Chief Executive, Department of Justice and Attorney General v Peterson Management Services Pty Ltd [2015] QCAT 473

CITATION: Chief Executive, Department of Justice and Attorney General v Peterson Management Services Pty Ltd [2015] QCAT 473 PARTIES: Chief Executive, Department of Justice and Attorney General (Applicant) v Peterson Management Services Pty Ltd (Respondent) APPLICATION NUMBER: OCR228-14 MATTER TYPE: Occupational regulation matters HEARING DATE: 6 July 2015 HEARD AT: Brisbane DECISION OF: Member Paratz DELIVERED ON: 25 November 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. A disciplinary ground has been established as to Ground Two (Window Cleaning Services) that Peterson Management Services Pty Ltd contravened Section 140(2) of the Property Agents and Motor Dealers Act 2000 (Qld). 2. The remaining three grounds are not established. 3. I direct that the matter be set for a Directions Hearing before me, on a date to be set, not before 28 days, for the purposes of setting a timetable for the hearing of further proceedings as to sanctions to be imposed on the Company in respect of Ground Two, and as to any submissions as to costs. CATCHWORDS: PROPERTY MANAGER – DISCIPLINARY PROCEEDINGS – where a Company held a Real Estate Corporation licence and held -- 1 of 20 -- 2 caretaking and letting rights for an apartment building – where the Company charged fees for certain services – whether the Company breached the provisions of the Property Agents and Motor Dealers Act 2000 (Qld) by charging fees for reward or expense above an amount allowed by the Act – where the meaning of the expressions ‘reward’ ,‘expense’, and ‘the amount collected’ as used in the Act was discussed. Property Agents and Motor Dealers Act 2000 (Qld), s 133, s 140, s 141, s 496(1)(b), s 497, s 529 Property Occupations Act 2014 (Qld), s 88(1)(b), s 88(2) Orchid Avenue Pty Ltd v Goode [2014] QDC 217 APPEARANCES: APPLICANT: Mr R N Vize (In-House Counsel for the Chief Executive) RESPONDENT: Mr B.W.J. Kidston of Counsel instructed by Mahoneys REASONS FOR DECISION [1] Peterson Management Services Pty Ltd (‘the Company’) owns the caretaking and letting rights at The Rocks Resort located at 828 Pacific Parade, Currumbin Beach, Queensland. [2] The Department of Justice and Attorney General (‘the Department’) applied to the Tribunal1 on 3 October 2014 to conduct a proceeding to decide whether a disciplinary ground against the Company is established pursuant to the Property Agents and Motor Dealers Act 2000 (Qld) (‘the Act’ or ‘PAMDA’). Four separate disciplinary grounds were alleged. [3] At the hearing on 6 July 2015, the parties agreed that the issue as to whether a disciplinary ground is established should be decided as a preliminary matter. If a ground is made out, then further proceedings are to be scheduled to determine the orders to be made.2 Depending upon the outcome, costs applications may be made, and are to be considered at a later date if sought. 1 Application pursuant to s 497 of the Act. 2 Orders the Tribunal may make are set out in s 529 of the Act. -- 2 of 20 -- 3 [4] At the conclusion of the hearing on that day, I gave Directions as to the filing of further submissions, and that a decision would be delivered as to the disciplinary grounds thereafter. [5] This is the decision on the disciplinary grounds. The alleged disciplinary grounds [6] The grounds for starting a disciplinary proceeding against a licensee or registered employee are set out in Section 496 of the Act, and include section 496(1)(b)(i): (b) the licensee or employee has contravened or breached – (i) this Act, including a code of conduct;… [7] Ground One - General Cleaning Services. Breach description: Licensee has contravened the Act (restriction on recovery of reward or expense above amount allowed) Section(s): Section 496(1)(b) – Section 141(6) Date(s) of breach(s): Between 3/12/2011 and 1/03/2012 Place of breach (s): Currumbin Beach [8] Ground Two - Window Cleaning Services. Breach description: Licensee has contravened the Act (restriction on recovery of reward or expense – no proper authorisation) Section(s): Section 496(1)(b) – Section 140(2) Dates of breach(s): Between 30/01/2012 and 1/03/2012 Place of breach (s): Currumbin Beach [9] Ground Three - Foxtel Services. Breach description: Licensee has contravened the Act (restriction on recovery of reward or expense above amount allowed) Section(s): Section 496(1)(b) – Section 141(6) Dates of breach(s): Between 1/12/2011 and 1/03/2012 Place of breach (s): Currumbin Beach [10] Ground Four – Wotif Bookings. Breach description: Licensee has contravened the Act (Commission may be claimed only in relation to actual amounts) Section(s): Section 496(1)(b) – Section 139(2) Dates of breach(s): Between 3/12/2011 and 1/03/2012 Place of breach (s): Currumbin Beach -- 3 of 20 -- 4 Agreed facts [11] The parties filed an Agreed Statement of Facts.3 It was variously agreed as follows. (a) Agreed facts as to contractual arrangements [12] The Company holds a Real Estate Corporation licence that was issued on 18 November 2014 and has an expiry date of 18 November 2016. It was responsible for letting units at The Rocks Resort on behalf of unit owners who signed letting agreements with it. [13] The Company held signed PAMD 20a forms (Appointment of agent – letting and property management) for each property in the letting pool. Those forms had a schedule attached detailing the agreed charges for a number of services. (b) Agreed facts as to general cleaning services [14] The ‘clean and services’ charges inclusive of GST on the schedule were: a) $64.90 per clean for a 1 bedroom unit b) $73.70 per clean for a 2 bedroom unit [15] The Company utilised the services of Evelyn Beuganey as a cleaner in the period 1 December 2011 to 29 February 2012. Copies of the cleaner’s invoices showed the charges made inclusive of GST were: a) $30.00 per clean for a 1 bedroom unit b) $39.50 for a 2 bedroom unit [16] The monthly trust account ‘Owner Room Statement’ and corresponding entry in the ‘Management Expense Summary’ showed that the Company charged owners the amounts shown in the schedule. (c) Agreed facts as to window cleaning services [17] The PAMD 20a forms did not state any specific fee, charge or commission payable to the Company for the provision of window cleaning services. [18] Copies of the cleaner’s invoices for the period 28 November 2011 to 3 March 2012 showed the charge for window cleaning inclusive of GST was either $14.00 for a unit with small windows, or $16.00 for a unit with large windows. The amounts charged for window cleaning were in addition to any other cleaning services conducted in the rooms and charged to the owners. The charges included cleaning the internal and external of balcony and bedroom windows. [19] The monthly owners statements for each of the units in the letting pool for the period December 2011 to February 2012 and the monthly trust account 3 Agreed Facts filed 26 March 2015. -- 4 of 20 -- 5 ‘Management Expense Summary’ reports for the same period stated that charges were being levied against owners for window cleaning services.in the amounts of $35.20 or $39.60 per clean. [20] For the 32 units concerned, the total amount charged by the Company to lot owners for window cleaning services in the period was $1,205.60. The difference between what the cleaner charged the Company, and what the Company charged the lot owners in the period, was $723.60. (d) Agreed facts as to Foxtel services [21] The Company was authorised to provide Foxtel services to the units accordance with the PAMD 20a forms. The form had a schedule which set out the charges as: a) $61.60 per month for 34 unit owners b) $64.90 per month for 6 unit owners c) $69.30 per month for 5 unit owners d) $65.00 per month for 1 unit owner e) $84.80 per month for 1 unit owner [22] Foxtel charged the Company the sum of $55.00 per unit including GST for each month in the period 1 December 2011 to 29 February 2012. [23] The Company charged the lot owners the sum of $84.80 per unit per month including GST for Foxtel services. That amount is $29.80 per unit per month more than the amount actually expended by the Company. (e) Agreed facts as to Wotif bookings [24] From time to time the Company utilised the services of the online booking agent, Wotif.com to obtain guests for the units managed by it. Guests pay Wotif for accommodation, and Wotif deducts a 10% commission. Wotif remits the balance of the amount paid by the guest to the Company trust account. [25] The Company was authorised by the PAMD 20a forms to a commission of 13.2% including GST for holiday accommodation rental amounts collected. [26] The Company charged commission to owners in the period December 2011 to February 2012 calculated on the amount collected by Wotif, and not on the lesser amount actually collected by the Company. [27] For the period January and February 2012, the Company paid to nine property owners on 12 occasions, rent less commission calculated on the amount Wotif collected from the guest. The total amount of the difference between the commission charged, and the amount calculated on the amount actually collected, was an extra $144.69. -- 5 of 20 -- 6 The Hearing [28] At the start of the hearing, Counsel for the Company indicated that it might seek to pursue a preliminary point as to whether the Tribunal had jurisdiction to hear the referral where the Department had not first brought proceedings in the Magistrates Court for any alleged breaches of the Act. [29] I proceeded with the hearing, and gave directions for the filing of submissions on the jurisdiction point at the conclusion of it, and for the filing of submissions in reply. Subsequently the Solicitors for the Company advised that they would not be making any submissions on that point, and it therefore does not need to be considered. [30] Evidence was given at the hearing by the investigator, Mr Pirie; the cleaner, Ms Begauney; and a Director of the Company, Mr Francis Peterson. [31] In the course of the hearing, Counsel for the Company conceded that Ground 2, as to the Window Cleaning Services, was made out, and that a price or expense was charged without proper authorisation. [32] Mr Pirie referred to Volume 1 of the Department’s material;4 Volume 2 of the Department’s material;5 and to his statement.6 [33] Mr Pirie was asked to look at paragraph 27 of a statement of Mr Peterson7, which contained a table showing that Foxtel charges had been levied by the Company over a seven year period from November 2005 to after January 2012. He was asked to accept that his enquiry over a 3 month period was of little use in the context of 7 years of charging, but did not agree with that proposition. [34] Ms Begauney referred to her statements.8 She said that she was given a key for each unit, one at a time, and that when she finished cleaning one unit she would get a key for the next unit. She said that she did not decide which units to clean, but was given directions by the Company as to which unit to clean and in which order. [35] She said that the daily cleaning sheet was prepared in Reception by the Company. She said that the Company checked each room after they were cleaned. She said that at times she was told to clean a room again, or sometimes someone from the Company would clean something small that she had missed. [36] She said that she did not do all types of cleaning, and that if it was something specialist such as a red wine stain, that the Company would get in a specialist cleaner. 4 Exhibit 1, dated 3 October 2014. 5 Exhibit 2, dated 3 October 2014. 6 Exhibit 3, dated 10 April 2015. 7 Exhibit 6, dated 24 March 2015. 8 Statements Evelyn Begauney dated 1 October 2014 and 10 April 2015 (Exhibit 3). -- 6 of 20 -- 7 [37] Mr Peterson said that the Company had taken over the management in 2000. He said that the ‘Appointment to Act’ forms had had been drawn up using a precedent from a Solicitor. He said there had been a number of schedules of rates. [38] He said that the ‘cleaning fee’ referred to in the Form 20a included supervision, handing out documents, and touching-up minor matters. He said that he just followed the trend from his predecessor. [39] He said that the Company had been using Ms Begauney since 2008. He said they would give her the key to each unit, and then either go up and change keys with her, or she would come down. He said that a record was not kept of the times she was requested to do a room again, but that it was usually perfect, and they would check for a towel missing or a mark on the wall that had been missed. [40] He said that the cleaning costs started from 2008, and then increased as the contractors charges changed. [41] He said that he could not quantify the Company time spent in relation to cleaning as it varied every day, and that for example there were 20 guests coming in that day. [42] He was asked how he calculated the Foxtel charges, and said that he carried forward the system from the former manager, and used the same percentages. [43] He said that the Company ensured that the Foxtel system was working, and that they would get called up to a unit 2 or 3 times on a Saturday night to help users operate it. He said that they always check the Foxtel before every arrival. He said that if they had to reset a unit that they might have to go back to one unit 3 times in one day. [44] He said that if there was a problem with the Foxtel box, that someone from the Company would arrange for the box to be taken away. He said that the Company handled all contact with Foxtel, not the guests. He said that the Company paid the Foxtel fees in bulk. [45] He said that the Wotif charges were programmed by the computer programmer as on other sites, and that he did not know how the system was instituted. He said that the Company took commission on the gross amount. Applicable law [46] Section 133 PAMDA provides that a real estate agent must not act as a real estate agent for a person (client) to perform an activity (service) for the client unless the client first appoints the real estate agent in writing. The appointment must, for each service: -- 7 of 20 -- 8 (a) state the fees, charges and any commission payable for the service.9 [47] The appointment must state as to expenses: (c)(i) the expenses, including advertising and marketing expenses, the agent is authorised to incur in connection with the performance of each service or category of service.10 [48] The appointment must also state as to amounts the agent may receive: (c)(iii) the source and the estimated amount or value of any rebate, discount, commission or benefit that the agent may revive in relation to any expenses that the agent may incur in connection with the performance of the service.11 [49] Sections 141 (1), (3) and (6) PAMDA provide: 141 Restriction on recovery of reward or expense above amount allowed (1) A person is not entitled to sue for, or recover or retain, a reward for the performance of an activity as a real estate agent that is more than the amount of the reward stated in the appointment given under section 133. … (3) A person is not entitled to sue for, or recover or retain, expenses for the performance of an activity as a real estate agent that are more than the amount of the expenses stated in the appointment given under section 133 and actually expended. (6) A person who sues for, or recovers or retains, a reward or expense for the performance of an activity as a real estate agent other than as provided by this section commits an offence. Appointment [50] The Form 20a signed by the lot owners provided as to performance of service: 4.1 Performance of service: Repairs and maintenance to be charged as applicable at the time of the service provided [51] The Form provided at 6.1 as to Amounts payable ‘Refer to schedule’. An example of the Schedule attached to a Form 20a was as follows.12 Schedule Cost to owners (holiday letting) Effective as of March 2008 Commission to management 12% of Gross Received + GST 9 PAMDA, s 133(3)(c). 10 PAMDA, s 133(3)(c)(ii). 11 PAMDA, s 133(3)(c)(iii). 12 Annexure NMW7 to Office of Fair Trading Brief Vol 1. -- 8 of 20 -- 9 Clean and services 1 Bedroom $64.90 Includes GST 2 Bedroom $73.70 Includes GST Linen services 1 Bedroom $25.40 Includes GST 2 Bedroom $50.80 Includes GST *** This includes tea, coffee, sugar, toilet rolls, soap*** All bunks are to be charged for every bed !!! Monthly charges TV Rental $26.00 $28.60 Includes GST PABX Line Rental $28.00 $30.80 Includes GST Adv. Levy $36.00 $39.60 Includes GST Maint & repairs Done and charged as required Foxtel $56.00 $61.60 Includes GST Statement Fee $ 7.50 Includes GST Credit Card Charge 3.75% Includes GST Replacements: Fees and charges payable to be charged as applicable at the time of the service provided. Repairs and maintenance: Fees and charges payable to be charged as applicable at the time of the service provided. Submissions and Discussion: Ground 1 – General Cleaning [52] The Chief Executive submits that section 133(3)(c)(ii) supports the interpretation that when the section refers to ‘expenses.. the agent is authorised to incur’ it means a service provided by a third party13, and that: 25. The agreed facts establish that each amount for a bedroom clean consists of a payment that is made to a cleaning contractor and the remainder is retained by the licensee. It is submitted that the amount retained by the licensee is not an expense and falls within the definition of reward. The appointment does not define or specify what the retained amount represents. The only authorised expense is what was paid to the cleaner. In the District Court case of Orchid Avenue Pty Ltd v Goode [2014] QDC 217 at paragraphs [62-64] McGill DCJ considered the effect of an undefined sum referred to in the appointment as ‘administrative fees’ 13 Applicant’s submissions filed 10 April 2015, para [20]. -- 9 of 20 -- 10 Plainly the amount sought to be so charged is independent of any amount in fact expended by the agent on advertising or marketing or for that matter internal administration; it is a transparent attempt to evade the restriction in the Act and Regulation, and is clearly ineffective for that purpose. It is in substance another commission sought to be charged contrary to the legislation, so the payment and receipt of it was illegal. 26. It is submitted that what (the Company) did in this case was not transparent but secretive and concealing. The fees taken were not defined which was also the situation in Orchid’s case and were not expenses as was also the case with the administrative fees in Orchid’s case. [53] It was submitted for the Company that it is a commercial enterprise operating for a profit, and that the unit owners elected to accept the charges in the Schedule:14 Subject to any contractual limitation, the respondent can provide its service any way it may choose to – that is an internal business decision for the respondent. Eg. it may employ staff to undertake the ‘clean and services’ service, or, as it has, engage a subcontractor. Regardless of how provided, the fee for that service payable by the Unit owner remains the same as is disclosed and agreed to in the Appointment of Agent. [54] The Company then submits that it is entitled to make a profit on providing a service:15 The respondent is entitled to make a profit providing services to the lot owner – that is its raison d’etre. That profit is made with the lot owners’ knowledge and consent by it agreeing to pay the fee charged by the respondent for the services the respondent has agreed to provide – the fact that there is a profit component in the fee is known, or ought to be known, to the lot owner – the respondent is conducting business. [55] The provisions in the Act restricting the recovery of ‘a reward or expense above amount allowed’16 are plainly intended to prevent agents obtaining secret commissions. The intent is that a consumer knows what they are being charged for, and that the consumer is fully aware of the nature and amount of a charge. [56] In Orchid Avenue the amount being sought was unspecified as to its basis – it was simply called ‘administrative expense’. A consumer would have no way of assessing what such a charge is for, or whether it was a reasonable charge for the service provided. [57] I note that in Orchid Avenue, the learned Judge did refer to the possibility of a charge being made for ‘internal administration’, which suggests that the provider can in fact charge for their own time. [58] In this situation, the service is clearly described as ‘a clean’ for a 1 or 2 bedroom unit. The charge for the service provided by the Company is as provided for in the Schedule. A Lot Owner is clearly aware of what the 14 Respondent’s Outline of Argument filed 3 June 2015, para [60]. 15 Respondent’s Outline of Argument filed 3 June 2015, para [61]. 16 PAMDA, s 141 – Heading. -- 10 of 20 -- 11 charge is being proposed for, and how much it is. If the Lot Owner wanted to make inquiries as to the reasonable market value of the charge, they would easily be able to do so. [59] The Company has charged the lot owners in accordance with ‘the schedule’ applying at the time. There is no provision in the Appointment Form in section 6.1 as to variation of the amounts payable for the fees and charges payable by the client for the service. However, there is reference in 4.1 as to Performance of Service that ‘Repairs and maintenance to be charged as applicable at the time of the service provided’. [60] The Company could not have an unfettered ability to name any amount in subsequent schedules, in the absence of any agreement. However, the Appointment clearly anticipates that charges will vary from time to time, by use of the phrase ‘as applicable’. [61] Each Lot Owner that signed the Appointment Form was knowingly agreeing to a charge for the service of unit cleaning. [62] Is the Company entitled to make a profit on the provision of the service, within that charge? There is no prohibition in the Act on the Company making a profit in principle - the Act is concerned to prevent the making of secret or undisclosed profits, which a consumer is not aware of, and has not consented to. [63] In terms of consumer fairness, no objection appears to arise as to the conduct of the Company as to the unit cleaning charges – the Company has clearly stated a price (which it charged); for a stated service (which was performed); and which the Lot Owner formally agreed to in writing, before the performance of the service. Any change in the price charged for that service was also notified in writing. [64] It is submitted on behalf of the Company that it is not shown that the Company did in fact even make a profit on the provision of the service, if the Company’s costs of management, and its operating costs are taken into account.17 If that were the case, then the ground may well be non- contentious, but evidence as to that aspect was not provided by any party. The Company argues that the Department has an onus of proof to establish that a profit was made – whether that is a correct proposition or not, it would still be open to the Company to raise that issue, and provide evidence as to it, which it did not do. In any event, I do not consider that it is necessary to determine that proposition. [65] The Act requires that a real estate agent must be appointed to perform an service for the client (s 133), and the appointment must state the fees, charges and any commission payable for the service (s 133(3)(c)(ii)). The agent is not entitled to recover a reward more than the amount of the reward stated in the appointment (s 141(1)). The agent is also not entitled to recover 17 Respondent’s Outline of Argument filed 3 June 2015, para [63]. -- 11 of 20 -- 12 an expense that is more than the amount of the expenses stated in the appointment given under s 133 and actually expended. [66] Central to this matter is whether the price charged for cleaning services is ‘an expense’ or ‘a reward’, or a combination of both. [67] I was advised in the course of the hearing by the Department that there has been no previous decision determining the construction of these provisions in a similar context. [68] The submissions for the Department and the Company show two different interpretations of what the cleaning charges should be categorised as. The Department says that the cleaning is an ‘expense’, and is limited to the actual cost of the cleaning, which in this case is the amount paid to the cleaner Ms Begauney. The Company says that the cleaning is a charge for the performance of a service, which may include a ‘reward’. [69] The difference in interpretation arises in part due to the drafting of the Act in the use of different expressions in different subsections. [70] Section 133(1)(a) refers to a ‘service’ for which the agent must be appointed in writing, but the requirement for each service in section 133(3)(c)(i) refers only to ‘fees, charges and any commission payable for the service’ – it does not use either of the words ‘expense’ or ‘reward’. [71] Section 133(3)(c)(ii) goes on to discuss ‘expenses’; but section 133(3)(c)(iii) which refers to amounts received by the agent, does not use the word ‘reward’. [72] Section 141 however, as to restrictions, refers to ‘the amount of the reward stated in the appointment given under section 133’ which is an expression not actually used in section 133. The definition in Schedule 2 of the Act provides that: Reward includes remuneration of any kind including, for example, any fee, commission or gain. [73] A ‘reward’ therefore includes a ‘fee’, but this does not preclude ‘fees, charges’ as referred to in section 133 from including a profit, or including an expense. [74] It would seem manifest that what the drafting anticipated was the situation of a distinct separation in an invoice between an expense and an amount received as personal payment to the agent. A parallel may be seen in legal practice where solicitors bill separately for ‘costs’ and ‘outlays’. A ‘cost’ is a personal professional charge made for the time of the Principal or an Employed Solicitor, which could be seen as a ‘reward’; whereas an ‘outlay’ is an external cost incurred, such as a filing fee or search fee or other professional’s fee such as an Expert or Counsel, which could be seen as an ‘expense’. -- 12 of 20 -- 13 [75] This situation is not as clear-cut as that though, because the Company is providing a ‘service’ which is the cleaning of the unit. It would not be expected that the manager would personally do the physical cleaning, but rather that employees or contractors of the Company would do the physical cleaning. [76] In this situation the price charged for the ‘service’ includes both a base ‘expense’ and a ‘reward’ to the Company for arranging it. Trying to categorise the cleaning as just one of either an ‘expense’ or a ‘reward’, is forcing an artificial construct. [77] Consequently, I do not consider that the Company has breached section 141(1) as to recovery of a ‘reward’ because it has not sought an amount for a ‘reward’ greater than an amount stated in the appointment under section 133 as a ‘reward’. [78] Similarly, I do not consider that the Company has breached Section 141(3) as to recovery of ‘expenses’ because it has not sought an amount for ‘expenses’ greater than an amount stated in the appointment under section 133 as an ‘expense’. [79] I consider that the Company has provided a ‘service’ of cleaning which cannot be defined as either simply a ‘reward’ or an ‘expense’, but which includes components of both, and is fully described as a ‘service’ within section 133(1)(a), and for which the ‘fees, charges’ is stated as required by section 133(3)(c)(i). [80] In this instance, the agent has been appointed to perform the ‘service’ of cleaning a unit, for which an agreed price, being a fee or charge, has been established. Section 133 of the Act is therefore complied with. [81] The Company is entitled to recover the fee or charge for the ‘service’ stated in the appointment, which it is has done. There is therefore not any non- compliance with the Act in relation to the fee or charge made for the cleaning services. [82] Accordingly, as I do not find any breach of the Act as to the fee or charge for the cleaning services, I do not find that a disciplinary ground exists as to the general cleaning services. Submissions and Discussion : Ground 2 – Window Cleaning Services [83] The Company concedes that it was not authorised to make the charges which it did for the window cleaning services. It submits that: 90. The respondent, having received the benefit of advice in respect of preparing this outline, now concedes that by each of its Appointment of Agents, insofar as they concern the expense of window cleaning, the respondent has not been properly appointed as required by section 140(1)(c) of the PAMDA. 91. The respondent is in the process of and will have by the time of the hearing repaid to each of the Unit Owners the difference between the amount -- 13 of 20 -- 14 it actually expended in respect of Ms. Beuganey for window cleaning and the amount it charged to Unit Owners for the period. [84] The agreed facts disclose that the Form 20a forms did not state any specific fee, charge or commission payable to the Company for the provision of window cleaning services. There is no reference to such services in the schedule attached to the Form 20a. [85] In the absence of any appointment as required by section 33 of the Act, the Company breached section 140(2) in retaining a charge for the service of window cleaning. [86] A disciplinary ground therefore is established for breaching the Act18 in relation to this Ground. Submissions and Discussion: Ground 3 – Foxtel services [87] The submissions and principles as to the provision of Foxtel services by the Company are very similar as to those as to the general cleaning. [88] Foxtel charges the Company a fee for its product. The unit owners do not contract directly with Foxtel, they contract with the Company. It is agreed that the charge made by the Company to the unit owners is greater than the charge made to it by Foxtel. [89] The Company says that it does more than just pass on the Foxtel price – it says that it does all the administration with Foxtel, checks the correct operation of the Foxtel boxes in each unit, assist guests who are having trouble operating the units, and liaises with Foxtel as to replacement of any faulty units. That activity can best be described as proving a ‘service’ of Foxtel to the unit owner. [90] The Company is appointed to provide Foxtel services by the Schedule to the Form 20a Appointment. [91] The same reasoning applies as to general cleaning – this is a disclosed, agreed price for the provision of a service under an Appointment. It is neither a discreet ‘expense’ or a ‘reward’, but is a stated and agreed ‘fee’ or ‘charge’ for the service. [92] The Company is similarly entitled to recover the fee or charge for the ‘service’ stated in the appointment, which it is has done, and there is similarly not any non-compliance with the Act in relation to the fee or charge made for the Foxtel service. [93] The Department submits that even if it were found that the Company was entitled to charge the amounts stated in the Form 20a without stating the fee portion, that section 141(6) is still contravened. The submission is that from 1 December 2011 to 29 February 2012 the Company deducted $84.80 18 PAMDA, s 496(1)(b)(i). -- 14 of 20 -- 15 for the Foxtel service, when 46 Form 20a appointments identified in paragraph 32 of the agreed facts had authorised a lesser payment.19 [94] The Company argues that it provided notice of an increase in the Foxtel charge by a newsletter dated December 2011. [95] As previously discussed, the Appointment anticipates that charges will vary from time to time, by use of the phrase ‘as applicable’. Whilst notice in a newsletter is not as clear as notice in an amended schedule, as it is not demonstrated that all relevant unit owners received the newsletter, it would have been clear in the subsequent statement received by the unit owner that the fees had been increased and queries or objection could have been raised at that time. [96] Given that there was an anticipation that fees would increase from time to time without any specific mechanism, I do not consider that it is demonstrated that the increase was not authorised, and that section 141(6) is contravened. [97] Accordingly, as I do not find any breach of the Act as to the fee or charge for the Foxtel service, I do not find that a disciplinary ground exists as to the Foxtel service. Submissions and Discussion: Ground 4 – Wotif Bookings [98] It is accepted that the Company was entitled to a commission of 13.2% including GST for holiday accommodation rental amounts. [99] Wotif charge a commission of 10% of the cost of holiday accommodation. [100] The issue is whether the agent’s commission should be calculated on the cost before the Wotif charge is deducted, or after the Wotif charge is deducted. [101] The amount of the discrepancy between the two calculation methods in the period of January and February 2012 was $144.69. [102] In his interview with Mr Patrick Tully, an investigator for the Office of Fair Trading on 18 October 2012, Mr Peterson said that the software system used for keeping the business accounts was supplied by Mr Neville Wright of Accommodation Management Systems.20 He said that the programmes they used was called Fiesta, and had been used for about two or two and a half years. He said that he assumed that the person setting up the programme knew what the legislation is.21 19 Department’s submissions filed 10 April 2015, para [46]. 20 Interview Mr Peterson line 293. Exhibit NMW 15.3 in Vol 2. 21 Interview Mr Peterson line 301. Exhibit NMW 15.3 in Vol 2. -- 15 of 20 -- 16 [103] Mr Peterson (‘FP’) said that he was unaware of the basis on which the software performed the calculation of payment made to the Company:22 491 NW: So when the booking is sitting there waiting to be paid off, what’s the amount that’s waiting to be paid off? Is it the advertised rate or the net amount that’s waiting to be paid off? 492 FP: I don’t, I don’t really… 493 JM: If you don’t know you don’t know. 494 FP: I don’t know. [104] Mr Peterson said that the software was designed by the programmer to charge commission on the advertised price of the accommodation:23 564. JM: Yeah. But I think Frank what you said before was that the way it was programmed by your programmer… 565. FP: Yep. 566. JM: …and not the amount that you collected. That’s the way it was set up? 569. FP: Yep. 570 JM: Because he set it up that way? 571. FP: Yeah. It’s, I think it’s Wotif is set up with other people. I believe that. I don’t know that. 572 JM: Okay [105] The Department submits that section 139(2) makes it an offence for the Company to claim commission worked out on an amount more than the amount actually collected.24 That section provides: 139 Commission may be claimed only in relation to actual amounts (1) This section applies to a real estate agent who performs, for the payment of a commission, a service of selling or letting property or collecting rents. (2) The real estate agent must not claim commission worked out on an amount more than the actual sale price of the property or the amount collected. [106] The Department then submits that the Act intends that reference in section 139(2) to ‘collected’ refers to collected by the licensee, and that the only rent collected by the Company is the net rent after deduction of the Wotif commission.25 It points to the process whereby the Company bills Wotif for the ‘net price’ under Clause 2.3 of the Supplier Agreement between the Company and Wotif.26 ‘Net Price’ is defined in the Agreement as meaning the Booking Price less the Wotif margin of 10%. 22 Interview Mr Peterson line 491. Exhibit NMW 15.3 in Vol 2. 23 Interview Mr Peterson line 564. Exhibit NMW 15.3 in Vol 2. 24 Department’s submissions filed 10 April 2015, para [49]. 25 Department’s submissions filed 10 April 2015, paras [54] and [55]. 26 Department’s submissions filed 10 April 2015, para [57]. -- 16 of 20 -- 17 [107] The Company submits that a relationship of principal and agent exists between the Company and Wotif, with the Company being the principal. It argues that this makes Wotif, as agent, a trustee of the ‘total rent payment’ for the Company27. It argues that the commission, which is agreed as ‘12% of gross received plus GST’ is payable on the ‘total rent payment’, as that is the gross received by the agent who is acting on behalf of the Company. [108] The Company submits as to the intent of s 139 of the Act that: Section 139 of the PAMDA appears to be intended to prevent agents from calculating commission on advertised or listed prices, rather than the amount actually paid by the guest for the accommodation. [109] The central issue in this regard is what is the true meaning of the expression ‘the amount collected’ in s 139(2)? [110] I note that the successor Act to PAMDA is in this regard, the Property Occupations Act 2014 (Qld) (‘POA’). Section 88 POA corresponds to section 139 PAMDA. However, the POA has added wording specifically relating to resident letting agents. [111] Section 88(1)(b) POA essentially reproduces the words in s 139(1) PAMDA, but adds a further subsection that the section applies to: (b) a resident letting agent who performs, for the payment of a commission, a service of letting lots or collecting rents. [112] Section 88(2) POA alters the wording of s 139(2) PAMDA, and adds further wording (shown in italics): 88(2) The property agent or resident letting agent must not claim commission worked out on an amount more than the actual sale price of the property, the actual rental for the property being let or the actual amount of rent collected. [113] The variation of the wording in POA would seem to be an attempt to address the difficulties in the former wording as to the simple use of the word ‘collected’. [114] It is accepted that this matter is governed by PAMDA, so it is the meaning in that Act that is relevant. [115] What amount has been collected in these circumstances, by whom, and on behalf of whom? [116] The ‘Terms and Conditions of Supplier Agreement’ between Wotif and the Company provide as follows: 2.1 We will accept Bookings on your behalf from customers at the Booking Price. 27 Respondent’s Outline of Argument filed 3 June 2015, paras [101] and [102]. -- 17 of 20 -- 18 [117] I accept that a proper interpretation of the Supplier agreement is that Wotif acts as an agent for the Company. The Company in turn acts as an agent for the unit owner. [118] Did the unit owners authorise the Company to engage Wotif as its agent? If the unit owners did authorise the Company to incur the expense of engaging Wotif, then the consequence would be that they authorised the incurring of the 10% Wotif fee, which is an expense separate from the commission payable to the agent. [119] There is no reference to a Wotif charge on the Form 20a. No separate reference to a Wotif charge is shown on any of the ‘Owner Room Statement and Reconciliation for Unit’ sheets28. The unit owners however appear aware that the Company was engaging a booking agent, as the rent only flowed through to them after it was processed by the booking agent and sent to the Company, and then processed and sent to the unit owner, and the unit owners had an awareness of the time taken, as indicated by Mr Peterson:29 But you know we just rely on, well again rely on Wotif too. It seems to be the best group that we’ve had with the least problems and at least they pay on time. We haven’t got owners chasing because the supplier like Ansett and like Queensland Travel might not pay for months. [120] No argument was raised that the Company had not been authorised to engage Wotif. In the absence of any contest to the engagement, and in light of the apparent acceptance by the unit owners that Wotif would be engaged, I am satisfied that the engagement of Wotif by the Company was authorised by the unit owners. [121] The amount paid by a holiday renter to Wotif is the gross amount received on behalf of the unit owner. [122] The schedule attached to the Form 20a provides for ‘Commission to management’ to be ‘12% of Gross Received + GST’. This expression, read on its face, entitles the Company to charge 12% plus GST on the gross amount received, which is the amount received by Wotif. [123] A confusion between the terms ‘collected’ and ‘received’ can be seen in another, but unrelated, section of PAMDA. Section 379 refers dealing with trust money. There is a use of both terms variously in the section and in the example: 379 Dealing with amount on receipt A licensee must, immediately on receiving the amount – (a) Pay it to the licensee’s general trust account; or (b) If section 380(1) applies, invest it under section 380(2). 28 Exhibit NMW 9.1 in Vol 1. 29 Interview Mr Peterson line 334. Exhibit NMW 15.3 in Vol 2. -- 18 of 20 -- 19 Examples of paragraph (a) – A licensee who collects an amount of rent for a property owner must pay the amount to the licensee’s general trust account before the money can be paid to the owner [124] Section 379 refers to ‘receiving’ an amount, but yet the example below it refers to ‘collects’ an amount. This suggests that the drafters of the Act saw the two terms as equivalent and interchangeable (even though an example is not binding). [125] No distinction has been shown between the expressions ‘money received’ and ‘money collected’. In the absence of any indication in the Act, or case law, as to how these terms differ; and having regard to their interchanged use in the Act; no reason appears to ascribe a different meaning to the expressions. [126] Once it is accepted that ‘received’ and ‘collected’ may be treated as equivalent and interchangeable, then the expression ‘Gross received’ in the Form 20a is equivalent and interchangeable with an expression ‘Gross collected’. Section 139 PAMDA in referring to the ‘amount collected’ can similarly be read to mean the ‘amount received’. [127] The consequence of this line of reasoning is that: a) the Company has been authorised by the unit owners to engage Wotif b) Wotif is authorised to receive money on behalf of the Company c) the Company is authorised by the Form 20a to charge 12% plus GST on the amount received d) The Company is therefore authorised to charge 12% plus GST on the amount received on its behalf by Wotif e) The amount ‘received’ by the Company is equivalent to the amount ‘collected’ by it [128] I therefore do not consider that the calculation of the payment of commission on the amount paid to Wotif, which is the ‘Gross Received’, conflicts with the expression in the Act as to ‘the amount collected’. [129] I therefore do not find any breach of the Act as to the charging of commission on Wotif bookings, and accordingly do not find that a disciplinary ground exists as to the Wotif bookings. Conclusion [130] The Department has applied to the Tribunal to decide whether a disciplinary ground is established against the Company. [131] Four grounds have been raised: Ground One – General Cleaning Services Ground Two – Window Cleaning services -- 19 of 20 -- 20 Ground Three – Foxtel services Ground Four – Wotif Bookings [132] I find that a disciplinary ground has been established as to Ground Two (Window Cleaning Services). [133] I find that the remaining three grounds are not established. [134] The Sanctions to be imposed on the Company in respect of Ground Two, and any questions as to costs, are to be determined in further proceedings, and I will direct that the matter be set for a Directions Hearing before me, not before 28 days, for the purposes of setting a timetable accordingly. [135] I order that: 1. A disciplinary ground has been established as to Ground Two (Window Cleaning Services) that Peterson Management Services Pty Ltd contravened Section 140(2) of the Property Agents and Motor Dealers Act 2000 (Qld) 2. The remaining three grounds are not established. 3. I direct that the matter be set for a Directions Hearing before me, on a date to be set, not before 28 days, for the purposes of setting a timetable for the hearing of further proceedings as to sanctions to be imposed on the Company in respect of Ground Two, and as to any submissions as to costs. -- 20 of 20 --