Part B, [1].

[30]Respondents’ additional material and submissions 28 May 2015 B1.8.

[31]Applicants’ submission dated 15 July 2015.

[32]Attachment to the applicants’ application to the Tribunal “Statement of Claim” Part B [3] and [4].

[33]Attachment ‘LL-7’ to the “Additional Material and Submissions” of the respondents dated 28 May 2015.

[34]Attachment to the applicants’ attachment to their application “Statement of Claim Summary” Part B, [2].

[35]Respondents’ additional material and submissions ‘LL-8’.

[36]Respondents’ Additional Material and submissions ‘LL-9’.

[37]Applicants’ attachment to their application ‘Statement of claim - Summary’ Part A [3], [4], [5].

[38]Respondents’ Additional Material and submissions ‘LL-10’.

[39][2012] QCAT 158.

[40]Submission of the applicant 15 July 2015 at p 4.

[41][2010] QCAT 51 at [20].

Close

Editorial Notes

  • Published Case Name:

    Michael Gavin and Michelle Lien v Lend Lease Realty Pty Ltd, Arthur Ilias, Nicholas Yacoel, Simon Brook, Simon Pagett, Kenneth Leslie James, Michael Peters and Catherine Price

  • Shortened Case Name:

    Gavin v Lend Lease Realty Pty Ltd

  • MNC:

    [2016] QCAT 10

  • Court:

    QCAT

  • Judge(s):

    Member Guthrie

  • Date:

    11 Jan 2016

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2016] QCAT 1011 Jan 2016Application for an extension of time in which to make a claim against the claim fund under the Agents Financial Administration Act 2014 (Qld); application dismissed: Member Guthrie.

Appeal Status

No Status

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