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  4. Noosa Resort Management Pty Ltd and Ors v Department of Justice and Attorney-General – Office of Fair Trading - [2022] QCATA 171

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Noosa Resort Management Pty Ltd and Ors v Department of Justice and Attorney-General – Office of Fair Trading[2022] QCATA 171

Noosa Resort Management Pty Ltd and Ors v Department of Justice and Attorney-General – Office of Fair Trading[2022] QCATA 171

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Noosa Resort Management Pty Ltd and Ors v Department of Justice and Attorney-General – Office of Fair Trading [2022] QCATA 171

PARTIES:

NOOSA RESORT MANAGEMENT PTY LTD

(first applicant/appellant)

JENNIFER MAY CARR

(second applicant/appellant)

PETER CHARLES BUTT

(third applicant/appellant)

v

DEPARTMENT OF JUSTICE AND ATTORNEY-GENERAL – OFFICE OF FAIR TRADING

(respondent)

APPLICATION NO/S:

APL269-20; APL201-21

ORIGINATING APPLICATION NO/S:

OCR254-18

MATTER TYPE:

Appeals

DELIVERED ON:

30 November 2022

HEARING DATE:

6 June 2022

HEARD AT:

Brisbane

DECISION OF:

Senior Member Aughterson

ORDERS:

  1. In relation to the second and third appellants, so far as they relate to disciplinary ground 3 the appeals are upheld and the sanction of reprimand in relation to that ground is set aside.
  2. The appeals are otherwise dismissed.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – OTHER CASES – where the appellants sought to appeal a decision of the Tribunal on a question of law – where leave to appeal not required – whether there was a ‘transaction’ for the purposes of the Agents Financial Administration Act 2014 (Qld) – whether error of law

PROFESSIONS AND TRADES – AUCTIONEERS AND AGENTS – DISCIPLINARY PROCEEDINGS – where second and third appellants were shareholders and directors of the corporate letting agent and held real estate principal licences – whether second and third appellants required to account to owner – whether disciplinary grounds made out in relation to second and third appellants

Agents Financial Administration Act 2014 (Qld), s 6, s  15, s 16, s 23

Property Occupations Act 2014 (Qld), s 99, s 169

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 146

Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors [2020] QCAT 277

Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors (No 2) [2020] QCAT 403

APPEARANCES &
REPRESENTATION:

Appellants:

APJ Collins, of counsel, instructed by Bathersby Legal

Respondent:

WM Slack, of counsel, instructed by the respondent

REASONS FOR DECISION

  1. [1]
    Under s 23 of the Agents Financial Administration Act 2014 (Qld) (‘the AFA Act’), an agent must account to a client for all amounts received for a ‘transaction’. In a decision of the Tribunal at first instance delivered on 8 July 2020, it was held that there had been a breach of that provision and that grounds existed for disciplinary action against each of the appellants under the AFA Act.[1] Orders were made as to sanction in a subsequent decision delivered on 14 October 2020.[2]
  2. [2]
    The central question for appeal APL269-20 is the meaning of the term ‘transaction’, it being submitted by the appellants that there had been no relevant ‘transaction’ that would give rise to a duty to account and, accordingly, there was no basis for the finding that grounds existed for disciplinary action. The proper interpretation of s 23 of the AFA Act is a question of law, so that leave to appeal is not required.
  3. [3]
    Appeal APL201-21 adds the ground of an alleged error in the finding of the Tribunal that a reprimand was the most appropriate order in respect of the s 23 AFA matter. However, in relation to this appeal the order sought is qualified: ‘That if the Decision of the Tribunal delivered on 8 July 2020 is set aside, then the Decision of the Member delivered on 14 October 2020 in respect of penalties, be set aside as a matter of course’. It follows from the proposed order that if the decision of 8 July 2020 is not set aside, the penalty remains in place.
  4. [4]
    The conduct of the appeal by the appellants is consistent with the terms of the order sought. While in the written submissions there was a brief submission  that if there were a breach of s 23 of the AFA Act it was ‘entirely unintentional and should not be the basis of any disciplinary action or finding’, that submission was not further developed in either the written or oral submissions and no error of the Tribunal in relation to penalty has been pointed to. Nor is there any apparent error. It is noted that the Tribunal at first instance accepted that the breach was unintentional and that was taken into account by the Tribunal in making its final decision.[3]
  5. [5]
    The first appellant (‘NRM’) is a licensed real estate corporation and was the letting agent of a holiday house owned by Jebral Nominees Pty Ltd (‘the owner’). The second and third appellants are shareholders and directors of NRM and hold real estate principal licences. Four prospective guests paid to NRM deposits for the future lease of the holiday house. After the owner terminated the appointment of NRM as the letting agent, an employee of NRM falsely represented to the prospective guests that the holiday house had become unavailable on the dates booked.[4] The employee gave the prospective guests a list of other available properties managed by NRM.[5] Two of the prospective guests switched their bookings to other properties managed by NRM, while the other two cancelled their bookings and their deposits were refunded.[6] The owner was not notified or given an account of the movement of the deposits.[7]
  6. [6]
    In relation to the initial five disciplinary grounds, the Tribunal found that grounds 3 and 5 were established in relation to each of the appellants and that ground 1 was also established in relation to the first appellant. The present appeal concerns only disciplinary ground 3; that is, that each of the appellants contravened s 23 of the AFA Act. Section 23 is headed ‘Accounting to clients’ and provides (emphasis added):
  1. (1)
    An agent must account as required under this section to a client who appoints the agent to perform an activity, for all amounts received for a transaction, including an amount mentioned in subsection (2)(c).

Maximum penalty—200 penalty units or 2 years imprisonment.

  1. (2)
    The account must be in writing and state—
  1. (a)
    the amounts received for the transaction; and
  1. (b)
    how the amounts were or are to be paid out; and
  1. (c)
    the source and the amount of any rebate, discount, commission or benefit the agent received—
  1. (i)
    for any expenses the agent incurred for the client in connection with the performance of a service; or
  1. (ii)
    for referring the client to someone else for services relating to the transaction.
  1. (3)
    The agent must give the client the account—
  1. (a)
    if the client asks, in writing, for the account—within 14 days after receiving the request; or
  1. (b)
    if the client has not asked, in writing, for the account—within 42 days after the transaction is finalised.
  1. [7]
    It was held by the Tribunal at first instance that NRM was in breach of s 23 of the AFA Act because it did not ‘account’ for a ‘transaction’ as required and that the second and third appellants were also in breach by enabling and aiding the contravention.[8] It was held that the ‘transaction’ was the letting or proposed letting of the holiday house to the four prospective guests.[9] It was then stated:[10]

NRM Pty Ltd was receiving the deposit for that transaction. Upon receipt of the deposit, and for a period afterwards, the ultimate fate of the deposit remained to be determined. It may in due course have become repayable wholly or partly to the prospective guest; it may have been forfeited in the event of late cancellation; it may have been transferred to a different ledger in the trust account for a letting contract with another owner; it may have been treated as part of the rent for Jebral Nominees Pty Ltd when the guest took up occupancy; and so on. Regardless, the deposit was an amount received for the transaction. NRM Pty Ltd was required, by section 23 of the Agents Financial Administration Act, to account to Jebral Nominees Pty Ltd, in writing, for how the deposit was paid out. NRM Pty Ltd failed to do so. It therefore contravened section 23.

  1. [8]
    It is conceded by the respondent that there has been no breach of s 23 of the AFA Act on the part of the second and third appellants. That is because there was no evidence that they were personally required to serve notices to account to the client under s 23 of the AFA Act.[11] The evidence established that there was a Property Management Agreement between the first appellant and the owner appointing them as the relevant agent in relation to the holiday house, so as to attract the provisions of s 23 of the AFA Act.[12] In those circumstances, the appeal is allowed to the extent that there was a finding of contravention of s 23 of the AFA Act on the part of the second and third appellants and the corresponding sanction of reprimand is set aside.
  2. [9]
    The appellants submit that there was no duty on the part of the first appellant to account in circumstances where there was no concluded letting of the premises and the owner was not entitled to receive any of the deposits and had no interest in the funds received. It is submitted that in circumstances where there was no obligation to pay any of the funds received to the owner, there was no ‘transaction’ within the meaning of the AFA Act. It was submitted: ‘When the monies were initially paid as a deposit at that time there existed a contingency, if and only if fulfilled, which may entitle the Owner to payment’.[13] It was added that it is not in dispute that the contingency was never fulfilled and the owner never did have an entitlement to the deposit monies.
  3. [10]
    It is noted that there is no definition of the term ‘transaction’ in the AFA Act.
  4. [11]
    Section 23 appears in Part 2 of the AFA Act, which is headed ‘Trust Accounts’. Division 2 of Part 2, incorporating sections 15 to 20, deals with ‘payments to trust accounts’, while s 23 appears in Division 4, which is headed ‘other trust account obligations’. Section 15(1)(a) provides that section 16 applies if an amount is received by an agent ‘for a transaction’, while s 15(2)(a) provides:

 amount, received by an agent for a transaction –

  1. (a)
    includes deposit and purchase monies for the transaction;
  1. [12]
    Section 16(a) provides that after receiving ‘the amount’ for a transaction, the agent must pay it into the agent’s general trust account. Section 23 of the AFA Act requires an agent to account to a client for ‘all amounts received for a transaction’.
  2. [13]
    The term ‘transaction’ is also used in the Property Occupations Act 2014 (Qld) (‘the POA’). By s 169(1) of the POA, a principal licensee must keep a trust account under the AFA Act ‘if an amount is likely to be received by the licensee for a transaction’. As with s 15(2) of the AFA Act, s 169(2) of the POA provides that an amount (likely to be) received for a transaction ‘includes deposit and purchase monies for a transaction’. Effectively, that provision in the POA is complemented by s 15 and s 16 of the AFA Act, which provide that if an amount (including a deposit) is received by an agent ‘for a transaction’, it must be paid into the agent’s general trust account. It is also noted that by s 99(1) of the POA an agent must not act for more than one person.
  3. [14]
    On the interpretation of ‘transaction’ advocated by the appellants, the meaning of the term ‘transaction’ would not be constant. It is evident from the terms of the POA and AFA Act that any deposit received by an agent must be paid into a trust account, regardless of who might ultimately be entitled to those monies. It cannot have been intended that it be paid into a trust account only when the fate of the deposit is known. On that basis, inevitably there will be a ‘transaction’ that gave rise to the payment of the deposit. On the other hand, on the submission of the appellants, while s 23 of the AFA Act requires the agent to account to a client ‘for all amounts received for a transaction’, there will be no ‘transaction’ under s 23 unless and until the client has an entitlement to the deposit monies.
  4. [15]
    Also, the submission of the appellants that where a deposit is received there will be no ‘transaction’ and hence no duty to account unless and until there is a concluded letting or sale and the fate of the deposit is known, does not sit comfortably with s 23(2)(c) of the AFA Act. Sub-section 23(2)(c) provides that the account must state:

the source and the amount of any rebate, discount, commission or benefit the agent received—

  1. (i)
    for any expenses the agent incurred for the client in connection with the performance of a service; or
  1. (ii)
    for referring the client to someone else for services relating to the transaction.
  1. [16]
    On the interpretation advocated by the appellants, it would mean that s 23(2)(c) arises only in relation to any rebate, discount, commission or benefit that is attributable to a concluded letting or sale agreement, or where the client is otherwise entitled to deposit monies, and not in relation to any rebates etc. received in connection with the performance of the service generally, including, for example, any advertising or other charges incurred for the client in circumstances where ultimately no monies are payable to the client. Accordingly, for example, where the client is required to pay for advertising or other fees regardless of whether ultimately there is a letting or sale, there would be no accounting to the client and no requirement for the agent to provide details as to any rebate etc. received for expenses incurred for the client, unless the client is entitled to any monies received or held by the agent. Particularly given the main object of the Act, there does not appear to be any reason as to why there would have been a legislative intention to draw that distinction.
  2. [17]
    The main object of the AFA Act is set out at s 6, which provides, in part:
  1. (1)
    The main object of this Act is to protect consumers from financial loss in dealings with agents regulated under an Agents Act.
  1. (2)
    The object is to be achieved mainly by—
  1. (a)
    regulating the way agents establish, manage and audit trust accounts; and

…

  1. [18]
    What ultimately happens to any deposit depends on what transpires after it has been paid. In the present case, as noted by the Tribunal Member, if a booking is cancelled and the property is not re-let, the deposit is forfeited, with the bulk of the deposit being payable to the client.[14]
  2. [19]
    Consistent with the main object of the AFA Act, a client has a direct interest in knowing when a deposit has been paid and how it has been disposed of. That is the more so given that in some cases a false representation by an agent or employee of an agent might influence who is ultimately entitled to any deposit monies.
  3. [20]
    It is evident from the wording and context of the AFA Act that a ‘transaction’ for the purposes of s 23 of the AFA Act includes any dealings carried out by an agent, on behalf of a client, under the terms of their appointment and in relation to which monies are received or paid out. Further, that is so regardless of whether or not the client is ultimately entitled to the monies received.  
  4. [21]
    There is no demonstrated error of law on the part of the Tribunal at first instance. In so far as the appeals relate to the first appellant, the appeals are dismissed.

Footnotes

[1] Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors [2020] QCAT 277.

[2] Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors (No 2) [2020] QCAT 403.

[3] Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors [2020] QCAT 277, [24], [25], [37], [73]; Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors (No 2) [2020] QCAT 403, [30]-[31].

[4] Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors [2020] QCAT 277, [1]-[2].

[5]  Ibid, [18].

[6]  Ibid, [20].

[7]  Ibid, [21]. In the agreed statement of facts it was agreed that there was no notification by the first appellant to the owner of the deposits received from the four prospective guests: agreed statement of facts, [74]; Submissions of the respondent, [14].

[8] Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors [2020] QCAT 277, [51]-[53].

[9]  Ibid, [51].

[10]  Ibid.

[11]  Submissions of the respondent, [18].

[12]  Ibid, [13].

[13]  Submissions on behalf of the appellants, [36].

[14] Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors [2020] QCAT 277, [8](f).

Close

Editorial Notes

  • Published Case Name:

    Noosa Resort Management Pty Ltd and Ors v Department of Justice and Attorney-General – Office of Fair Trading

  • Shortened Case Name:

    Noosa Resort Management Pty Ltd and Ors v Department of Justice and Attorney-General – Office of Fair Trading

  • MNC:

    [2022] QCATA 171

  • Court:

    QCATA

  • Judge(s):

    Senior Member Aughterson

  • Date:

    30 Nov 2022

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd (No 2) [2020] QCAT 403
3 citations
Jump To
Cite 1 - [2020] QCAT 403
Cite 2 - [2020] QCAT 403
Cite 3 - [2020] QCAT 403
Department of Justice and Attorney-General – Office of Fair Trading v Noosa Resort Management Pty Ltd and Ors [2020] QCAT 277
10 citations
Jump To
Cite 1 - [2020] QCAT 277
Cite 2 - [2020] QCAT 277
Cite 3 - [2020] QCAT 277
Cite 4 - [2020] QCAT 277
Cite 5 - [2020] QCAT 277
Cite 6 - [2020] QCAT 277
Cite 7 - [2020] QCAT 277
Cite 8 - [2020] QCAT 277
Cite 9 - [2020] QCAT 277
Cite 10 - [2020] QCAT 277

Cases Citing

No judgments on Queensland Judgments cite this judgment.

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