Jorgensen t/a Laketrend Pty Ltd v Goto
[2010] QCAT 369
•9 July 2010
| CITATION: | Jorgensen t/a Laketrend Pty Ltd v Goto & Anor [2010] QCAT 369 |
| PARTIES: Applicant | David Jorgensen trading as Laketrend Pty Ltd |
| v | |
| First Respondent Second Respondent | Meiko Goto Peter Kumnick trading as K2 Law Pty Ltd |
| APPLICATION NUMBER: | 558/10 |
| MATTER TYPE: | Other Minor Civil Dispute matters |
| HEARING DATE: | 8 June 2010 |
| HEARD AT: | Southport |
| DECISION OF: | C TRUEMAN, Adjudicator |
| DELIVERED ON: | 9 July 2010 |
| DELIVERED AT: | Southport |
| ORDERS MADE: | THAT the claim is dismissed |
| CATCHWORDS : | Appointment of real estate Agent – Entitlement to Commission – Whether agreement is void – Whether failure to comply with s 134 of the Property Agents & Motor Dealers Act 2000 renders agreement ineffective – whether failure to comply with s 140 of the Property Agents & Motor Dealers Act 2000 would restrict the recovery of commission to real estate Agent - Validity of Irrevocable Authority |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr David Jorgensen |
| FIRST RESPONDENT: | Ms Mieko Goto |
| SECOND RESPONDENT: | Mr Peter Kumnick |
REASONS FOR DECISION
HISTORY OF THE APPLICATION
- This is an application by Mr David Jorgensen who is the sole Director of Laketrend Pty Ltd claiming $16,421.84 for commission payable to him pursuant to the terms of an alleged agreement as contained in a “Sales Consultancy Agreement” signed by Ms Goto and dated 23rd October 2009.
- The Applicant joined to the proceedings the Second named Respondent Mr Kumnick. Mr Kumnick was the Solicitor who acted for Ms Goto in the sale of her property. The Applicant contends that if his claim against Ms Goto fails an alternative cause of action relates to a claim against Mr Kumnick who allegedly refused to comply with an Irrevocable Authority directed to him to release the commission held in his trust account to the Applicant.
- Mr Kumnick alleges that he should not be a party to the proceedings. Further he contends that there is no contractual relationship between him and Mr Jorgensen. Mr Kumnick contends that Mr Jorgensen has not raised any ground for which Mr Kumnick has any liability to Mr Jorgensen.
- The following facts are admitted:
a)The Applicant is a Licensed Real Estate Agent under the Property Agents and Motor Dealers Act 2000. (“PADMA”)
b)The property known as Unit 53, 127 Gooding drive at Merrimac in Queensland (the “Merrimac property”) was owned by the First Named Respondent.
c)The First named Respondent signed a Sales Consultancy Agreement on the 21st October 2009 and such signature was not witnessed.
d)The Applicant did not provide to the First Named Respondent a Form 22A Appointment of Real Estate Agent as required pursuant to section 134 of PAMDA.
e)The Sales Consultancy Agreement does not substantially comply with a Form 22A.
f)The Merrimac property was sold on the 6/12/2009 for $366,000.00 and settlement occurred in accordance with condition 5 of the Terms and Special conditions and settlement occurred on 30th December 2009.
g)An amount of $10,560.00 is held by K2 Law Pty Ltd in their Trust Account
h)Ms Goto has not paid Laketrend Pty Ltd the commission.
THE EVIDENCE
Mr Jorgensen provided a Sales Consultancy Agreement to Ms Goto on or around the 19th October 2009 via email. The agreement did not include a statement advising Ms Goto to obtain independent legal advice. Mr Jorgensen requested that Ms Goto sign the agreement and return to him. Ms Goto did not obtain independent legal advice prior to signing the agreement. Ms Goto signed the agreement and Irrevocable Authority and faxed it back to the Applicant on 21st October 2009. Ms Goto did not have her signature witnessed on the agreement prior to returning it to the Applicant. The Agreement was signed by Mr Paul Flynn on behalf of the Applicant company, Laketrend Pty Ltd on the 23rd October 2009. Mr David Jorgensen witnessed the signature of Mr Paul Flynn. Mr Jorgensen also signed the agreement and Irrevocable authority as witnessing the signature of Ms Goto. Mr Jorgensen gave evidence he signed as witness without actually witnessing Ms Goto’s signature.
During the Hearing it became evident there were two Agreements. The first agreement was the original agreement signed by Ms Goto noting that the property would be deemed to be sold if the sale price was ‘greater than $360,000.00.’ A second agreement that was amended by Mr Jorgensen noting that the property would be sold if the sale price was ‘greater than $350,000.00.’ It is this agreement that Mr Jorgensen seeks to rely upon and it is this agreement that is attached to his claim.
7. Ms Goto gave evidence that at no time did she agree to change the price for sale and that the change to the agreement was not signed or initialled by her. Mr Jorgensen gave evidence that he contacted Mr Kumnick by telephone and that he agreed to the sale price on behalf of Ms Goto. Mr Kumnick denies that contention. Mr Kumnick contended that he would provide instructions in writing and that he did not put anything in writing to Mr Jorgensen. I accept that evidence and accept that is it usual practice for solicitors to put instructions to another party in writing, particularly in light of the content and effect of such instructions.
8. Mr Kumnick did not dispute a telephone call did occur between them but that he stated that he requested all documents be sent to him so that he and his client, Ms Goto could peruse the contract. I found Mr Kumnick to give his evidence in an honest and open manner. Mr Kumnick contended that he did not obtain his client instructions regarding the sale of the property. Mrs Goto supported that contention. I find it incredulous that Mr Jorgensen would solely rely on the content of an alleged telephone conversation to reduce the price and sell a property in light of the fact he was to sign the contract on behalf of Ms Goto. Mr Jorgensen contended that the instructions to accept the offer were provided orally. I do not accept the evidence of Mr Jorgensen in that regard and I prefer the evidence of Mr Kumnick. I accept that Mr Kumnick expected to receive a contract and other documents for signing by Ms Goto and was not aware that Mr Jorgensen had authority to sign the contract.
9. Ms Goto gave evidence that she was surprised when Mr Kumnick received the contract for the sale of her property and discovered that Mr Jorgensen had signed the contract for the sale on her behalf. Mr Jorgensen referred to the agreement (clause 3) whereby Ms Goto had authorised him to sign contracts for the sale of her property on her behalf. Ms Goto gave evidence that she was not aware that was a term and condition of the agreement. In fact the evidence of Ms Goto was that she did not obtain legal advice prior to signing the agreement and was not advised by Mr Jorgensen to obtain legal advice. Mr Jorgensen gave evidence and contended that Ms Goto was a savy and experience property investor and had purchased property before and was familiar with contracts. Ms Goto rejected that proposition.
10. Mr Jorgensen sought to rely on the fact that Ms Goto proceeded with the contract as evidence of her having agreed to sell the property and that her solicitor, Mr Kumnick had given permission to sell for that price. Ms Goto disagreed with that contention and gave evidence that when the contract was presented to her signed by Mr Jorgensen she spoke to her solicitor and told him she did not want any trouble, didn’t want to have to go to court or involve the law. Ms Goto gave evidence that she did not want to cause a problem and she reluctantly instructed her solicitor to proceed with the sale. I accept the evidence of Ms Goto in that regard and this evidence was also supported by the evidence of Mr Kumnick. Mr Kumnick confirmed that Ms Goto expressed those concerns to him, that he gave her advice about the contract and not proceeding and that Ms Goto provided instructions to him that although she was reluctant to sell she would proceed with the sale.
11. From the evidence of Ms Goto I am satisfied that she had little insight regarding the content of the agreement she had signed and was not familiar with buying and selling real property. In fact, Ms Goto contended that this property was the first she had bought and that she had little knowledge of conveyance matters. I accept the evidence of Ms Goto in this regard.
12. It was also contended by Ms Goto and Mr Kumnick that at the actual time the contract was signed by Mr Jorgensen that Mr Kumnick had not sighted the second agreement. Both Mr Kumnick and Ms Goto contended they did not have any knowledge of the change to the sale price from the first agreement and the actual commission due and payable to Mr Jorgensen until they received the signed contract.
13. The first agreement signed by Ms Goto provides that the sale price of the property determines the commission to be received by Mr Jorgensen. Clause 6 of the contract provides that:
“For the purpose of this Agreement the said Property shall be deemed to have been “sold” immediately upon execution of a legally binding Contract of Sale where:
(a) (i) The sale price is greater than $360,000;and
(ii)Completion is due to take place on or before 60days from the date of such Contract;
(b) The proceeds from the sale of the said Property shall be received by the Vendor’s Solicitor on settlement and shall be distributed in the following order of priority:
(i)The sums referred to in the above 6(a)(i) minus any normal contractual adjustments such as outstanding rates, levies, and release fees shall be paid to the Vendor or as the Vendor directs;
(ii)The balance proceeds of sale shall be paid to the Consultant as its fees;”
14. If the first Agreement was valid and to be relied upon the amount of commission due and payable to Mr Jorgensen would have been approximately $6000.00 being all those funds over and above the sale price of $360,000.00. The second agreement sought to be relied upon by Mr Jorgensen with the sale price amended to $350,000.00 would calculate the commission amounts owed to him of approximately $16,000.00.
Mr Jorgensen’s disclosure to the Buyer
15. Mr Kumnick contended that Mr Jorgensen was dishonest in his disclosure obligations as Mr Kumnick provided to the Tribunal a copy of a Form 22A noting the client as Laketrend Pty Ltd and the Agent as Signature Realty Pty Ltd. Mr Kumnick contended that this document was prepared by Mr Jorgensen and not disclosed to either Mr Kumnick or Ms Goto on or around the 13th May 2010. This document purported to note that the listing price of the property was $379,990.00 and that the property was an open listing. Further, a Conjunctional Agreement was provided by Mr Kumnick that referred to the listing agent as Laketrend Pty Ltd and that the conjuncting or referring agency was Signature Realty Pty Ltd. The conjunctional arrangement purported to stipulate fees for the Listing Agent to receive 52.7% and the Conjuncting Agent to receive 47.3%. The form 22A was signed by Mr Jorgensen on behalf of Laketrend on the 25th November 2009 and Mr Mark Fordham from Signature Realty on the 28th November 2009. The Conjunctional agreement was signed by Mr Jorgensen and Mr Fordham on the 7th December 2009.
16. Ms Goto contended that none of these documents had ever had been shown to her and that she did not know of their existence until after settlement had occurred. Ms Goto also contended that she was not aware her property had been sold by a conjuncting Agent or that Signature Realty was involved in any way with the sale of her property. I accept that evidence of Ms Goto in that regard.
17. A Form 27C was provided to the tribunal by Mr Kumnick. This document confirms that the purchaser, Katherine May Cook, was advised that the selling agent was Laketrend. The document discloses that the commission to be received from Laketrend Pty Ltd was an amount of $10,560.00. Clearly that document was incorrect and was prepared and presented by Laketrend to the purchaser with the intention to mislead the buyer. This document prepared by Mr Jorgensen was inconsistent with both his oral evidence and the amount contained in the claim filed by him as Mr Jorgensen contended that he was entitled to commission of $16,000.00.
18. Mr Jorgensen was not appointed as the ‘selling agent’ by virtue of s134(3) of the PADMA. Further, Mr Jorgensen’s disclosure to the Buyer is in contrast to the amount sought in his claim. I find some of the actions of Mr Jorgensen in amending the sale price in the Agreement without Ms Goto amending such document, by signing the contract on behalf of Ms Goto without her specific instructions and the disclosure made by him to the Buyer of the Merrimac property dishonestly disclosing the amount of commission he was to receive raises concerns regarding issues of credibility. I find that Mr Jorgensen had an apparent preparedness to manipulate facts and circumstances for his own personal financial gain.
19. Ms Goto and Mr Kumnick contend that the claim by Mr Jorgensen should be dismissed.
THE LEGISLATION
20. Mr Jorgensen claims commission for the sale of the Merrimac property pursuant to a Commercial Sales Consultancy Agreement.(‘Agreement’)
21. Mr Jorgensen claims the amount of $16,000 of commission calculated with reference to a sale price of $366,000.00 less the $350,000 payable to the Vendor in accordance with the terms and conditions of the second agreement.
The appointment as an agent
22. Mr Jorgensen claims to be appointed as a Real Estate Agent by Ms Goto pursuant to the Agreement.
23. Section 134 of PADMA sets out:
134 Form of appointment
i.The appointment must be in the approved form.
ii.The approved form must include a prominent statement that the client should seek independent legal advice before signing the appointment.
iii.An appointment that does not comply with subsection (1) is ineffective from the time it is made.
24. Section 598 of PADMA states that the Chief Executive may approve forms for use under PADMA. From 1 July 2009 the Chief Executive approved Form 22A version 5 as the approved form for the appointment of a real estate agent (sales and purchase)
25. Mr Jorgensen did not use an agreement to be appointed as a Real Estate Agent in the approved form. The agreement does not comply with the approved Form 22A. The agreement did not contain a prominent statement that Ms Goto should seek independent legal advice before signing the appointment
Restriction on recovery of reward or expense if not proper authorised
25. Section 140 of PADMA states:
140 Restriction on recovery of reward or expense – no proper authorisation etc.
a. A person is not entitled to sue for, or recover or retain, a reward or expense for the performance of an activity as a real estate agent unless, at the time the activity was performed, the person—
i.held a real estate agent’s licence; and
ii.was authorised under the person’s licence to perform the activity; and
iii.had been properly appointed under division 2 by the person to be charged with the reward or expense
b. A person who sues for, or recovers or retains, a reward or expense for the performance of an activity as a real estate agent other than as provided by subsection (1) commits an offence.
Maximum penalty for subsection (2) – 200 penalty units.
26. Mr Jorgensen was not properly appointed pursuant to s134 PADMA and therefore cannot rely on s 140(1)(c) to claim for commissions and fees regarding the sale of the property.
ALTERNATIVE CLAIM BY MR JORGENSEN AGAINST MR KUMNICK
27. Mr Jorgensen sought to enforce an Irrevocable Authority signed by Ms Goto to compel Mr Kumnick to release the funds held in his trust account to him. The Authority was attached to the Agreement regarding the sale of Ms Goto’s property.
28. The Agreement is not binding and enforceable as the agreement was not effective at the time it was made. The Irrevocable Authority therefore cannot be sought to be relied upon as Mr Jorgensen as he is not entitled to be paid commission and costs if he was not properly and duly appointed.
CONCLUSION
29. The agreement prepared by Mr Jorgensen is not in proper form and is not a Form 22A. The Agreement does not comply with the form of a Form 22A. Further, the agreement does not comply with s134(1) and (2) of the PADMA and is therefore ineffective from the time it was made. In the circumstances, Mr Jorgensen is not entitled to sue for, or recover or receive commission from Ms Goto.
30. The Agreement is found to be not in effect. The Agreement is not legally binding on the parties.
31. The Irrevocable Authority was signed by Ms Goto to release funds at settlement to Mr Jorgensen. The Authority was signed at the same time as the Agreement. Ms Goto’s signature was not witnessed when signing those documents. Mr Jorgensen amended the agreement between him and Ms Goto. Ms Goto did not initial the amendments to the agreement. A dispute arose regarding commissions due or entitled to be paid pursuant to the Agreement to Mr Jorgensen.
32. I am not required to turn my mind to the validity and effect of the Irrevocable Authority as the Agreement is not in proper form and does not conform to a Form 22A. I find that Mr Jorgensen has not been duly appointed pursuant to the requirement of s134 of PADMA and is therefore not entitled to be paid commission pursuant to s140 PADMA.
ORDER
Claim is dismissed.
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