Elfbest Pty Ltd v Menniti [2008] QDC 14

DISTRICT COURT OF QUEENSLAND CITATION: Elfbest Pty Ltd v Menniti [2008] QDC 14 PARTIES: ELFBEST PTY LTD (ACN 059 664 498) Plaintiff v LUCIANO MENNITI Defendant FILE NO/S: 316/05 PROCEEDING: Civil Trial ORIGINATING COURT: District Court Southport DELIVERED ON: 15 February 2008 DELIVERED AT: Southport HEARING DATE: 30, 31 October 2007 JUDGE: Newton DCJ ORDER: Judgment for the plaintiff in the sum of $76,120.00 together with interest fixed at $19,412.13. Defendant to pay plaintiff’s costs to be assessed. CATCHWORDS: Appointment of Real Estate Agent - Entitlement to commission - Formalities of Exclusive Agency - Whether agreement is void for uncertainty – Whether failure to comply with s 133 and s 135 of the Property Agents & Motor Dealers Act 2000 renders Form 22a ineffective – Whether failure to comply with s 133 and s 135(1) of the Property Agents & Motor Dealers Act 2000 renders Form 22a ineffective – Whether agreement is void as a result of a breach of s 52 of the Trade Practices Act 1974 (Cwth) Property Agents & Motor Dealers Act 2000 Trade Practices Act 1974 Acts Interpretation Act 1954 COUNSEL: Mr P Morrow for the plaintiff Mr S Di Carlo for the defendant SOLICITORS: Short Punch & Greatorix Solicitors for the plaintiff PHV Law for the defendant -- 1 of 25 -- 2 [1] Elfbest Pty Ltd claims $76,120.00, as commission payable to it, pursuant to the terms of an alleged agreement as contained in an Appointment of Real Estate Agent Form 22a under the Property Agents & Motor Dealers Act 2000. [2] The following facts are admitted: (a) Elfbest is a licensed real estate agent; (b) Mr Menniti signed a written document which stipulated that Elfbest was appointed as exclusive agent and thus entitled to commission if the subject property was sold during the term of the agreement by another agent; (c) the agreement was to commence on 15 February 2005; (d) Mr Menniti sold the property on 15 March 2005 for $2.75 million and such sale was completed in accordance with condition 2.1(1) of the Terms and Conditions; and (e) Mr Menniti has not paid Elfbest the commission. [3] Mr Menniti has raised five grounds of defence in his Further Amended Defence and Counterclaim, as follows: (i) the agreement is void for uncertainty; (ii) the Form 22a is ineffective by reason of the failure to comply with sections 133 and 135 of the Property Agents & Motor Dealers Act 2000 (“PAMDA”) and as a result Elfbest is not entitled to recover any reward or expense by virtue of section 140 (1) (c) of PAMDA; (iii) the Form 22a is ineffective by virtue of section 137 (3) of PAMDA for failing to comply with sections 133 and 135 (1) of PAMDA; (iv) Mr Menniti seeks an order under section 87 of the Trade Practices Act 1974 (“TPA”) that the agreement is void as a result of a breach of section 52 of TPA in that Elfbest falsely represented that: • Elfbest was acting as an agent for the sale of Lot 11; • there was a contract on Lot 11 for $4 million; • the deposit had been paid; -- 2 of 25 -- 3 • the contract was due to go unconditional any day; • there was a 14 day settlement period; • Mr Menniti would get between $3.3 and $3.5 million for the Lot if he waited; (v) that it was a term of the agreement that Elfbest would start selling after Lot 11 settled and once Mr Menniti advised that he would proceed. [4] Mr Menniti abandoned the ground pleaded in paragraph 13 of the Further Amended Defence and Counterclaim on the morning of the second day of the trial. Paragraph 13 pleads that there was an implied term that Elfbest would use its best efforts to market and sell the property and that no attempt had been made to market and sell the property after 2 February 2006. [5] The only witness to testify at the hearing was Aspa Papa, a licensed real estate agent on behalf of Elfbest. Ms Papa said that she had a reputation of something as a specialist in marketing apartments in the Platinum on the Beach building. She had an exclusive listing for apartment 11 when she became aware that Mr Menniti had apartment 7 for sale as an open listing. She called Mr Menniti who requested Ms Papa to list his apartment as an open listing. Ms Papa was very busy at the time and was reluctant to open list apartment 7 as so many other agents had listed it and she did not want to be just another one with an open listing. Ms Papa said that she made it clear to Mr Menniti that “I wasn’t able to complete an open listing with the whole town and just not knowing where I stand, so that he promised that he will think about the exclusive listing and that he will let me know and which [sic] he rang on the 2nd of February in the morning. I rang back and he told me that he is happy and willing to go ahead and give me the exclusive agency. He asked me how long was it for. I said it’s 60 days. I also read out of the form – in Form 22a we have like 1, 2, 3 ticks as to what an exclusive agency means and I also said to Mr Menniti if you can give me some more details like his proper name and also I said we need to pretype the form today and he said today is fine. So I instructed my PA to pretype the 22a form for an exclusive agency with the right – relevant boxes ticked and with the dates too – second February to 15 th of April.” -- 3 of 25 -- 4 [6] Ms Papa stated that an appointment was made for 2.00pm on 2 February 2005 at which time the PAMDA Form 22a was signed by both Ms Papa and Mr Menniti. Prior to signing Ms Papa went through the document with him. [7] Ms Papa was asked whether any changes were made to the document as prepared by her and signed by Mr Menniti. She replied as follows: “At first he agreed to everything except spending any money at all towards marketing and advertising all the way up to signing and we stopped and started talking about all sorts of other things and at some point after, he had signed he says, ‘Oh, I’m sorry’ he says, ‘I have promised verbally really another agent to give him the time for about a week or so to produce a contract.’ He said to me that after an inspection he had lately he’s having hopes that he can take someone to contract. Well, although it was enough to – thought I really couldn’t but agree to that, and I said – actually I remember exactly, I said ‘If I was the one that had asked you this and you promised me I would have been upset if you hadn’t kept your word, so I’m happy to give you more than a week’ and I – we agreed to make it the 15th and I put 15 instead of the second… and Mr Menniti straight away initialled that.” [8] There were no other changes made with respect to the finishing date. [9] Nothing was included in the document about a reserve or listing price. According to Ms Papa “if the client is not very cut and dried about the asking price we suggest about two to three weeks of running with the property and see what the feedback is from the prospective purchasers and we review that on the process and then we become a bit more specific on the price.” Ms Papa stated that Mr Menniti was happy with that sort of approach. [10] Similarly, the property description details on page 7 of the document were not included. Ms Papa testified that “I believe this doesn’t belong to this form. It is my understanding that REIQ includes this through our Realworks subscription as a complimentary guidance, so when we go to the properties we could use it to fill out all the details of the property.” -- 4 of 25 -- 5 [11] Ms Papa denied, contrary to what had been pleaded in the defence, that there was an oral agreement that the appointment would not commence to operate until either the settlement of the sale of Lot 11 or until she received oral confirmation from Mr Menniti. [12] After Mr Menniti had signed the agreement the parties spoke as to how the property was to be marketed. Ms Papa also told Mr Menniti that there was a contract for Lot 11 at $4 million. That contract did not settle. However, within a short period Ms Papa did succeed in selling Lot 11 for $3.3 million. Ms Papa denied having told Mr Menniti during their discussions that a deposit had been paid on Lot 11 or that the contract was due to go unconditional any day. She also denied having said to Mr Menniti at any stage that she would get him $3.3 to $3.5 million for Lot 7 if he waited. [13] On 3 February 2005 Ms Papa handed to Mr Menniti his copy of the agreement, Form 22a, and the prestige marketing campaign which she had amended. She then took steps to sell the property. Five inspections were conducted by Ms Papa. A flyer was prepared with the assistance of a graphic designer and this was mailed to prospective purchasers sometime after 15 February. Ms Papa stated that “we did send this out to Mr Menniti… at that point we would have had a few more conversations about the price. He was two eight. I was happy to market it close to three so we settled for the 2.9 million which I thought it was a very good price.” [14] Ms Papa advertised the property in the Gold Coast Bulletin on 5 and 6 March at her own expense. Each advertisement cost from $150 to $250. She also made arrangements to have the property placed on an internet site. A further flyer was prepared and mailed to Ms Papa’s full data base on 28 February 2005. The property was also included on an in-house website and could be accessed worldwide through Google. [15] Photographs of Lot 7 were placed on the website, on the mail outs and on the flyers, according to Ms Papa. [16] A tax invoice for commission was forwarded to Mr Menniti by Ms Papa on or about 17 March 2005 after the property had been sold by another agent. Keys to the property which had been provided by Mr Menniti to Ms Papa were released to a -- 5 of 25 -- 6 Ray White salesperson on 11 April 2005. On 10 March, said Ms Papa “he admitted himself to me that, yes, actually there is a contract on the property from Ray Whites and so what do we [do] now about it?” Ms Papa stated that she suggested “well, although it’s an exclusive agency I will be very happy to conjunct with any other agent, so if that is the case, would you please tell Ray Whites to contact us and finalise the sale via Select Properties, so we conjunct?” [17] Ms Papa stated that on the following day she telephoned Mr Menniti and reminded him that he could be liable to pay two commissions. His response was, according to Ms Papa, “‘Look, I’ve got many projects, every year I build and sell. I’ll give you future business. You’re not going to be disadvantaged.’” [18] In cross-examination it was put to Ms Papa that “It’s proper that somebody like you would be able to market it at one single figure which would give a serious approach to it?” Ms Papa responded as follows: “No, I didn’t say at one single figure at all, ever. I am repeating myself. I insist that it should be marketed in line with having the same understanding in between me and my vendor so the same understanding in between and my vendor, so the same understanding gets across the line to the market and you can market a property without the price, I mean we auction all the time without a price, the gist here is more into how you present this property out there and as to there is one person or 50.” [19] Again, in cross-examination, Ms Papa was asked why she was claiming $76,000 as opposed to half of that amount, given the sale of Mr Menniti’s property by Ray White. Ms Papa replied as follows: “It’s not what a conjunctional arrangement is. Mr Menniti sold the [property] through another agent without my knowing or contributing or agreeing into anything at all …I was happy to conjunct with Ray White even though of the unorthodox way that they went about behind my back to do this and I said assure Ray White’s please that I’m happy to conjunct as per our agreement. But it’s not only my desire, it has to be the other agent’s desire as well… …It was not a conjunctional sale.” -- 6 of 25 -- 7 [20] Ms Papa rejected a suggestion by counsel for Mr Menniti that she did not go through the Form 22a with the defendant at all. [21] In my view the evidence given by Ms Papa should be accepted. Ms Papa was an impressive witness who testified in a forthright manner and who was largely unshaken by a lengthy and probing cross-examination. I am satisfied that her evidence was both truthful and reliable. UNCERTAINTY [22] It is contended by Mr Menniti that the Form 22a is void for uncertainty because: (i) there was no price stated at which the plaintiff was to offer to sell the property; (ii) there was no description of the property to be sold; (iii) it did not state how the plaintiff’s services were to be performed, or list any limitations or restrictions on the performance of the services; (iv) it did not state the period to which the open listing would continue; (v) it did not address expenses that the plaintiff was authorised to incur; (vi) it did not name the agent and did not reflect the date on which the agent signed the agreement; (vii) item B in the schedule is vague and ambiguous; and (viii) item F in the schedule changes the date of commencement, which has not been initialled, the date of signing is not stated and the agent’s details have not been recorded. [23] A contract is void for uncertainty if it is not clear and complete, at least in the essentials (see Upper Hunter County District Council v. Australian Chilling and Freezing Company 1968 118 CLR 429 at 436 – 7). It may be helpful, then, to set out those respects in which the agreement is clear and complete. The agreement provides that Mr Menniti has appointed the plaintiff as exclusive agent to sell the property described as Lot 7 on Plan SP 149214 situated at 19 Northcliffe Terrace, Surfers Paradise Qld 4217. The property was to be sold by private treaty. Mr Menniti instructed the plaintiff to accept conjunctional arrangements for a -- 7 of 25 -- 8 “Conjunction Sale of the Property” with other agents during the term of the appointment. The property was to be sold in accordance with clauses 2, 3, 4, 5, 7, 8, 9, 10 and 12 as contained in the Terms and Conditions of the REIQ Schedule attached to the agreement. [24] Clause 2 of the Terms and Conditions stipulates that commission is payable where a contract of sale of the property is completed and where the relevant person is the effective cause of the sale within the term. Because the appointment is for an exclusive agency, the relevant person is any person (including the client). [25] Clause 4 of the Terms and Conditions stipulates that only written offers and those expressions of interest which the agent determines in its discretion are to be communicated to the client. [26] Part 8 of the Form 22a was not completed and thus the plaintiff was not authorised to incur any expenses on behalf of Mr Menniti. Similarly Part 7 of the form was not completed and accordingly, the plaintiff had no authorisation to incur any fees and charges under the appointment. [27] Part 6 of the form sets a maximum amount of commission chargeable by the agent. In the absence of a negotiated lesser amount, the agreed commission is 5% of the first $18,000 and 2.5% of the balance of the sale price thereafter plus 10% GST. Commission expressed as a percentage is worked out only on the actual sale price. [28] Thus, it may be accepted that the identity of the parties, the identity of the property, the exclusive agency and the commission payable are all certain. PRICE [29] Mr Menniti submits that the price or price range at which the plaintiff is to offer to sell the property is an essential term of the agreement. It is argued that the nomination of a listing price defines the very scope of the agent’s authority and avoids either party having to entertain an offer which is significantly below the anticipated sale price as well as avoiding unrealistic expectations on behalf of the vendor. Mr Menniti submits that although Part 4.1 specifically excludes clause 1 of the Terms and Conditions, Part 4.2 does not and therefore Part 4.2 should be read in conjunction with clause 1. Clause 1 provides as follows: -- 8 of 25 -- 9 “1. PRICE 1.1 The Client instructs the Agent that the Price at which the Agent must offer to sell the Property will be the Price stated in Clause 4.2 of the Appointment.” Because Part 4.1 of the form excludes clause 1 and inconsistency is created within the agreement, whereby at one point the parties are apparently agreeing that there is to be no listing price, and then at the next point at the Form 22a the client is instructing the agent as to the price at which the property is to be offered, it is contended by the defendant that such an inconsistency must render the agreement void for uncertainty. [30] The plaintiff concedes that the agreement does not specify a price at which the property should be sold, and that Part 4.2 of the Form 22a does provide a space where the listing price could be included. However, the plaintiff argues that there is no need for the nomination of that price for the agreement to be certain and valid. [31] I accept that if one has regard to the scheme of Part 4 of the agreement, it is clearly implied that the seller would negotiate a price for the sale by private treaty. Thus, Part 4.1 of the Form 22a sets out that the property is to be sold by private treaty as per Item B and conditions 2 to 12 (excluding 6 and 11) of the Terms and Conditions. Clause 4.2 of the Terms and Conditions sets out how the price would be ascertained by requiring that the agent communicate to the client all written offers about the sale, together with, at the agent’s discretion, all expressions of interest. [32] It should be remembered that Part 4.1 of the Form 22a does not incorporate condition 1 of the Terms and Conditions which provides that the client instructs the agent that the price at which the agent must offer to sell the property will be the price stated in Part 4.2 of the Form 22a. Since it has been agreed by the parties that condition 1 will not form part of the appointment, I accept that they have expressly acknowledged that there will be no agreed listing price. [33] Commission is payable pursuant to condition 2 of the Terms and Conditions if a contract of sale is entered into with a buyer and that contract of sale is completed. A contract of sale will not be completed unless vendor and purchaser have -- 9 of 25 -- 10 successfully negotiated a price. There would be, therefore, no difficulty in determining the amount of commission payable as Part 6 of the Form 22a provides that the commission payable is to be assessed as a fixed percentage of the “actual sale price”. The actual sale price is certain when the seller enters into a contract with a purchaser. In these circumstances, then, it is not necessary that the Form 22a specify a sale price. The certainty of the agreement is not lessened by its not including a listing price. [34] I observe that condition 11.1 of the Terms and Conditions acknowledges that there is no need for the client to inform the agent of a reserve price in the event of an auction. If no reserve price is nominated, then it shall be “as instructed by the client in writing prior to the time of auction”. This, in my view, tends to confirm the construction that I have adopted in relation to a sale by private treaty. [35] Further support for this construction is found in the decision of Dodds DCJ in Rose v Ken Guy Real Estate Pty Ltd 2004 QDC 435 at [30]. In that case it was argued that the defendant was not obliged to pay commission because the Form 22a had failed to: (a) specify the dollar value for commission but rather specified a percentage of the actual sale price; and (b) include a reserve or listing price. His Honour held that the validity of the Form 22a was not affected by the failure to insert the listing price, and rejected the argument that the listing price was an essential term of the appointment. [36] In the present case, the evidence of Ms Papa was that Mr Menniti did not want the property listed at a particular price. The parties had agreed that Ms Papa would ascertain the feedback from the market, and thus it was not necessary for the parties to agree on a listing price. As counsel for the plaintiff has pointed out in his written submissions, Mr Menniti at all times had control over what the eventual sale price would be. Offers or expressions of interest would be conveyed to him by Ms Papa and Mr Menniti could either accept an offer or negotiate a sale price with a prospective purchaser. There is nothing unusual in this situation. -- 10 of 25 -- 11 [37] In my view a listing price was not an essential term of the appointment and, subject to my observations with respect to the defendant’s contentions as to the objects of PAMDA, the failure to include a listing price does not render the agreement void for uncertainty. NO DESCRIPTION OF PROPERTY TO BE SOLD [38] The defendant on the second day of the trial abandoned his allegation that the property had not been described in the Form 22a. It is difficult to comprehend why this allegation was ever made as Part 3 of the form clearly identifies the property to be sold. FAILURE TO STATE HOW THE SERVICE WAS TO BE PERFORMED [39] In Part 4 of the Form 22a Mr Menniti has appointed the plaintiff to perform the service of selling his residence identified in Part 3. In Part 4.1 it is stipulated that the property is to be sold “by Private Treaty” as per clause B in the Items Schedule and clauses 2, 3, 4, 5, 7, 8, 9, 10 and 12 as contained in the Terms and Conditions of the REIQ Schedule attached”. Clause B clearly discloses that Mr Menniti has instructed the plaintiff to accept conjunctional arrangements for the sale of the property. The term “conjunctional sale” is defined in condition 13 of the Terms and Conditions as “a sale conducted in conjunction with other agents”. There is nothing uncertain about this system which is well-known to the real estate industry generally. [40] The obligation of the plaintiff to communicate certain offers or expressions of interest to the defendant is set out in condition 4. The defendant is able to accept such an offer or enter into further negotiations with a prospective purchaser. As I have previously indicated, the fact that Part 4.1 of the form specifically does not refer to condition 1 of the Terms and Conditions indicates that the parties have agreed not to specify a listing price. [41] In Rose v Ken Guy Real Estate Pty Ltd 2004 QDC 435 Dodds DCJ held that a service listed as “for sale by way of private treaty negotiation” was not void for uncertainty, and that phrase meant that the agent was to bring about a sale by way of negotiated agreement between the buyer and the seller. -- 11 of 25 -- 12 [42] In my view there is no uncertainty in the present case as to how the service is to be performed. The description of the service in Part 4 of the Form 22a is not void for uncertainty. The means of sale were to be by way of private treaty in accordance with condition 4 of the Terms and Conditions. PERIOD OF OPEN LISTING [43] Although it is conceded by the defendant that the failure to indicate in Part 5.2 of the Form 22a when the open listing would end after the expiry of the exclusive agency would not of itself create a degree of uncertainty sufficient to render the agreement void, it is suggested that there are so many inconsistencies and omissions in the form that to sever the immaterial clauses would be to render the agreement void for uncertainty. It is argued that there are too many issues on which the parties have failed to agree. [44] It should be noted that immediately above the clause relating to the nomination of a date of expiry of an open listing, is a notice to the client which states as follows: “TO THE CLIENT: At the end of the Sole/Exclusive Agency, you may elect to continue the appointment of the agent as an Open Listing, which may be ended at any time by you or by the Agent.” Mr Menniti elected to continue the open listing as the relevant box is marked. Since no date has been nominated for the end of such listing, I accept that the clause would operate in such a way that it may be ended at any time by either of the parties. Accordingly, there is no uncertainty as to the operation of the clause. FAILURE TO ADDRESS EXPENSES [45] Part 8 of the Form 22a relates to the client’s authorisation of the agent to incur expenses in relation to the performance of the service of selling the client’s property. Part 8 has not been filled in by the parties in any respect. It is submitted by the defendant that “nil” should have been inserted in Part 8 so as to ensure that he was certain of his obligations under the agreement, as opposed to risking a dispute requiring resolution by mediation or litigation over who should pay expenses once incurred. -- 12 of 25 -- 13 [46] The plaintiff contents that the construction of Part 8 clearly means that Mr Menniti did not authorise the plaintiff to incur any expenses on his behalf for advertising or marketing and that there is nothing uncertain about such construction. [47] It should be remembered that the unchallenged evidence of Ms Papa was that at the time the parties were negotiating the agency agreement, Mr Menniti indicated that he was not prepared to make any payment for any expenses incurred. This was accepted by Ms Papa. In these circumstances I accept that Part 8 reflects the agreement of the parties concerning expenses which the plaintiff was authorised to incur, namely that the defendant had not authorised the incurring of any expenses in relation to the performance of the service by the plaintiff of selling Mr Menniti’s property. FAILURE TO NAME THE AGENT AND THE DATE SIGNED BY THE AGENT [48] The defendant submits that the licensed agent is to be named in the Form 22a. It is not in dispute that there has been a failure to include the name of the agent and the date in Item F of the agreement. [49] The items form part of a schedule to the main agreement. In the main part of the agreement the name of the agent has been included as the plaintiff trading as Select Properties by Aspa. Also included is an ABN, postal address, telephone number and the relevant licence number. Part 9 of the agreement makes provision for signature by the agent. It has been signed by Ms Papa, who was authorised to sign on behalf of the agent. The date under Ms Papa’s signature is 3 February 2005 rather than 2 February 2005. Ms Papa testified that this was a mistake and that the agreement was actually signed on 2 February. In the circumstances I accept that these factors do not make the agreement uncertain. ITEM B IS VAGUE AND AMBIGUOUS [50] The defendant has abandoned this ground. -- 13 of 25 -- 14 ITEM F CHANGES THE DATE OF COMMENCEMENT WHICH IS NOT ADOPTED, THE DATE OF SIGNING IS NOT STATED, THE AGENT DETAILS ARE NOT RECORDED [51] The defendant complains that Item F (Commencement of Appointment) has not been signed by the agent and that no party has dated the document at that part of the document. Further, the commencement date has been changed from 2 February 2005 to 15 February 2005 and no initialling or adoption of the changed has taken place. Accordingly, the defendant submits, it is impossible to determine when the appointment commenced which must be an essential term of the contract. Furthermore, because the Court is construing a contract, the provisions of which are strictly regulated by PAMDA, it is argued that a strict approach is required by the Court to any uncertainty in the Form 22a. Counsel for the defendant emphasises that PAMDA is a piece of legislation which is designed to protect the consumer. [52] The difficulty which confronts the defendant in this regard is that Part 5 of the agreement clearly and expressly provides that the exclusive agency is to start on 15 February 2005. Although the agreement initially was to have commenced on 2 February, the agreement was amended shortly after it had been signed to reflect a commencement date of 15 February. There is no dispute that this was the commencement date. Mr Menniti has initialled the agreement at Part 5.1 to acknowledge the change from 2 February. There can be no doubt that the parties have adopted and agreed that the commencement date would be 15 February. [53] Item F of the schedule indicates that the commencement date was to be 15 February 2005 but, although Mr Menniti has signed the schedule immediately below the commencement date, the date of signing has not been completed. Nor does the agent’s name or signature appear below Item F. There can be no uncertainty however, as to the agent’s identity as clause 2 of the agreement clearly indicates this. Thus, while greater care obviously could (and should) have been exercised in ensuring that the agreement and schedule was properly completed, those parts that have been so completed provide sufficient clarity as to the intentions of the parties. -- 14 of 25 -- 15 FAILURE TO COMPLY WITH SECTIONS 133 and 135 PAMDA [54] Section 133(1) PAMDA provides that a real estate agent must not act as a real estate agent for a person unless the client first appoints the real estate agent in writing. [55] Section 133(3) PAMDA provides that the appointment for each service must: “(a) state the service to be performed by the real estate agent and how it is to be performed; and (b) state, in the way prescribed under the regulation, that fees, charges and commission payable for the service are negotiable up to any amount that may be prescribed under a regulation: and (c) state, - (i) the fees, charges and any commission payable for the service; and (ii) 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; and (iii) the source and the estimated amount or value of any rebate, discount, commission or benefit that the agent may receive in relation to any expenses that the agent may incur in connection with the performance of the service; and (iv) any condition, limitation or restriction on the performance of the service; and (d) state when the fees, charges and any commission for the service become payable; and (e) if the service to be performed is the sale or letting of property or the collecting of rents and commission is payable in relation to the service and expressed as a percentage of any estimated sale price or amount to be collected, state that the commission is worked out only on the actual sale price or the amount actually collected; and (f) if the appointment is for a sole or exclusive agency, state the date that the appointment ends.” [56] Where the appointment is for an exclusive agency, section 135(1) PAMDA provides that the following additional requirements must be satisfied: -- 15 of 25 -- 16 “… before the appointment is signed, the real estate agent must discuss with the client whether the appointment is to be for a sole agency or an exclusive agency and specifically bring to the client’s notice the information in the form of appointment about – (a) the proposed term of the appointment; and (b) if the appointment is for the sale of residential property, the client’s entitlement to negotiate the term of the appointment up to a maximum term of 60 days; and (c) the difference between sole agency and exclusive agency, unless the information has been brought to the client’s notice under s 134(A); and (d) the consequences for the client if the property is sold by someone other than the agent during the term of the appointment.” [57] Where a real estate agent does not comply with the requirements of section 135 PAMDA, they commit an offence under the Act (section 135(1)). [58] Where an agent commits an offence against section 135(1) of the Act, the appointment of the agent is rendered ineffective (section 137(3) PAMDA). SECTION 133(1) – THE AGENT MUST BE APPOINTED IN WRITING [59] The Form 22a constitutes the appointment in writing as required by PAMDA. It is not in dispute that the form was signed by the defendant and by an authorised representative of the plaintiff. In his written submissions Mr Di Carlo accepts that the agreement is in writing and on the approved form. However, the defendant challenges the effectiveness of the Form 22A. SECTION 133(3)(a) – STATE THE SERVICE AND HOW IT IS TO BE PERFORMED [60] The defendant contends that the inclusion of a listing price or price range was required as part of the form stating how the service was to be performed. It is argued that this view is consistent with clause 1 of the attached Terms and Conditions. That clause provides as follows: “1. PRICE -- 16 of 25 -- 17 1.1 The Client instructs the Agent that the Price at which the Agent must offer to sell the Property will be the Price stated in Clause 4.2 of the Appointment.” [61] The plaintiff however, submits that clause 4.1 satisfies the requirements of section 133(3)(a) PAMDA. That clause clearly states that the “Property to be sold by private treaty as per Clause B in the Items Schedule and Clauses 2, 3, 4, 5, 7, 8, 9, 10 and 12 as contained in the Terms and Conditions of the REIQ Schedule attached.” In other words, clause 1 has been excluded from the agreement. [62] In her evidence Ms Papa explained that a price had not been included in the agreement because Mr Menniti was not “steady” on his price. Ms Papa therefore suggested that the parties assess the feedback from potential purchasers for several weeks. [63] In Rose v Ken Guy Real Estate Pty Ltd 2004 QDC 435 Dodds DCJ accepted that the words “for sale by way of private treaty negotiation” were sufficient compliance with section 133(3)(a). In the present case clause 4.1 is more extensive in that it also incorporates Item B in the Items Schedule and the Terms and Conditions. Condition 4, annexed to the Form 22a, it will be remembered, sets out what offers would be communicated to Mr Menniti. [64] In my view clause 4.1 of the agreement is sufficient to satisfy the requirements of section 133(3)(a). SECTION 133(3)(b) PAMDA – STATE THAT THE FEES, CHARGES AND COMMISSIONS PAYABLE FOR THE SERVICE ARE NEGOTIABLE UP TO THE AMOUNT PRESCRIBED UNDER THE REGULATION [65] In this regard Mr Di Carlo has, in his written submissions, accepted that the Form 22a indicates that commission may be negotiated (at Part 6). However, he submits that the form fails to indicate that fees and charges may be negotiated. [66] In my view it is clear that Part 6 of the form relates solely to commission. In that regard the form indicates in bold type that the client has a right to negotiate a lower amount of commission than the maximum amount set by The Property Agents and Motor Dealers Regulation 2001. This satisfies the statutory requirements with -- 17 of 25 -- 18 respect to commission. The only fees and charges other than commission which the plaintiff was entitled to recover relate to monies payable pursuant to the termination penalty contained in condition 12 of the Terms and Conditions. This condition was specifically included in Part 4.1 of the agreement. No other fees and charges are payable under the appointment, and therefore no necessity arose to indicate on the form that fees and charges may be negotiated. [67] The defendant accepts that the Form 22a indicates the commission, fees and charges that are payable, thus complying with section 133(3)(c)(i). However, with regard to section 133(3)(c)(ii) PAMDA which requires the appointment to state the expenses, including advertising and marketing expenses the agent is authorised to incur in connection with the performance of each service, Mr Di Carlo submits that the Form 22a fails to provide for any expenses the agent is authorised to incur. Furthermore, it is contended that it is no answer for the plaintiff to say that the failure to state that any expenses were authorised leads to the inference that the parties agreed that the agent was not authorised to incur any marketing or advertising expenses. The word “nil” should, it is submitted by the defendant, have been inserted in Part 8 in order to ensure that Mr Menniti was certain of his obligations under the agreement. [68] Mr Morrow, counsel for the plaintiff, draws my attention to the format of Part 8 of the agreement. Part 8.1.1 refers to advertising and marketing expenses (if any), and makes provision for an attached advertising program and an attached marketing program. In her evidence Ms Papa stated that she had a proposed advertising and marketing program which she took to a meeting with Mr Menniti. However, during that meeting it was made clear to her by the defendant that he would not pay any monies by way of advertising or marketing. There was, therefore, no necessity to attach an advertising or marketing program to clause 8.1.1. The words “if any” qualifying “Advertising/Marketing” indicate that the clause envisages situations such as the present where no authorisation exists to incur expenses. In such cases there is no obligation to insert the word “nil” or any other word to indicate that authorisation by the client to the agent to incur expenses has not been forthcoming. I accept that the fact that no sum has been included in clause 8.1.1 leads to a clear inference that Mr Menniti did not authorise the plaintiff to incur any advertising or -- 18 of 25 -- 19 marketing expenses. The same situation exists with respect to other expenses referred to in clause 8.1.2. [69] Section 133(3)(c)(iv) provides that the appointment must state any condition, limitation or restriction on the performance of the service. The defendant accepts that this is dealt with in Part 4.1. [70] Section 133(3)(d) provides that the appointment must state when fees, charges and commission become payable. Again, it is accepted by the defendant that this requirement is dealt with at Parts 6.2 and 7.2. [71] Section 133(3)(e) provides that the appointment must state, where commission is payable as a percentage of an estimated sale price, that the commission is worked out only on the actual sale price. The defendant accepts that this is dealt with in Part 6.1 of the Form 22a. [72] Section 133(3)(f) provides that the appointment, if for a sole or exclusive agency, must state the date the appointment ends. The defendant accepts that this is dealt with in Part 5.1. [73] In the premises I accept that the agreement does comply with all of the relevant provisions of section 133 PAMDA. In these circumstances it is unnecessary to consider the scope of section 49(1) of the Acts Interpretation Act 1954 which provides that if a form is approved under an Act, strict compliance is not necessary and substantial compliance is sufficient. The Form 22a has been approved pursuant to Section 134 of PAMDA. I accept that one of the objects of PAMDA, as stated in the preamble, is to protect consumers against particular undesirable practices. Consumer protection for purchasers of residential property is properly sought to be achieved by comprehensive regulation of activities, licensing and conduct of real estate agents under the provisions of PAMDA, (MNM Developments Pty Ltd v - Gerrard 2005 2 QDR 515 at 519 per de Jersey C.J.). However, I am unable to accept the contention of counsel for the defendant that in this case there has been a lax approach taken to the entire form which resulted in numerous deficiencies. -- 19 of 25 -- 20 SECTION 135 PAMDA [74] It is submitted on behalf of the defendant that the plaintiff has failed to comply with Sections 135(1)(a), (b), (c) and (d) of PAMDA. These provisions are as follows: 135 APPOINTMENT OF REAL ESTATE AGENT – SOLE AND EXCLUSIVE AGENCIES 1. If the appointment is for a sole or exclusive agency, before the appointment is signed, the real estate agent must discuss with the client whether the appointment is to be for a sole agency or an exclusive agency and specifically bring to the client’s notice the information in the form of appointment about – (a) the proposed term of the appointment; and (b) if the appointment is for the sale of residential property, the client’s entitlement to negotiate the term of the appointment up to a maximum term of 60 days; and (c) the difference between sole agency and exclusive agency, unless the information has been brought to the client’s notice under section 134A; and (d) the consequences for the client if the property is sold by someone other than the agent during the term of the appointment. “Maximum penalty – 200 penalty units.” The commission of an offence against subsection (d) also renders an appointment for the sale of a place of residence ineffective under section 137(3). [75] Ms Papa’s evidence was that at a meeting on 2 February 2005 at Mr Menniti’s apartment she went through the agreement with the defendant prior to his signing the document (p.8 transcript). In cross-examination (p.43 transcript) Ms Papa stated that she explained to Mr Menniti the various parts of the form. She repeated this at p.44 transcript. Again, at p.45 Mr Papa stated “I have the form in front of me. As I look at it he looks at it and we go through… If he has questions he answers and we explain.” More specifically with respect to clause 5.1 of the Form 22a headed -- 20 of 25 -- 21 “Open Listing, Sole Agency or Exclusive Agency” Ms Papa (at p.60 transcript) was asked: “He asked you how long on the phone and you told him 60 days?... Yes. Thank you. You’re quite positive about that?... I am positive about that, but also in the previous conversations I think that everyone, and, most especially Mr Menniti that buys and sells all the time, the agencies across Queensland that I know it is always 60 days for everyone, not a special arrangement we make. I understand that. I wanted to find out if there was anything else you told him at that particular time. You told me you were positive?... I’m positive.” [76] Presumably, Mr Di Carlo at this point of his cross-examination had in mind the following provision in clause 5.1 which appears immediately before clause 5.2: “For the sale of residential property, the term of a Sole or Exclusive Agency is negotiable between the Client and the Agent up to a maximum term of 60 days.” This provision reflects the language of section 135(1)(b) of PAMDA. [77] Counsel for the defendant is critical of the evidence of Ms Papa in this regard. Mr Di Carlo submits that Ms Papa was evasive, difficult and unresponsive to questions which ought to have been readily answerable. He further submits that Ms Papa was unable to relay any of the direct conversation that took place with Mr Menniti at the meeting, or even the gist of what took place, other than repeating that she took him through the form. [78] The criticisms of Ms Papa’s evidence are, in my view, not capable of being sustained. Her evidence is that she went through the Form 22a with Mr Menniti. Her inability to recall direct conversation with respect to individual components of the form is to be expected after the passage of such a long period of time. She made no notes of the conversation. Again, I can see nothing untoward in that. Her evidence is not contradicted by any sworn testimony from another source. Although Ms Papa did not in terms state that she informed Mr Menniti that he could negotiate a term of up to 60 days, if she did in fact go through the form with him, -- 21 of 25 -- 22 she must have done so when discussing clause 5.1. Ms Papa was at no stage directly asked whether she had informed the defendant that he could negotiate a term of up to 60 days. Her evidence remains that she went through the form with Mr Menniti. That form encompasses the provision directly relating to this issue. As the evidence stands I am unable to conclude that section 135(1)(b) was not complied with and that therefore, as a consequence of section 137(1), the appointment was ineffective from the time it was made. In my view there has been compliance with section 135 by the plaintiff. APPOINTMENT INEFFECTIVE DUE TO FAILURE TO COMPLY WITH SS.133 AND 135 PAMDA – NO ENTITLEMENT TO RECOVER REWARD PURSUANT TO S.140(1)(c) PAMDA [79] Pursuant to the provisions of section 140(1)(c) PAMDA 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 had been properly appointed under Division 2 by the person to be charged with the reward or expense. [80] As I have concluded that the plaintiff has complied with sections 133 and 135 of PAMDA, the submission of counsel for the defendant that section 140(1)(c) precludes the plaintiff from seeking commission on the sale of Mr Menniti’s apartment must be rejected. ORDER UNDER SECTION 87 OF THE TRADE PRACTICES ACT FOR FALSE AND MISLEADING STATEMENT [81] The defendant pleads in paragraphs 8, 9, 10 and 14 of the Further Amended Defence and Counterclaim that false and misleading statements were made and seeks an order under section 87 of the Trade Practices Act 1974 that the agreement be avoided. [82] In paragraph 8 of the pleadings it is alleged that the following representations were made: (a) the plaintiff was acting as an agent for the sale of Lot 11; (b) there was a contract on Lot 11 for $4 million; (c) a deposit had been paid; -- 22 of 25 -- 23 (d) the contract was due to go unconditional; (e) there was a 14 day settlement; (f) the plaintiff would get between $3.3 and $3.5 million if the defendant waited. [83] The plaintiff admits that the representations in (a), (b) and (e) were made, but denies that those in (c), (d) and (f) were made. The evidence of Ms Papa was consistent with the plaintiff’s pleadings as to these matters. [84] In his written submissions Mr Di Carlo concedes that there is no evidence to contradict the plaintiff’s assertions that the representations contained in (c), (d) and (f) were not made. In these circumstances I find that Ms Papa at no stage represented that a deposit had been paid or that the contract was due to go unconditional or that she would get between $3.3 and $3.5 million if the defendant waited. [85] As to the representations contained in (a), (b) and (e), that is that the plaintiff was acting as an agent for the sale of Lot 11, and that there was a contract on Lot 11 for $4 million, and that there was a 14 day settlement, there is no evidence to suggest that any of these statements made by the plaintiff were false or misleading. As counsel for the plaintiff points out in his written submissions, the evidence of Ms Papa was that the vendor of Lot 11 was a resident in the complex, as was Mr Menniti. If there had been any false representations, presumably information could have been obtained from that vendor and put to Ms Papa during cross-examination. [86] In the circumstances I am satisfied that no false or misleading representations were made by the plaintiff. Furthermore, there is no evidence to establish that, if there had been any false or misleading representation by Ms Papa, the defendant relied upon or was induced by such to enter into the exclusive agency agreement. Indeed, the evidence before me suggests that any discussions between Ms Papa and Mr Menniti in relation to Lot 11 occurred after the exclusive agency agreement had been signed. This, at the very least, strongly suggests that Mr Menniti did not rely upon the alleged misrepresentations to enter into the exclusive agency agreement. Furthermore, Ms Papa testified that the discussions relating to the exclusive agency took place at various times over a period of approximately one week. According to Ms Papa an appointment was made to enable Mr Menniti to sign the agreement for -- 23 of 25 -- 24 an exclusive agency on 2 February 2005. Again, this suggests that Mr Menniti had already decided on signing an exclusive agency agreement before any of the alleged misrepresentations could have been made. PLEADED IN PARAGRAPH 9 OF DEFENCE THAT THE PARTIES AGREED THAT THE PLAINTIFF WOULD START SELLING AFTER SETTLEMENT OF LOT 11 [87] The defendant pleads in paragraphs 9, 10 and 11 of the Amended Defence that no agreement came into operation until settlement of Lot 11. It is further pleaded that Lot 11 was not settled prior to 15 March when the defendant’s property was sold. Therefore, it is contended that the agreement never became operative. [88] Counsel for the plaintiff responds to this contention by pointing out, correctly, that the written agreement contains no such term, and that the written terms of the agreement are inconsistent with such a term. Clause 5.1 of the Form 22a indicates that the “start date” of the exclusive agency is 15 February 2005 and the “end date” is 15 April 2005. The appointment was thereafter to continue as an open listing. There is nothing in the agreement to indicate that it would operate only after settlement of Lot 11. [89] The evidence of Ms Papa was that she did commence performance of the agreement and that Mr Menniti well knew that she was performing the agreement because there had been five inspections of Mr Menniti’s apartment and Mr Menniti had provided access for those inspections. Furthermore, Ms Papa had communicated the reports of the inspections to Mr Menniti. In these circumstances I am unable to accept the defendant’s contention that the agreement was not to commence until the sale of Lot 11 had settled. PARAGRAPH 13 OF THE DEFENCE [90] The defendant has abandoned the allegations set out in paragraph 13 of the Defence by filing the Further Amended Defence on the second day of the trial. CONCLUSION [91] I am satisfied that the plaintiff had an exclusive agency to sell the defendant’s apartment, and, in the premises, is entitled to judgment for the commission payable under the agreement, that is in the sum of $76,120.00, together with interest on such -- 24 of 25 -- 25 sum at the rate of 9% per annum from 15 April 2005 to the date of judgment 15 February 2008 which amounts to $19,412.13. The defendant is to pay the plaintiff’s costs to be assessed. -- 25 of 25 --