Cellmore Real Estate Pty Ltd v Funston
[2025] VCC 1205
•25 August 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION GENERAL LIST | Revised Not Restricted Suitable for Publication |
Case No. CI-20-03577
| CELLMORE REAL ESTATE PTY LTD (ACN 100 814 953) TRADING AS WOODARDS BLACKBURN & ANOR | Plaintiff/Defendants by Counterclaim |
| v | |
| RICHARD ARTHUR FUNSTON | Defendant/Plaintiff by Counterclaim |
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JUDGE: | Her Honour Judge Brimer | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 13-19 February, 21-23 October and 20 November 2024 | |
DATE OF JUDGMENT: | 25 August 2025 | |
CASE MAY BE CITED AS: | Cellmore Real Estate Pty Ltd v Funston | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 1205 | |
REASONS FOR JUDGMENT
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Subject:CONTRACTS AND CONSUMER LAW
Catchwords: STATUTORY CONSTRUCTION – Exclusive Sale Authority - Compliance with ss 49A(1)(c)(i), 49A(2) and 49B of the Estate Agents Act 1980 (Vic) – requirement of s 49A(1)(i)(c) for commission and outgoings to be contained in the engagement or appointment
MISREPRESENTATION – Whether certain representations were made – whether representations were false and untrue
NEGLIGENCE – Whether Cellmore owed Mr Funston a duty of care – duty of care co-existent with a contractual duty – whether Cellmore breached any duty of care – no loss or damage suffered
FIDUCIARY DUTY – Whether Cellmore owed Mr Funston a fiduciary duty – whether Cellmore breached any fiduciary duty - no loss or damage suffered
CONSUMER LAW – Misleading or deceptive conduct – Unconscionability – Whether the charging clause was an unfair term – Undue harassment of coercion - Contraventions under the Australian Consumer Law not made out - no loss or damage suffered.
Legislation Cited: Competition and Consumer Act 2010 (Cth); Estate Agents (Professional
Conduct) Regulations 2008 (Vic); Estate Agents Act 1980 (Vic); Interpretation of Legislation Act 1984 (Vic); Wrongs Act 1958 (Vic).
Cases Cited:Australian Competition and Consumer Commission v Maritime Union of
Australia [2021] FCA 1549; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; Advisory Services Pty Ltd (trading as Ray White St Albans) v Augustin [2018] VSCA 95; Advisory Services Pty Ltd v Augustin & Anor [2017] VCC 1195
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; Canon Australia Pty Ltd v Patton & Anor (2007) 244 ALR 759; Director of Consumer Affairs v Johnson (Review and Regulation) [2019] VCAT 1063; Edmonds v Donovan (2005) 12 VR 513; Equipment Investments Pty Ltd v M. J. Dowthwaite & Co Pty Ltd (1969) 16 FLR 23; Fatimi Pty Ltd v Bryant [2004] NSWCA 140; Ferme v Kimberley Discovery Cruises Pty Ltd [2015] FCCA 2384; Funston v CCSS Pty Ltd [2021] VSC 24; Geneva Laboratories Limited v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63; George T Collings (Aust) Pty Ltd v H.F. Stevenson Pty Ltd (Supreme Court of Victoria, Nathan J, 11 December 1990); Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; HFM043 v Republic of Nauru (2018) 359 ALR 176; Krishnan v Estee Lauder Pty Ltd [2022] FCA 273; Leveraged Equities Ltd v Goodridge (2011) 274 ALR 655; Oliver Hume (Australia) Pty Ltd v Land Source Australia Pty Ltd [2015] VSC 77; Oliver Hume South East Queensland Pty Ltd v Investa Residential Group Pty Ltd [2017] FCAFC 141; Paciocco & Anor v Australia and New Zealand Banking Group Ltd [2017] HCA 28; Pasion v Creative Realty Pty Ltd (Civil Claims) [2020] VCAT 404; Productivity Partners v Australian Competition and Consumer Commission & Anor [2024] HCA 27; Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd & Ors [2006] NSWCA 356; Schmidt v AHRKalimpa Pty Ltd [2020] VSCA 193.
Judgment: For the defendant on the claim and the defendants on the counterclaim
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff and Defendants by counterclaim | Mr J Tesarsch | Hall & Wilcox |
| For the Defendant and Plaintiff by counterclaim | Mr A Panna KC with Ms Renee Sion (on 13-19 February 2024) Mr M Goldblatt (on 21-23 October and 20 November 2024) | CKL Lawyers A.I.F. Lucas & Co |
TABLE OF CONTENTS
INTRODUCTION
BACKGROUND
ISSUES TO BE DETERMINED
A. Cellmore’s claim
(1) Did Cellmore comply or fail to comply with s49A(1)(c)(i), s48B(1), and/or s49A(2) of the Act? If it failed to comply, does s50(1) of the Act prohibit Cellmore from seeking payment of its marketing expenses?
B. Mr Funston’s Counterclaim
The Representations
(2) Did Cellmore represent to Mr Funston that the ESA he signed was a REIV standard form contract (Standard Form Representation)? If yes, was the Standard Form Representation false?
Mr Funston’s credit
Mr Wheeler’s credit
Mr Johnstone’s credit
(3) Did Cellmore represent after the expiry of the ESA on about 21 August 2017 that they were acting as Funston’s agents, on his behalf as vendor of the Property, and impliedly represent that as his agents they would pass on to him the terms of all offers from interested purchasers as soon as possible, and that they would facilitate the sale of the Property (Agency Representations)? If yes, were the Agency Representations false?
(4) On about 10 November 2017, did Cellmore represent to a potential purchaser who had made an offer to purchase the Property (November Offer) that Funston had rejected it (Rejection of Offer Representation)? If yes, was the Rejection of Offer Representation false?
(5) Did Cellmore represent to potential purchasers that the Property was not currently available for sale and was ‘on hold’ (On Hold Representation)? If yes, was the On Hold Representation false?
Mr Way’s credit
C. Negligence
(6) Did Cellmore owe Funston any duty of care? If yes, what was the scope of the duty of care?
(7) Did Cellmore breach its duty of care?
D. Fiduciary duty
(8) Did Cellmore owe Funston any fiduciary duty? If yes, what was the scope of the fiduciary duty?
(9) Did Cellmore breach its fiduciary duty?
E. Loss or damage
(10) Has Funston suffered any loss or damage as a result of any breach of duty of care or fiduciary duty?
F. Misleading or deceptive conduct – s 18(1) ACL
(11) Did Cellmore contravene s 18(1) of the ACL by making the Representations?
a. Were the Representations made in trade or commerce?
b. Were the Representations misleading or deceptive or likely to mislead or deceive?
G. Making false or misleading statements – s 30(1) ACL
(12) Did Cellmore contravene ss 30(1)(a) and/or 30(1)(c) of the ACL by making the Representations?
H. Unconscionability – s 21 ACL
(13) Did Cellmore engage in conduct in trade and commerce in connection with the supply of services to Funston that was, in all circumstances, unconscionable and contrary to s 21 of the ACL by:
a. the insertion of the charging clause?
b. harassment for payment of the outstanding marketing invoice?
c. threats to lodge a caveat?
d. lodging a caveat?
I. Unfair term – s 23 ACL
(14) Was the charging clause an unfair term pursuant to s23 of the ACL and therefore void?
J. Undue harassment or coercion – s 50 ACL
(15) Did Cellmore engage in undue harassment or coercion in connection the supply of services or payment for services, contrary to s50 of the ACL by:
a. refusing to remove the Property from its advertising unless and until Funston paid a disputed marketing invoice?
b. repeatedly and excessively contacting Funston to demand payment of the disputed invoice, including by way of communications that were derogatory, offensive and abusive?
c. threatening Funston that Cellmore would take him to Court?
d. threatening Funston that Cellmore would lodge a caveat on the Property unless Funston paid the disputed invoice?
(16) Was Way involved in the alleged contraventions of s18, s21, s30(1) and/or s50 of the ACL?
K. Loss or damage
(17) Has Funston suffered any loss within the meaning of s236(1) of the ACL by reason of any contravention of the ACL?
CONCLUSION AND ORDERS
ANNEXURE A
SECOND FURTHER REVISED JOINT STATEMENT OF ISSUES DATED 21 NOVEMBER 2024
ANNEXURE B
HER HONOUR:
INTRODUCTION
1On 8 July 2017, the defendant, Mr Richard Funston,[1] signed an Exclusive Sale Authority (ESA) with Cellmore Real Estate Pty Ltd, a real estate agency trading as Woodards Blackburn (Cellmore). Mr Funston was the owner of a property in Strabane Avenue, Mont Albert North (the Property). The Property had previously been listed for sale in 2016 with Ray White but passed in at auction.
[1] Plaintiff by Counterclaim.
2Mr Funston is a former real estate agent, compliance officer with the Estate Agents Board, and property developer.
3The ESA was a Real Estate Institute of Victoria (REIV) form which Mr Russell Wheeler, a Cellmore property consultant, filled out.[2] In the space for “Advertising $”, Mr Wheeler wrote “TBA”. At the time Mr Funston signed the ESA, the advertising costs had not been agreed.
[2] The completed ESA is attached as Annexure B.
4A charging clause was located on the bottom of each page of the ESA: “The vendor charges the property with the due payment of all monies payable pursuant to this agreement” (the charging clause). The charging clause was located where the REIV copyright logo and wording appeared on the standard form REIV exclusive sale authority.
5On 11 July 2017, Mr Wheeler emailed Mr Funston an advertising schedule with advertising costs reduced (reduced advertising schedule). Mr Funston signed the reduced advertising schedule and emailed it back to Mr Wheeler.
6The Property did not sell and the ESA expired on 21 August 2017.
7Cellmore sought payment of the advertising account. Mr Funston did not pay the advertising account. The relationship between Cellmore and Mr Funston deteriorated.
8In March 2018, Cellmore issued proceedings in the Magistrates’ Court of Victoria, seeking payment of the advertising account.[3] Mr Funston denies liability to pay on the basis that Cellmore failed to comply with the Estate Agents Act 1980 (Vic) (the Act). In summary, Mr Funston’s defence is that under s 50 of the Act, Cellmore is not entitled to sue for or recover the advertising account because it breached the following sections of the Act:
(a) s 49A(1)(c)(i). By writing “TBA” for the advertising costs, the ESA did not contain the outgoings that had been agreed as required;
(b) s 48B(1). Cellmore cannot satisfy the requirement that it cannot claim an amount greater than the amount paid or payable for outgoings; and
(c) s 49(A)(2). Cellmore failed to retain documents as required.
[3] In April 2020, orders were made transferring the proceeding to this Court.
9Mr Funston counterclaimed against Cellmore and one if its directors, Mr Cameron Way,[4] for loss and damage he claims he suffered, alleging Cellmore made a number of misrepresentations as follows:
(a) Cellmore represented to Mr Funston that the ESA was a REIV standard form contract by providing Mr Funston with the ESA which included the REIV logo and by failing to bring Mr Funston’s attention to the charging clause (the Standard Form Representation);
(b) Cellmore represented to prospective purchasers that it was acting for and on behalf of Mr Funston and impliedly represented that it would pass on the terms of all offers from interested purchasers to the vendor as soon as possible and would facilitate the sale of the Property (the Agency Representations). The Agency Representations were false and untrue because Cellmore did not have authority to act on behalf of Mr Funston and failed to facilitate the sale of the Property and pass on terms of relevant offers to Mr Funston;
(c) Cellmore informed a prospective purchaser who made an offer to purchase the Property in November 2017 that Mr Funston had rejected his offer, which was false and untrue (the Rejection of Offer Representation); and
(d) From at least late August 2017, Cellmore represented to prospective purchasers of the Property that the Property was not available for sale (the On Hold Representation). Cellmore knew the On Hold Representation was false, was reckless as to whether it was true or false or was negligent.
[4] In final submissions, Mr Goldblatt clarified and confirmed that the claim against Mr Way is for accessorial
liability in respect of the alleged breaches of the Competition and Consumer Act 2010 (Cth) sch 2 (ACL) only, by Mr Way being involved in the alleged contraventions of the ACL.
10Mr Funston alleges that he was induced to sign the ESA by the Standard Form Representation. Further, Cellmore breached its duty of care and fiduciary duties to Mr Funston, and by its conduct contravened numerous provisions of the Competition and Consumer Act 2010 (Cth) sch 2 (ACL). Mr Funston also alleges numerous breaches of the Estate Agents (Professional Conduct) Regulations 2008 (Vic) (the Regulations).
11Mr Funston claims he suffered loss and damage and claims exemplary and aggravated damages.
12Cellmore contends it complied with the Act and is not disentitled from recovering the advertising costs by s 50 of the Act. It denies it made the Standard Form Representation, or that if made, that it induced Mr Funston to enter into the ESA. Cellmore denies it made the Rejection of Offer Representation and the On Hold Representation. Even if the Rejection of Offer Representation was made, it was not false and untrue. To the extent the Agency Representations were made, they were not false and untrue.
13Cellmore denies it owed Mr Funston the duties as alleged, that it breached any duty of care or fiduciary duty owed to Mr Funston, or contravened any provisions of the ACL. Even if such a breach or contravention was proved, Mr Funston suffered no loss or damage.
14For the reasons set out below, I find for the defendant on the claim and for the defendants on the counterclaim.
BACKGROUND
15In late January 2017, after seeing the Property on realestate.com.au still listed with Ray White, Mr Christopher Senaratne inspected the Property and made an offer of $1.3m. The offer was not accepted by Mr Funston.
16In early May 2017, Mr Wheeler telephoned Mr Funston and queried whether he was still interested in selling the Property.
17On 18 May 2017, Mr Funston met with Mr Wheeler and another real estate agent from Cellmore, Mr Mark Johnstone, to discuss the sale of the Property.[5] The contents of this discussion is disputed and is dealt with in Issue 2 below.
[5]Mr Johnstone began working at Cellmore in January 2013.
18On 22 May 2017, Mr Wheeler emailed Mr Funston a comparable sales report and a statement of information, including an indicative selling price range of $1.45 to $1.595m.
19On 25 May 2017, Mr Wheeler emailed Mr Funston a proposed advertising schedule and a schedule of advertising expenses in the sum of $4,552 (proposed advertising schedule). In relation to advertising, Mr Wheeler stated, “[t]he internet is the package we offer. As we only use the basic Domain it really doesn’t make any difference if we exclude it so best keeping it in.”
20On 10 June 2017, Mr Wheeler emailed Mr Funston, enclosing a General Sales Authority (GSA) signed by Cellmore, which included a vendor’s price of $1.52m. Beneath the signature line of the GSA was the charging clause. There were no advertising expenses payable under the GSA.[6]
[6]Mr Wheeler gave evidence that no advertising expenses were payable under the GSA because at that stage, Mr Funston did not want to incur any expenses.
21That same day, Mr Funston replied to Mr Wheeler, enclosing the signed GSA with a revised vendor’s price of $1.6m. In the cover email to Mr Wheeler, Mr Funston stated “I would like it quoted at 1.5m to 1.6”.
22On 6 July 2017, Mr Funston invited Mr Wheeler and Mr Johnstone over to his home in Blackburn (Sheehans Road Property) for a meeting. What was discussed at the meeting is in dispute and dealt with in Issue 2 below.
23On 7 July 2017, Mr Funston emailed Mr Wheeler a draft contract of sale, section 32 statement, floor plan,[7] and photos of the Property.[8] Later that day, Mr Wheeler emailed Mr Funston a copy of the ESA. In the space on the ESA for “Advertising: $...” was the notation “TBA”.
[7]The floor plan was prepared when the property was previously listed for sale.
[8]The photos had been taken when the property was previously listed for sale.
24On 8 July 2017, Mr Funston replied to Mr Wheeler’s email, enclosing the signed ESA.
25On 11 July 2017 at 2.26pm, Mr Wheeler emailed Mr Funston:
“Rick,
Please see attached the advertising Schedule.
That’s the best I could arrange my end
Using your photos but I do need to do a re-draw on the floorplan to get it to fit in with our brochures and internet and be high res
Whilst I haven’t been able to eliminate the full typesetting $ Production cost of $390 I have managed to get that reduced to $200.
And I shall do the copywriting.
Let me know if this is ok?
I have also asked that any invoice for this is withheld for 30 days
regards”
Attached to Mr Wheeler’s email was the reduced advertising schedule, including a total of $3,968.
26On 12 July 2017 at 11.22am, Mr Funston replied to Mr Wheeler’s email:
“Hi Russell
That’s fine
Just get them to hold off on the invoice until its sold or end of the agency which ever come first.
Thanks
Rick”
27Following Mr Wheeler’s request for a signed copy of the reduced advertising schedule, Mr Funston emailed the signed reduced advertising schedule to Mr Wheeler.
28On 14 July 2017, Mr Funston approved the copywriting draft provided by Mr Wheeler the previous day.
29On 18 August 2017, Mr Wheeler suffered a heart attack and stopped work for a couple of months. Mr Johnstone became Cellmore’s agent representative for the sale of the Property.
30On 21 August 2017, the ESA expired.
31That same day, Mr Johnstone emailed Mr Funston asking if it was “ok to open [the] property this Thursday at 2.00-2.30 and on Saturday at 1.30-3.00?” Mr Johnstone later met with Mr Funston.
32After their meeting, Mr Funston emailed Mr Johnstone:
“Hi Mark
Good to meet up today and discuss everything.
Confirming the following
- The opens for this Thursday and Saturday will at 12 to 12.30pm
- You have agreed to my request to end the exclusive agency as of today.
- Woodards will keep the internet advertising continuing
- You and I will meet next Monday to discuss the advertised price.
- You will follow up on the buyers from Saturday 12 Aug who were auctioning their property last Saturday.
Thanks
Rick”
33On 22 August 2017 at 8.06am, Mr Johnstone replied to Mr Funston’s email:
“Good morning Rick,
Yes, it was terrific to meet up yesterday and have a robust and productive talk.
I do indeed confirm all the points you made in your email.
I look forward to speaking with you further very shortly.
Kind regards,…”
34On 31 August 2017, Cellmore’s advertising coordinator and office manager, Ms Sarah Mazur, emailed Mr Funston and attached an invoice for “Advertising expended for the above property. The account is now due and payment would be appreciated within fourteen days.” The account was for $3,951 (Advertising Invoice). Upon receipt of the Advertising Invoice, Mr Funston requested a breakdown of the costs of each invoiced item. Mr Funston also asked Ms Mazur to “obtain from you OIEC what [is] the intent and meaning of…” the charging clause.
35On 4 September 2017, Ms Mazur replied to Mr Funston’s email copying in Mr Johnstone and Mr Way, stating that the charging clause “means that [Cellmore has] the ability if required to lodge a “caveat” on the property for all monies payable (outstanding) pursuant to this authority”.
36On 5 September 2017, Ms Mazur emailed Mr Funston, copying in Mr Johnstone and Mr Way, enclosing “invoices as requested”, and stating that Cellmore was unable to provide invoices “…for some of our internet sites due to the fact that these are combined rate…”.
37Later that same day, Mr Way emailed Mr Funston, copying in Mr Johnstone and Ms Mazur, confirming that the amount charged corresponded with Mr Funston’s authorised amount. Further, Mr Way suggested Mr Funston consider revising the asking price to around $1.395m for the Property to be sold in the near future.
38On 6 September 2017 at 10.21am, Mr Way emailed Mr Funston again, copying in Mr Johnstone and another real estate agent from Cellmore, Ms Demi Liu:
“Good morning Rick,
Demi has just asked me to arrange for a “private inspection” for this Saturday 10.30am for one of her Asian buyers who has just missed out on buying another property at auction?
Is that ok with you?
Kind regards…”
39On 6 September 2017 at 10.53am, Mr Funston replied to Mr Way’s email:
“Hi Cameron
Saturday at 10.30 is fine – let’s hope she makes a sale
Your administration manager has replied to my request to obtain from you the meaning and intent of the statement, added to your authority, " The vendor charges the property with due payment of all monies payable pursuant to this agreement".
She has said it means that we have the ability if required to lodge a "caveat" on the property for all monies payable (outstanding) pursuant to this authority.
Could you please explain why the statement means a caveat can be lodged on the property?
Thanks
Rick”
40On 6 September 2017 at 1.10pm, Mr Way replied to Mr Funston’s email:
“Hi Rick, If anyone can achieve a premium price it will be Demi, she is exceptionally good at buyer management and getting the best out of them!!
The question you have asked below simply means if any outstanding advertising account remains unpaid/outstanding we can lodge a caveat on title until its paid, this is something we very rarely use as 99.99% of people pay.
Should you consider taking the property to Auction we will need to get the “price quote right” given the property has been “on the market” for a while, it should go well, the alternative would be a “Deadline Private Sale”?
I can also request REA to re upgrade your property back to Premier 30 days, this will give it top position again?
Lets see how Saturday goes, would you be happy to upgrade the OFI to a public open?
Kind regards…”
41On 6 September 2017 at 1.39pm, Mr Funston replied to Mr Way’s email:
“Hi Cameron
I did instruct Mark to take the listing down on Saturday and Monday but it seems that has not been done so if it’s still up you can have it open on Sat with Demi, just let me know the time.
Also you said in one of your previous emails you can confirm that the amount is in the authorised amount I would like to know what the costs are from the internet companies – if you can confirm it you must be able to show me how you confirmed it.
Thanks and fingers crossed for Saturday.
Rick”
42On 6 September 2017 at 3.10pm, Mr Way replied to Mr Funston’s email:
“We will lock in 3pm to 3.30pm as we don’t want to interfere with Demi’s private in the morning.
Kind regards…”
43On 6 September 2017 at 3.57pm, Mr Way replied again to Mr Funston’s email:
“Hi Rick, this was the scanned copy of invoices that Sarah has emailed to you the other day. This identifies the main internet portal being REA which alone costs $2395, the balance ($555 approx) are made up as an aggregate (as they don’t charge per property rather monthly) being for the other sites such as; Domain.com.au, realestateview.com.au, reviewproperty.com.au, thehomepage.com.au, homely.com.au, squarefoot.com.hk, myfun.com, ozhouse.com.au and chineseage.com.au. I trust that makes sense.”
Attached to Mr Way’s email were the scanned copies of the advertising invoices Ms Mazur sent to Mr Funston on 5 September 2017.
44Mr Funston responded later that day to confirm the timing of the open for inspection; “That’s fine”.
45On 12 September 2017 at 10.27am, Mr Funston replied to Mr Way’s email regarding the advertising invoices:
“Hi Cameron
Re the $555 balance you are charging.
I refer to your below email - as you have suggested it does make sense but it still doesn’t show how the $555 was calculated.
I hope you can understand where I am coming from –in the past I have been charged for expenses which I should not have been charged for.
Most times its mistakes made by the advertising staff and sometimes by poor practices of the agency.
If you are able to work out $555 then all I ask for is for you to show the invoices for the supplier and how you have calculated what is my share.
In other words how the $555 was derived.
Thanks
Rick”
46On 12 September 2017 at 2.35pm, Mr Way replied to Mr Funston’s email:
“Hi Rick, It's a very complicated process that I undertake each year based on average number of listings/sales divided into the accumulated subscription costs for the other websites. I process these cost through a spreadsheet which then gives me an average to use. I could always send you a months worth of the invoices, that will be a lot more...
As an experienced property player you would know that this amount for internet is very cheap and it includes REA Premiere.
Kind regards…”
47On 13 September 2017 at 10.11am, Mr Funston replied to Mr Way’s email:
“Hi Cameron
As an experienced property player you should know I would not like paying for something I don’t have to.
Are you going to lodge a caveat if it’s not paid?
Nothing is cheap if it doesn’t get results –can you tell me how many inspections there were?
Thanks
Rick”
48On 13 September 2017 at 11.39am, Mr Way replied to Mr Funston’s email:
“Hi Rick,
I will have the up to date open for inspection report printed and will email it across to you.
We wont lodge a caveat unless the account remains un paid, which I'm sure wont be the case.
It looks like the inspections from last Saturday have not resulted in any offers.
Now what are we going to do to get your property sold?
Kind regards…”
49On 13 September 2017 at 12.11pm, Mr Funston replied to Mr Wheeler’s email:
“Hi Cameron
I would like you to understand you initiated a very tough business approach with inserting a caveat charge clause in authority so I am sure you can see why I want to make sure you only charge me for what I have to pay.
The caveat threat is extremely onerous and gives an agent unfair leverage.
I doubt very much if you realise the position you have put yourself in by the caveat approach – as you said I am an experienced property player.
There is one easy way to resolve this matter and that is for me to get the property sold as soon as possible.
Why don’t you come around to my place and we can discuss auctioning the property the sooner the better.
Thanks
Rick”
50On 14 September 2017 at 8.55am, Mr Way replied to Mr Funston’s email:
“Hi Rick, we have been including the ability to lodge a caveat for decades and is good business practice as it safe guards my business on bad debts. Other agents collect the advertising money "up front" so don't need it, eitherway if all parties stick to the contract there is never a problem and its fair on all parties. And yes the objective is to sell the property because unless we do we work for nothing!
As requested I have printed off and attached the OFI attendees for your perusal.
When would you like to meet up to discuss the next strategy, Im ok middle Friday and would like Demi to come along as well??
Kind regards…”
Attached to Mr Way’s email was an inspection report of the Property, including 58 total inspections between 10 June and 9 September 2017.
51On 15 September 2017 at 10.32am, Mr Funston replied to Mr Way’s email:
“Hi Cameron
My experiences in the property industry includes having been employed, because of my industry knowledge and experience, in the compliance and investigation section of the Estate Agents Board under the direction of the
Attorney General of Victoria.
All be it many years ago but I was well trained in how the legal enforcement system works - it hasn't changed since then -all I have had to do since them is keep up to date with the changes in the laws, which I have done.
I am happy to test my knowledge about the laws of Estate Agency with any including your solicitor.
You have not been able to supply evidence for the $555 internet charge that complies with the Estate Agents Act definition of Outgoings - Sect 4 states - any moneys spent by the estate agent on his principals behalf for which the estate agent is at common law entitled to be reimbursed.
In short that means you can only be reimbursed for expenses you have tax invoices with show a link to the principal property eg. street address.
What you have described below does not identity for the $555 as outgoings but rather it identifies " overheads." If an agent's overheads increase then they have the choice of negotiating a higher commission -that the instrument an agent uses to cover his overheads. The premium advertising cost is an outgoing as it was an expense specifically for my property.
The fact that you
1 may have been audited by CAV and charging for not specific items was not picked up only means they missed it.
Don't fool yourself as many do and think that it's been approved.
2 just because other agents do it doesn't mean it's legal - people exceed the speed limit when the police see them and don't get stopped - it only means the police are busy with something else.
It's most likely CAV could make every dollar charged this way be returned to the vendors.
I really suggest you check with your solicitor and accountant -please show them this email and they are welcome to contact me.
Be aware If you check with CAV and alert them to what they have missed they could easily take action.
I suggest the way around to be charged for these non-specific internet expenses is offer vendors two options a commission service without the nonspecific internet extras at say 2% and with the internet extras at slightly more. This way at least if you sell the property you will recoup extra income.
In fact if an agent is smart they can make more commission and more profit and it's totally legal.
There are some other issues which I have only recently become aware since you sent me the copies of the inspections.
It would appear your staff have not done their job according to the law.
It would best to meet away from your office and without you sales staff-you are welcome to bring your solicitor and I will bring my evidence with me-it is a very serious matter and I am sure you will be very disappointed and embarrassed by it.
You can suggest a venue – I am happy to meet at your solicitors office but it needs to be today and I am sick and tired of all this overcharging and caveat issue.
If we do not meet today I will refer all my complaints with evidence to the director of Consumer Affairs over the weekend - you have threatened me with a caveat and I will not being any expenses that I legally don't have to.
You leave me with no option but to take these strong steps - remember you choose to play the hard game before realsing your weak points which is always staff.
Thanks
Rick…”
52On 15 September 2017 at 11.07am, Mr Way replied to Mr Funston’s email:
“Rick, I detect from the tone of your email below you have no intention of addressing the main issue in getting your property sold. Therefore we require your outstanding advertising account be paid in full immediately, we confirm our agency agreement to sell this property is no[w] at an end. [sic]..”
53On 15 September 2017 at 11.30am, Mr Way replied again to Mr Funston’s email:
“Feel free to forward me any information or “evidence” of a serious nature you have that you feel I need to be aware of?”
54On 18 September 2017 at 9.44am, Mr Way emailed Mr Funston:
“I will be requesting individual property invoices from the remaining suppliers, these will be forwarded to you in due course. In the meantime please pay the outstanding advertising account.”
55On 18 September 2017 at 11.44am, Mr Funston replied to Mr Way’s email regarding the outstanding advertising account:
“Cameron
You will be paid when you send me all the invoices.
I don't understand how you were able to calculate a total invoice accurately when didn't have all the invoices in the first place.
Please remove all the internet listings for my property forthwith.
With luck Mark's buyer will buy the property and we will all be satisfied.
Rick”
56On 19 September 2017 at 9.19am, Mr Way replied to Mr Funston’s email:
“Rick, you can pay the account less the $555 immediately and I have requested invoices for the remaining suppliers and will be provided to you in due course for payment: As soon as the initial amount is paid we will remove the property from the internet.
Once the other invoices are provided we will require payment of the balance of $555...”
57On 21 September 2017 at 9.38am, Mr Funston emailed Mr Johnstone a copy of a letter from the Whitehorse City Council to Mr Funston dated 28 April 2014 regarding allocation of street numbers.
58On 21 September 2017 at 1.20pm, Mr Way emailed Mr Funston:
“Dear Rick, I understand that it is unlikely the potential purchaser that Mark is dealing with will come good with an offer that you would be happy with.
Accordingly we require payment of the outstanding advertising account less the disputed amount of $555 which shall remain a pending payment until we supply you with relevant invoices as requested.
Upon this payment of the initial amount we agree to remove the property from the internet and cease all attempts to sell the property.
Please confirm your preferred method of payment, we also accept Credit Card payment.”
59On 22 September 2017 at 3.42pm, Mr Way emailed Mr Funston:
“Good afternoon Rick,
Our buyer who inspected the property last Saturday is still potentially interested.
His lawyer is currently studying the contracts.
I will report back to you when I have some news.
Enjoy your weekend.
Kind regards,…”
60On 25 September 2017 at approximately 4.30pm, Mr Way and Mr Funston had a telephone conversation. The content of their discussion is in dispute and is dealt with below.
61On 25 September 2017 at 4.34pm, Mr Way left a voicemail on Mr Funston’s mobile phone, which was transcribed:
"Rick, it's Cameron Way Woodards
I am going to give you until the end of this week to pay the outstanding advertising amount that you owe us
You can withhold the $555 for the other two invoices that I don't have yet but you can pay the balance.
If it's not paid by the end of the week I am happy to hand the file over to our solicitors then we will take legal action.
They will take you to the Magistrates Court, they will lodge a caveat over your property and they will charge you costs if you don't pay by the end of the week”
62On 26 September 2017 at 11.49, Mr Funston sent an email to Mr Way:
“Cameron
Friday is ok I should have it all sorted then - if you have the extra invoices that will be even better.
In the meantime a sale would be great.
Rick”
63On 30 September 2017 at 1.26pm, Mr Way texted Mr Funston:
“Dear Rick, just wanting to confirm that you have made payment of your advertising accounts as agreed? Cameron”
64On 3 October 2017 at 9.17am, Mr Way replied to Mr Funston’s email:
“Dear Rick, we haven’t seen any payment could you confirm you have paid as agreed?
Kind regards…”
65On 6 October 2017 at 1.02pm, Mr Funston emailed Ms Mazur:
“Sarah
I think you should know the most recent conservations I have had with Cameron and I think you would be wise to seek your own independent legal advice as you are being instructed by your employer to resolve a potential supreme court legal matter which he has threatened. Withdrawal of Caveats are a Supreme Court matter
Also you should note your emails were responsible for commencing this now prolonged matter.
I suggest you listen to this voicemail he left for me last week.
This was two minutes after he made a very abusive phone call to me where he lost his temper and said "you are dickhead" several times and "you are crazy and everyone knows it".
I take the instruction you gave me to that the internet advertisement will not be taken done until the advertising has been paid as blackmail and holding me to ransom.
Please be advised that if the my property is in anyway broken into, damaged or robbed since the date the authority to sell ceased to exists Woodard's, Cameron and yourself will be held responsible because of the illegal public expose of it.
I take the fact that you are taking instructions from Cameron the OIEC who you said was on leave as direct indication
that you have been appointed as the manager of the day to day operations of the Woodard's Blackburn.
If you solicitor wants to contact me fora confidential chat I would welcome that.
At no stage have I ever made an agreement with Cameron to pay the advertising expenses until all supplier invoices have been evidenced by me.
Again I instruct you to remove my property from the internet.
Please do not contact me again.
Rick”
66On 6 October 2017, Mr Funston signed a GSA with Raine and Horne Balckburn, with a vendors price of $1.5m.
67On 9 October 2017 at 12.10pm, Mr Funston emailed Mr Way, copying in Ms Mazur:
“…
Cameron
I refer to the REIV Exclusive Sale Authority between you as estate agent and myself as vendor and your appalling and unprofessional behaviour to me, vendor, after the authority ended on 22 August 2017.
You are embarrassing not only yourself but all agents and employees operating under the Woodards name and your fellow directors and members of the REIV.
Your actions and lack of actions show would appear to have little understanding of Estate Agents Act, Estate Agents (Professional Conduct) Regulations, CAV guidelines and Australian Consumer Law or no intention of complying with them.
Which is it -- little understanding/ignorance or deliberate noncompliance or both?
1 you added your charge clause to the standard copyright REIV authority to sell
2 you failed to remove the internet advertising when the agency expired on 22 August 2017
3 you instructed Mark Johnston one of your sales staff to tell me the internet advertising would not be removed until the advertising was paid
4 your advertising invoices show you have invoiced me $20 and $78 more than your suppliers invoice show
5 you have invoiced me for $555 expenses which you cannot substantiate as outgoings as defined in Section 4 of the Estate Agents Act
6 you have failed to keep your agreement to provide suppliers invoice for the $555
7 you constantly refused you remove the internet advertising of my property
8 your unlawful demands, in writing on the 21 September with the intent to hold me to ransom
9 you have verbally abused me over the phone
10 you (by voicemail) have threatened to lodge a caveat on my property and make a claim in the Magistrates court
11 you have instructed Sarah Mazar to act in a manner in breach of the Estate Agents (Professional Conduct) Regulation in refusing to follow my instructions remove the internet advertising.
12 your office had 59 inspections with no offer and no price indications and it was advertised at the estimated selling price made by your staff and under your supervision.
Let me identify the consequences of your actions per point.
1 an estate agent if they chose to use an REIV authority can only use in its standard form - breach CAV guidelines
2 failing to remove my internet advertising at the end of the agency (where was no continuing agency) means you have acted without my instructions to continue to adverting the property
3 you have instructed one of your staff act illegally and to extort money from me
4 your overcharging me $98 is a breach of Sect 50 and misleading and deceptive conduct under Australian Consumer Law
5 your overcharging me without proof that the expenses were outgoings is a breach of Sect 50 and misleading and deceptive conduct under Australian Consumer Law
It would appear from your detailed explanation you have described how you amortised overhead costs with the intent you could pass off you amortised overheads as legal outgoings.
In short an agent can only be reimbursed for expenses there is a tax invoice for showing the property address and the supplier like the REA premium internet advertisement.
6 misleading and deceptive conduct under Australian Consumer Law
7 failing to act in my best interests,
8 evidence of extortion from you directly-and possible civil damages for loss
"Upon this payment of the initial amount we agree to remove the property from the internet and cease all attempts to sell the property."
9 losing your temper and abusing your vendor by telling him he is dickhead over and over again and telling him everyone thinks he is crazy - breach of Reg 13
10 leaving voice mail messages of threats is again very stupid and I would think very embarrassing for you when you threaten to make the matter public in a court room-what do you think your staff, you wife and family would think of you?
11 breach of Reg 13.
12 unsatisfactory performance and not once did anyone including yourself suggest revising the price by Section 47AE.
I could list many more breaches I think I have made my point.
BUT all the above is relatively minor because what I think you fail to realise is by adding a charge clause you have obtained a beneficial interest in my real estate breach of section 55.
The penalty is $33,000 approx, fine or 2 years imprisonment or both.
I have no idea why you would tamper with a copyright document and add some without having solicitor give you written legal assurance it was ok.
You say you have been doing it for years so maybe you didn't realise Section 55 changed in August 2011.
The fact that other agents may have done the same thing and doesn't make it lawful......you should wonder why most agents don't use a charge clause.
I have a good deal on knowledge of charge clauses since Fletchers tried this little trick on me some time ago following the same overcharging deceit they uses.
It took them a while but they woke up to themselves and withdrew the caveat and their VCAT claim one day before [it] went to court – presumably because their legal advisors they told them would lose.
I did not know much about charges, caveats, and Section 55 when they took action but I soon learned the law in that area.... charges and caveats are like dynamite and not handled the right way they can blow up in your face and cause a lot of damage, any solicitor will advise of that.
Since then they withdrew the matter I found a very interesting legal precedent -Collings V Stevenson -it is unconscionable for an agent to embed an onerous clause in an authority to sell which changes the nature of the heading of the authority to sell.
The idea of an agent taking a charge over their vendor is insidious and far from standard business practice.
Like it or not once your authority has been signed by both parties then you have obtained a beneficial interest in my real estate the agent is locked in a conflict of interests and cannot get out without doing a deal with the other party- me.
Section 55 is what is known as a reverse onus law - guilty until proven innocent (see attached from Hansard).
The only way an estate agent cannot contravene this section is by relying on Section 55(4) when they purchase the vendors property with the vendors consent, both parties sign a disclosure of conflict of interest and the agent cannot charge any commission.
Don't be misled by the heading for Section 55 Restriction on agent purchasing property - as I initially was until a barrister told me otherwise.
The Interpretation of Legislation Act 1984 Sect 36 provides that section headings inserted into sections of Acts passed before 2001 do not form part of the Act.
The Estate Agents Act was passed in 1980
I offer you the choice to purchase my property - at terms and conditions to be discussed by mediation which I would like to be held on this coming Wednesday October 11th at 2pm.
If you confirm your acceptance of this offer I will hold off referring the matter to CAV and the press.
I understand you are on leave so this will give you time to return to Melbourne suggest you give this matter your utmost immediate attention.
I am sure you understand my need for urgency as you have threatened to caveat my property and you are holding me to ransom by illegally exposing my property and its price on the internet.
No doubt you will be aware of how CAV operates, if serious complaint is made, the inspectors/investigators not only look at the particular complaint they look to see if it is systemic, they could take 500 files.
In this case they would initially looking for authorities with the charge clause and any outgoing that cannot be substantiated with tax invoices.
Any agent overcharging is made to refund all overcharging to the respective vendors which could amount to hundreds of thousands of dollars.
Further there is with the issue of your complaints and dispute resolution policy -- it states any complaints are subject to a team of senior managers and Woodard Dispute Resolution Panel.
Again I have no idea where you get the idea this is legal and not a breach of confidentially.
Reg 7 Confidential information - agent cannot disclose confidential information unless authorised by a principal to do so.
Reg 8 (5) the aim is for the agent to minimise the dispute not escalate it.
The estate agents public register shows each "Woodards" agency is separate legal entity and is not part of a legal franchise under Section 43 of the Estate Agents Act.
It would appear you have not even followed your own advertised dispute resolution policy [whether it's legal or not) by taking the matter to the "Panel" but rather you have decided to take the matter to court.
You can't have it both ways.
I advised you, I was a former compliance officer with the Estate Agents Board so I find it hard to understand why you would think bullying me was an effective way to resolve our dispute.
I am more than happy to fight with you through the courts as I am extremely confident I know the law in this area
very well.
At the end it's all about reputations - yours Woodards and mine.
I don’t know whether people think I am crazy but they know I do know the estate agency laws extremely well and that I am a tenacious fighter.
Wednesday 2pm we meet and mediate or I will take the matter to CAV and the press.
Rick Funston”
68On 9 October 2017, Mr Way referred to Mr Funston’s email dated 26 September 2017 and provided:
“Dear Rick, I note your promise on 26th September in the below email to pay your outstanding advertising by Friday 29th September. This has now passed and despite our attempts to communicate with you, that you have subsequently ignored I'm left with no other alternative than to pass the matter on to our solicitors for debt collection. This I'm sure you would be aware shall incur additional recovery costs. However, I'm prepared to wait until this Friday 13th October for you to pay this account, after that the file will be handed over to the solicitors. Any further communication on this matter should be made in writing to myself and advise you that this and all other communication shall be relied upon in future proceedings against you if the account is not paid.
Kind regards…”
69At 12.58pm, Mr Funston replied to Mr Way’s email:
“Cameron
I didn't not make any promise -1 don't know where you get word the "promise" from.
I said it should be ok - that's not a promise
Don't you know the difference between "should" and "promise" they are two totally different words.
I was giving myself an option before I paid so I could obtain legal advice to part pay without the $555.
As it turns out my legal advice was that you do not have any legally enforceable agreement for advertising costs.
So it turns out it was not ok for me to pay on Friday..... nothing like a promise -you dreamed up "promise" in your own head
The smart thing for you to have done when you couldn't provide the suppliers invoices for the $555 would have been to send another invoice but you were too greedy and wanted to keep your options open to hold me over a barrel.
Also and most importantly the authority is a standalone agreement with no advertising included in it.
The document with the advertising details sent to me has no legal entity on it no "Cellmore Real Estate Pty Ltd"
It doesn't even have your trading name Cellmore - it only has a trading name of Woodards and it appears you do not own that trading name.
It is a standalone letter not joined with the authority to sell..... try as you might it's not a legally enforceable document.
I wish you would stop threatening me over and over again and the not carry out your threats
As I said in my email I think you should about the big picture the breach of Section 55
Rick”
70On 6 November 2017 at 12.02pm, Enrich Property Group’s contract administrator, Ms Jessica See, emailed Mr Funston, copying in their sales consultant, Mr Joshua Yeoh:
“Thank you for giving Enrich Property Group the opportunity to assist you in the marketing and selling of your property. We are jubilant to be part of this exciting time, assisting you though the entire process and ensuring the transition to be a pleasant experience for you…”
71On 6 November 2017 at 12.51pm, Mr Johnstone emailed Mr Funston:
“Good afternoon Rick,
I have a buyer who would like to make a written offer of $1,350,000.
Would you entertain that figure?
Kind regards,…”
(the November Offer)
72On 6 November 2017 at 8.38pm, Mr Funston replied to Mr Johnstone’s email:
“Hi Mark
Get it signed up on a contract with an deposit then I will be in a position to entertain it.
Thanks
Rick”
73On 8 November 2017 at 12.35pm, Mr Wheeler emailed the prospective purchaser, Mr Senaratne:[9]
[9] Mr Senaratne was the prospective purchaser who inspected the Property and made an offer of $1.3m
in late January 2017.
“Chris,
Please make sure all details are correct.
I have added 2 business days to the contract on page 1
I have added special condition 9
If all is agreed please sign the contract of sale above your name
Also please sign the Section 32 statement above your name
Please send all the documents back to myself and cc mark as per this email
Many thanks
Call me if you have any questions
Regards”
74On 8 November 2017 at 1.26pm, Mr Senaratne replied to Mr Wheeler’s email, copying in Mr Johnstone:
“Hi Russell
Please see attached the signed documents.
Please let me know if you need anything else from me.
Many thanks
Chris”
Attached to Mr Senaratne’s email were the following the documents:
(a) An offer in the form of a contract of sale agreement to purchase the Property, signed by Mr Senaratne;
(b) Particulars of sale signed by Mr Senaratne, including a sale price of $1.35m, a deposit of $135,000 to be paid 13 November 2017, and settlement to occur on 17 January 2018;
(c) Special Condition 9;[10]
(d) A signed declaration by Mr Senaratne; and
(e) A credit/debit card payment authorisation form signed by Mr Senaratne.
[10]The offer is subject to a legal review of the contract by the purchasers chosen legal representative within 5 business days from the day of sale. If the legal parties are unable to resolve any matters arising from this contract the purchaser may end this contract and all deposit monies will be refunded.
75On the morning of 9 November 2017, Mr Funston and Mr Johnstone had a brief telephone conversation. The question of what was said is dealt with below.
76On 9 November 2017 at 11.09am, Mr Wheeler emailed Mr Funston a new ESA and requested that he return a signed copy.
77On 9 November 2017 at 5.40pm, Mr Funston replied to Mr Wheeler and copied in Mr Johnstone:
“Russell
My property is not a plaything for Woodards to use to entertain themselves - to use the word Mark has chosen in his email.
My property is a substantial asset which I own and I placed with trust to you on behalf of Woodards carry out the duties of a selling estate agent.... look what has happened.
I don't know if you fully realise the position you have put yourself in - my properties saleability has been seriously damaged by Woodards abusive actions of not removing it from the internet when the agency expired.
At that stage with no continuing authority you role to advertise my property ceased.... finished full stop finiito end of authrority..... I asked to remove from the internet.
But no its been used to hold me to ransom. The cost to Woodards is about $200 a day in my holding costs so far it's close to $20,000 ....no agent will take on the sale when Woodards have it advertised.
Further your OlEC's email "....Upon this payment of the initial amount we agree to remove the property from the internet and cease all attempts to sell the property." shows he has little understanding of the law.
The length of the authority is not determined by the payment of money its determined by the agreed term as stated in the authority.
The OlEC's deliberate attempt to keep advertising when he had no authority to do so is a deliberate act to sabotage the saleability of my property.
If the OIEC does not respect the law that's his problem the Estate Agents (Professional Conduct) Regulations require agent's reps follow the law and if that conflicts with the illegal actions of the OIEC then I suggest you seek your own independent legal advice.
You telling me last week "I don't know" to questions I asked you will not place you in a string position when the CAV investigate this matter.
The advertising document you forwarded to me is not a legally enforceable contract - I don't know why you sent it – I wonder whether the OIEC has taken that matter up with you yet -- I suspect since he is so worried about his expenses he will make you pay for your mistake.
This matter is far from over is currently with my solicitor who is busy with a big trial -he is a strong litigator and 'that's why I have waited so long for him to act.
I don't know if the OIEC told you but using the charge clause on the authority is breach of Section 55 and you are dragged into that....I suggest you check the penalty associated with breach of Section 55.
I previously told about my issues with Fletcher and their use of a similar clause. You are going to be toast with the OIEC -it will be all over the newspapers and TV....trust I know what I am doing and trust me your OIEC is nothing but talk he has no idea of the law.
He threatened me with caveats etc and writs -nothing has happened because he is nothing more than a threat maker.
You would have been wise to say out of this but you decided to get involved -
My instructions to you are -- Woodards have acted on the own behalf against my instructions to find a buyer for my property.
Now that you have acted as my agent even without my authority you are legally obliged to follow through the offer as you have represented to the buyer that you have my property for sale.
I instruct you to forward a copy of the purchasers signed copy of the contract and advise the purchaser Woodards do not have authority to sell my property.
If you choose not do this then you will be held responsible for not carrying out my instructions.
It’s highly likely you will not receive any commission but believe that will be the least of your problems -- you will be up for huge legal bills.
I think once this blows up the OIEC will blame your for everything - that's his style he doesn't like accepting he is
wrong.
So send me the contract or if you don't make sure you get your own legal advice direct from a solicitor of your choosing -- you are now up to your ears in all this crap.
If your solicitor wants to call me then might be a good idea.
I am not going to be treated by Woodards the way I have been and let them get away with it
Rick
Ps do you realise Woodards is a trading name that is not connected with an estate agency....so when I sue I will be suing everyone who uses that name Woodards”.
In the same email, Mr Funston enclosed his email to Mr Way, copying in Ms Mazur, dated 9 October 2017 at 12.10pm.
78On 10 November 2017 at 12.42pm, Mr Wheeler replied to Mr Funston:
“Dear Rick,
I presume from your email below that you are not interested in accepting or agreeing to the offer Mark has discussed with you.
Accordingly we will advise the buyer the same…”
79On 10 November 2017 at 2.51pm, Mr Funston replied to Mr Wheeler, copying in Mr Way and Mr Johnstone:
“Russell
My email to you yesterday states quite clearly "....send me the contract'
How can I make decision about accepting the offer without seeing contract and all the conditions and terms.... your presumption that I am not interested shows you have little understanding of estate agency practice.
The OIEC sending me a copy of your email and my email shows he has little understanding of estate agency practice
Estate Agents (Professional Conduct) Regulations 2008 S.R. No. 46/200811
16 Communication of offers by estate agent
Unless otherwise instructed in writing by a principal, an estate agent must communicate to the principal all offers to purchase, sell or lease real estate or a business, made to the estate agent/whether those offers were made verbally or in writing, as soon as possible after the offer has been made.
24 Communication of offers by agent's representative
Unless otherwise instructed in writing by his or her principal, an agent's representative must communicate to the principal all offers to purchase, sell or lease real estate or a business, made to the agent's representative, whether those offers were made verbally or in writing, as soon as possible after the offer has been made.
I believe they regulations are very clear –must communicate….. as soon as possible.
Mark Johnstone phoned me yesterday morning and advised he has written offer on a contract from a buyer and I instructed him to email me the contract.
I requested Mark comply with regulation 24.
He has so far failed to do that.
I advise you to read, take notice and follow the above regulations
Your failure to follow the instructions will make you liable to the consequences of breaches of these regulations by CAV.
Regards
Rick Funston”
80On 10 November 2017 at 5.16pm, Mr Wheeler emailed Mr Way and Mr Johnstone:
“I just got off the phone to “the purchaser” and felt I was asked questions that probably shouldn’t have been asked
Something smells…”
81On 10 November 2017 at 6.57pm, Mr Way replied to Mr Funston’s email:
“Rick, We are going to Pass on this one!
You have lived up to my expectations and some, You need to get some help!
PS With your vast legal knowledge do you know anything about class actions or restraining orders? I suspect there would be a very long list of plaintiffs.
Kind regards…”
82On 14 November 2017 at 3.46pm, Mr Way replied again to Mr Funston’s email:
“Hey Rick, I have had some very interesting conversations with a long list of your past agent's, You really do have an atrocious track record in dealing with agents and I see you were an agent as well!
We are not play things either!
Neither my staff or myself will tolerate your bullying, intimidation and offensive behavior. So I'm going to ask you one last time to pay your advertising account, if you continue to refuse to do so I will hand the file over to our solicitors for recovery and costs…”
83On either 14 or 15 December 2017, the Sheehans Road Property[11] went to auction and was passed in.
[11] The property in which Mr Funston was living at the time.
84By ESA dated 2 January 2018, Mr Funston signed an ESA in relation to the Property with Le & Co Estate Agents, including a vendor’s price of $1.65m.
85On 13 March 2018, Cellmore initiated proceedings against Mr Funston at the Magistrates’ Court of Victoria, claiming $3,519, interest and costs for failing and/or refusing to pay the marketing expenses incurred by Cellmore in the course of the alleged authority.
86On 31 March 2018, Mr Funston signed an ESA with First National Real Estate Lindellas, including a vendor’s price of $1.65m.
87On 14 May 2018, Mr Funston signed an ESA with Stockdale & Leggo, including an agent’s estimate of selling price between $1.5m and $1.6m.
88On 23 June 2018, the Property went to auction with Stockdale & Leggo and was passed in on a vendor’s bid for $1.425m. The reserve amount was above $1.425m.
89On 11 July 2018, Cellmore lodged a caveat over the Property.
90On 23 July 2018, Mr Funston made a counter-offer of $1.53m to a potential purchaser, Ms Wee Yan, through Stockdale & Leggo.
91On 6 August 2018, Mr Funston signed an ESA with Biggin & Scott Glen Waverley, including ‘TBA’ as the vendor’s price.
92On 23 October 2018, Mr Funston signed an ESA with ET Edgar Bundoora, including ‘TBA’ as the vendor’s price.
93In November 2018, a GSA was prepared with Austrump Boxhill Pty Ltd, without recording a vendor’s sale price.
94On 2 November 2018, Mr Funston signed a GSA with Ivy Real Estate, including a vendor’s price of $1.6m.
95On 5 November 2018, Mr Funston signed an ESA with LLC Real Estate Pty Ltd, including a vendor’s price of $1.6m.
96On 12 December 2018, Mr Funston sent a letter to Mr Wheeler. Mr Wheeler claimed that the letter was delivered by Mr Funston in person in the late afternoon, while Mr Funston claimed it was delivered via registered post.[12] The letter stated the following:
[12] Nothing turns on the mode of delivery.
“Hi Russell
Are you are up to date on the dispute between Cellmore and myself?
If not then you need to be because It now concerns you In a very big way.
Did Cameron tell you that he has now lodged a caveat on Strabane Ave based on the charge condition added to the REIV Authority to Sell that you are responsible for?
Cameron had previously taken out a summons for payment of the advertising schedule you prepared and emailed to me. Note It is not agreement to pay.
You were seeking my approval for the places the advertising was to be placed.
I was expecting when this was done for you to then prepare a new Authority to sell to comply with Sect 50 and 49A of the Estate Agents Act. You failed/forgot to do this.
The summons is not an issue that not directly affects you other than you will have to give evidence
in court that why you choose to put the marketing allowance on a separate document and not on the authority to sell.
What should concern you is the Caveat - the Caveat as you can see attached it relies on the agreement between Cellmore and myself (the exclusive authority to sell) dated 7 July 2017.
Where you aware that by using an Authority to sell with a Charge condition that you had a conflict of interests?
Did you realise the legal consequences of what you were doing?
You were responsible for the Authority -you prepared It, you signed it, you emailed it and your name is on it.
Were you aware it is breach of Section 55 of the Estate Agents Act to obtain a beneficial interest in a vendor's property?
Never mind what Cameron might have told you -go and ask your own solicitor -someone independent of Cellmore.
You were/are Cameron's representative and could very well end up as Cameron's scapegoat.
This Is not a Consumer Affairs matter where they could put some of the responsibility on the Officer in Effective Control this Is an Australian Consumer Law matter where you will be seen as responsible for Cellmore.
You are required by the Estate Agents (Professional Conduct) Regulations 6 as an agent's representative to have working knowledge of -
(a) the Act and any regulations made under the Act; and
(b) any other laws relevant to the functions performed by the estate agent and agent's representative.
Cameron is a loose cannon -1 have numerous emails from him to prove that he doesn't want to accept any responsibility for his action towards me. He may have loaded the bullets but you fired the gun.
Were you made aware by Cameron of the consequences of engaging a vendor In an authority to sell with the charge clause?
After agency expired and I was overcharged marketing expenses I asked Sarah to ask Cameron what the meaning and intent was of the charge condition.
I was told it "means that we (Cellmore) have the ability if required to lodge a "caveat" on the property for all monies payable (outstanding) pursuant to this authority".
Sect 55 of the Estate Agents Act states an estate agent must not obtain a beneficial interest in principal's real estate that they have been commissioned to sell.
Note the penalty -1 would say it's very severe 240 penalty units ($38K approx.) and or 2 years
Imprisonment
Any agent is playing with fire when you don't comply with the most sacrosanct section in the Estate agents Act.
In 14 Sept 2017 Cameron emailed me when I asked why the charge condition was added.
"HI Rick, we have been including the ability to lodge a caveat for decades and is good business practice as it safe guards my business on bad debts. Other agents collect the advertising money "up front" so don't need it, either way if all parties stick to the contract there is never a problem and Its fair on all parties. And yes the objective is to sell the property because unless we do we work for nothingl"
All I can say about his reply is - did he not realise Section 55 was amended on 24 August 2011 to stop agents obtaining a beneficial interest In vendor properties -many other agents knew law was changed.
I suggest you should seek your own legal advice and look at getting the caveat removed - that way you will not end up in the Supreme Court witness box.
You have been part of a scam which I have been told has all the indications of being fraudulent.
At this stage I am prepared to accept you have been naive and been used by Cellmore but if I don't hear from your solicitor with seven (7) days and see you are doing something positive about getting the caveat withdrawn I will assume you not working in my best interests as you are legally required to do.
With the help of your solicitor I may be able to help you save yourself.
If I was you I would be speaking to your solicitor before you speak to Cameron about this.
Regards
Rick Funston
Ps do you know the real reason why the charge condition is there -it's to threaten vendors with a caveat when they dispute the advertising expenses?
Cellmore's advertising invoice was $3951 they could only provide supplier's invoices for $3312 that's $639 overcharge.
In Cellmore's invoice the floor plan redraw was charged at $90 the supplier's invoice was for $70.
Cellmore's Invoice for Admin layout and design was $200 and for the suppliers invoice I received some cut and paste job which showed $132 no suppliers name -it's not a supplier invoice Its looks like a scam invoice.
Cellmore failed to provide supplier's invoices for $551 for internet expenses.
I just happen to know my legal rights very well and I don't like being ripped off.
Cameron refused to back down I pointed his wrongdoings and he then made a big issue out of it and it appears your reputation is at risk.”
97On 23 March 2019, Mr Funston signed an ESA with LLC Real Estate Pty Ltd, including a vendor’s price of $1.5m.
98On 4 April 2019, Mr Funston signed a GSA with Inline Real Estate Pty Ltd.
99On 10 April 2019, Mr Funston signed a contract of sale with Ying Zhang and Yan Yan Li for $1.3m.
100On 21 June 2019, the caveat over the Property was removed.
101On 28 June 2019, settlement of the Property occurred.
ISSUES TO BE DETERMINED
102The issues to be determined are set out in the parties’ second further revised joint statement of issues dated 21 November 2024, which is annexed to these reasons for decision.
A. Cellmore’s claim
(1) Did Cellmore comply or fail to comply with s49A(1)(c)(i), s48B(1), and/or s49A(2) of the Act? If it failed to comply, does s50(1) of the Act prohibit Cellmore from seeking payment of its marketing expenses?
Mr Funston’s submissions
103Mr Goldblatt, on behalf of Mr Funston, submitted that Mr Funston is not liable to pay the marketing invoice by reason of the following alleged breaches of the Act:
(a) Cellmore’s failure to specify the marketing expenses it was going to incur in the ESA as required by s 49A(1)(c)(i);
(b) Cellmore seeking to recover outgoings beyond the sum incurred from Mr Funston, contrary to s 48B; and
(c) Cellmore’s failure to retain the documents required by s 49A, in contravention of s 49A(2).[13]
[13] Mr Funston did not press his claim that Woodards did not comply with the obligation in s 49A(1)(b),
which is pleaded in paragraph 3(b) of the Further Amended Defence and Further Amended Counterclaim.
104As a result of its non-compliance, Cellmore is prohibited from recovering the marketing expenses pursuant to s 50 of the Act.
Section 49A(1)(c)(i)
105Mr Funston contended that s 49A(1)(c)(i) requires the advertising costs to be set out in the ESA itself. The “TBA” annotation in the box next to marketing expenses on the ESA together with the subsequent signed reduced advertising schedule was non-compliant with the requirements of the Act.
106The Act does not define “engagement or appointment” however the ESA is the relevant “engagement or appointment” in this case. It is the same document that is referred to in s 49A(1)(a) and (b). As the “engagement or appointment” is the ESA itself and it did not contain any details of marketing expenses, rather “TBA,” it was non-compliant.
107Mr Funston relied on Advisory Services Pty Ltd (trading as Ray White St Albans) v Augustin,[14] in which the Court of Appeal held that particular notices required to be given by estate agents to clients must be in the relevant engagement or appointment.[15] This indicates an intention that the client have an opportunity to read the statement before rather than after signing the engagement or appointment[16] and supports a construction that the details of the outgoings have to be contained in the one document.
[14] [2018] VSCA 95 (Advisory Services)
[15] Advisory Services at [44]. See also Director of Consumer Affairs v Johnson (Review and Regulation)
[2019] VCAT 1063 at [64] (applying Advisory Services).
[16] At [44].
108Strict compliance is required by s 49A of the Act. In Oliver Hume (Australia) Pty Ltd v Land Source Australia Pty Ltd,[17] the Victorian Supreme Court stated that it was:
“…clear from the plain and ordinary meaning of the words of the Estate Agents Act that the legislation is intended to have a strict operation. There is no scope, on that plain reading, for distinguishing between sophisticated parties or those who may be commercially inexperienced.”[18]
[17] [2015] VSC 77 (Oliver Hume v Land Source)
[18] Oliver Hume v Land Source at [38].
109The interpretation contended for is consistent with the strong and consistent theme of consumer protection that courts have held runs through Part IV of the Act.[19] These provisions are directed towards both standards of conduct and transparency in respect of estate agents’ dealings with clients and third parties.[20]
Section 48B(1)
[19] Advisory Services at [39].
[20] Advisory Services at [39].
110Mr Funston submitted that Cellmore cannot satisfy the requirement in s 48B(1) in respect of the sum of $132, a component of the advertising account provided to Mr Funston.[21] The sum of $2,531 for “Internet Listing Feature Credit & E-Brochure” included the $132. The only information provided to Mr Funston regarding the charge of $132 was a single line. Mr Way described this single line entry as a charge “on another internet portal” for the Property. No other information about the charge was made available, including the entity which invoiced Cellmore for the charge. Although Mr Goldblatt acknowledged that “it’s small potatoes” in the scheme of things, nevertheless, Mr Funston was not in a position to verify the charge or what it was for.
Section 49A(2)
[21] Mr Funston challenged an amount claimed by Cellmore included an internal expense of $200
for “Administration Layout & Design 2”. As an internal charge, this is not an “outgoing” within the meaning of the Act. Without conceding the issue, Cellmore abandoned its claim to the $200
111In his affidavit of documents, Mr Way identified “Funston’s exclusive sale authority original.” The original was called for and not produced, breaching Cellmore’s obligation to not destroy any document required by the section and to retain any such document for the prescribed period.
Cellmore’s submissions
112Cellmore submitted that on a proper construction of s 49A(1) of the Act, Cellmore’s advertising costs were not required to be set out in the same document as the ESA:
(a) Whilst s 49(1)(b) of the Act states that the agent is required to inform the client that commission and outgoings are negotiable before obtaining the client’s signature, no temporal requirement is imposed by s 49(1)(c) of the Act.
(b) Rather, the provision requires the engagement or appointment to contain details of the commission and outgoings “that have been agreed.” Where outgoings have not been agreed at the time of the signing of the ESA, it is not possible for the ESA to specify those outgoings nor is it necessary for it do so.
(c) Section 49(1)(c) does not require that the engagement or appointment be contained in one document, nor does it preclude subsequent agreement (or amended agreements as to outgoings). In Advisory Services, the Court of Appeal noted that the authority then under consideration “did not exclude the possibility that… the client could pay for additional services of that nature”.[22]
(d) Mr Funston’s contrary construction does not accord with the plain meaning of the words of that provision. Further, a construction to that effect would not accord with commercial common sense:
(i)whenever there is an amendment to the expected advertising cost or a client requests a further marketing expense, a further ESA would have to be executed (or the original ESA would have to be amended and re-signed);
(ii)that would result in there being reduced flexibility in an advertising campaign, which would not be in the interests of consumers or consistent with the purpose of the legislation;
(iii)Mr Funston’s legalistic proposition that the issue could have been satisfactorily addressed by amending and initialling the ESA places undue emphasis on form rather than substance. There is no additional consumer protection offered by the construction contended for by Mr Funston, as distinct from the construction relied upon by Cellmore, as well as Cellmore’s practice of obtaining Mr Funston’s signed agreement to the advertising costs.
[22] Services being for advertising and marketing. See Advisory Services at [52].
113Mr Way gave evidence that the expenses the subject of the claim were actually incurred including the amount of $2,399 invoiced by realestate.com and $132 invoiced by realestateview.com, both of which related to the Property.[23] The document sent to Mr Funston to support the $132 charge was an extract from the tax invoice of the relevant supplier (being realestateview.com).
[23] The $555 charge the subject of invoices from domain.com that was not property specific was deleted
from the amount invoiced to Mr Funston in January 2018.
114It was not a breach of that provision for the advertising costs, once subsequently agreed, to be set out in the reduced advertising schedule and signed.
115Cellmore submitted that, substantial compliance is sufficient. Cellmore relied on Funston v CCSS Pty Ltd,[24] another instance in which Mr Funston refused to pay an estate agent’s outgoings.
(a) Mr Funston appealed a Magistrates’ Court’s judgment in favour of a estate agent for outgoings claimed in relation to an authority to sell the Sheehans Road Property. On appeal, Mr Funston raised a number of issues including that contrary to s 49A(1)(b) of the Act, the estate agent did not inform him before entering into the authority that any money to be paid in respect of outgoings was subject to negotiation.
(b) Mr Funston’s appeal was dismissed. Quigley J held that where information is required to be provided to assist a party to understand the basis and likely amount due to the agent as a result of the services provided, substantial compliance will be sufficient as long as the information contained is accurate and not misleading.[25]
[24] [2021] VSC 24 (Funston v CCSS).
[25] Funston v CCSS at [103].
116Cellmore contended that there has been substantial compliance with the s 49A:
(a) Mr Wheeler had previously emailed Mr Funston a proposed schedule of advertising costs which Mr Funston had rejected, instead negotiating for the removal of certain advertising costs.
(b) Mr Funston specifically agreed to and signed the reduced advertising schedule for a reduced amount.
(c) Mr Way and Mr Wheeler gave evidence to the effect that all such expenses were incurred after the signing of the reduced advertising schedule.
Section 48B(1)
117Cellmore contended that the evidence supports a conclusion that the expenses the subject of the claim were actually incurred.
118Cellmore did not concede that the “internal” charge for $200 for typesetting and production was not an outgoing nevertheless, Cellmore abandoned its claim to the $200 to save costs.
119Cellmore submitted that it is unclear on what basis Mr Funston suggests that the charges of $2,399 and $132 cannot be recovered by Cellmore:[26]
(a) Mr Way gave evidence that the expenses the subject of the claim were actually incurred;
(b) it was not put to Mr Way that this was incorrect, and nor is there any contrary evidence;
(c) in any event, there was no requirement in the Act (or the ESA) for standalone invoices to be generated for the Property by these two suppliers; and
(d) s 48B(1) only applies to the practice of an agent retaining rebates.[27] It is therefore not relevant.
Section 49A(2)
[26] Asserted in [19]-[20] of Mr Funston’s closing submissions.
[27] Funston v CCSS at [80]–[82].
120Cellmore submitted that it could not be said that Cellmore failed to retain documents and accordingly is not entitled to sue for or recover moneys for outgoings. There is no evidence that Cellmore destroyed or else did not retain any such document, as there is no evidence that Mr Funston gave the original signed ESA to Cellmore. Rather, he emailed it a signed copy, which Cellmore retained both electronically and in hard copy.
Legal principles
121Section 50 of the Act states:
“(1)An estate agent is not entitled to sue for or recover or retain any commission or money in respect of any outgoings for or in respect of any transaction unless—
(a) at all material times in relation to the transaction he or she is the holder of an estate agent's licence; and
(b) the agent has complied with section 49A(1) with respect to the engagement or appointment to undertake the transaction and is not in breach of section 49A(2) with respect to the engagement or appointment; and
(c) the agent has complied with sections 48A and 48B with respect to the engagement, appointment or transaction.”
(emphasis added)
122Section 4(1) of the Act defines “outgoings” to mean “any monies spent by an estate agent on his principal’s behalf for which the estate agent is at common law entitled to be reimbursed.”
123Section 49A of the Act states:
“(1)An estate agent must not obtain, or seek to obtain, any payment from a person in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent unless—
(a)the agent holds a written engagement or appointment that is signed by the person (or the person's representative); and
318There was no disparity of bargaining power in favour of Cellmore,[99] Mr Funston well understood the ESA and the presence of the charging clause and no unfair tactics by Cellmore were used.
[99] See findings in respect of Mr Funston’s knowledge and experience above at [161] and [165] of these
reasons.
319Central to the finding of unconscionable conduct in Collings v Stevenson were the following factual findings:
(a) The agent led the principal’s representative to believe its entitlement to commission expired with the exclusive period.
(b) The obligation to pay commission was of an indefinite nature and thereby was onerous and unfair.
(c) The principal was enticed to enter into the agreement by the assurance of the agent that no other onerous provisions obtained.
(d) The agent knew that the principal was relying on them to be utterly frank and honest with her and with the assurances made in mind, she placed herself in an unequal position with the agent.
(e) The agent placed itself in a superior position which enabled it to extract notional agreement to the unconscionable term.
320Those circumstances are not present here. Mr Funston was well able to protect himself. In various emails to Cellmore between 15 September and 9 November 2017, Mr Funston claimed:
(a) “My experiences in the property industry includes having been employed, because of my industry knowledge and experience, in the compliance and investigation section of the Estate Agents Board under the direction of the Attorney General of Victoria”;
(b) “I have a good deal of knowledge of charge clauses since Fletchers tried this little trick on me some time ago following the same overcharging deceit they uses”;
(c) “I advised you, I was a former compliance officer with the Estate Agents Board so I find it hard to understand why you would think bullying me was an effective way to resolve our dispute. I am more than happy to fight with you through the courts as I am extremely confident I know the law in this area very well”;
(d) “I am a former compliance officer and estate agent for many years – I know the laws of the industry very well;”
(e) “I am a former compliance officer with the Estate Agents Board, I have a very good knowledge of estate agency laws and laws of evidence;” and
(f) “I previously told you about my issues with Fletcher and their use of a similar clause. You are going to be toast with the OIEC – it will be all over the newspapers and TV…trust I know what I am doing and trust me your OIEC is nothing but talk he has no idea of the law.”
321Mr Funston was at liberty to not engage Cellmore. Albeit I have found that Mr Funston was well aware of the charging clause, on his own evidence, he would not have signed the ESA had he known it contained the charging clause. As demonstrated by the evidence, he was prepared to deal with and did deal with many other agents.
322For the reasons set out above, I am not satisfied that:
(a) Cellmore’s attempts to enforce what it considered to be its contractual right to payment for the outstanding advertising account[100] amounted to harassment constituting unconscionable conduct in the circumstances as found above.[101]
(b) Cellmore’s conduct is not of “… such a high level of moral impropriety that it could properly be described as ‘unconscionable’”[102] despite the evident frustration on the part of Mr Wheeler and Mr Way in some of the correspondence.
(i)I prefer the evidence of Mr Way as to the tone of the phone call with Mr Funston.[103] In his email to Mr Way copying in Ms Mazur on 9 October 2017, Mr Funston stated that Mr Way “left a voicemail messages [sic] of threats”. The only voicemail message in evidence which was left after a phone call between Mr Way and Mr Funston was not of that character and supports Mr Way’s version of the phone call.
(ii)Mr Way’s email to Mr Funston on 10 November 2017 in which he stated that “You have lived up to my expectations and some, You need to get some help! PS With your vast legal knowledge do you know anything about class actions or restraining orders? I suspect there would be a very long list of plaintiffs” is likely one of those emails that Mr Way considers he ought to have written but not sent.
(iii)Nevertheless, considered in context, it was not more than an inappropriate response borne out of frustration, not harassment in the context of the ACL.
(c) Cellmore informing Mr Funston that it would lodge a caveat if the outstanding advertising account was not paid or that the lodgement of the caveat constituted unconscionable conduct. I consider Cellmore was simply providing notice to Mr Funston of the steps it was intending to take in circumstances where I have found the charging clause was discussed with Mr Funston, he was well aware of its presence and went ahead and engaged Cellmore.
(d) Cellmore’s lodgement of the caveat. Informed by the surrounding context addressed in these reasons, I do not consider lodgement of the caveat was an unfair tactic amounting to unconscionable conduct. Further, I am not satisfied that Mr Funston suffered any loss or damage by the lodgement of the caveat.
[100] Where Mr Funston had negotiated the costs, agreed to and approved the advertising costs, and signed
the reduced advertising schedule.
[101] Leveraged Equities Ltd v Goodridge (2011) 274 ALR 655 at [416]-[417].
[102] Canon Australia Pty Ltd v Patton & Anor (2007) 244 ALR 759 at 771 [55].
[103] This is further addressed below.
I. Unfair term – s 23 ACL
(14) Was the charging clause an unfair term pursuant to s23 of the ACL and therefore void?
Mr Funston’s submissions
323Mr Funston did not address this issue in written submissions and barely addressed it in oral submissions. Mr Goldblatt submitted that, although Mr Funston’s evidence was that he wasn’t told about the charging clause, Mr Wheeler’s evidence was to the effect that when he told Mr Funston about the charging clause and Mr Funston objected to it, Mr Wheeler said “take it or leave it”. That’s an unfair contract term.
Cellmore’s submissions
324Cellmore submitted that s 23 of the ACL does not apply in these circumstances. Cellmore’s charging clause:
(a) did not result in a significant imbalance in the parties’ rights and obligations;
(b) was transparent (and Mr Funston was well aware of its effect, and had previously litigated in relation to a charging clause); and
(c) is not of a kind which falls within the examples provided in s 25 of the ACL.
Legal principles
325Section 23(1) of the ACL renders void an unfair term of a consumer contract or small business contract. In summary, a term is unfair for the purposes of the regime is found in s 24(1), which provides that a term will of a consumer contract or small business contract will be “unfair” if it:
(a) would cause significant imbalance in the parties’ rights and obligations arising under the contract;
(b) is not necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
(c) would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
326The time at which unfairness is to be assessed is the time at which the contract is formed.[104]
[104]Ferme v Kimberley Discovery Cruises Pty Ltd [2015] FCCA 2384 at [58].
327In determining whether a contract term is unfair, a court may consider:
“… such matters as it thinks relevant, but must take into account the following:
(a) the extent to which the term is transparent;
(b) the contract as a whole.”[105]
[105] ACL s 24(2).
328In Pasion v Creative Realty Pty Ltd (Civil Claims),[106] Member Forde considered a similar clause in a real estate agent’s authority to the effect that the vendor charged the Property with the payment of all commission and marketing expenses properly incurred and payable to O’Brien Real Estate, which remain unpaid 30 days after the issue of any invoice.” Member Forde was not satisfied:
“…that the clause itself is an unfair contract term. If the commission were not paid, Creative had the right to sue Mr and Mrs Pasion. Giving Creative a right to lodge a caveat for an unpaid commission does not in my opinion cause a significant imbalance to the parties’ rights and obligations.”[107]
[106] [2020] VCAT 404 (Pasion).
[107] Pasion at [98].
Conclusion and analysis
329It is unnecessary for me to determine this question. Having regard to my findings on the interpretation of s 49A(1) of the Act, Cellmore’s claim fails. Since Cellmore’s claim has failed there is no question of enforcing the ESA against Mr Funston.
330Had I needed to determine the question, even if the term was an unfair term and as such Cellmore contravened s 23 of the ACL, such a finding renders the term void. For the reasons set out below, it could not be said that Mr Funston suffered any loss or damage because of Cellmore’s conduct. Mr Funston did not rely on the charging clause when entering into the ESA for the reasons set out above. The caveat was removed before settlement.
J. Undue harassment or coercion – s 50 ACL
(15) Did Cellmore engage in undue harassment or coercion in connection the supply of services or payment for services, contrary to s50 of the ACL by:
a.refusing to remove the Property from its advertising unless and until Funston paid a disputed marketing invoice?
b.repeatedly and excessively contacting Funston to demand payment of the disputed invoice, including by way of communications that were derogatory, offensive and abusive?
c. threatening Funston that Cellmore would take him to Court?
d.threatening Funston that Cellmore would lodge a caveat on the Property unless Funston paid the disputed invoice?
Funston’s submissions
331Mr Funston claims that he suffered anxiety, distress, humiliation, financial pressure and stress as a result of Cellmore’s conduct, in particular:
(a) harassing and abusing Mr Funston, including by calling him crazy and a dickhead;
(b) refusing to remove the Property from its advertising unless and until Mr Funston paid disputed sums for marketing expenses to Cellmore; and
(c) threatening to and placing a caveat on the Property.
Cellmore’s submissions
332Cellmore contended there was no harassment or improper conduct by Cellmore. Cellmore took legitimate steps to recover payment of agreed outgoings. It was Mr Funston who adopted a highly aggressive and confrontational approach.
Legal principles
333Section 50 of the ACL provides that a person must not use physical force, or undue harassment or coercion, in connection with the supply of services.
334There is no definition of “undue harassment or coercion” in the ACL. In Australian Competition and Consumer Commission v Maritime Union of Australia,[108] Hill J explained “undue harassment” to mean:
“persistent disturbance or torment. In the case of a person employed to recover money owing to others…it can extend to cases where there are frequent unwelcome approaches requesting payment of a debt…where the frequency, nature or context of such communications is such that they are calculated to intimidate or demoralize, tire out or exhaust a debtor, rather than merely convey the demand for recovery, the conduct will constitute undue harassment…
It is clear that the word “undue” suggests that what is done must, having regard to the circumstances in which the conduct occurs, extend beyond that which is acceptable or reasonable…The words “undue” when used in relation to harassment, ensures that conduct which amounts to harassment will only amount to a contravention of the section where what is done goes beyond the normal limits which, in the circumstances, society would regard as acceptable or reasonable and not excessive or disproportionate.”[109]
[108] [2021] FCA 1549 (ACCC v Maritime Union).
[109] ACCC v Maritime Union at [62]-[64].
335In the same case, Hill J explained “coercion” as follows:
“”Coercion” on the other hand carries with it the connotation of force or compulsion or threats of force or compulsion negating choice or freedom to act… A person may be coerced by another to do something or refrain from doing something, that is to say the format is constrained or restrained from doing something or made to do something by force or threat of force or other compulsion. Whether or not repetition is involved in the concept of harassment, and it usually will be, it is not in the concept of coercion.”[110]
[110] ACCC v Maritime Union at [61].
Conclusion and analysis
336For the reasons set out above, I do not consider that Cellmore engaged in harassment or coercion in connection with the supply of services.
337Albeit I have found against Cellmore on the construction of s 49A(1) of the Act and accordingly Cellmore is precluded from recovering the advertising costs under s 50 of the Act, Cellmore’s conduct did not go beyond the normal limits which, in the circumstances, society would regard as acceptable or reasonable in seeking to recover what it considered to be a contractual entitlement. The circumstances include that Mr Funston signed the reduced advertising schedule and accepted the costs in the form in which they appeared in the reduced advertising schedule.
338There were undoubtedly firm emails sent by Mr Way pressing payment from Mr Funston, which revealed a level of frustration with Mr Funston’s somewhat confrontational and confusing approach. For example, even after Mr Way left the voicemail for Mr Funston on 25 September 2017, informing him that he would hand the file over to his solicitor if the advertising account was not paid by the end of the week, Mr Funston replied by email the following day, stating that “Friday is ok I should have it all sorted then – if you have the extra invoices that will be even better. In the meantime a sale would be great.”
339As to the content of the telephone conversation between Mr Way and Mr Funston on 25 September 2017, I prefer Mr Way’s account.
(a) Mr Funston’s account of Mr Way’s conduct in the phone call in which he alleges Mr Way lost his cool and called him a “dickhead” and “a fucking idiot”, is inconsistent with the firm but measured manner adopted by Mr Way in the voicemail left shortly afterwards. Although Mr Way may well have calmed down before leaving the voicemail as suggested by Mr Funston in evidence, Mr Way’s account is supported by Mr Funston’s email to Mr Way the following day on 26 September 2017. Mr Funston said that he should have the Advertising Invoice sorted by Friday, in the meantime a sale would be great. Mr Funston said nothing about what he later alleges Mr Way said to him during the phone call.
(b) Mr Funston’s allegation that Mr Way said “you are a dickhead” and “you are crazy and everyone knows it” appears in an email to Ms Mazur some days later on 6 October 2017. This email was sent after Mr Way sent Mr Funston two further emails following up on the unpaid advertising invoice, which Mr Funston had indicated should be ok to pay and “have it all sorted” by the end of the previous week.
340I do not consider that the absence of a response to Mr Funston’s email of 6 October 2017 constitutes an admission that what was said in the email was true:
(a) Mr Way’s response is in short compass and focussed on informing Mr Funston the matter would be referred to Cellmore’s solicitors for debt collection. Mr Way did not otherwise engage with the many allegations made by Mr Funston.
(b) Later that day, Ms Mazur emailed Mr Funston Cellmore’s complaint and dispute resolution procedures, providing Mr Funston with information including that if his complaint could not be resolved, he may refer it to the Department of Consumer Affairs or VCAT. There is no evidence that Mr Funston followed any such process.
341Albeit Mr Way emailed Mr Funston on 21 September 2017 indicating he would remove the Property listing upon payment of the outstanding advertising account, the approach taken by Cellmore in “hiding” the advertising and requesting payment for its outstanding advertising costs does not constitute undue harassment or coercion. Rather, it was a reasonable response by Cellmore in the circumstances addressed above.
342For the reasons set out above, I do not consider that Cellmore informing Mr Funston that a caveat would be lodged on the Property unless Mr Funston paid the advertising invoice constitutes undue harassment or coercion.
(16) Was Way involved in the alleged contraventions of s18, s21, s30(1) and/or s50 of the ACL?
343Having regard to my findings, it is unnecessary for me to determine this issue.
K. Loss or damage
(17) Has Funston suffered any loss within the meaning of s236(1) of the ACL by reason of any contravention of the ACL?
344Pursuant to s 236 of the ACL:
“If:
(a) a person (the claimant) suffers loss or damage because of the conduct of another person; and
(b) the conduct contravened a provision of Chapter 2 or 3 the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.”
345Mr Funston claims that he has suffered the following loss and damage:
| Description | Amount | ||
| A. | Loss arising from Rejection of Offer Representation | $50,000 | |
| B. | Property holding costs (total) | $103,004 | |
| · NAB Mortgage | $94,365.40 | ||
| · Utilities, rates, taxes and insurance | $8,638.90 | ||
| C. | Caveat removal expenses (total) | $5,262 | |
| · Legal cost to remove caveat | $1,671.47 | ||
| · Trust account deposit regarding advertising | $3,591 | ||
| SUBTOTAL | $158,266 | ||
| D. | Damages – interest claimed on A, B and C at penalty rate | $73,323 | |
| E. | Legal costs reasonably incurred from the date of issue of counterclaim | TBA | |
| TOTAL | $231,589 | ||
346Mr Funston’s claim fails. Even if I had found that Cellmore breached the ACL, I would not have been satisfied that Mr Funston suffered any loss because of any contravention of the ACL.
(a) Even if the Agency Representations were false or misleading, there is no evidence that the sale of the Property was adversely impacted by the internet listings. Even if some of the advertising was not hidden, there is no evidence that this caused Mr Funston any loss. In fact, the evidence is to the contrary. Mr Funston engaged other agents with their retainers overlapping and entertained and rejected other offers as set out above.
(b) Even if the Rejection of Offer Representation was false or misleading, I have found that Mr Funston would not have accepted the November Offer. The contemporaneous, objective evidence overwhelmingly supports that inference.
(c) Even if the On Hold Representation was made, there is no evidence of any adverse impact on the sale of the Property. The evidence supports an inference that the Property did not sell because Mr Funston’s price expectations were too high and it was only after more than two years on the market that Mr Funston lowered his price expectations, and the Property eventually sold for $1.3m on 10 April 2019.[111]
(d) Even if the caveat lodgement was unconscionable under s 21 of the ACL, there is no evidence that the presence of the caveat affected the purchase price that Mr Funston would otherwise have obtained for the Property. As noted above, the caveat was removed before the sale and settlement of the Property.
[111] Settlement occurred on 28 June 2019.
347Mr Funston is not entitled to exemplary or aggravated damages. Proof of loss is a necessary component to Mr Funston’s claims for such damages. Accordingly, exemplary damages cannot be awarded in the absence of loss as they can only be parasitic on compensatory damages.[112]
[112] Fatimi Pty Ltd v Bryant [2004] NSWCA 140 at [72]–[76].
348Exemplary and aggravated damages cannot be awarded for misleading or deceptive conduct under the ACL.[113]
[113] Geneva Laboratories Limited v Prestige Premium Deals Pty Ltd (No 5) [2017] FCA 63 at [79], referred
to in Krishnan v Estee Lauder Pty Ltd [2022] FCA 273 at [119].
349There is no evidence supporting the assertion that Mr Funston suffered anxiety, distress, humiliation, financial pressure or stress as a result of any conduct of Cellmore or Mr Way. Further, there is no evidence that Mr Funston has suffered significant injury and therefore any such claim (other than possibly under Federal Law) would be barred by s 28LE of the Wrongs Act 1958 (Vic).[114]
[114] Thomas v Powercor Australia Limited [2011] VSC 586 at [107], [116].
CONCLUSION AND ORDERS
350There be judgment for the defendant on the claim.
351There be judgment for the defendants by counterclaim on the counterclaim.
352I invite the parties to prepare proposed orders to reflect my findings and reasons for judgment.
353Subject to any matters that the parties bring to my attention on the question of costs, I propose to order that:
(a) the plaintiff pay the defendant’s costs of the claim on the standard basis in default of the agreement; and
(b) the plaintiff by counterclaim pay the defendants by counterclaim’s costs of the counterclaim on the standard basis in default of agreement.
- - -
Certificate
I certify that these 353 paragraphs are a true copy of the judgment of her Honour Judge Brimer delivered on 25 August 2025.
Dated: 25 August 2025
Georgia Moody
Associate to her Honour Judge Brimer
ANNEXURE A
SECOND FURTHER REVISED JOINT STATEMENT OF ISSUES DATED 21 NOVEMBER 2024
Parties
Cellmore Real Estate Pty Ltd is a real estate agency trading as Woodards Blackburn (Cellmore).
Cameron Way (Way) is and was at all relevant times a director of Cellmore.
Richard Arthur Funston (Funston) was at all relevant times the vendor of a property at 76 Strabane Avenue, Mont Albert North (the Property).
LEGAL ISSUES TO BE DETERMINED
Cellmore’s claim
The issue for the Court to determine is whether Cellmore complied or failed to comply with s48B(1), s49A(1)(c)(i) and/or s49A(2) of the Estate Agents Act 1980 (Vic) (Estate Agents Act) and, if it failed to comply, does s50(1) of the Estate Agents Act prohibit Cellmore from seeking payment of its marketing expenses.[115]
[115]Cellmore submissions [10] – [40] and reply submissions [3] – [7]; Funston submissions [4] – [21] and reply submissions [3] – [5]; Funston defence [3] – [9]; Cellmore reply [3] – [9].
Funston’s counterclaim
Representations
Did Cellmore represent to Funston that the Exclusive Sale Authority he signed was a REIV standard form contract (REIV Standard Form Representation)?[116] If yes, was the REIV Standard Form Representation false?
[116]Funston submissions [5] – [6], [50] and reply submissions [13]; Cellmore submissions [64] – [65] and reply submissions [3] – [4]; Funston further amended counterclaim [3] – [10], [29] – [32]; Cellmore defence [3] – [10], [29] – [32].
Did Cellmore represent after the expiry of the Exclusive Sale Authority on about 21 August 2017 that they were acting as Funston’s agents, on his behalf as vendor of the Property, and impliedly represent that as his agents they would pass on to him the terms of all offers from interested purchasers as soon as possible, and that they would facilitate the sale of the Property (Agency Representations)?[117] If yes, were the Agency Representations false?
[117]Funston submissions [24] – [26], [38], [51] and [60] – [61] and reply submissions [7]; Cellmore submissions [66] and reply submissions [8]; Funston further amended counterclaim [11] – [15] and [29] – [31]; Cellmore defence [11] – [15], [29] – [31].
On about 10 November 2017, did Cellmore represent to a potential purchaser who had made an offer to purchase the Property (November Offer) that Funston had rejected it (Rejection of Offer Representation)?[118] If yes, was the Rejection of Offer Representation false?
[118]Funston submissions [27] – [30] and [60] and reply submissions [9]; Cellmore submissions [42], [46] – [49] and reply submissions [9] – [10]; Funston further amended counterclaim [17] – [19] and [29] – [31]; Cellmore defence [17] – [19], [29] – [31].
Did Cellmore represent to potential purchasers that the Property was not currently available for sale and was ‘on hold’ (On Hold Representation)?[119] If yes, was the On Hold Representation false?
[119]Funston submissions [31] – [32], [54] and [60]; Cellmore submissions [59] and reply submissions [11] – [12]; Funston further amended counterclaim [20] – [21]and [29] – [31]; Cellmore defence [20] – [21], [29] – [31].
(collectively, the Representations)
Negligence
Did Cellmore owe Funston any duty of care?[120] If yes, what was the scope of the duty of care?
[120]Funston submissions [33] – [43]; Cellmore submissions [43] - [47], [60] – [63], [71] – [73] and reply submissions [13] – [17]; Funston further amended counterclaim [23] – [25]; Cellmore defence [23] – [25].
Did Cellmore breach its duty of care?
Fiduciary duty
Did Cellmore owe Funston any fiduciary duty?[121] If yes, what was the scope of the fiduciary duty?
[121]Funston submissions [44] – [46] and reply submissions [6] – [8]; Cellmore submissions [44] - [48] and reply submissions [21] – [22]; Funston further amended counterclaim [26] – [28]; Cellmore defence [26] – [28].
Did Cellmore breach its fiduciary duty?
Loss or damage
Has Funston suffered any loss or damage as a result of any breach of duty of care or fiduciary duty?
Misleading or deceptive conduct – s18(1) Australian Consumer Law (ACL)
Did Cellmore contravene s18(1) of the ACL by making the Representations?
a. Were the Representations made in trade or commerce?
b. Were the Representations misleading or deceptive or likely to mislead or deceive?
Making false or misleading statements – s30(1) ACL
Did Cellmore contravene ss30(1)(a) and/or 30(1)(c) of the ACL by making the Representations?
Unconscionability – s21 ACL
Did Cellmore engage in conduct in trade and commerce in connection with the supply of services to Funston that was, in all the circumstances, unconscionable and contrary to s21 of the ACL[122] by:
[122]Funston submissions [5] – [7], [50] and [64] and reply submissions [13]; Cellmore submissions [67], [69] – [70], [74] and reply submissions [24]; Funston further amended counterclaim [4] – [10], [16], [22], [32] and [37] – [38]; Cellmore defence [4] – [10], [16], [22], [32] and [37] – [38].
a. the insertion of a term into the Exclusive Sale Authority stating that “the vendor charges the property with the due payment of all monies payable pursuant to this agreement” (Charging Clause)?
b. harassment for payment of the outstanding marketing invoice?
c. threats to lodge a caveat?
d. lodging a caveat?
Unfair term – s23 ACL
Was the Additional Term an unfair term pursuant to s23 of the ACL and therefore void?[123]
[123]Funston submissions [50] and reply submissions [13]; Cellmore submissions [68]; Funston further amended counterclaim [5] – [6], [9] – [10], [37] and [38] – [39]; Cellmore defence [5] – [6], [9] – [10], [37], [38] – [39].
Undue harassment or coercion – s50 ACL
Did Cellmore engage in undue harassment or coercion in connection with the supply of services or payment for services, contrary to s50 of the ACL[124] by:
[124]Funston submissions [24], [64]; Cellmore submissions [69] – [70], [74] and reply submissions [24]; Funston further amended counterclaim [11] - [12], [16], [40] and [40A];
a. refusing to remove the Property from its advertising unless and until Funston paid a disputed marketing invoice?
b. repeatedly and excessively contacting Funston to demand payment of the disputed invoice, including by way of communications that were derogatory, offensive and abusive?
c. threatening Funston that Cellmore would take him to Court?
d. threatening Funston that Cellmore would lodge a caveat on the Property unless Funston paid the disputed invoice?
Was Way involved in the alleged contraventions of s18, s21, s30(1) and/or s50 of the ACL?[125]
[125]Funston submissions [5] – [8], [24] – [26], [28], [30] – [40], [49] – [51], [60] and [64] and reply submissions [14] – [15];Cellmore submissions [84] – [85]; Funston further amended counterclaim [12] – [22], [29] – [31], [36A] - [37A] and [40] - [40A]; Cellmore defence [12] – [22], [29] – [31], [36A], [37A] and [40] - [40A].
Loss or damage
Has Funston suffered any loss within the meaning of s236(1) of the ACL by reason of any contravention of the ACL?[126]
[126]Funston submissions [42] – [43] and [57] – [64]; Cellmore submissions [50] – [59], [86] – [87] and reply submissions [1], [18] – [20], [29] – [31]; Funston further amended counterclaim [42] – [45]; Cellmore defence [42] – [46].
DATED: 21 November 2024
J. TESARSCH
Counsel for Cellmore & Way
Plaintiff & Defendants by Counterclaim
M. GOLDBLATT
Counsel for Funston
Defendant & Plaintiff by Counterclaim
ANNEXURE B
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