Propcare Pty Ltd v Orchid Avenue Realty Pty Ltd
[2012] QDC 361
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- Unreported Judgment
- Propcare Pty Ltd v Orchid Avenue Realty Pty Ltd[2012] QDC 361
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Propcare Pty Ltd v Orchid Avenue Realty Pty Ltd[2012] QDC 361
Propcare Pty Ltd v Orchid Avenue Realty Pty Ltd[2012] QDC 361
DISTRICT COURT OF QUEENSLAND
CITATION: | Propcare Pty Ltd v Orchid Avenue Realty Pty Ltd [2012] QDC 361 |
PARTIES: | PROPCARE PTY LTD Appellant AND ORCHID AVENUE REALTY PTY LTD Respondent |
FILE NO/S: | D 441/2011; M2644/2008 |
DIVISION: |
|
PROCEEDING: | Civil Appeal |
ORIGINATING COURT: | Magistrates Court at Southport |
DELIVERED ON: | 7 December 2012 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 23 October 2012 |
JUDGE: | McGill DCJ |
ORDER: | Appeal dismissed with costs. |
CATCHWORDS: | PRINCIPAL AND AGENT – Right to Commission – real estate agent – conjunction agreement – whether conjunction agent can recover share of commission under agreement – whether appointment under Act required Property Agents and Motor Dealers Act 2000 s 133, s 140. Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 – cited. Di Dio Nominees Pty Ltd v Brian Mark Real Estate Pty Ltd [1992] 2 VR 732 – cited. F J Richards Pty Ltd v Mills Pty Ltd [1995] 1 Qd R 1 – cited. Houston v Dewi Thomas Pty Ltd [1967] VR 300 – cited. Jones v Knobel & Davis Property Services Pty Ltd. [2008] QCA 105 – cited. L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52 – cited. Parsons v Raby [2007] QCA 98 – cited. Property Sales Association of Qld v Outlook Realty Pty Ltd [2006] QIRComm 57; 182 QGIG 88 – cited. Stevenson v Yasso [2007] 2 Qd R 4 – cited. Sultana Investments Pty Ltd v Cellcom Ltd (No. 1) [2009] 1 Qd R 589 – applied. Yong Internationals Pty Ltd v Gibbs [2011] QCA 161 – cited. |
COUNSEL: | L Pirotta (Director) for the appellant IA Bisson (Solicitor) for the respondent |
SOLICITORS: | The appellant was not represented Hartnett Lawyers for the respondent |
- [1]Both parties are real estate agents. The respondent recovered judgment against the appellant for an amount of $20,022.75 together with interest and costs as money payable under a conjunction agreement in respect of the sale of a property for which the appellant held an exclusive agency. The appellant has a right to appeal to this court from that decision;[1] the appeal is by way of re-hearing: UCPR r 765; r 785.
PAMDA s 140
- [2]The appellant’s main argument focussed on the certain provisions of the Property Agents and Motor Dealers Act 2000 (“PAMDA”). Section 140(1) of that Act 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 by the person to be charged with the reward or expense”. In Div 2, s 133 prohibits a real estate agent from acting as a real estate agent for a person to perform an activity for that person unless that person first appoints the real estate agent in writing, which appointment must comply with the requirements of ss 133 and 134. There was no dispute that the written conjunction agreement which was entered into did not comply with the requirements of those sections.
- [3]The appellant’s argument was that these provisions applied to a conjunction agreement between real estate agents, so that the respondent was not entitled to sue on this conjunction agreement. The Magistrate held however that these provisions did not apply to a conjunction agreement, but were concerned with the situation where a real estate agent was engaged by a client or customer. The Magistrate did not refer to any authority on the subject, but reached this conclusion on the basis that the statute was concerned, at least in this respect, with the issue of consumer protection, not with the regulation of dealings between real estate agents, and that it should accordingly be given a purposive interpretation.
- [4]The appellant submitted that there were no exceptions anywhere in PAMDA relating to conjunction agreements, and that accordingly the requirements of the Act had to be complied with. Even if that had not been appreciated up until now, if that was what the Act meant then that was the position, which is true. He noted that claims concerning conjunction agreements did not seem to be litigated very frequently, which is also true.
- [5]It is I think fair to say that, read literally, the provisions of s 140 are wide enough to apply to such a situation. There is nothing in the language used which expressly excludes their operation in respect of a conjunction agreement. It was the case that the respondent was in the Magistrates Court suing for and seeking to recover a reward for the performance of an activity as a real estate agent. Read literally therefore s 140 was a bar to the respondent’s claim.
- [6]However, the requirement in s 140(1)(c) that the person be properly appointed under division 2 by the person to be charged suggests that the section applies only in circumstances where such an appointment would be appropriate. In division 2, s 133(1) is concerned with a client appointing a real estate agent to perform a service[2] for the client, that is, a person for whom the agent performs an activity to act as a real estate agent. That is an appropriate description of the relationship between the vendor and the appellant, but it does not readily apply to the relationship between the appellant and the respondent. The respondent was in a sense acting, indirectly as a real estate agent for the vendor, but was not appointed by the vendor, and in the immediate sense was acting, as a real estate agent would act, for the appellant.[3] The respondent would not be entitled to claim commission from the vendor, but there is no reason to interpret s 133 as applying to the formation of a conjunction agreement between two real estate agents. The whole content of s 133, indeed division 2, is inapt for that purpose.
- [7]It would be equally inapt to the relationship between employer and employee. If a corporate real estate agent is appointed by a client, there must be no need to comply with s 133 if that agent employs a natural person who holds a licence to do the necessary acts to perform, on behalf of the corporate agent, the services it has been appointed to perform for the client.[4] Section 128(1), which in a sense defines a real estate agent, speaks about the relevant activities being performed as agent for others for reward, and s 128(2) provides that the agent may do this “as an employee of someone else”, although, curiously, not “by an employee”. Other provisions of the Act contemplate that the holder of a real estate agent’s licence may be an employee.[5] It would be very odd if such a person could not sue the employer for remuneration unless “appointed” under s 133.[6]
- [8]When such a defence was attempted in Victoria in 1967, it was able to be easily rejected because of the existence in the applicable legislation, which included something like s 140 of PAMDA, of provisions which expressly excluded such a situation from the scope of that provision, in terms which I suspect would also have excluded conjunction agreements: Houston v Dewi Thomas Pty Ltd [1967] VR 300. The differences in the terms of the legislation mean that that decision is not an authority when dealing with PAMDA, but it does show that, in this respect, the Victorian legislation then in force was better drafted than was PAMDA in 2000. It is unfortunate that the Queensland Act was not drafted in terms which were so clear that this issue could not have been seriously raised, or, if raised, could have been resolved by reference to express provisions of the Act.
- [9]As well, an analysis of the structure and objects of PAMDA supports the conclusion of the Magistrate that these sections do not apply to a conjunction agreement between real estate agents. I respectfully adopt the analysis by the Court of Appeal in Sultana Investments Pty Ltd v Cellcom Ltd (No. 1) [2009] 1 Qd R 589 at [26] – [31] Such an application would be extraneous to the consumer protection objectives of the legislation.[7] That is also supported by the fact that no reference at all is made to conjunction agreements in PAMDA, although such a thing was quite common in the industry prior to 2000.[8] That suggests that the legislative purpose did not extend to regulating such agreements. Accordingly in my opinion it was not necessary for the respondent to be appointed by the appellant in accordance with s 133 of the Act, and s 140 does not prevent the appellant from recovering money payable under the conjunction agreement.
- [10]With regard to compliance with s 134, the appellant referred to the decision of the Court of Appeal in Yong Internationals Pty Ltd v Gibbs [2011] QCA 161. That decision turned on the question of whether there had been substantial compliance with the statutory requirement that the appointment be in the approved form. The decision was not concerned with the validity of the conjunction agreement between agents, or the existence of any legislative requirements for one.
Code of Conduct
- [11]Apart from this the appellant submitted that the respondent had failed to comply with a number of provisions of the code of conduct, established by regulation under s 154 of PAMDA. It is unnecessary to detail the particular allegations of breaches alleged by the appellant, because in my opinion it is clear that a breach of the code of conduct would not have the effect of disentitling the respondent from suing on the conjunction agreement. Whether a breach of a provision of a statute produces consequences in terms of civil remedies depends on the true interpretation of the statute. Ordinarily, where a specific consequence is provided in the statute for a breach of a particular provision, that indicates a legislative intention that that be the only consequence of breach.
- [12]By s 155 a breach of a provision of the code of conduct can be the basis of disciplinary proceedings under PAMDA, but there is nothing to indicate that this is a matter which can be raised in ordinary civil litigation, or that it provides a defence in respect of a liability which would otherwise exist pursuant to a contract.[9] There is nothing in the Act to suggest that it ought to be interpreted in a different way, and no analysis by reference to the legislation has been advanced by the appellant in order to demonstrate or support a different construction of PAMDA. Accordingly, in my opinion a breach of the code of conduct if established would not have disentitled the respondent from succeeding in the action. In these circumstances it is unnecessary for me to consider whether any and which of the appellant’s allegations in this regard are made out, though I note that the Magistrate did not find that any of them had been made out on the evidence at the trial.
Other matters
- [13]The appellant also submitted that the respondent had not shown that the conjunction agreement was made with it, since the description of the conjunction agent in the agreement was simply “Ray White Main Beach”. There was evidence that the respondent carries on business at Main Beach under the name “Ray White Surfers Paradise – Main Beach”, and it was also clear that it was an employee of the respondent with whom the appellant was dealing in relation to the transaction. There was no evidence before the Magistrate that any other person or company carried on business under the name “Ray White Main Beach”, and in my opinion the correct conclusion is that the reference in the conjunction agreement was a reference to the respondent. This follows as a matter of interpretation of the words used in the document. It was also submitted by the appellant that the respondent never made the appellant aware that it could be entering into an agreement with other associated companies, but once the identity of the other party of the contract is correctly identified there is no question of the appellant entering into any agreement with any associated company, so this point is without substance.
- [14]It was also submitted that no valid agreement had come into existence because the document prepared by the appellant and forwarded to the individual working for the respondent referred to its being signed by the “licensee”. It was submitted that that required the signature of a person who held a real estate agents licence, and since the document had been signed by someone who did not hold such a licence, there was no valid agreement. But the respondent holds a licence under PAMDA, a corporate licence, and in my opinion the signature of the agreement by a person who was authorised to do so on behalf of the respondent amounted to a signature by the respondent as “licensee” so that the requirement of the document had been satisfied. The document did not specify that it could only be validly executed by the person who held a real estate agents licence on behalf of the respondent, and in my opinion there is no reason to interpret it in that way. The appellant’s argument in this regard also failed to appreciate that what came into existence was an agreement with the respondent rather than anyone else.
- [15]The appellant also complained that what the respondent had done by way of securing a prospective purchaser had been done before the conjunction agreement was entered into, and this had not been disclosed by the person with whom the appellant was dealing. Although s 140 requires that there be an appointment in place at the time the relevant activity was performed before a real estate agent can recover reward for the activity, if, as I have concluded, s 140 did not apply, the question is simply whether there is anything at common law which prevents a contract of this nature from operating.
- [16]Ordinarily one would expect that a conjunction agreement would arise in circumstances where one real estate agent held an exclusive agency to sell a particular property, but another real estate agent knew of a prospective purchaser for that property and wanted to obtain some benefit for putting that person in communication with the agent holding the exclusive agency. Accordingly one would expect that there would ordinarily be a prospective purchaser already lined up, but the important function of the conjunction agreement is to enable the matter to move towards a sale. That is what in fact occurred here after the conjunction agreement was signed. Because the purchaser was quite keen, and the vendor was happy to sell, the sale resulted quite quickly, and it does seem that in practice nothing else was required by way of effort from the appellant to bring about the execution of the contract of sale.
- [17]It did have some input into the terms of the contract, which were drawn up by the vendor’s solicitors, specifically by excluding reference to the conjunction agreement from the contract, in connection with which the appellant’s director informed those solicitors of the existence of the agreement and that the respondent had a right to a share of the commission under it. The Magistrate seems to have treated this as a waiver of any technical deficiencies in the contract between the parties. Whether there can be a waiver by a communication between one party to a contract and a third party is perhaps a complex question, which I do not need to decide because I am not persuaded that there was any relevant technical deficiency in the contract. The letter was inconsistent with the evidence given by the appellant’s director at the trial that prior to its date he had in conversation with the respondent’s salesman cancelled the conjunction agreement. It also indicates that in respect of the conjunction agreement the appellant has been blowing hot and cold.
- [18]In any case, I do not consider that there is any obstacle to the liability of the appellant under the conjunction agreement that the respondent had in fact lined up the purchaser, as it were, prior to the time the agreement was entered into. Nor do I consider that there was any obligation on the respondent to disclose this fact. On the appellant’s account nothing was said to suggest to the contrary, and he conceded that this was not a matter that he asked the respondent’s representative about when negotiating the conjunction agreement. Accordingly I am not persuaded there was any obligation on the respondent to disclose this matter, and therefore there can be no relevant misrepresentation in failing to disclose it.
- [19]The appellant also claimed that the conjunction agreement was not enforceable because the ultimate buyer in the contract was a different legal entity from what was disclosed as the “prospective purchaser” in the conjunction agreement. There are I think two answers to this. The first is that what was disclosed, Amalgamated Property Group, did not identify a specific legal entity. It seems that a particular company associated with the particular developer, with whom the group was associated, undertook the purchase of the land, and in those circumstances it appears that the appropriate inference is that that company was a member of the group.
- [20]I do not consider that a conjunction agreement would be rendered invalid because the prospective purchaser was nominated in that way, because it may be unknown even by the persons in control of the group which particular company would be used ultimately to purchase the land, or the information may not have been communicated to the relevant agent at that time. There was no evidence in this matter that the agent in fact knew the identity of the particular company which was to be the purchaser at the time the conjunction agreement was entered into. Accordingly I do not consider that there was any material misdescription of the prospective purchaser.
- [21]The other reason why I consider that this does not provide a defence is that I cannot see anything in the conjunction agreement which expressly provides that the share of commission would be payable only if the purchase proceeds with the prospective purchaser nominated in the agreement. Indeed, the document is somewhat cryptic as to the circumstances under which the conjunction agent’s commission will be payable, but the ordinary inference would be, if that agent had contributed to bringing about the sale and purchase of the land, that is, if he was an effective cause of the sale that eventuated.[10] In some circumstances a real estate agent as a result of dealings with A can be the effective cause of a sale of a property to B, and commission is payable in such circumstances at common law.[11] Accordingly I do not think that this point is of any significance. What matters is that the respondent had been in discussion with an individual associated with the group who was interested in purchasing the land, so that the description of the group as the prospective purchaser was accurate at the time that the conjunction agreement was made.
- [22]The appellant also submitted that the respondent has not shown that it was properly appointed by the vendors; however, the respondent’s entitlement to recover under the conjunction agreement does not depend upon the existence of a proper appointment of the respondent by the vendors. That would only be relevant if the respondent was seeking to recover directly from the vendors. There was some mention in evidence that at one point the respondent did have an appointment from the vendors, but that was irrelevant to the claim before the Magistrate and the Magistrate’s decision.
- [23]The appellant’s director complained about the significance attributed by the Magistrate to his statements in a letter of 24 August 2007 to the vendors’ solicitor, which were treated as an admission that the conjunction agreement was in place. He submitted that this involved some misinterpretation of the letter, or that it was a false statement he made in order to avoid disclosing the existence of the dispute with the respondent. These explanations are in my opinion unconvincing. The letter is quite clear and was a clear admission, though the existence and effect of the conjunction agreement were proved anyway; indeed, that the appellant produced and signed the actual document was not in dispute. It seems to me that the principle significance of the letter was that it was inconsistent with the evidence of the appellant’s director that he had, in the telephone conversation three days earlier, cancelled the conjunction agreement. Whether the letter amounted, as the Magistrate put it, to a waiver of any alleged impropriety or defect in action as to style or procedure on behalf of the respondent (p 23), was in my opinion irrelevant because, for the reasons I have given, there was no relevant impropriety or defect.
- [24]The appellant submitted that there had been a breach of certain provisions of the Trade Practices Act, in particular s 64(2A) which prohibits the assertion of a right to payment for unsolicited services unless the corporation has reasonable cause to believe that there is a right to payment. That cannot apply here, because the respondent obviously believed it had a right to payment, and it was reasonable for it to believe that, because it did have a right to payment under the conjunction agreement. In those circumstances there necessarily cannot be a breach of that section.
- [25]There were some other matters mentioned in the outline of submissions of the appellant, or in oral submissions by the director. It is sufficient to say that none of them gave rise to any doubt as to the correctness of the decision of the Magistrate in relation to the action on the contract. Having considered the evidence and the documents, and the submissions on behalf of the appellant, in my opinion the appellant was properly held liable under the conjunction agreement to pay the share of the commission payable to the respondent found by the Magistrate.[12] That justifies the judgment and the appeal must be dismissed.
Unjust Enrichment
- [26]The appellant also complained about the fact that the Magistrate, having upheld the claim in contract, went on to hold that the appellant was also liable in unjust enrichment. He drew attention to the fact the respondent’s solicitor at the trial had conceded that the claims were advanced in the alternative. I think this misrepresents the effect of the judgment. The Magistrate was not saying that the appellant was also liable in unjust enrichment, but rather was making a finding on a precautionary basis, that if there were no liability in contract, he would have found liability on the basis of unjust enrichment anyway.
- [27]There is no entitlement to recover on the basis of unjust enrichment if there is an entitlement to recover in contract, so the fact that the contractual basis was found enforceable necessarily means there was no liability in unjust enrichment. I do not think the Magistrate was under any misapprehension as to that. It is, however, not uncommon for a trial court to make findings on a precautionary basis; a common example is the assessment of quantum of damages in cases where the plaintiff fails on liability in an action for damages. That is all the Magistrate was doing in the present case, and in my opinion that approach was quite justified.
- [28]Whether the appellant would have been liable on the basis of unjust enrichment, i.e. in restitution, if there had been no claim available in contract is therefore, strictly speaking, at this point an academic exercise. The outcome of that enquiry would depend on the basis upon which the appellant was not liable in contract. If I were of the opinion that s 140 did preclude a claim on the conjunction agreement, that would also have been a bar to recovery in restitution, since it has been held that the wording of s 140 is wide enough to preclude a claim in restitution as well as a claim in contract.[13] If there were some factual deficiency in the claim in contract, whether there was a cause of action in restitution would depend on the particular facts. I suspect that the Magistrate’s conclusion that, if there were no claim in contract, there was necessarily one available in restitution, was too wide, but having concluded that there was a claim in contract it is unnecessary for me to consider the matter further, and anything I said on the subject would only be a conclusion based on hypothetical facts, which is unnecessary and unhelpful. I will therefore say nothing more about liability in restitution.
- [29]The consequence is that the appeal is dismissed with costs to be assessed.
Footnotes
[1]Although the amount involved was less than $25,000.00 the proceeding was commenced prior to 1 November 2010: Magistrates Courts Act 1921 s 60
[2]This is the overall task for which the agent is engaged, not a part of it or particular work to enable it to be performed: Jones v Knobel & Davis Property Services Pty Ltd. [2008] QCA 105 at [22].
[3]Accordingly, the meaning identified by Lindgren J in Colbron v St Bees Island Pty Ltd (1995) 56 FCR 303 at 313 would not be satisfied, as there was no appointment of the respondent by the vendor.
[4]A corporate licensee must have an individual who is licensed in charge of each of its places of business: s 132(2).
[5]PAMDA s 129(2), s 159(2)(a).
[6]This was apparently assumed rather than decided in Property Sales Association of Qld v Outlook Realty Pty Ltd [2006] QIRComm 57; 182 QGIG 88.
[7]Sultana Investments (supra) at [53].
[8]They are expressly referred to in the Code of Conduct Regulation 2001, s 20, made under s 154 of PAMDA, and in the form approved for the purpose of s 134.
[9]If a disciplinary hearing results in a finding that grounds exist to take disciplinary action, one of the orders the Tribunal may make is that the person pay compensation to someone else who has suffered loss or damage because of what was done: s 529(1)(ba).
[10]As to effective cause of sale, see L J Hooker Ltd v W J Adams Estates Pty Ltd (1977) 138 CLR 52 at 67 – 8, 76.
[11]Di Dio Nominees Pty Ltd v Brian Mark Real Estate Pty Ltd [1992] 2 VR 732.
[12]Applying Stevenson v Yasso [2007] 2 Qd R 4; Parsons v Raby [2007] QCA 98.
[13]F J Richards Pty Ltd v Mills Pty Ltd [1995] 1 Qd R 1 at 11.