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To v Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development[2006] QDC 381

To v Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development[2006] QDC 381

DISTRICT COURT OF QUEENSLAND

CITATION:

To v Chief Executive, Department of Tourism etc [2006] QDC 381

PARTIES:

STEPHANIE TOAppellant

V

CHIEF EXECUTIVE, DEPARTMENT OF TOURISM, FAIR TRADING AND WINE INDUSTRY DEVELOPMENTRespondent

FILE NO/S:

D1646/05

DIVISION:

 

PROCEEDING:

Appeal

ORIGINATING COURT:

Commercial and Consumer Tribunal

DELIVERED ON:

10 November 2006

DELIVERED AT:

District Court, Brisbane

HEARING DATE:

8 September 2006

JUDGE:

McGill DCJ

ORDER:

Leave to appeal; Appeal allowed; decision of Tribunal of 18 May 2006 set aside; order matter remitted to the Tribunal to decide according to law as expounded in these reasons.  Order the respondent to pay the appellant’s costs of the appeal (if any) to be assessed.

CATCHWORDS:

AGENCY – Authority – real estate agent – authorised to perform “letting” of property – authority to enter into a tenancy agreement.

LANDLORD AND TENANT – Option for renewal of lease – agreed by agent of lessors – whether agent had authority to bind lessors and purchasers.

PRINCIPAL AND AGENT – Statutory provisions relating to agents – real estate salesperson – whether committed breach of prohibition of false or misleading statements – whether reasonable grounds for honest belief.

STATUTES – Interpretation – provision concerning breach of prohibition on false or misleading statements – whether honest and reasonable mistake of fact defence.

WORDS AND PHRASES – “letting”.

Property Agents and Motor Dealers Act 2000 s 574.

Byrne Bros. Pty Ltd v City of Maryborough (1984) 53 LGRA 383 – cited.

Castor v Brisbane City Council [1955] St R Qd 348 – cited.

He Kaw Teh v The Queen (1985) 157 CLR 523 – considered.

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 – considered.

Kehoe v Dacol Motors Pty Ltd, ex parte Dacol Motors Pty Ltd [1972] Qd R 59 – followed.

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 – cited.

R v Clare [1994] 2 Qd R 619 – applied.

Yorke v Lucas (1985) 158 CLR 661 – cited.

COUNSEL:

R. Hong (representative by leave) for the appellant

R. Vise for the respondent

SOLICITORS:

The appellant was not represented

Department of Tourism etc for the respondent

  1. [1]
    This is an appeal from a decision of the Commercial and Consumer Tribunal dated 18 May 2006.  On 4 October 2005 the respondent Chief Executive, by a delegate, decided that an amount of $866.50 be paid to certain claimants from the claim fund under the Property Agents and Motor Dealers Act 2000 (“the Act”), and that the appellant and a company were jointly and severally liable for the financial loss of the claimants, and that they were to reimburse the fund for that amount under s 490 of the Act.  By s 483 of the Act, the appellant was entitled to have that decision reviewed by the Tribunal.
  1. [2]
    The appellant sought that review, but on 18 May 2006 the decision of the Chief Executive was confirmed by the Tribunal.  The appellant seeks to appeal from that decision to this court, pursuant to s 100 of the Commercial and Consumer Tribunal Act 2003.  By that section, the appeal is only on the ground of error of law or excess or want of jurisdiction, and requires the court’s leave:  s 100(1).  The matters identified by the appellant which the appellant seeks to raise are questions of law, and some of them are matters of some importance as to the general operation of the Act.  Accordingly, I am prepared to give leave to appeal.

Background

  1. [3]
    Mr and Mrs Kania owned a townhouse in a block at Gumtree Street, Runcorn.  On 27 April 2003 they signed a form 20(a) under the Act by which they appointed a particular real estate agency as managing agent, to perform certain services relating to the letting of that unit.  That agent subsequently let the unit to two tenants by an agreement in writing in form 4H “General Tenancy Agreement” under the Residential Tenancies Act 1994 for a term of six months ending on 17 December 2003.  Soon after this agreement was signed, however, it was on 2 July 2003 amended by the agent’s granting the tenants an option to extend the tenancy for a period of 12 months.[1]  There was also a finding, which was not specifically challenged on the appeal, that the tenants had exercised their option to extend the lease.
  1. [4]
    Later in 2003 the owners appointed a different real estate agent (the company against whom the reimbursement order was also made) as agent to sell the unit. That agent secured a contract dated 11 September 2003 for the sale of the unit to a Mr and Mrs Chen, which contract was signed by the owners as vendors.  The contract was subject to the existing tenancy, and settled in October 2003.  The Tribunal found that prior to the execution of that contract by the purchasers, they were told by the appellant, who was the sales person handling the sale on behalf of the agent company, that the lease expired on 17 December 2003.  After settlement, however, the purchasers were told by the managing agent that the option had been exercised and the tenants would not be vacating the property in December 2003.  The purchasers were keen to obtain possession of the property at that time, and reached an arrangement under which they made a payment to the tenants to induce them to vacate.  That payment, and another expense,[2] made up the quantum of the claim which those purchasers then made against the fund under the Act.

The Act

  1. [5]
    Under s 470 of the Act a person may make a claim against the fund if the person suffered financial loss because of the contravention of inter alia s 574 by a relevant person.  Section 574(1) provides:

“A licensee or registered employee must not represent in any way to someone else anything that is false or misleading in relation to the letting, exchange or sale of property.  Maximum penalty – 540 penalty units.”

  1. [6]
    The claimants alleged that the real estate agent and the appellant[3] had represented that the tenancy in the property came to an end in December 2003, that that representation was made in relation to the sale of the property, and that it was false or misleading because the tenancy had been extended, so there was a contravention of that section.  The claim was accepted by the delegate of the Chief Executive, who also ordered the appellant and the real estate agent for which she worked to reimburse the fund for the amount paid out to the purchasers.  The appellant exercised her right to appeal to the Tribunal against the order, so far as it affected her.  The only parties to the proceeding in the Tribunal were the appellant and the Chief Executive, so all that was in issue was the order as between these parties.

Authority of managing agent

  1. [7]
    The first matter argued on appeal was whether the tenancy had been validly extended at all. The tribunal found that the tenancy agreement had been amended by the managing agent to give the tenants an option to extend the term for a further 12 months.  The evidence was to the effect that Mr and Mrs Kania had not agreed to the amendment of the tenancy agreement by the inclusion of this term, nor had they ratified this amendment by the agent; at least, there was no factual finding to the contrary by the Tribunal.  Rather, the Tribunal found that the letting agent had authority to make this amendment because of the terms of the retainer signed by Mr and Mrs Kania.  That proposition was challenged by the appellant.
  1. [8]
    The appointment was in the standard form under the Act, form 20(a).  Clause 4 provided for the actual appointment of the agent in the following terms:

“The client appoints the agent to perform the following services:

Letting/leasing of property; collection of rent; other property management services – payment of accounts as requested or agreed.”[4]

  1. [9]
    The clause went on to provide that the services would be performed “In accordance with the Restricted Letting Agents Letting Agreement with the body corporate for the building.” The appointment was a continuing appointment; there was provision for commission and fees and charges and expenses, and the agreement further provided that when performing the services the agent would comply with, relevantly, the ‘Restricted Letting Agency Practice Code of Conduct’.
  1. [10]
    The first question is whether the appointment of the agent to perform “letting/leasing of property” meant that the agent had authority to enter into a tenancy agreement in respect of the property on behalf of the owners. Ordinarily a real estate agent appointed to “sell” a parcel of land on behalf of owners does not actually have authority to enter into a contract of sale; rather, the function of the agent is simply to find a suitable purchaser.[5]  Nevertheless, there is no reason in principle why an agent could not be given actual authority to enter into a contract for sale of land on behalf of the owners, provided that that was the true interpretation of the appointment of the agent.[6]  The same does not apply to the leasing of property, or the letting of property for relatively short-term residential tenancies, where any presumption that the agent would not have actual authority to enter into the contract would be much weaker.[7]  One would expect, for example, that the managing agent of a block of holiday units would ordinarily have authority to enter into at least short-term tenancy agreements in respect of all the units in the rental pool.
  1. [11]
    Property management may well involve letting premises, and the concept of “letting” ordinarily involves the actual grant of the right to possess the premises, although on a temporary basis.[8]  In my opinion, therefore, the natural construction of the appointment of the agent to perform the service of “letting/leasing of property” is that authority was granted to the agent to enter into a tenancy agreement such as the agreement entered into in this case.  There is no particular reason why the documents should be read in a more restrictive sense.
  1. [12]
    The Act in Schedule 2 defines “letting” as “includes every form of leasing or letting of places of residence, land, estates or businesses.”  This definition does not suggest a narrow interpretation of the use of this term in form 20(a).  It may be contrasted with the definition of “letting agent business” in s 16(2) of the Body Corporate and Community Management Act 1997, where the term is defined as “the business of acting as the agent of owners of lots … for securing, negotiating, or enforcing … leases or other occupancies of lots included in the scheme.”  Arguably, the omission of the word “granting” from that definition meant what is contemplated would not involve, or perhaps would not necessarily involve, actually granting or entering into the lease or other occupancy.
  1. [13]
    Accordingly I agree with the conclusion of the Tribunal that the managing agent had actual authority to enter into a tenancy agreement with the tenants. If there was authority to enter into that agreement, it follows that there was also authority to vary it or extend it, and therefore authority to grant an option to the tenant to extend the term for 12 months. In my opinion, the grant of that option and the variation of the tenancy agreement in order to grant it were within the actual authority granted to the agent by the appointment in form 20(a).
  1. [14]
    The notice of appeal referred to the “schedules or attachments” which appear at the bottom of the third page of that form, but there is no reference in the document to there being any particular schedules or attachments, and no evidence that there was anything scheduled or attached to this form. The form suggests that it can operate without any schedule or attachment.
  1. [15]
    The next point which was raised was that clause 4.1 provided that the agency would be performed in accordance with the Restricted Letting Agents Letting Agreement with the Body Corporate for the building.  It was submitted that that document was not in evidence, so that the form 20(a) did not in itself contain all of the necessary information.  However, the structure of the form 20(a) is such that one would not expect to find in such a document a restriction on the authority of the managing agent to let the unit.  Rather, the contract provided that the letting agent would carry on its operations in accordance with that agreement with the body corporate for the building.  On the face of the document it conferred authority to enter into the tenancy agreement, and, unless the Tribunal were disposed to treat that letting agreement as a document more particularly within the power of the respondent so as to draw some inference against the respondent because of the failure to produce the document,[9] in circumstances where it would be a matter for the appellant to rely on that document as a basis for cutting down the otherwise adequate grant of authority to the agent contained elsewhere in the form 20(a) the onus was on the appellant to show that that authority was cut down by the terms of that agreement.
  1. [16]
    Section 111(1)(a) of the Act provided that a restricted[10] letting agent’s licence authorises the holder to perform as agent for others for reward “letting lots in a building complex”.  It was submitted that these were procedural activities, and did not involve an agent’s decision-making power on behalf of the lessors.  However, bearing in mind that a letting agent in connection with a building complex, who one would expect to have a restricted letting agents licence, would include someone who was engaged in the short term letting of holiday apartments, and bearing in mind also the width of the definition of “letting” in the Act, I think that provision ought not to be read down in this way.
  1. [17]
    Reference was also made to s 10 of the Restricted Letting Agency Practice Code of Conduct, which provided:

“A restricted letting agent must act in accordance with the client’s instructions unless it is contrary to this code or otherwise unlawful to do so.”

  1. [18]
    There was, however, no finding by the Tribunal that any extension of the term in this way, or the grant of such an option, was contrary to the instructions of the owners of the property. The letting agent who was called was reminded in cross‑examination that under the code of practice she was “required to work in the best interests of the lessors and to follow the instructions”.[11]  It was not, however, suggested that the owners had given instructions not to act in this way; the thrust of the cross‑examination was that the agent ought not to have acted in this way anyway without getting express authority from the owners, which in my opinion is contrary to the correct interpretation of the form.
  1. [19]
    Mrs Kania, who gave evidence, was asked, “Have you ever given the managing agent permission, that they can extend the lease term beyond 17 December 2003?” and answered, “No”,[12] but this was not really the point; the issue was whether there were prior instructions not to extend the lease term beyond 17 December 2003, and there was no evidence from Mrs Kania of that.  In these circumstances, it would not have been open to the Tribunal to have found that there were relevant instructions prior to the time when the letting agreement was varied which restricted the authority of the letting agents to enter into such a variation of the tenancy agreement.
  1. [20]
    The Tribunal said that whether the conduct of the letting agents was appropriate in terms of the Restricted Letting Agency Practice Code of Conduct was not relevant. I do not quite agree with that proposition, in that, because of the way in which the agency agreement was formulated, if there had been a specific instruction to the agent which acted as a limitation on the letting which the agent could do in accordance with the agency, the effect of s 10 would have been that that instruction would have operated as a limitation on the agent’s actual authority to let.  If the agent purported to act contrary to that instruction, there would have been no actual authority, though there may have been apparent or ostensible authority; it is not necessary to consider that issue further, however, because in this case there was no evidence of any actual instruction, so the conclusion arrived at by the Tribunal was, on the facts of this case, correct.  In the absence of any relevant instruction prior to the grant of the option, the managing agent had authority to grant that option to the tenants.  Accordingly, it was binding on the property owners, and therefore binding on the purchasers.  This aspect of the appeal therefore fails.

Interpretation of section 574 – appellant’s submissions

  1. [21]
    The next submission on behalf of the appellant was that there had been no breach of s 574(1), because that section was a section creating an offence, and there was a general presumption that an offence will be committed only when there is the necessary mens rea.  Reference was made to He Kaw Teh v The Queen (1985) 157 CLR 523.  That case was concerned with a provision of the Customs Act which made it an offence to import any prohibited import into Australia, and without reasonable excuse to have in possession any prohibited import which had been imported into Australia in contravention of the Act.  It was held by a majority of the court that the prosecution had the onus of proving that he accused knew that he was importing a prohibited import, and that the accused knew of the existence of the prohibited import that was in his exclusive physical control, in order to sustain charges under these two parts of this provision.
  1. [22]
    Gibbs CJ, with whom Mason J agreed, at p 528 quoted an English authority[13] for the proposition that:

“There is a presumption that mens rea, an evil intention, or a knowledge of the wrongfulness of the act, is an essential ingredient in every offence; but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject‑matter with which it deals, and both must be considered.”

  1. [23]
    His Honour went on at p 529 to say:

“The rule is not always easy to apply.  Its application presents two difficulties – first, in deciding whether the Parliament intends that the forbidden conduct should be punishable even in the absence of some blameworthy state of mind and secondly, if it is held that mens rea is an element of the offence, in deciding exactly what mental state is imported by that vague expression.”

  1. [24]
    His Honour, after considering further this question, also referred to the existence of the defence of honest and reasonable mistake of fact, and continued at p 533:

“These cases establish that if it is held that guilty knowledge is not an ingredient of an offence, it does not follow that the offence is an absolute one.  A middle course, between imposing absolute liability and requiring proof of guilty knowledge or intention, is to hold that an accused will not be guilty if he acted under an honest and reasonable mistake as to the existence of facts which, if true, would have made his act innocent.”

  1. [25]
    Brennan J at p 565 said:

“When a statute creates and defines an offence only by reference to its external elements, a mental element is usually implied in the definition.  A person who engages in prohibited conduct is not criminally responsible for it unless the mental element is present.  The mental element is mens rea or guilty mind.”

  1. [26]
    His Honour referred to an authority and continued:

“Nowadays, a presumption is made that mens rea is an element in a statutory offence though the offence is defined only by reference to its external elements.”

  1. [27]
    His Honour then referred to authority and after some further discussion summarised at p 582 the general principles he would apply:

“1. There is a presumption that in every statutory offence, it is implied as an element of the offence that the person who commits the actus reus does the physical act defined in the offence voluntarily and with the intention of doing an act of the defined kind.

  1. There is a further presumption in relation to the external elements of a statutory offence that are circumstances attendant on the doing of the physical act involved.  It is implied as an element of the offence that, at the time when the person who commits the actus reus does the physical act involved, he either –
  1. (a)
    knows the circumstances which make the doing of that act an offence; or
  1. (b)
    does not believe honestly and on reasonable grounds that the circumstances which are attendant on the doing of that act are such as to make the doing of that act innocent.
  1. The state of mind to be implied under (2) is the state of mind which is more consonant with the fulfilment of the purpose of the statute.  Prima facie, knowledge is that state of mind.”

- the legislation and its history

  1. [28]
    Section 574 of the Act provides, so far as it is relevant, as follows:

“(1) A licensee or registered employee must not represent in any way to someone else anything that is false or misleading in relation to the letting, exchange or sale of property.  Maximum penalty 540 penalty units.

  1. (3)
    Without limiting subsection (1) … a representation is taken, for the subsection, to be false or misleading if it would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist, whether or not the representation indicates that that state of affairs does exist.
  1. (4)
    Also, if a person makes a representation in relation to a matter and the person does not have reasonable grounds for making the representation, the representation is taken to be misleading.
  1. (5)
    The onus of establishing that the person had reasonable grounds for making the representation is on the person.
  1. (6)
    It is not a defence to a prosecution under subsection (1) … for the defendant to prove that an agreement with the person was terminated or that the person did not enter into an agreement because of the representation.
  1. (7)
    This section does not limit another Act or law about false or misleading representations.
  1. (8)
    In this section – “false or misleading” in relation to a representation includes the wilful concealment of a material fact in the representation …”
  1. [29]
    I was not referred to any authorities specifically on the interpretation of this section, and I do not know of any.
  1. [30]
    The section is a successor to various legislative provisions which have applied to real estate agents since 1936 when s 24A was inserted in the Auctioneers, Real Estate Agents, Debt Collectors and Motor Dealers Act 1922.  That section relevantly provided:

“Any … real estate agent … who makes to any purchaser or prospective purchaser any false representation concerning any real … property which he has for sale … as real estate agent … shall be guilty of an offence … .  It shall not be a defence to a charge of an offence against this section to prove that the sale to the purchaser was rescinded or that the prospective purchaser did not buy.”

  1. [31]
    That section was considered by the Full Court in Kehoe v Dacol Motors Pty Ltd, ex parte Dacol Motors Pty Ltd [1972] Qd R 59.  That case concerned the prosecution of a company which was a motor dealer for an offence against s 24A on the basis that it had made a false representation concerning a utility truck.  It was complicated by the fact the company was charged in circumstances where the representation had been made by an employee, but all members of the court held that the offence created by s 24A had to be read subject to the provisions of Chapter 5 of the Criminal Code, in particular s 24 dealing with honest and reasonable mistake of fact and s 23 concerned with intention, motive and accident.  The prosecution had the onus of negativing a defence of honest and reasonable mistake of fact, which could not be discharged by the evidence in that case.
  1. [32]
    When the 1922 Act was replaced by the Auctioneers and Agents Act 1971, s 65 provided relevantly:

“(1) No … real estate agent .. or employee of … a real estate agent … shall make to any purchaser or prospective purchaser … any statement or representation that is false or misleading (whether to his knowledge or not) concerning any real or personal property which he, or as the case may be, his employer, has for sale … as a real estate agent … .

  1. (4)
    If a person is charged with an offence against subsection (1) of this section –
  1. (a)
    it shall be a sufficient defence if the person charged proves that, in relation to a false statement, or representation, he had reasonable grounds for believing and did in fact believe that the statement or representation was true; or that, in relation to a misleading statement or representation, that he had reasonable grounds for believing and did in fact believe that the statement or representation was not misleading;
  1. (b)
    it shall not be an offence to prove that the sale to the purchaser was rescinded or that the prospective purchaser did not buy …”
  1. [33]
    That section was clear, unambiguous and straightforward; knowledge was not an element of the basic offence, but an honest belief on reasonable grounds in what was being said was a defence, although the onus of proving this was on the defendant. Its formulation was consistent with the basic propositions as to criminal responsibility stated in He Kaw Teh (supra).  It would be tempting to think that the reformulation of this section was a response to the decision in Kehoe; however, the 1971 Act received Royal assent almost six months before the judgment in Kehoe was delivered, and indeed before it had even been argued.
  1. [34]
    The Act superseded the 1971 Act, which it repealed. The explanatory note for the bill does not throw any light on the scope of the offence intended, though it does make it clear that the reversal of the onus in subsection (5) was deliberate, on the basis that knowledge about the reasonableness of a representation made by a person is information which is peculiarly within the knowledge of that person.[14]
  1. [35]
    Legislation of this kind apparently started with the introduction of the Real Estate Agents Act 1930 in Victoria.  Section 41(a) made it an offence, with “the intention of inducing a prospective purchaser to buy … knowingly [to make] any false representation …”  The section went on to prohibit other specific conduct, and was said to be a response to widespread complaints of land being sold on promises to resell for the purchaser at a profit, a matter dealt with subsequently expressly in this section.[15]  More recently, Victorian legislation did not include a specific prohibition of this nature in respect of real estate agents, presumably relying on more general legislation.  In 1941 the New South Wales Auctioneers and Agents Act included a provision in s 84(1) which made it an offence to make a representation which was false or misleading, whether to the knowledge of the agent or not, and subsection (3) gave a defence if the agent acted innocently and had reasonable grounds to believe and did in fact believe that the statement was true or the state of affairs existed.  The Act was subsequently renamed the Property Stock and Business Agents Act 1941, and was replaced by the Property Stock and Business Agents Act 2002, which in s 52 contained provisions to similar effect.  There is no ambiguity and the legislation operates in a way consistent with the general principles of criminal responsibility stated in He Kaw Teh.

- respondent’s submissions

  1. [36]
    Counsel for the respondent relied in particular on High Court decisions to the effect that s 52 of the Trade Practices Act operates without requiring any element of intention.  Reference was made to Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216.  At p 228 Stephen J, with whom Jacobs J agreed, said:

“Again, in s 52(1) nothing turns, I think, upon the intent of the Hornsby Centre.  In the tort of passing off the defendant’s absence of intention to deceive will not provide him with a defence … As I read s 52(1) the same may be said of it, it is concerned with consequences as giving to particular conduct a particular colour.  If the consequence is deception, that suffices to make the conduct deceptive.  Section 52(1) creates no offence, it only prescribes a course of conduct deviation from which may result in an order of the court, made under s 80 of the Act, forbidding further deviation in the future.  The section should be understood as meaning precisely what it says and as involving no questions of intent upon the part of the corporation whose conduct is in question.”[16]

  1. [37]
    Murphy J at p 234 also expressed the view that intention to mislead or deceive was not required.  The matter was considered further by the High Court in Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191.  Reference was made to Hornsby by Gibbs CJ at p 197 when noting that it had been held that the section was not confined to conduct that was intended to mislead or deceive.  Then in Yorke v Lucas (1985) 158 CLR 661, four members of the court in a joint judgment at p 666 said:

“It is, of course, established that contravention of [s 52] does not require an intent to mislead or deceive and even though a corporation acts honestly and reasonably, it may nonetheless engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

  1. [38]
    The two cases just referred to were cited. It is to be noted, however, that the reasoning of two of the judges in Hornsby Building Information Centre made express reference to the fact that the section did not create an offence.  It therefore did not give rise to the presumptions discussed in He Kaw Teh (supra).  In my opinion, the fact that s 574 does create an offence is a basis for distinguishing those cases relied on by counsel for the respondent in relation to the Trade Practices Act.  The fact that both are consumer protection legislation is in my opinion not to the point; there are different ways in which consumers can be protected.
  1. [39]
    Counsel for the respondent submitted that He Kaw Teh can be distinguished because these proceedings are not proceedings for an offence so that criminal responsibility principles do not apply.  But s 574 is a section which creates an offence, and the meaning of the section is not going to change depending on whether someone is being prosecuted for an offence under this section, or whether civil proceedings are being taken which rely on the proposition that the section has been breached.  In order to show for the purposes of s 470 that there has been a contravention of s 574, it is necessary to show that the appellant has committed the offence defined by it, the only difference being that the standard of proof is only on the balance of probabilities:  s 481(2); s 488(2).

- another submission

  1. [40]
    After the hearing of the appeal and before delivering judgment, I heard another appeal which also raised the question of the true construction of s 574:  London v Reynolds [2006] QDC.  Counsel for the respondent in that case, whose interest was the same as that of the respondent in this case, advanced further submissions in relation to the question of whether s 24 was relevant to the consideration of whether there had been a contravention of s 574 for the purpose of s 470 of the Act.  Reference was made to s 36 of the Criminal Code, which provides that the provisions of chapter 5 (including s 24) “apply to all persons charged with any criminal offence against the statute law of Queensland.”  There is then a provision in relation to regulatory offences which is irrelevant.  His submission was that the appellant was not in these proceedings charged with any offence, so that s 24, and indeed the other provisions of the chapter, did not apply.
  1. [41]
    This is an imaginative submission, but in my opinion it is not correct. Section 470 will only operate when there can be shown to have been a “contravention” of one of the various sections identified there, including s 574.  Although the term “contravention” may be applied to any statutory prohibition on particular behaviour, it would certainly apply to the situation where there has been a breach of a provision which makes certain specified conduct an offence.  When a person is charged with an offence under that section, what is in issue is whether that person has contravened that section.  For the purpose of s 470, in my opinion the same position applies:  the question is whether the defendant would if charged have been shown to have breached the section.
  1. [42]
    In my opinion, it would be an anomalous operation of the statute if a person could be said to have contravened a particular provision of the Act creating an offence, in circumstances where, had that person been charged with an offence under that provision, that person would not have been convicted of that offence. Yet, if the question of whether there was a “contravention” for the purpose of s 470 is determined without regard to the operation of chapter 5 of the Code, that situation could easily arise.  Although s 36 of the Code did not apply directly because the appellant was not charged with an offence under the Act, in my opinion in order to recover compensation it is necessary to show that if the appellant had been charged she would have been convicted of the offence, and that involves showing, for the reasons that I have stated, that there was no defence under s 24, in respect of which there was some onus on the appellant.
  1. [43]
    Although I have not in the time available been able to locate any authority specifically on this argument (and none was cited by counsel for that respondent), it seems to me as a matter of principle that this must be right. In my opinion, this follows as a matter of construction of s 470, and in particular of the interpretation of the word “contravention”.  If the provision the contravention of which is in issue is not a provision which creates an offence, then it is unnecessary, indeed impossible, to show the person has committed an offence in order to show that the provision has been contravened.  But where what is in issue is whether there has been a contravention of a provision which does create an offence, in my opinion it is necessary to show that that offence has been committed.  That can only be shown by reference to the legal position applicable if the person had been charged with that offence.
  1. [44]
    Most of the sections listed in s 470(1)(a) are sections which create offences, but not all are; s 302(4), s 573A, s 573B and s 573C do not.  Section 573C contains a prohibition on a marketeer making a representation to someone that is false or misleading in connection with inter alia the sale of residential property in Queensland.  This is not made an offence, although a note draws attention to the existence of remedies in chapter 16 by way of injunction, undertaking, the preservation of assets and civil penalties.  It would be unsurprising if the scope of s 573C were intended by the legislature to be wider than the scope of s 574, and not just because it is not confined to conduct of a licensee or a registered employee.  There ought to be some significance in the fact that one section criminalises certain conduct whereas the other section simply gives rise to civil remedies for contravention.  In my opinion, this reinforces the conclusion that the question of whether there has been a contravention of s 574 is to be assessed by reference to the criminal code to determine whether the offence has been committed.
  1. [45]
    I note also that s 470(1)(e) identifies as an event giving rise to an entitlement to claim against the fund “a stealing, misappropriation or misapplication by a relevant person of property entrusted to the person as agent for someone else in the person’s capacity as a relevant person.”  It cannot be doubted that the question of whether there has been a stealing or misappropriation for the purposes of that provision would have to be determined by the application of the provisions of the Criminal Code, including the provisions of chapter 5.

- analysis

  1. [46]
    I can see no reason why the approach laid down by the Full Court in Kehoe (supra) in relation to the 1992 Act should not apply to the current Act.  It is not a matter of adopting or implying into the section some requirement of mens rea; under the Criminal Code there is generally no requirement of mens rea as such in Queensland criminal law.[17]  The effect of Kehoe, in my opinion, is that Part V of the Criminal Code does apply to the offence created by s 574, except to the extent that some particular provision impliedly provides to the contrary.  There is no express provision to the contrary in the section.
  1. [47]
    Applying s 23, therefore, the appellant would not be liable for a representation which was made independently in the exercise of her will, or for an event which occurred by accident.  The facts in this case, however, do not give rise to either of those “defences”.  The Tribunal found that the appellant told the purchasers that the lease expired on 17 December 2003.  Her case, apart from the proposition that the lease did in fact expire on that date because it had never been validly extended, was that this information was based on the documents available for her examination and the inquiries she made with the managing agent of the property and the vendors.  In these circumstances, no defence under s 23 was available.  Intention is not expressly declared to be an element of the offence, and therefore the result intended to be caused is immaterial.
  1. [48]
    The difficulty is created by subsections (4) and (5).  As indicated by the analysis in He Kaw Teh, one would expect that, where an offence was created which did not involve any element of intent, a defence of honest and reasonable mistake in fact would apply, and that was the situation under s 65(4)(a) of the 1971 Act.  But read literally, that is not what subsection (4) provides.  That subsection is introduced with the words “also”, which conveys that the subsection is intended to operate as an extension of the previous provision, not as a modification or restriction of it.  Read literally, it provides that a representation made by a person who does not have reasonable grounds for making the representation is taken to be misleading.  Logically, that would only operate in a circumstance where the misrepresentation would not otherwise be misleading (or, I suppose, false).  Ordinarily, a representation is misleading if it leads the representee into error.[18]  In other words, a representation which would not be misleading in the ordinary sense (or under the other parts of the section) is nevertheless deemed to be misleading if the person who made it did not have reasonable grounds for making it.
  1. [49]
    On the face of it, therefore, subsection (4) criminalises the making of a representation which is not misleading if it was nevertheless made without reasonable grounds.  Further, the onus of proving the existence of reasonable grounds is placed by subsection (5) on the person charged.  Viewed in isolation, that would be an absurd outcome,[19] particularly if subsection (1) is interpreted as creating an absolutely offence.  Perhaps the absurdity is reduced if one assumes that the provisions are framed on the assumption that s 24 of the Code, which provides for a defence of honest and reasonable mistake of fact, does apply to the offence.  Even then, subsection (4) does not make much sense, because the existence or otherwise of reasonable grounds is not relevant to the question of whether a representation is misleading, but relevant to the question of whether the making of it ought to be an offence.
  1. [50]
    The difficulty in interpreting subsection (4) is that it is unclear whether it is a provision which builds on the application of section 24 to the section, or whether it is an inept attempt to reproduce what was expressed clearly in s 65(3)(a) of the 1971 Act,[20] or indeed whether the intention was something else entirely.  There is another potential source of inspiration for this provision:  s 51A(1) and (2) of the Trade Practices Act 1974 (Cwth).  That section, which is well known, provides that a representation with respect to any future matter shall be taken to be misleading if at the time it is made the corporation does not have reasonable grounds for making it, and goes on to put the onus of showing that the corporation had reasonable grounds for making the representation on the corporation.
  1. [51]
    In terms of a representation as to a future matter, that is a perfectly rational provision. Ordinarily, a representation as to a future matter is essentially a representation as to a belief on the part of the representor.[21]  In order to show that such representation is false, it may be necessary to show that the representor did not have that belief at the time the representation was made, something which may well be difficult.  The function of this section therefore is to make a representation as to a future matter misleading, unless the person who made the representation had reasonable grounds for making it at the time it was made, and it goes on to put the onus on the representor to prove that it had those reasonable grounds.  But that really makes sense only in relation to a representation as to a future matter.  A representation as to a present or past matter will be misleading if it is wrong, regardless of care taken to avoid error, and whether there were reasonable grounds for the representation.[22]
  1. [52]
    Subsections (4) and (5) would make sense as an attempt to reproduce s 51A(1) and (2) of the Trade Practices Act, were it not for the fact that the crucial word “future” was omitted from the first line of subsection (4) before the word “matter”.  Nevertheless, this must be another possible explanation for subsections (4) and (5).  If that is the correct one, they are simply irrelevant in the present case, because this was not a representation as to a future matter.[23]  In that situation again there is no reason to treat them as excluding the operation of s 24 of the Code.
  1. [53]
    Ultimately, it is not necessary for me to determine what (if anything) subsection (4) actually means.  Neither party particularly relied on it in argument in this appeal, and the only relevant question is whether it has the effect of excluding or in some material way modifying the operation of s 24.  In my opinion, it certainly does not clearly exclude that provision, nor is it possible to see any particular modification of it.  On the other hand, subsection (5) can be seen as reversing the onus in relation to the obligation which would otherwise be on the prosecution of showing an absence of reasonable grounds for an honest belief to the contrary.  The effect of that subsection is that it is for the person charged, or in the present context the appellant, to show that she had reasonable grounds for making the representation alleged against her to have been false or misleading.  If she was able to do so, then in the absence of proof that she did not honestly believe in the representation that she made, no breach of s 574 has been made out against her.
  1. [54]
    In paragraph [8] of its reasons, the Tribunal said that it did not matter what the appellant believed and what inquiries she had made.  That in my opinion is not correct; it ignores the application to s 574 of s 24 of the Criminal Code, as modified in relation to the onus by subsection (5).  In my opinion it was necessary for the Tribunal to determine whether the appellant had discharged the onus (on the balance of probabilities) of showing that she had reasonable grounds for making the representation that she made, and if so, whether the respondent had discharged the onus (again on the balance of probabilities) of showing that the appellant did not honestly believe what she said.  If the appellant discharged the onus on her, and the respondent failed to discharge the onus on it, the appellant was entitled to be exonerated from any obligation to reimburse the respondent in respect of the amount paid out of the fund.

The evidence

  1. [55]
    I have given some consideration to the evidence, which unfortunately was not all consistent. The evidence did appear to show, however, that the owners did not inform the appellant of the lease extension, and did initially tell her that the lease would end on 17 December 2003.[24]  She claimed that it was on this basis that she passed on that information to the purchaser.[25]  On the other hand, there was evidence that she was told by both Mr and Mrs Allard of the lease extension at a relatively early stage in the sale process.[26]  She seemed to admit in cross‑examination that she had been told something by Mrs Allard about the lease extension, and claimed that she had asked for a document in relation to the extension but Mrs Allard had refused to provide it.[27]  Mrs Allard on the other hand said that she gave no reaction when told about this.[28]  The appellant also claimed to have passed this information on to the purchaser,[29] something that the purchaser denied under cross‑examination.[30]
  1. [56]
    There was evidence that the appellant then got in contact with the owner (through her daughter),[31] who then provided information which tended to confirm that there was no lease extension, including a letter, which the owner claimed had been drafted by the appellant,[32] which stated expressly that the lease expired on 17 December 2003.[33]  That, however, was only provided on 11 September 2003, the day the contract was signed by the vendor, and the date on the contract.  The appellant’s evidence was that the purchasers had signed the contract prior to the signature of the vendor, and that the contract had then been faxed to the vendor, who had subsequently come to Brisbane and attended the appellant’s office in order to sign it.[34]
  1. [57]
    On that version of events, the information from the vendors in the form of a written statement which tended to confirm that there was no lease extension was provided to the appellant after the contract had been signed by the purchasers, and therefore after the time when any representation as to the termination of the lease had been made. Any information provided at that stage could not amount to reasonable grounds for the representation that was previously made. Whether there are reasonable grounds to make the representation has to be assessed by reference to the grounds available to the person at the time the representation was made.
  1. [58]
    Unfortunately, the matter is complicated by the fact that the purchasers also claimed to have signed the contract on 11 September, and denied that the appellant provided any information about the possible extension of the lease.[35]  There are some conflicts as was recognised by the Tribunal, and it follows that the outcome in relation to this matter must depend on the resolution of those conflicts of evidence, or at least may be influenced by that resolution.  In the absence of findings by the Tribunal, it is not possible for me to say on the basis of the transcript what the outcome necessarily ought to have been.
  1. [59]
    This is not an appeal by way of rehearing.[36]  On the evidence, it seems to me that it would have been open to the Tribunal to have found that the appellant had failed to discharge the onus of showing that she had reasonable grounds, but the evidence is not such that no other finding was reasonably open to the Tribunal.[37]  Even if the finding was made that there were reasonable grounds, it is still necessary for the Tribunal to consider whether the appellant had been shown not to believe the representation that was made.  In these circumstances, I cannot finally determine the matter on the appeal.
  1. [60]
    All I can say is that the appellant has shown that there was an error of law in the approach adopted by the Tribunal, and that that error may have meant that the Tribunal’s conclusion was wrong. It is necessary therefore for the matter to go back to the Tribunal for the Tribunal to make any necessary findings of fact, and to arrive at a final conclusion applying the law as expounded in these reasons. It occurs to me that if the same tribunal member is able to consider the matter, it may be possible to avoid a further oral hearing, with the matter simply being decided on the basis of the evidence already received, and submissions by the parties. That, however, would be a matter for the Tribunal.
  1. [61]
    I should add that it appears that the only issue before the Tribunal was whether the appellant was liable to reimburse the fund. The Tribunal was not considering the question of whether the payment to the purchasers out of the fund was properly made, nor indeed the question of whether the other party ordered to reimburse the fund was liable to do so. Hence, it was only the two parties before me who were parties to the proceeding before the Tribunal. The only order the Tribunal could make, if it ultimately concluded that the appellant had not been shown to have breached s 574, would be to set aside the decision that the appellant reimburse the fund in respect of the amount paid out to the claimants.  The Tribunal is not concerned with the position as between the claimants and the fund.

Conclusion

  1. [62]
    There were other matters argued, which can be dealt with quickly. It was submitted that the lease extension was not valid because it was not shown that the tenants were not in breach of the existing lease so as to be entitled to exercise the option to extend. But that was a matter which really went to the quantification of the claimants’ loss, and was concluded in a practical sense by their failure in the Small Claim Tribunal. The existence of the option made the appellant’s statements as to when the tenancy would end misleading, whether or not there was room for argument about the validity of its exercise. It was also submitted that the variation of the tenancy agreement to include the option was contrary to s 36(1) of the Residential Tenancies Act 1994.  But that section prohibits agreements which purport to exclude, change, or restrict the application in operation of a provision of that Act about the terms in that act which would prevent the grant of such an option, or the amendment of a tenancy agreement to include such an option, or which requires a tenant to vacate at the end of a fixed term tenancy; s 46(4) is to the contrary on this last point.  The option to extend the lease was not rendered void by this section.
  1. [63]
    The Act does not prevent a fixed term tenancy from being extended prior to the expiration of the term. The Fact Sheet issued by the Residential Tenancy Authority simply says that a fixed term tenancy can be extended when it comes to an end; it does not say it cannot be validly extended earlier, and if it did, there would be no basis for such a proposition in the Act.
  1. [64]
    The appeal is allowed, the decision of the Tribunal is set aside, and in lieu thereof it is ordered that the matter be remitted to the Tribunal to decide according to law as expounded in these reasons. It is not clear whether the appellant has incurred any legal costs in relation to the appeal, but I will order the respondent pay the appellant’s costs of the appeal (if any) to be assessed. It occurs to me that there may well be at least a filing fee and the cost of the transcript which ought to be reimbursed by the respondent.

Footnotes

[1]The same day the tenants and the agent signed a separate document referring to the option.  That document is a little unclear as to whether it was a grant of an option or its exercise by the tenants, but it does not matter.  If the option was validly granted, it was subsequently binding on the vendors and, later, the purchasers.

[2]The costs associated with an application by the purchasers to the Small Claims Tribunal to obtain possession of the property, which was unsuccessful.

[3]The appellant was a registered employee for the purposes of the section.

[4]There is provision for one or more boxes to be ticked, but in this case all three boxes were ticked.

[5]Davies v Sweet [1962] 2 QB 300 at 305; Kedcorp Pty Ltd v Jenkins [1999] QCA 452 at [16].

[6]It is not usually inferred or implied:  Lang “Estate Agency Law and Practice in NSW” (5th edition, 1994) p 350.

[7]Ibid, p 352.

[8]Byrne Bros. Pty Ltd v City of Maryborough (1984) 53 LGRA 383 at 390; Castor v Brisbane City Council [1955] St R Qd 348 at 360.

[9]Jones v Dunkel (1959) 101 CLR 298; Burke v LFOT Pty Ltd (2002) 76 ALJR 749 at 774 [134] per Callinan J.

[10]The term now used is resident letting agent.  I will use the terminology used in the documents.

[11]Appellant’s transcript p 39 line 28.  Each party produced a transcript of the proceedings in the Tribunal, but the appellant’s transcript was by Auscript Pty Ltd and was easier to use, and I prefer to rely on it.

[12]P 46 line 20.

[13]Sherras v De Rutzen [1895] 1 QB 918 at 921.

[14]2000 explanatory notes volume 3 p 1966; presumably what was meant was that the grounds on which the representation was made is a matter peculiarly within the knowledge of the person making the representation.

[15]Dean “Estate Agents and Auctioneers” (2nd edition 1941) p 122.

[16]Emphasis added.  See Trade Practices Act 1974 s 79 as it then stood.  It is curious that no mention was made of the right to damages under s 82 and the possibility of ancillary orders under s 87.

[17]R v Clare [1994] 2 Qd R 619 at 642 per Pincus JA, where his Honour added that “a clear provision is required to exclude the criminal responsibility sections of the Code.”

[18]Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198.

[19]There is no rational justification for criminalising accurate guesses.

[20]Consistently with the New South Wales legislation since 1941.

[21]Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88.

[22]Miller’s Annotated Trade Practices Act (22nd Ed 2001) p 373, [1.52.25]; Parkdale v Puxu (supra) p 197 per Gibbs CJ.  His Honour went on to note that the provision was, from one point of view, draconic, which has been amply confirmed by some of the later cases under s 52.

[23]It was a representation as to the terms of the existing tenancy.

[24]Owners’ letter 12 January 2004.

[25]Letter of appellant 10 July 2004; statement of Chen (purchasers) 15 November 2005; appellant transcript p 12.

[26]Mr Allard statement 14 December 2005 (told her on 6 September 2030); Mrs Allard statement 14 December 2005 (8 September 2003), and see transcript p 35.

[27]Transcript p 15 line 19; see also p 15 line 30, p 20 line 1.

[28]Transcript p 38.

[29]Transcript p 16 line 26.

[30]Transcript p 29; see also statement 15 November 2005 p 5.

[31]Statement of Mrs Kania 12 July 2004; Transcript p 46 (prior to faxing tenancy agreement to appellant on 9 September 2003).

[32]Statement of Mrs Kania 15 December 2005.

[33]Letter from appellant 10 July 2004.

[34]Appellant transcript pp 9-11.

[35]Statement of Chen 15 November 2005; Transcript p 30.

[36]As to an appeal on a question of law, see Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139.

[37]The inspector’s report of 22 February 2005, without the benefit of all of the evidence the Tribunal had, included the comment that “the misrepresentation was innocent and unintentional as the [appellant] had reasonable grounds for making the representation.”

Close

Editorial Notes

  • Published Case Name:

    Stephanie To v Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development

  • Shortened Case Name:

    To v Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development

  • MNC:

    [2006] QDC 381

  • Court:

    QDC

  • Judge(s):

    McGill DCJ

  • Date:

    10 Nov 2006

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
Azzopardi v Tasman UBE Industries P/L (1985) 4 NSWLR 139
1 citation
Jump To
Cite 1 - (1985) 4 NSWLR 139
Burke v LFOT Pty Ltd (2002) 76 ALJR 749
1 citation
Jump To
Cite 1 - (2002) 76 ALJR 749
Byrne Bros Pty Ltd v City of Maryborough (1984) 53 LGRA 383
2 citations
Jump To
Cite 1 - (1984) 53 LGRA 383
Cite 2 - (1984) 53 LGRA 383
Castor v Brisbane City Council [1955] St R Qd 348
2 citations
Jump To
Cite 1 - [1955] St R Qd 348
Cite 2 - [1955] St R Qd 348
Davies v Sweet [1962] 2 QB 300
1 citation
Jump To
Cite 1 - [1962] 2 QB 300
Global Sportsman Pty Ltd v Mirror News Papers Ltd (1984) 2 FCR 82
1 citation
Jump To
Cite 1 - (1984) 2 FCR 82
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216
2 citations
Jump To
Cite 1 - (1978) 140 CLR 216
Cite 2 - (1978) 140 CLR 216
Jones v Dunkel (1959) 101 CLR 298
1 citation
Jump To
Cite 1 - (1959) 101 CLR 298
Kaw Teh v The Queen (1985) 157 CLR 523
2 citations
Jump To
Cite 1 - (1985) 157 CLR 523
Cite 2 - (1985) 157 CLR 523
Kedcorp Pty Ltd v Jenkins[2002] 1 Qd R 49; [1999] QCA 452
1 citation
Jump To
Cite 1 - [1999] QCA 452
Kehoe v Dacol Motors Pty Ltd; ex parte Dacol Motors Pty Ltd [1972] Qd R 59
2 citations
Jump To
Cite 1 - [1972] Qd R 59
Cite 2 - [1972] Qd R 59
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
3 citations
Jump To
Cite 1 - (1982) 149 CLR 191
Cite 2 - (1982) 149 CLR 191
Cite 3 - (1982) 149 CLR 191
R v Clare [1994] 2 Qd R 619
2 citations
Jump To
Cite 1 - [1994] 2 Qd R 619
Cite 2 - [1994] 2 Qd R 619
Sherras v De Rutzen (1895) 1 QB 918
1 citation
Jump To
Cite 1 - (1895) 1 QB 918
Yorke v Lucas (1985) 158 CLR 661
2 citations
Jump To
Cite 1 - (1985) 158 CLR 661
Cite 2 - (1985) 158 CLR 661

Cases Citing

Case NameFull CitationFrequency
Advance Business Finance Pty Ltd v Tuff Toys Qld Pty Ltd & Ors [2010] QCAT 5251 citation
Chandra v Key to Australia Pty Ltd [2024] QCAT 2252 citations
Crozier v Key to Australia Pty Ltd [2024] QCAT 2402 citations
Holcombe v Key to Australia Pty Ltd [2024] QCAT 2741 citation
Jacobsen v Key to Australia Pty Ltd [2024] QCAT 1862 citations
Kine v Key to Australia Pty Ltd [2024] QCAT 2152 citations
Millar v Key to Australia Pty Ltd [2024] QCAT 2892 citations
Nagle v Key to Australia Pty Ltd [2024] QCAT 1851 citation
Robertson v Airstrike Industrial Pty Ltd [2013] QCAT 1072 citations
Wainui v Key to Australia Pty Ltd [2024] QCAT 2882 citations
Weeds v Key to Australia Pty Ltd [2024] QCAT 2422 citations
Wehbe & Partners Pty Ltd v Harmony Group Developments Pty Limited [2013] QCAT 3402 citations
Wilson v Key to Australia Pty Ltd [2024] QCAT 2272 citations
Wood and Ors v Chief Executive, Department of Employment, Economic Development and Innovation and Ors [2011] QCAT 2412 citations
1

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