Rose v Ken Guy Real Estate Pty Ltd
[2004] QDC 435
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- Unreported Judgment
- Rose v Ken Guy Real Estate Pty Ltd[2004] QDC 435
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Rose v Ken Guy Real Estate Pty Ltd[2004] QDC 435
Rose v Ken Guy Real Estate Pty Ltd[2004] QDC 435
DISTRICT COURT OF QUEENSLAND
CITATION: | Rose v. Ken Guy Real Estate Pty Ltd [2004] QDC 435 |
PARTIES: | MARK PETER ROSE (Applicant) KEN GUY REAL ESTATE PTY LTD (Respondent) |
FILE NO/S: | 157 / 04 |
DIVISION: | Civil |
PROCEEDING: | Chamber Application |
ORIGINATING COURT: | District Court Maroochydore |
DELIVERED ON: | 28 May 2004 |
DELIVERED AT: | Maroochydore |
HEARING DATE: | Friday 14 May 2004 |
JUDGE: | K.S. Dodds, DCJ |
ORDER: | Application Dismissed |
CATCHWORDS: | Appointment of Real Estate agent – entitlement to commission – formalities of exclusive agency. Legislation Cited: S. 133 – 140 Property Agents and Motor Dealers Act 2000; S. 49 Acts Interpretation Act 1954; Regulation 17 Property Agents and Motor Dealers Regulations. |
COUNSEL: | Mr A. Wallace for the Respondent |
SOLICITORS: | John Berry & Co Solicitors for the Applicant; Griffiths Parry Lawyers for the Respondent |
- [1]This is an originating application seeking declarations: that an appointment of a real estate agent was ineffective and / or was void; that the agent was not entitled to commission and expenses for work done in bringing about a sale of the applicant’s real property; that the agent was not entitled to retain a deposit in part satisfaction of commission and expenses and for consequential orders.
- [2]It may be accepted that the respondent brought about the sale of the applicant’s real property and was the stakeholder of the deposit of $20,000.00 which has now been paid into court. Commission, together with GST and marketing charges slightly exceeds that amount.
- [3]The mode of bringing the matter before the Court was said by the applicant to be appropriate because the only or main issue in the proceeding was a matter of law, and a substantial dispute of fact was unlikely. Rule 11 (a) Uniform Civil Procedure Rules (UCPR).
- [4]Central to the application are provisions of the Property Agents and Motor Dealers Act 2000, (the Act) Regulation 17 of the Property Agents and Motor Dealers Regulation 2001, (the Regulation) and the completed approved form of appointment of the respondent as real estate agent for the sale of the applicant’s property, Form 22 a.
- [5]Section 134 (1) of the Act provides that the appointment of a real estate agent to perform an activity for a client “must be in the approved form”. The approved form at the material time was Form 22(a). Section 134 (3) provides that an appointment that does not comply with subsection (1) “is ineffective from the time it is made”.
- [6]Section 134 is in Division 2 of Part 2 of Chapter 5 of the Act. There are two other instances in Division 2 where the legislation provides that an appointment of a real estate agent “is ineffective from the time it is made”. Section 137 of the Act provides that an appointment for the sale of residential property under a sole or exclusive agency “is ineffective from the time it is made if the term of the appointment is more than 60 days.” Section 136 of the Act provides for the reappointment of a real estate agent for a sole or exclusive agency for the sale of residential property for one or more terms of not more than 60 days. Section 136 A (1) requires the reappointment under Section 136 must be in the approved form. Section 136 A (2) provides that a reappointment that does not comply with subsection (1) “is ineffective from the time it is made”.
- [7]It is not in dispute that Form 22a was filled in and signed by the applicant and the respondent prior to the sale of the applicant’s real property. It is exhibit 1 to the affidavit of the applicant filed in this application on 4 May 2004. It is a printed document with space provided for details to be inserted. Some of these spaces have been filled in with type script except for the following which are handwritten:
- the date under each signature has been altered from typescript 18/8/2003 to handwritten 6/9/2003;
- in paragraph 5.1 which deals with the type of listing, open, sole agency or exclusive agency, the start and end dates for the exclusive agency have been altered from 18/8/2003 typescript to handwritten 6/9/2003 and from typescript 16/10/2003 to handwritten 6/11/2003 respectively.
- [8]It can be seen that the period spanned by the typewritten dates was 60 days and by the handwritten dates was 62 days.
- [9]In an affidavit by one Loren Allen, a real estate salesperson employed by the respondent she has deposed she was the person who secured the listing of the applicant’s real estate with the respondent. In the first instance she had the Form 22a completed by office administration staff. She had understood the exclusive agency agreement was to commence on 18/8/2003 and rollover to an open listing 60 days thereafter if the property had not been sold. However it emerged the applicant did not want to put the property on the market in August 2003. At that time he owned the property with his brother, whose interest he purchased for $200,000.00 on 29 August 2003. Subsequent to that the applicant contacted Ms Allen and requested the property be listed and on 6 September 2003 signed the exclusive agency agreement. Ms Allen altered the dates on the agreement to reflect the delay. In calculating the dates to reflect a 60 day exclusive agency she fell into error. She intended the dates to reflect a 60 day period but put the wrong end date in the document. She explained to the applicant at the time of signing that nearing the end of the 60 day period, the parties would review the exclusive agency period or alternatively the property would become open listed. On or about 17 October 2003 the applicant signed a contract of sale prepared by Ms Allen for the sale of the listed property which settled on 18 December 2003.
- [10]The applicant submitted that because of the provisions of Section 137 (1) of the Act the respondent was not entitled to commission.
- [11]Section 137 is concerned with the appointment of a real estate agent under a sole or exclusive agency which is a particular type of appointment potentially advantageous to the agent. It is the appointment as a sole or exclusive agent which by the section is made ineffective from the date it is made.
- [12]Section 140 is in Division 4 of Part 2 of Chapter 5 of the Act. It provides
“A person is not entitled to sue for or recover or retain a reward or expense for the performance of an activity as a real estate agent unless at the time the activity was performed, the person –
………….
- (c)had been properly appointed under Division 2 (Sections 133 to 137) by the person to be charged with the reward or expense”.
- [13]Section 133 of the Act requires that the appointment of a real estate agent to perform a service for a person must be in writing under Section 133. Provided Sections 133 and 134 are complied with I think an agent is properly appointed to perform the service the subject of the appointment, here, to sell the property in question. However if the appointment is for a sole or exclusive agency and the term of the appointment is more than 60 days, the appointment as a sole or exclusive agent is ineffective from the time it is made.
- [14]The applicant also submitted that the Form 22(a) was not properly completed and consequently by reason of Section 134 (3) ineffective from the date it was made. The submission was it was not properly completed because it did not contain an amount of commission in dollars at Paragraph 6.1 in addition to the percentages by which commission was calculated on the actual sale price.
- [15]S. 133 (3) of the Act relevantly provides that the appointment as agent to sell real property “must ….
- (a)state the service to be performed and how the service is to be performed;
- (b)state in the way prescribed under a regulation that fees charges and commission payable for the service are negotiable up to any amount that may be prescribed under a regulation;
- (c)state -
- (i)the fees charges and any commission payable for the service
- (ii)the expenses including advertising and marketing expense that the agent is authorised to incur in connection with the performance of the service or category of service
- (d)state when the fees charges and commission become payable
- (e)if the service to be performed is the sale … of property … and commission is payable in relation to the service and expressed as a percentage of the estimated sale price … state that the commission is worked out only on the actual sale price”.
Regulation 17 of the Regulation amongst other things provides that for S. 133 (3) (b) of the Act, the appointment must state –“The maximum amount of commission chargeable is (state percentage and estimated amount in dollars). Please note you have a right to negotiate an amount lower than this amount of commission”.
- [16]The completed Form 22(a) in Section 4 headed “Appointment of Agent” makes provision for insertion of a reserve or listing price. It contains at Section 4.2 “4.2 reserve or listing price” . . .. Nothing has been inserted in the space provided.
- [17]Section 6 of the completed Form 22(a) headed “Commission” at 6.1 reads
“Agreed commission
The client and the agent agree that the total commission and GST payable for this service to be performed by the agent is:
Total Commission $
GST $
Total Payment $”
These have been completed as follows:
“Total Commission $ 5% of the first $18,000.00 then 2.5% of the balance thereafter
GST $ 10% of the commission
Total Payment $ Total Commission plus 10% GST”.
- [18]Any dollar amount inserted in section 6 of Form 22(a) based upon a reserve or listing price, will not represent actual commission if the actual sale price differs from that price. The form recognises this for under the space provided for Total commission GST and Total Payment, it contains :
“To the client: Percentage - Commission expressed as a percentage is worked out only on the actual sale price
Commission: commission expressed as an amount represents the commission payable if the property is sold at the listed price, (see Section 4.2 above). If the property is actually sold at a higher or lower price the amount of commission payable may vary from the amount stated.”
- [19]The appointment under Section 133 must state the commission payable, Section 133 (3) (c) (i), and in the way prescribed under Regulation 17 that commission (is) negotiable up to any amount that may be prescribed under a Regulation. (Section 133 (3) (b)). Section 133 of the Act does not require that the appointment state a reserve or listing price. Nor does any regulation. Nor is the term reserve or listing price defined by the Act or any regulation. The approved form however makes provision for an amount to be inserted as a reserve or listing price. Unless some such amount is nominated no amount in dollar terms for the “maximum amount of commission” can be calculated using percentages prescribed for commission ; see Section 31 Schedule 1 of the Regulation.
- [20]Section 133 (3) (b) is concerned with an appointment stating that, inter alia, commission payable is negotiable up to any amount which is prescribed under a regulation.
- [21]Section 133 (3) (c) (i) is concerned with an appointment stating the commission payable for the service to be provided.
- [22]Section 133 (d) is concerned with an appointment stating inter alia when any commission for the service to be performed becomes payable.
- [23]Section 133 (e) is concerned with an appointment stating that, inter alia, the commission is worked out only on the actual sale price. Relevantly, it has application if the service to be performed is the sale of real property, commission is payable in relation to the service and is expressed as a percentage of an estimated sale price.
- [24]If Regulation 17 is to be regarded as requiring the “maximum amount of commission” chargeable to be inserted in dollar terms in Form 22 (a) it introduces a potential conflict because Section 133 (3) (e) requires that the appointment state that commission is worked out only on the actual sale price. The actual sale price may mean commission is higher than the “maximum amount of commission” chargeable expressed in dollar terms inserted in the Form 22 (a). For instance an appointor may require the real estate agent to get the best price and thus if possible to negotiate a higher price than some “reserve or listing price”. In fact Form 22 (a) in Section 6.1 uses the phrase “Total Commission”. If what is to be inserted for “Total Commission” is in the terms of Regulation 17 “the maximum amount of commission payable” in dollar terms it would indicate that was the total commission in dollar terms when in the same section of the form and in Section 133 (3) (e) of the Act it is made clear that commission is payable only on the actual sale price.
- [25]The applicant also submitted that because a reserve or listing price was not inserted the completed Form 22 (a) was not properly completed thus not in the approved form and was therefore ineffective from the time it was made because of Section 134 (3) of the Act.
- [26]The submission called in aid S. 49 (2) of the Acts Interpretation Act 1954 which provides:
“If a form prescribed or approved under an Act requires …
- (a)the form to be completed in a particular way; or
- (b)specified information to be included in …the form; or
……………
the form is not properly completed unless the requirement is complied with”.
- [27]However section 49 (1) of the Acts Interpretation Act 1954 provides
“If a form is prescribed or approved under an Act, strict compliance is not necessary and substantial compliance is sufficient”.
- [28]It is difficult to see any disadvantage to a vendor if the Form 22(a) appointing a real estate agent does not include a reserve or listing price or a dollar amount of commission calculated on a “reserve or listing price”. Form 22(a) in accordance with Section 133 advises that the actual commission is payable on the actual sale price. So long as the percentages for calculating the commission do not exceed the maximum prescribed and are inserted against Total Commission in Form 22 (a) so that actual commission may be readily calculated on an actual sale price, a vendor is fully informed.
- [29]I think there has been substantial compliance with the Form 22 (a). The appointment in Form 22 (a) has stated those matters required to be stated by Section 133 of the Act in particular Sections 133 (3) (c ) (i) and Section 133 (3) (b). In the case of the latter subparagraph I think the intent of the subparagraph and the regulation have been complied with. The appointment has also complied with Section 133 (3) (e).
- [30]The applicant also submitted that the reserve or listing price was an essential term of the appointment by analogy with the sale price in a contract of sale. It is sufficient to say that I do not find the analogy a valid one.
- [31]The applicant also submitted that the appointment was void for uncertainty. The submission called on Section 133(3) (a) of the Act which requires that the appointment of an agent must “state the service to be performed by the real estate agent and how it is to be performed”.
- [32]The completed Form 22(a) in Section 4 under the heading Sale by Auction indicated “The client does not authorise the agent to sell by auction”. At section 4.1 under the heading “Performance of Service. To the agent. State how you will perform the service and any conditions limitations or restrictions on the performance of the service …”. the words “for sale by way of private treaty negotiation” were inserted.
- [33]The applicant submitted the phrase “sale by way of private treaty negotiation” was so vague in meaning that an essential term of the contract, that is, how the service of selling the property was to be performed was so uncertain that the appointment was void.
- [34]I do not agree. I think the term makes it clear how the service is to be performed. At the risk of oversimplification sale is a contract between a seller and a buyer by which the former in consideration of payment or promise of payment transfers title to property. Treaty may mean a number of things. Relevantly, it may mean an agreement or contract between individuals or parties, or a formally concluded and ratified agreement or contract between two or more states, see the New Shorter Oxford Dictionary.
- [35]In the context in which it occurs I think the phrase sale by way of private treaty negotiation in the completed Form 22 (a) plainly indicates sale by way of a negotiated agreement between the seller and another party who is the buyer. The real estate agent’s task in this case was to bring that about.
- [36]A real estate agent is only entitled to commission if at the time the service attracting the commission was performed he or she had been properly appointed under Division 2 of Part 2 of Chapter 5 of the Act by the person to be charged with the commission.
- [37]For the reasons set out above I think the respondent was properly appointed under Part 2 as a real estate agent to sell by way of private treaty negotiation, the applicant’s real property, although it was not an exclusive agency, that purported appointment being ineffective from its inception.
- [38]Counsel for the respondent submitted an originating application was an inappropriate mode of proceeding because, contrary to the applicant’s assertion, there was potentially a substantial factual dispute about the common intention which existed between the applicant and Ms Allen when Form 22 (a) was executed. Ms Allen’s affidavit provided some evidence about this. He submitted there arose a question about rectification and unjust enrichment the latter based upon the applicant taking the benefit of the respondent’s efforts in circumstances when he was aware the intention was to create an exclusive agency for only 60 days and was not misled or disadvantaged in any way by the form of appointment. In the view I have taken of the matter it is not necessary to deal with these submissions.
- [39]The application is dismissed.