Irvine v The Prosperity Group
[2007] QDC 260
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- Unreported Judgment
- Irvine v The Prosperity Group[2007] QDC 260
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Irvine v The Prosperity Group[2007] QDC 260
Irvine v The Prosperity Group[2007] QDC 260
DISTRICT COURT OF QUEENSLAND
CITATION: | Irvine v The Prosperity Group & Anor [2007] QDC 260 |
PARTIES: | IRENE LORRAINE IRVINE Plaintiff v THE PROSPERITY GROUP PTY LTD (ACN 089 892 641) First Defendant And BRIAN MULLAN Second Defendant |
FILE NO/S: | 225 of 2006 |
DIVISION: | Civil |
PROCEEDING: | Application for Summary Judgment |
ORIGINATING COURT: | Southport |
DELIVERED ON: | 19 September 2007 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20 August 2007 |
JUDGE: | O'Sullivan DCJ |
ORDER: |
|
CATCHWORDS: | Property Agents and Motor Dealers Act 2000, s 114; whether assignment of letting rights in units illegal. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, Celik Developments Pty Ltd v Mayes [2005] QSC 224; M & M Developments Pty Ltd v Gerrard [2005] QCA 230. |
COUNSEL: | Mr A. Morrow for applicant Mr P. Woods for respondent |
SOLICITORS: | Peter Baker and Associates, Solicitors for applicant Lehns Solicitors for respondent |
REASONS FOR JUDGMENT
- [1]The plaintiff sues the first defendant for $6,209.74 for breach of contract, and against the second defendant for damages pursuant to ss 52, 82 and 87 of the Trade Practices Act 1974 (Cth).
Application for Summary Judgment by the Defendants:
- [2]The plaintiff claims commission lost by her for the period since the date of acquisition by her of the letting rights for units in the Aurelia Apartments (‘the Apartments’) for the period from 26 January 2006. Details of the calculation of the sum of $6,209.74 are contained in amended schedule ‘D’ to the Amended Statement of Claim filed 14 June 2007.
- [3]It is not in issue that prior to 25 January 2006, 179 Pty Ltd appointed the first defendant to act as its delegate in carrying out the terms of the letting authorisation agreement for the Apartments. It is also not in issue that the first defendant provided letting services to the owners/landlords of lots in the Apartments.
- [4]The plaintiff alleges that it was a term of the authority and appointment given by 179 Pty Ltd to the first defendant that if 179 Pty Ltd elected to sell the letting rights it held pursuant to the leasing authorisation agreement, the first defendant would relinquish, by way of deed of assignment, the benefit of the various appointments held by the first defendant to act as a letting agent for the owners/landlords of lots in the Apartments.
- [5]It was not in issue that on or about 25 January 2006, the plaintiff entered into a written Deed of Assignment with the first defendant in respect of the letting rights to the Apartments (‘the Deed’).
- [6]Section 114 of the Property Agents and Motor Dealers Act 2000 (‘the Act’) was as follows:
“(1) A restricted letting agent who is asked by a person (‘a client’) to perform an activity (‘service’) for the client must not act for the client unless the client first appoints the letting agent in writing under this section.”
- [7]Section 114 of the Act did not permit the assignment of an appointment from one restricted letting agent to a new letting agent. It was amended, and s 115A was inserted from 21 August 2006. Counsel for the applicant relied, in part, on the 2006 amendments to the Act, and the Explanatory Note from Parliament.
- [8]The application for summary judgment is based on the submission that the Deed of Assignment is illegal because s 114 of the Act did not permit the assignment of a Form 20A appointment from the first defendant to the plaintiff.
- [9]Counsel for the applicant submitted that the intent and purpose of the Deed was for the first defendant to assign each appointment to the plaintiff, and he relied on the recitals. Recital B states: ‘The Assignor has agreed to assign its interest in the appointment to the Assignee on the terms and conditions set out in this Deed’. He also referred to clause 3.2 of the Deed.
- [10]Counsel for the applicant submitted that one of the main objects of the Act was to provide a system for regulating persons as restricted letting agents for the protection of consumers. It required the new letting agent to enter into new appointments for each lot owner. He relied on Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, where Gibbs CJ said:
“Where, as here, a statutory imposes a penalty for contravention of a expressed prohibition against carrying on a business without a licence or an authority and the business is carried on entering into contracts, the question is whether the statute intends merely to penalise the person who contravenes the prohibition whether it intends to go further and prohibit contracts, the making of which constitutes carrying on of the business. In deciding this question the court will take into account the scope and purpose of the statute and the consequences of the suggested implication with a view to ascertaining whether it would conduce to, or frustrate, the subject of the statute.” (page 4).
- [11]Counsel for the respondent submitted that s 114 of the Act does not expressly or impliedly prohibit the entry into the Deed or the performance of the Deed, and the Deed was not tainted with any illegality. The Deed provided for the assignment of the first defendant’s right, title, estate and interest as agent in, to and under the appointments (Clauses 2.1 and 5). Common law and equity recognise the right to assign a right or benefit under a contract. The Deed did not assign any appointments. Once the assignments occurred, there is no evidence of any breach of s 114 of the Act (paragraph 28 of Outline of Submissions).
- [12]He further submitted that there was not a breach of s 114 because the plaintiff was not a resident letting agent when the Deed was completed, and there was no evidence that she performed services as a resident letting agent during the period before she was licensed on 17 February 2006. He submitted that there is nothing unlawful about a non-licensed person owning letting rights. It is only unlawful under s 114 of the Act if the resident letting agent performs an activity as a resident letting agent without the relevant appointment. There is no evidence that this occurred. The plaintiff was in the position to perform the letting rights lawfully. She could have followed the same procedure as 179 Pty Ltd had done by acquiring the letting rights and engaging another real estate agent to perform the services of a resident letting agent until she was licensed as a resident letting agent on 17 February 2006.
- [13]He further submitted that the Act imposed penalties for a breach of s 114 and directly provided for civil consequences to flow from a breach of s 114, in s 117 of the Act.
- [14]He submitted that the question whether the Deed of Assignment is prohibited by the Act, and therefore illegal, must be determined by the particular legislation and whether the legislation merely prohibits the conduct in question or whether by implication it also prohibits contracts involving that conduct. He referred to Yango Pastoral Co Pty Ltd (supra), cited in Cheshire & Fifoot Law of Contract at paragraph 18.9. The question is decided by reference to the purpose and context of the legislation, and conformity with the established principles of statutory interpretation. Whether the section provided a penalty, or even if it provides a substantial penalty, is not determinative. The penalty provided within s 114(1) is a maximum penalty of 200 penalty units, and s 117 of the Act is also relevant.
- [15]Paragraph 18.9 in Cheshire and Fifoot states:
‘It has often been said that a court should be slow to hold a statute to deprive the parties to a contract of the rights and remedies ordinarily available to them, notwithstanding that it involves illegal conduct. The continuing proliferation of regulatory legislation impinging on contracting parties obliges the courts to exercise caution in this respect’.
- [16]Paragraph 18.10 of Cheshire and Fifoot states:
‘But the presence of even a severe penalty is not decisive of whether the policy of the Act clearly implies prohibition. The question is whether the penalty attaches to each legal transaction (suggesting implied prohibition) rather than to a course of conduct or state of affairs.’
- [17]Counsel for the applicant referred me to Celik Developments Pty Ltd v Mayes [2005] QSC 224 and M & M Developments Pty Ltd v Gerrard [2005] QCA 230. It is certainly true, as stated in the Addendum to Outline of Argument, that the object of the Act is consumer protection. I have considered these two cases, and the legislative provisions and non-compliance they discuss. I do not consider that they lend themselves to the conclusion that s 114 of the Act impliedly prohibited the Deed.
- [18]I consider that s 114 of the Act does not impliedly prohibit appointments in breach of that section. I therefore find that the Deed was not tainted by illegality.
- [19]I dismiss the Application by the defendants for Summary Judgment.
Application to Remit to Magistrates Court:
- [20]The plaintiff applies to have the action remitted to the Magistrates Court because of the amendment of the claim from $101,543.00 to $6,209.74.
- [21]If the plaintiff’s Further and Better Particulars of Amended Schedule ‘D’ substantiate the sum of $6,209.74, it would then be appropriate for the defendants to consent to the action being remitted to the Magistrates Court.
Further and Better Particulars and Disclosure
- [22]The defendants applied for Further and Better Particulars and Disclosure. In relation to the contents of Amended Schedule ‘D’ to the Amended Statement of Claim, I agree that the method of calculation of the sums in respect of each of the units is not able to be ascertained by reference to the contents of Amended Schedule ‘D’, and I consider the plaintiff is obliged to provide Further and Better Particulars and Disclosure. I consider this is the appropriate course notwithstanding the defendant’s admission on the pleadings. I give leave for that admission to be withdrawn.
Costs
- [23]The defendant is to pay the plaintiff’s costs of the appearance on 20 August 2007, except the costs concerning Further and Better Particulars and Disclosure which are reserved.