JUDGE:	Quigley J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 November 2020
DATE OF JUDGMENT:	29 January 2021
CASE MAY BE CITED AS:	Funston v CCSS Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 24

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APPEAL – Magistrates’ Court of Victoria – Estate Agents Act 1980 (Vic) ss 48B, 49A and 50 – Appeal of final order pursuant to Magistrates’ Court Act 1989 (Vic) s 109 – Statutory interpretation – Agent’s claim for marketing expenses – Whether recovery barred by failure to meet disclosure obligations – Whether an agent can recover expenses that are not ‘outgoings’ as defined in the Estate Agents Act 1980 (Vic) s 4 – Agent’s obligation to inform of right to negotiate – Whether a reserve price must be used to calculate commission or other relevant amounts can be used – Whether strict or substantial compliance with statute is required – Held – Appeal dismissed – Advisory Services Pty Ltd (trading as Ray White St Albans) v Augustin & Anor [2018] VSCA 95 applied – Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] 29 CLR 165 and – HamiltonFinley Pty Ltd v Aojia Investment Pty Ltd [2017] VSC 319 considered.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr I.W. Upjohn QC with Ms Shanta Martin	Belleli King & Associates
For the Respondent	Mr T. Greenway	Shayne Daley & Associates

HER HONOUR:

Background

The appellant, Mr Funston engaged the respondent, CCSS Pty Ltd, trading as Ascend Real Estate (the Agent) to act as his agent in selling his property located at 36A Sheehans Road, Blackburn.

Initially, the engagement was formalised by a General Sale Authority dated 24 October 2017. This General Sale Authority indicated a vendor’s price of $2.6 million and the agent’s estimated of selling price (ESP) of between $2.5 and $2.6 million.

Subsequently, Mr Funston decided to auction the property and the General Sale Authority was replaced on 14 November 2017 with an Exclusive Auction Authority (the Auction Authority). The Auction Authority indicated an ESP of between $2.1m and $2.2m and a vendor’s reserve price was nominated as ‘TBA’. The Auction Authority provided for marketing expenses of $7,479 payable on the written request of the Agent.

Prior to the signing of the Auction Authority, the Agent had incurred marketing expenses in relation to newspaper advertising of $600 and photography in the amount of $176.

The property went to auction on 16 December 2017 and was passed in on the vendor’s bid of $2.35 million. Mr Funston rejected offers of $2.15 and $2.16 million following the auction.

On 14 March 2018, the Agent filed a complaint against Mr Funston in the Magistrates’ Court of Victoria. The Agent sought payment of $7,479 for reimbursement of outgoings pursuant to the Auction Authority and tendered into evidence…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Funston v CCSS Pty Ltd

Details

AGLC: Funston v CCSS Pty Ltd [2021] VSC 24
Case: [2021] VSC 24
Decision Date: 29 January 2021

CaseChat Overview and Summary

The appellant, Funston, sought an appeal against a decision made by the Magistrates' Court of Victoria, which ruled in favour of the respondent, CCSS Pty Ltd. The central issue in this case revolved around the recovery of marketing expenses by an estate agent, and whether these expenses were barred due to the agent's failure to meet certain disclosure obligations under the Estate Agents Act 1980 (Vic). Specifically, the appellant claimed that the agent had not properly informed them of their right to negotiate, and whether a reserve price must be used to calculate commission or if other relevant amounts can be used. The court was also required to determine whether strict or substantial compliance with the statute was necessary.

The court considered the relevant statutory provisions and previous case law to address these issues. It found that the agent had not met the disclosure obligations as required by the Act, and that this failure barred the agent's claim for marketing expenses. The court held that the agent could not recover expenses that were not classified as 'outgoings' as defined in the Estate Agents Act 1980 (Vic) s 4. Furthermore, the court held that the agent's obligation to inform the client of their right to negotiate must be strictly adhered to. The court also held that a reserve price must be used to calculate commission, and that strict compliance with the statute was required.

Based on these findings, the appeal was dismissed. The court relied on previous cases such as Advisory Services Pty Ltd (trading as Ray White St Albans) v Augustin & Anor [2018] VSCA 95, Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] 29 CLR 165, and Hamilton Finley Pty Ltd v Aojia Investment Pty Ltd [2017] VSC 319 to support its decision. The court's decision reinforces the importance of estate agents adhering to their statutory obligations, and that failure to do so may result in the loss of any claim for marketing expenses.

Orders