Cantwell v Beitzel
[2014] NSWSC 242
•21 March 2014
Supreme Court
New South Wales
Medium Neutral Citation: Cantwell v Beitzel and ors [2014] NSWSC 242 Hearing dates: 22 November 2013 Decision date: 21 March 2014 Before: Bellew J Decision: (i) The summons is dismissed;
(ii) The plaintiff is to pay the costs of the
defendants, as agreed or assessed.
Catchwords: APPEAL - Appeal from decision of Magistrate - where cross claims brought by the defendants following proceedings instituted by the plaintiffs - where judgment entered in favour of the defendants - whether reasons adequate
STATUTORY CONSTRUCTION - where plaintiff entered into management agreements with defendants to manage units in a strata scheme - where plaintiff brought proceedings for breach of agreement - where defendants brought cross claims asserting that the plaintiff was not entitled to remuneration paid to him pursuant to the agreement - where statutory provisions ousted an entitlement to remuneration - where judgment entered in favour of the defendants on the cross claims on the basis of lack of entitlement
WORDS AND PHRASES - "not entitled"Legislation Cited: Consumer Claims Act 1998
Property, Stock and Business Agents Act (NSW) 1941
Property, Stock and Business Agents Act (NSW) 2002
Local Court Act 2007Cases Cited: Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430
Commonwealth v Baume (1905) 2 CLR 405
Craig v State of South Australia (1985) 184 CLR 163
Investment Source Corporation Pty Limited v Knox Street Apartments Pty Limited [2002] NSWSC 710; (2002) 56 NSWLR 27
Minster for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323
Munro v ACP [2012] NSWSC 100
Pollard v RRR Corporation Pty Limited [2009] NSWCA 110
Project Blue Sky Inc. v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Qushair v Raffoul [2009] NSWCA 329
Stoker v Adecco Gemvale Constructions Pty Limited [2004] NSWCA 449
Sutton v Zullo Enterprises Pty Limited [2000] 2 Qd R 196
Transport Accident Commission v Treloar [1992] 1 VR 447
Walsh v Permanent Trustee Australia Limited (1996) 21 ACSR 213Texts Cited: Statutory Interpretation in Australia (Seventh Edition) - D C Pearce and R S Geddes Category: Principal judgment Parties: Paul Cantwell - Plaintiff
Eric Beitzel - First defendant
Rita Beitzel - Second defendant
Garry O'Donohoe - Third defendant
Anne O'Donohoe - Fourth defendant
Leo Millist - Fifth defendant
Jean Millist - Sixth defendant
Michael Colledge - Seventh defendant
Antonius Andriessen - Eighth defendant
Fiona Danne - Ninth defendant
David Robinson - Tenth defendant
Donna Robinson - Eleventh defendantRepresentation: Counsel:
Mr T Davie - Plainitff
Mr J A Darvall - Defendants
Solicitors:
Kennedy and Cooke - Plainitff
Merimbula Legal - Defendants
File Number(s): 2013 / 216060 Publication restriction: Nil
Judgment
INTRODUCTION
By summons filed on 16 July 2013 the plaintiff appeals from a decision of Magistrate Degnan delivered in the Bega Local Court on 18 June 2013 in which his Honour entered judgment in favour of each of the defendants in respect of cross-claims brought by them against the plaintiff.
THE FACTS
Strata scheme 19061 covers a residential unit complex known as "Marine Court" located at 1 Marine Parade Merimbula ("the complex"). In December 2006 the plaintiff and his wife purchased a management rights business known as "Marine Court Holiday Units" for a sum of $180.000.00. In conjunction with the purchase of that business, the plaintiff entered into:
(i) a Caretaker Agreement ("the Caretaker Agreement") for 5 years, with an option to renew for a further 5 years, pursuant to which he agreed to repair and maintain the common property of the complex; and
(ii) a Management Agreement with each individual unit owner ("the Management Agreement") for a similar term.
Pursuant to each Management Agreement, the plaintiff agreed to act as on-site manager at the complex, in return for which he was entitled to remuneration calculated as a percentage of the gross tariff charged for letting each unit, along with other amounts referable to supervision, cleaning, maintenance, advertising and promotion.
Between 16 December 2006 and 29 October 2011 the plaintiff managed the complex and in doing so attended to a range of duties. These included the promotion of the complex, booking and renting units, cleaning and maintaining those units and the common property, and the associated administration of the complex generally.
On 24 March 2012 the owners corporation resolved at a general meeting to terminate the Caretaker Agreement. The plaintiff did not accept that termination and indicated that he intended to continue to act in his capacity as caretaker. Following that indication, action was taken to remove the plaintiff as a signatory to relevant bank accounts, thereby rendering it impossible for him to continue to perform any duties pursuant to the Caretaker Agreement. However, the plaintiff continued to perform duties pursuant to each Management Agreement.
THE PROCEEDINGS IN THE LOCAL COURT
A complex set of proceedings in the Local Court have arisen from the above facts.
To begin with, the owners corporation brought proceedings against the plaintiff seeking damages for breach of the Caretaker Agreement. It is not necessary, for present purposes, to detail the nature and extent of the breaches which were alleged in those proceedings. It is sufficient for present purposes to note that the plaintiff filed a defence in which he denied the alleged breaches.
The plaintiff then filed a cross-claim naming, as the cross-defendants, the owners corporation along with each of the owners of the individual units in the complex (who are the present defendants). In that cross-claim, the plaintiff alleged that:
(i) the owners corporation had wrongfully repudiated the Caretaker Agreement;
(ii) alternatively, the owners corporation had frustrated the Caretaker Agreement; and
(iii) each of the individual unit owners had breached the relevant Management Agreement.
Each of the present defendants then filed a separate cross-claim against the plaintiff seeking the recovery of commissions paid to him pursuant to each individual Management Agreement. The pleadings in each cross-claim alleged that:
(i) the Management Agreement was an "Agency Agreement" within the meaning of s. 3 of the Property Stock and Business Agents Act 2002 ("the Act");
(ii) the plaintiff was a "licensee", for the purposes of ss. 3 and 55 of the Act;
(iii) a copy of the Management Agreement had not been served within 48 hours of being executed, contrary to s. 55(1)(c) of the Act;
(iv) accordingly, pursuant to s. 55(1) of the Act, the plaintiff was not entitled to receive any remuneration by way of (inter alia) commission;
(v) no written Agency Agreement complying with the statutory requirements of the Act had ever been executed between the plaintiff and each owner;
(vi) alternatively the agreement had been repudiated in each case; and
(vii) as a consequence, each cross-claimant was entitled to judgment on his or her cross-claim for the amount paid to the plaintiff as remuneration.
THE HEARING BEFORE THE MAGISTRATE
The proceedings came before Magistrate Degnan on 15 May 2013, at which time his Honour was informed that he would be required to determine an issue arising out of the provisions of s. 55 of the Act. The Magistrate was also informed that he would be asked to determine what was described as a "jurisdictional issue". During the hearing before me, both parties indicated that the Magistrate's determination of the latter issue was not relevant to any question I was asked to determine.
The matter then proceeded before the Magistrate by the parties each tendering evidence. The plaintiff's evidence consisted of an evidentiary statement dated 11 February 2013 which he adopted on oath, and about which he was not cross-examined. Annexed to that statement were copies of each Management Agreement. The plaintiff stated (at paragraph 10 and following of his statement) that he had been unaware of any statutory requirement that he serve the Management Agreement upon each defendant within 48 hours of it being signed. An affidavit of each defendant was also tendered setting out the amounts paid to the plaintiff by way of (inter alia) commission pursuant to each Management Agreement, of which recovery was sought. The evidence before the Magistrate was such that there was no dispute between the parties at least in respect of those matters set out in [9](i), (ii) and (iii) above.
The proceedings on that day concluded with the Magistrate setting a timetable for the filing of written submissions from each party. The matter was then adjourned until 4 June 2013.
When the matter came before the court on 4 June, the Magistrate indicated that he was not in a position to deliver judgment because he wished to give each party an opportunity to make further oral submissions and also wished to have an opportunity to read some of the authorities to which the written submissions had referred. Having heard further oral submissions, the Magistrate then adjourned the proceedings until 12 June 2013 for the purposes of delivering his judgment.
THE MAGISTRATE'S JUDGMENT
The Magistrate gave judgment on 12 June 2013. Because one of the grounds of appeal asserts that the Magistrate's reasons were inadequate, it is necessary for me to set out the majority of what is recorded in the transcript of the proceedings on that day (commencing at T2 L3):
"In a further cross-claim by the Beatsell's (sic) against Mr Cantwell they claimed that a copy of the management agreement was not served by Mr Cantwell on the Beatsells (sic) within forty-eight hours of the execution of the agreement. Therefore they plead that Cantwell is not entitled to any remuneration for services performed or reimbursement for charges incurred by him regarding services performed as licensee since 16 December 2006. With regard to that pleading they claim $17,666.60.
Further and alternately to that they plead that no written management agreement since 16 December 2011 exists. They plead that pursuant to s55(1) of the Property (Stock and Business Agents) Act 2002 that Cantwell is not entitled to any monies received and held by him from 16 December 2011 through to 15 October 2012. Up to that point they claim $3,384.64.
Further and alternatively they claim that Cantwell repudiated any management agreement on 5 May 2012 and that was accepted by the Beatsells (sic) on 25 May 2012. They claimed $775.62 for that period, totalling all up $21,051.24. Mr Cantwell in his defence to his further cross claim has conceded s 55 applies but denies the cross claims. It must be said there are identical defences and cross claims made by each of the individual lot owners, although they are in differing amounts. In regards to the Robinsons who are the owners of lot 8 they did not plead the alternates that no written management agreement since 16 December 2011 and the repudiation of the contract on 5 May 2012.
Again, in his defence to each of these cross claims Mr Cantwell has conceded s 55 applies but denies each cross claim.
The hearing of the substantive claims is listed for a special fixture on 17 July 2013 at this court. I have been asked to determine a preliminary jurisdictional issue with respect to the application of s 55 of the Property Stock and Business Agents Act. I have been assisted by written submissions made by the parties. It should be noted that each of those written submissions are on file. I also heard oral submissions by both the representatives, Mr Thompson on behalf of Mr Cantwell, and Mr Groch on behalf of the owners of the strata plan and the individual lot owners.
He as a threshold issue raises the fact that there was no motion filed and served in accordance with the Uniform Civil Procedure Rules of 2005. As a consequent he argues there is nothing on the record as to the actual orders sought by Mr Thompson on behalf of Mr Cantwell, nor any indication as to the orders proposed by the Court. I am directed to rule 12.11 of the Uniform Civil Procedure Rules 205 which provide that the Court can make orders declaring a court has no jurisdiction in respect of the subject matter of the proceedings, or an order declining to exercise jurisdiction, but such order may not be made unless notice of motion to apply for the order is filed by the defendant within the time limited for the defendant to enter an appearance in the proceedings. There is no notice of motion, that is clear. In any event, I will continue to consider the arguments that have been raised.
It is quite clear that both parties were on notice and at one point in time when the matter came before my brother magistrate on 24 April it was listed for this preliminary hearing on 15 May. On 15 May this year there was a check of the record of what occurred on the earlier date in April, and it certainly was confirmed that the parties had agreed for the Court to determine the preliminary jurisdictional issue. There is no doubt that the Court has a civil jurisdiction. There is also no doubt that the Consumer Trader and Tenancy Tribunal has jurisdiction of some matters.
Mr Groch argues that s 30 of the Local Court Act confers civil jurisdiction on the Local Court in proceedings of money claim. He relies upon the definition as being a claim for recovery of any debt, demand or damages. He says the cross claims of the owners fall square within this definition. My understand (sic) of Mr Thompson's claim is that the cross claims by the owners are matter that are within the exclusive jurisdiction of the Consumer, Trader and Tenancy Tribunal. I accept the argument that the Consumer, Trader and Tenancy Tribunal while it has jurisdiction to deal with consumer claims, there is an overlapping of matters and it does not have a exclusive jurisdiction. Mr Groch rightly claims that subs 36(4) and (8) of the Property Stock and Business Agents Act of 2002 allow a certain type of dispute to be treated as a consumer claim by the CTTT, and that I accept the argument "In the absence of express provision to the contrary conferral of jurisdiction on a quasi-judicial tribunal does not remove or limit the jurisdiction of courts to determine matters otherwise falling within the court's jurisdiction".
I accept his argument that in the majority judgment in Fish v Solution 6 Holdings Limited [2006] HCA at 22, where it was stated:
"It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words."
He referred to a number of examples where there is a recognition of concurrent or overlapping jurisdiction given to the CTTT, and referred to s 208 of the Residential Tenancies Act 2010 as well as 48L of the Home Building Act 1989 and s 226 of the Strata Schemes Management Act 1996. He also refers to s 23 of the CTTT Act acknowledging that the CTTT and courts have overlapping jurisdictions in allowing the transfer of matters with common issues between the courts and CTTT.
I cannot find, despite the written submissions of Mr Thompson, any clear authority limiting the jurisdiction of the Local Court to deal with these claims. There is no doubt that s 55 of the Property, Stock and Business Agents Act 2002 provides requirements. I should say as a very clear statement under subs 1:
"A licensee is not entitled to any commissioner or expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person unless:
(a) the services were performed pursuant to an agreement in writing signed by or on behalf of:
(i) the person, and
(ii) the licensee, and
(b) the agency agreement complies with any applicable requirements of the regulations, and
(c) a copy of the agency agreement signed by or on behalf of the licensee was served by the licensee on that person within 48 hours after the agreement was signed by or on behalf of the person."
And there are further subsections which provide for standard forms and regulations and the means of service of such an agreement.
What has been the focus of much of the argument before me deals with subs 4 and 5 of that same section. Subsection 4 says:
"A court or tribunal before which proceedings are taken by a licensee for recovery of commission or expenses from a person, or before which a licensee is a respondent to a consumer claim relating to commission or expenses may order that the commission or expenses concerned are wholly or partly recoverable despite a failure by the licensee to service a copy of the agreement within the forty-eight hours."
These are not proceedings taken by the licensee for the recovery of commission or expenses from a person. Nor are they proceedings before which a licensee is a respondent to a consumer claim relating to commission or expenses as referred to within s 36. Section 36 clearly provides jurisdiction to the tribunal under the Consumer Claims Act of 1998 which is the CTTT, and it provides that:
"If a person is served with a statement of claim under the section or is provided with an itemised account provided by the section they may apply to the tribunal for the determination of a consumer claim within the meaning of the Consumer Claims Act 1998."
That has not occurred here. So subs 55(4) of the Act does not apply to these proceedings before me, nor of course subs (5).
As I said previously, Mr Cantwell has conceded s 55 applies, but subs 55(4) and 55(5) are not applicable in these proceedings before me on the basis that he argued that the claim made by the owners could only be viewed as a consumer claim. Mr Cantwell relied upon the limitation period prescribed by s 7 of the Consumer Claims Act. Obviously because of my determination this is not viewed as a consumer claim. I reject that argument. I also reject it on the basis that I accept the argument by Mr Groch that the cause of action applied every time the commission was taken by Mr Cantwell in defiance of s 55(1) of the Property, Stock and Business Agents Act 2002.
Mr Thompson also argued on behalf of Mr Cantwell that the old provisions of the repealed Property, Stock and Business Agents Act, being s 42AA(4) previously identified commission received despite non-compliance with the section was claimable as a debt. He argued that in the absence of similar legislation in s 55, similar provisions in s 55 of the Property, Stock and Business Agents Act of 2002, there is no basis to maintain the claims that amounts received in contravention of the section are recoverable as a debt in the Local Court. I reject that argument.
It is my understanding that the only matter I needed to determine was whether the cross claims made by the owners calling for identifying the breaches of s. 55 and calling for the repayment of the remuneration received are rightly brought before me".
At that point the matter was adjourned until 18 June 2013 without the Magistrate making or entering any formal orders. An indication was given that further discussions were to take place between the parties in an effort to resolve the matter.
The matter then came back before the Magistrate on 18 June 2013. The transcript of the proceedings on that day which is in evidence before me was prepared by someone other than a member of the court's transcription service. A CD recording of the proceedings on that day is also in evidence, although it was not suggested that the transcript was in any way inaccurate.
The Magistrate commenced the proceedings on that day by seeking to confirm the proposed hearing date for the proceedings. The solicitor for the plaintiff then indicated that he had received instructions to commence an appeal in this Court before saying:
"I don't think your Honour has entered judgment or made any orders in relation to the preliminary issue but I can indicate that my instructions are to commence an appeal in relation to that decision".
The plaintiff's solicitor then said:
"I'm unsure of whether the oral judgment your Honour gave on the last occasion constitutes full reasons for the decision reached so I seek confirmation either way if that oral judgment was given was reasons, and so be it, your Honour would take the time in giving further reasons in writing, I'd ask that you would do so."
The Magistrate responded by saying:
"No, these are my reasons."
No further reasons were given. The Magistrate then entered judgment for the present defendants on their cross claims before adjourning the proceedings to permit an appeal to proceed in this Court.
THE GROUNDS OF APPEAL
The grounds of appeal are drafted in the following terms:
(a) His Honour erred in finding that the failure to comply with s. 55 of the Property Stock and Business Agents Act 2002 meant that the (the plaintiff) should repay commission to the (defendants).
(b) His Honour erred by failing to give any, or any proper, reasons as to why (the plaintiff) repay (sic) commission to the defendants.
At the hearing before me, counsel for the plaintiff made it clear that both of these grounds were pressed, on the basis that they were inextricably linked. It was not suggested on behalf of the defendants that the plaintiff required leave to pursue either ground.
It is appropriate to deal firstly with the asserted failure on the part of the Magistrate to give proper reasons.
THE FAILURE TO PROVIDE REASONS
The submissions of the parties
Counsel for the plaintiff submitted, by reference to the transcript, that to the extent that it could be inferred from the Magistrate's judgment that he had in fact made a determination of the issues, his reasons were inadequate.
In particular, it was submitted that any reasoning process which the Magistrate adopted to reach the conclusions he apparently reached was not evident from the judgment.
Counsel for the defendants submitted that it was necessary to read the Magistrate's judgment as a whole. He submitted that on such a reading, it was open to conclude that the Magistrate had determined that s. 55 of the Act applied so as to disentitle the plaintiff to the receipt of any amount under any individual Management Agreement. By reference to various parts of the transcript, counsel submitted that the reasoning process adopted by the Magistrate was sufficiently exposed.
CONSIDERATION AND CONCLUSION
In dealing with this ground, two matters should be noted at the outset. The first, is that a failure to provide proper reasons, if established, may amount to an error of law (see Stoker v Adecco Gemvale Constructions Pty Limited [2004] NSWCA 449 per Santow JA at [41] and Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 444 per Meagher JA). The second, is that in circumstances where the Magistrate had reserved his decision, this not a case where the principles governing review of ex tempore reasons are in any way applicable (see Munro v ACP [2012] NSWSC 100 at [21] per RA Hulme J and the authorities cites therein).
There are a number of minimum requirements which apply to the duty to provide reasons. In Stoker (supra) Santow JA said (at [41]):
"It is clear that the duty to give reasons is a necessary incident of the judicial process. Without adequate reasons, justice has not been seen to be done, so that failure to give adequate reasons may be an error of law: Pettit v Dunkley [1971] 1 NSWLR 376, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 278-9 per McHugh JA, Mifsud v Campbell (1991) 21 NSWLR 725, Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430. But the duty does not require the trial judge to spell out in minute detail every step in the reasoning process or refer to every single piece of evidence. It is sufficient if the reasons adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings."
Previously, in Beale (supra) (that being one of the authorities to which Santow JA referred) Meagher JA had said (at 442):
"A failure to provide sufficient reasons can, an often does, lead to a real sense grievance that a party does not know or understand why the decision was made: Re Poyser and Mills' Arbitration [1964] 2 QB 467 at 478. This court has previously accepted the proposition that a judge is bound to expose his reasoning in sufficient detail to enable a losing party to understand why it lost."
Observations to a similar effect were made by McColl JA (Ipp JA and Bryson AJA agreeing) in Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 at [56], and were also summarised by Sackville AJA (Campbell JA and Bergin CJ in Eq agreeing) in Qushair v Raffoul [2009] NSWCA 329 at [52] and following.
It is to be inferred from the orders that the Magistrate made that he concluded that the provisions of s. 55 of the Act disentitled the plaintiff to any commission or expenses, and that the provisions of s. 55(4) did not apply. However in my view, his judgment does not sufficiently disclose the reasoning process he applied in order to arrive at those conclusions, to the point where his reasons are inadequate. Three matters in particular are noteworthy.
Firstly, the Magistrate concluded (at T4 L38) that s. 55(4) had no application. In doing so he rejected (at T5 L12) a particular submission advanced on behalf of the plaintiff as to the proper construction of s. 55(4), based upon the legislative predecessor to that provision. Other than stating that he rejected the argument, the Magistrate said nothing further. He gave no reasons for such rejection.
Secondly, part of the Magistrate's determination that s. 55(4) did not apply included a conclusion the proceedings brought by the defendants by way of their cross claims did not constitute a consumer claim as referred to in that section. He gave no reasons for reaching that conclusion.
Thirdly, having reached the conclusion that ss. 55(4) did not apply, the Magistrate did not proceed to consider the related question of whether, as a consequence, the plaintiff was "not entitled" to the amounts in question as contemplated by s. 55(1). Whilst it might be inferred, from the orders which were made, that the Magistrate found that the plaintiff was not entitled, the reasoning process which led him to that conclusion is not apparent from the judgment.
In my view, and although it was not the subject of submissions on the hearing of the appeal, a further problem arises from the manner in which the Magistrate approached the issues he had been asked to determine.
The Magistrate noted (at T2 L31) that he had been asked to determine "a preliminary jurisdictional issue with respect to the application of s. 55 (of the Act)". The submissions of the parties before the Magistrate set out two essential questions for determination. The first was whether or not the Local Court had jurisdiction to entertain the cross-claims which had been brought. The second was whether, if the Local Court did have such jurisdiction, the provisions of s. 55 of the Act should be construed in such a way so as to conclude that the plaintiff was not entitled to the monies paid to him, such that the defendants were entitled to judgment in their favour on the respective cross claims.
In my view, the terms (in [37] above) in which the Magistrate articulated the issues he was being asked to determine amounted to a conflation of two quite separate and distinct questions. As a result, in my view the Magistrate asked himself the wrong question and/or identified the wrong issue. In either case, an error of law is established (see Craig v State of South Australia (1985) 184 CLR 163 at 179; Minster for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at [82]; 351.) As I have said, this was not the subject of submissions before me. However, for the other reasons set out, the Magistrate's reasons were inadequate in any event.
It follows that the second of the two grounds is made out. However, that does not determine the appeal as it is necessary to proceed to consider the first ground.
THE PROPER CONSTRUCTION OF SECTION 55
The relevant statutory provisions
The first ground of appeal asserts that the Magistrate erred in finding that the failure to comply with s. 55 of the Act meant that the plaintiff should repay the commission to the defendants. As I have noted, the Magistrate concluded that s. 55(4) had no application in the circumstances. I am left to infer from his final orders that he proceeded to find that the plaintiff had no entitlement to the commissions paid to him, and that the defendants were therefore entitled to judgment on the respective cross claims.
At the time of the Magistrate's determination, s. 55 of the Act was in the following terms:
55 No entitlement to commission or expenses without agency agreement
(1) A licensee is not entitled to any commission or expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person unless:
(a) the services were performed pursuant to an agreement in writing (an "agency agreement" ) signed by or on behalf of:
(i) the person, and
(ii) the licensee, and
(b) the agency agreement complies with any applicable requirements of the regulations, and
(c) a copy of the agency agreement signed by or on behalf of the licensee was served by the licensee on that person within 48 hours after the agreement was signed by or on behalf of the person.
(2) The regulations may make provision for or with respect to regulating the form of agency agreements and the terms, conditions and other provisions that an agency agreement must or must not contain. Without limiting this subsection, the regulations may prescribe one or more standard forms of agency agreement.
(3) Without limiting the means by which a copy of the agency agreement may be served on a person, it may be served by means of facsimile transmission or by such other means as the regulations may allow.
(4) A court or tribunal before which proceedings are taken by a licensee for the recovery of commission or expenses from a person, or before which a licensee is a respondent to a consumer claim relating to commission or expenses (as referred to in section 36), may order that the commission or expenses concerned are wholly or partly recoverable despite a failure by the licensee to serve a copy of the relevant agency agreement on the person within 48 hours after it was signed by or on behalf of the person.
(5) A court or tribunal is not to make such an order unless satisfied that:
(a) the failure to serve a copy of the agreement within the required time was occasioned by inadvertence or other cause beyond the control of the licensee, and
(b) the commission or expenses that will be recoverable if the order is made are in all the circumstances fair and reasonable, and
(c) failure to make the order would be unjust.
Section 36 of the Act (to which reference is made in s. 55(4)) is also relevant for present purposes and provides as follows:
36 Review of commission and fees
(1) An action or other proceedings cannot be commenced by a licensee for the recovery of remuneration or any sum as reimbursement for expenses until the expiration of 28 days after a statement of claim has been served personally or by post on the person to be charged with the remuneration or expenses.
(2) The statement of claim must be in writing, set out the amount claimed and contain details of the services performed by the licensee in respect of which the remuneration or expenses are claimed.
(3) If money has been paid to or is or has been retained by a licensee (out of money received by or paid to the licensee) in respect of any transaction by or with the licensee as a licensee and has been so paid or retained as remuneration or as reimbursement for expenses in connection with the transaction, the person paying the money or the person who would be entitled to the money had the money not been retained, may require the licensee to furnish the person with an itemised account of the transaction in accordance with the regulations.
(4) A person who is served with a statement of claim under this section or is provided with an itemised account of a transaction as provided by this section may apply to the Tribunal for the determination of a consumer claim within the meaning of Consumer Claims Act 1998 in relation to:
(a) the entitlement of the licensee to the whole or any part of the amount specified in the statement of claim or the itemised account, or
(b) whether the whole or any part of the amount is reasonable, or both.
(5) For the purpose of the application of the Consumer Claims Act 1998 to that person, a reference in that Act to a
"consumer" is taken to include a reference to that person.
(6) The Tribunal has jurisdiction to hear and determine any such consumer claim despite:
(a) the terms or conditions of any agreement or contract entered into between the licensee and the applicant, and
(b) the amount being more or less than the maximum amount (if any) of remuneration to which a licensee is entitled under this Act.
(7) This section does not limit the Consumer Claims Act 1998 .
(8) In this section:
"expenses" means expenses or charges incurred in connection with services performed by a licensee in his or her capacity as a licensee.
"remuneration" means remuneration by way of commission, fee, gain or reward for services performed by a licensee in his or her capacity as a licensee.
Section 3 of the Consumer Claims Act 1988 defines the word "consumer" in the following terms:
"consumer" means:
(a) a natural person,
...
to whom or to which a supplier has supplied or agreed to supply goods or services, whether under a contract or not, or with whom or which a supplier has entered into a contract that is collateral to a contract for the supply of goods or services.
Section 3A of the same Act defines the term "consumer claim" to include "a claim made by a consumer for a specified sum of money".
The predecessor to s. 55 of the Act was contained in s. 42AA of the Property, Stock and Business Agents Act 1941 ("the 1941 Act"). Section 42AA was in the following terms:
42AA Agency agreements to be in writing
(1) A licensee shall not be entitled to:
(a) any remuneration by way of commission, fee, gain or reward for services performed by the licensee in his or her capacity as licensee, or
(b) any sum or reimbursement for expenses or charges incurred in connection with services performed by the licensee in his or her capacity as licensee, from the person for whom or on whose behalf those services were performed unless:
(c) the agreement pursuant to which those services were performed is in writing and signed by or on behalf of:
(i) the licensee, and
(ii) that person,
(d) the agreement contains such terms (if any) as may be prescribed, and
(e) a copy of the agreement was served by the licensee on that person within 48 hours of the agreement being signed by or on behalf of that person.
(2) Subsection (1) does not apply to a prescribed agreement, transaction, circumstance or person or an agreement, transaction, circumstance or person of a prescribed class or description.
(3) Any provision in, or applying to, an agreement referred to in subsection (1) and purporting to exclude or restrict the operation of the terms (if any) required to be contained in that agreement has no force or effect.
(4) Where a licensee has recovered or retained from a person any remuneration or sum to which the licensee is not entitled by virtue of subsection (1), the person who would be entitled to the remuneration or sum so recovered or retained by the licensee had that remuneration or sum not been so recovered or retained may bring proceedings in any court of competent jurisdiction for the recovery of that remuneration or sum, or both, as a debt.
(5) A licensee who recovers or retains any remuneration or sum to which the licensee is not entitled by virtue of subsection (1) is guilty of an offence against this Act.
It will be noted that s. 42AA(4) of the 1941 Act facilitated the recovery, by an owner, of monies to which a licensee was not entitled by virtue of the operation of ss. 42AA(1). No equivalent provision appears in s. 55.
Submissions of the plaintiff
The fundamental proposition advanced by the plaintiff was that s. 55 did not permit the defendants to recover the amounts paid to the plaintiff as licensee, notwithstanding the plaintiff's failure to comply with s. 55(1). Counsel for the plaintiff advanced three principal submissions in support of that proposition.
Firstly, counsel relied upon the fact that s. 42AA(4) of the 1941 Act contained a provision permitting recovery of amounts paid to, or retained by, a licensee when there was a failure to comply with the requirements of S. 42AA(1). It was submitted that the absence of such a provision in the Act, and the inclusion of ss.55(4), reflected an intention on the part of the legislature to allow a licensee to retain all or part of the monies paid to him, notwithstanding his failure to comply with the provisions of s. 55(1).
Secondly, counsel submitted that the Magistrate's conclusion that s. 55(4) did not apply gave rise to an anomaly. It was submitted that on the basis of such interpretation, a licensee such as the plaintiff could himself bring proceedings in the Local Court and recover all or part of the remuneration owing to him notwithstanding that he had not complied with s. 55(1), but that he could not, when defending proceedings brought against him for the recovery of such remuneration, retain all of part of it. It was submitted, in effect, that s. 55(4) should be construed in such a way as to permit a Local Court to determine the consumer claim to which s. 36 refers.
Thirdly, counsel submitted that the failure to comply with the requirements of s. 55 was not without sanction and that (inter alia) disciplinary action could be taken against a licensee pursuant to s. 191 of the Act. As I understood it, the effect of this submission was that in circumstances where disciplinary provisions were provided for in the Act, the provisions of s. 55(1) should not be construed in, in effect, as some form of disciplinary or penal provision.
Submissions of the defendants
Counsel for the defendants submitted that the effect of s. 55(1) was to deprive a licensee such as the plaintiff of any claim to remuneration in any case of non compliance with the section's requirements. He submitted that in those circumstances, the retained commissions were a debt owed to each owner, the recovery of which was a "money claim" as defined in s. 29A of the Local Court Act 2007.
Counsel further submitted that the construction of s. 55 which was advanced by the plaintiff ignored the clear and unambiguous words used in the section. It was further submitted that construing the provision of s. 55 by reference to its legislative predecessor was an error. In this regard Counsel referred me to the observations of Brownie J in Walsh v Permanent Trustee Australia Limited (1996) 21 ACSR 213 where his Honour said:
"It can hardly be right to construe a statute, particularly one as apparently complete as the Australian Securities Commission Act 1989 by reference to its precursors, thereby concluding that because it omits an expression from an otherwise clear provision, that clear provision means something not apparent on its face."
CONSIDERATION AND CONCLUSION
I am not able to accept the submission advanced on behalf of the defendants that the effect of s. 55(1) is to "deprive" a licensee of any claim to remuneration. That submission overlooks the provisions of ss. 55(4) which confer a power on a court or tribunal to order, in specified circumstances, that remuneration paid pursuant to an agency agreement shall be wholly or partly recoverable by a licensee notwithstanding a failure to comply with s. 55(1)(c).
Further, whilst it is correct that caution must be applied when seeking to construe a statutory provision by reference to its predecessor, it is not correct to assert, as the submissions made on behalf of the defendants effectively did, that courts are never prepared to adopt such an approach. In Statutory Interpretation in Australia (7th edition, DC Pearce and RS Geddes), the authors (at [3.31]) cite a number of authorities in such an approach has been adopted, before making the following observation:
"The good sense of this approach is obvious. If one views the whole scheme of the legislation, it may be possible to see the way in which the legislature is dealing with the subject matter: whether it is extending or contracting benefits; whether it is increasing penalties and so on. Such information is likely to be of use to a court in its endeavour to understand the legislature's wishes."
Section 42AA(4) of the 1941 Act enabled an owner to bring proceedings against a licensee for recovery, as a debt, of remuneration to which the licensee was not entitled because of the operation of s. 42AA(1) (which was in similar terms to s. 55(1)). Section 42AA(4) was replaced by s. 55(4). Section 55(4) represented a complete departure from s. 42AA(4) and made provision for the whole or partial recovery, by a licensee, of remuneration notwithstanding a failure to comply with s. 55(1)(c).
However, s. 55(4) must be construed according to its terms. It confers a discretion to order that commissions or expenses shall be wholly or partly recoverable by a licensee notwithstanding compliance with the provisions of s. 55(1)(c). That discretion is conferred upon a court or tribunal before which:
(i) proceedings are taken by a licensee for recovery of commissions or expenses; or
(ii) a licensee is a respondent to a consumer claim relating to commission or expenses as referred to in s. 36.
In the present case, no proceedings have been taken by the plaintiff, as licensee, for recovery of commission or expenses. The question which therefore arises is whether the plaintiff is, for the purposes of s. 55(4), a "respondent to a consumer claim relating to commission or expenses as referred to in s. 36".
Section 36(4), which I have previously set out, permits an owner to apply to the Tribunal (which, at the time of the Magistrate's determination of this matter, was a reference to the Consumer, Trader and Tenancy Tribunal) for a determination of a consumer claim in relation to a licensee's entitlement to a claim made for commission or expenses. The section expressly contemplates such an application being made to the Tribunal, not to a Court. The filing, by the defendants, of their cross-claims in the Local Court did not have the effect of the plaintiff being a respondent to a consumer claim in the Tribunal.
Whilst there is some force in the submission that such an interpretation gives rise to an anomaly, the legislature has been careful to draw a distinction between proceedings taken by a licensee, and proceedings in which that licensee is a respondent to a consumer claim. The claims brought by the defendants in these proceedings would arguably fall within the strict definition of "consumer claim" as it appears in s. 3A of the Consumer Claims Act. However, the legislature has included, in s. 55(4) an express reference to "a consumer claim as referred to in s. 36". A consumer claim referred to in s. 36 is one made to a Tribunal, not one before the Local Court.
The submissions advanced on behalf of the plaintiff in relation to the construction of s. 55(4) essentially amounted to an invitation to ignore the words "as referred to in s. 36" as they appear in the section. That, in my view, is not a proper approach. The words of a statutory provision cannot simply be ignored. They must be given meaning and effect (see Commonwealth v Baume (1905) 2 CLR 405 at 414 per Griffith CJ; Project Blue Sky Inc. v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [71]; 382 per McHugh, Gummow, Kirby and Hayne JJ). Further, the fact that they have been inserted as the consequence of the introduction of a new Act to replace the 1941 Act tends in favour of the proposition that the words were inserted by the legislature quite deliberately (see Transport Accident Commission v Treloar [1992] 1 VR 447 at 462 per Brooking J). The fact that there may be other sanctions contained in the Act applicable to licensees is not to the point. The provision must be construed according to its terms.
It follows that in my view, the legislature has been careful to distinguish proceedings taken by a licensee for recovery of commission and expenses, and proceedings in which the licensee is a respondent to a consumer claim of the kind referred to in s. 36. It follows that in my view, s. 55(4) has no application to the present case.
That then leaves the question of the meaning of the term "not entitled" as it appears in s. 55(1). In my view, the term "not entitled" means having, in law, no right or title (see Sutton v Zullo Enterprises Pty Limited [2000] 2 Qd R 196 at 204 per McPherson JA). In the context of the present case, that means that the plaintiff has no right or title to the monies he has retained. In those circumstances, the defendants are entitled to the recovery of the monies paid to the plaintiff by way of remuneration pursuant to each Management Agreement.
ORDERS
Although I have concluded that the second ground is made out, I have come to the view that the plaintiff is not entitled to the amounts in question and that as a consequence the defendants are entitled to succeed on their cross claims.
The matter proceeded before the Magistrate on the basis of the evidence that I have outlined by agreement between the parties. In these circumstances there is no warrant to remit the matter to the Magistrate for any further determination of this issue.
In these circumstances I make the following orders:
(i) The summons is dismissed;
(ii) The plaintiff is to pay the costs of the defendants, as agreed or assessed.
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Decision last updated: 21 March 2014
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