Maloney's the Estate Agent Pty Ltd v Jason Paul Presti & Robyn Carmen Muscat-Presti (Civil Disputes)
[2009] ACAT 14
•4 June 2009
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
Maloney’s The Estate Agent Pty Ltd v Jason Paul Presti & Robyn Carmen Muscat-Presti (Civil Disputes) [2009] ACAT 14
XD 82151 of 2008
Catchwords:
Tribunal:Mr P Thompson, Member
Date: 4 June 2009
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 82151 of 2008
BETWEEN:MALONEY’S THE ESTATE AGENT PTY LTD
Applicant
AND:JASON PAUL PRESTI & ROBYN CARMEN MUSCAT-PRESTI
Respondent
DECISION
Tribunal: Mr P Thompson, Member
Date of Decision: 10 February 2009
Decision:
Judgment for the Applicants in the sum of $3,366.00 and costs of $112.00, Total $3478.00.
3 months to pay.
Counter-claim dismissed.
…………………………….
Phillip ThompsonMember
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 82151 of 2008
BETWEEN:MALONEY’S THE ESTATE AGENT PTY LTD
Applicant
AND:JASON PAUL PRESTI & ROBYN CARMEN MUSCAT-PRESTI
Respondent
REASONS FOR DECISION
On 10 September 2008 the applicant company commenced proceedings in the Small Claims Court against the respondents claiming that the company was owed $3366.00 under the terms of an exclusive agency agreement entered into between the parties on 5 February 2008, in respect of a property situated at 11 Kurama Close, Ngunnawal ACT.
According to the applicant company, in that agreement, the respondents approved advertising to the value of $2740.00 plus GST, totaling in all $3,014.00. Further, that the respondents also authorized two more Canberra Times advertisements to the value of $352.00 including GST.
It was the applicant company’s contention that the exclusive agency agreement provided that the respondents were required to pay for the advertising, even in the event that the property was withdrawn from sale or if the property failed to sell.
According to the pleadings, the respondents duly initialed and signed the relevant sections of the agreement. Subsequently, the property was withdrawn from sale and a request for payment made by the applicant company. The respondents refused that request.
On 1 October 2008 the respondents filed a response disputing liability and counter-claiming $2,200.00, being for four weeks lost rent. According to the respondents, the applicant company listed the property for sale at an over inflated price and this was a contributing factor to what they considered was wasted advertising time and money. According to the response, this claimed lack of expertise, together with a perceived lack of quality service and communication difficulties, gave rise to a belief that the respondents should not be held liable for the advertising costs, despite having signed an agreement to be so liable.
Briefly the details of the counterclaim were as follows:
The respondents requested the applicant company to remove the house from the market as they had tenants ready to move into the property for rent. They were then informed that an offer had been made so decided to leave the property on the market hoping for the sale to go through. A request to have the offer in writing was not complied with and the respondents have stated a belief that the offer was not valid. After the process dragged out over four weeks, with no contact from their agent, the respondents decided to rent the property. The respondents believe that they should be reimbursed by the applicant company for the four weeks lost rent.
The matter came before me for hearing on 10 February, 2009, with Mr. Peter Maloney, accompanied by Mr. Dimitri Georgalis, appearing on behalf of the applicant company, and with Mr. Jason Presti representing himself and his wife, Robyn Muscat-Presti. Evidence was given at the hearing for the applicant company by Mr. Maloney, the principal of Maloney’s the Estate Agent and by Mr. Georgalis, a sales person with that company
Mr. Presti was subsequently joined by his wife and they both gave evidence in support of their response to the applicant’s case and in the prosecution of their counter claim.
Basically, Mr. Maloney defended his company’s assessment of the value put on the property and gave evidence that the particular market where the respondents home was placed, dropped about $100,000.00 in a four month period, due to external factors involving increased interest rates and the scarcity of finance available to secondary lenders, amongst other factors.
Mr. Maloney stated that he was not the actual selling agent but the person dealing with the respondents had two and a half years experience, and that the respondents made a commercial decision to go with his company, after dealing or consulting with three other agents as “Maloney’s was the best in his [Jason’s] interest at that time”.
Later on during the hearing, and after Mrs. Presti had arrived, she stated that she chose Maloney’s “because they were brand new and I heard [their] reputation for this side of town was excellent”. According to her, it was their reputation that was important to her, and she knew that they would not get near the $700,000’s.
Mr. Maloney produced a copy of the listing agreement showing that the agreed listing price was to be between $650,000.00 and $695,000.00. In fact, the agreement signed by the respondents specifically states that they agree for the home to be promoted at that price range and that they will consider offers within that range.
The agreement also goes on to state that the respondents “agree the marketing component in the promotion of the property is in addition to Fees Payable. The marketing costs are to be paid as per clause 5.1 & 5.2 should the property fail to sell or the property is withdrawn from sale”.
Clause 5.1 is an acknowledgement to immediately reimburse Maloney’s in full for all expenses incurred in the marketing of the property up to and including the date of withdrawal from sale. Clause 5.2 deals with written notice of such withdrawal and an acknowledgement of responsibility for any expenses incurred in the marketing of the property until such written notice has been provided.
The Exclusive Agency Agreement was indeed signed by all parties on 5 February, 2008 and appointed Maloney’s as the respondents sole and exclusive agents to sell the subject property for a period of 120 days.
Mr. Maloney also tendered the following documents:
· Exhibit A - Documents setting out examples of houses sold in the area; and
· Exhibit B - Maloney’s seller fact sheet.
At this point in the hearing Mr. Georgalis gave evidence based on his experience and the documents in Exhibit A as to relative house prices in the area, his estimated valuations and the prices, (lower) that were eventually obtained, which went some way to backing up Mr. Maloney’s assertion that house prices dropped considerably during the three months that the Presti’s house was on the market.
Mr. Maloney also gave evidence that during the time that the property was originally marketed, there were tenants in residence and these tenants were not presenting the home particularly well, so the marketing was stopped until the tenants were moved out. Contrary to the respondents assertions Mr. Maloney maintained that there were constant communications between the parties.
The house was advertised in the Canberra Times on 8 occasions at a total cost to Maloney’s of $2,240.00. Sign boards, colour brochures, copywriting, photography and internet charges added another $820.00 to the costs, which together with GST charges of $360.00 amounted to a total of $3,366.00. A tax invoice for that amount dated 13 May 2008 was forwarded to Mr and Mrs Presti.
Evidently the first ad ran on 1 March 2008, then there was a break until the tenants vacated the premises, with the next ad then running on 29 March 2008 and not 26 April 2008 as incorrectly stated by me during the hearing.
Mr Presti, for his part, whilst acknowledging that he signed the agency agreement, stated that the agreement did not comply with the Agency Agreement Act and therefore he was questioning whether there was in fact any agreement. In fact, the correct title of the Act is the Agents Act 2003 (ACT).
He went on to state that as he could not dispute that he signed the agency agreement, he had to look at other avenues. According to Mr Presti he had had meetings with the Department of Fair Trading who went over the documentation with him. According to the respondent, the agreement in question did not comply with the relevant Act as it did not ”have the information on there that is required to make it an agreement”.
Mr. Presti stated that he was not however, intending to call the relevant officer to mount any legal argument as to the validity or otherwise of the agreement signed between the parties, and was instead intending to argue the issue himself from the information supplied to him by that office.
Aside from that issue, Mr Presti stated that his dispute was basically that he wanted to know how the value of their house went from $650,00 to $695,000 down to $580,000 to $630,000 in the space of four to five weeks, which was what the other agents stated the value as, originally.
Whilst he stated his belief that Maloney’s had lied to him and had over-inflated the property, I found no credible evidence to support this contention. With the known trends in house prices at that time, it was reasonable to believe that when the house was originally placed on the market and without the downturn, it may have sold for around $640,000 to $650,000, which places all four agents in the same ball park, with Maloney’s valuation being a tad optimistic That, however does not induce me to accept the proposition of dishonest dealing put forward by the first respondent.
Obviously Maloney’s wanted to sell the respondents’ house, and their commission was dependent on such a sale. Whether they could have done more to promote such a sale is unknown to me, however I am aware that they have received no remuneration for their efforts on behalf of the respondents, and in fact, to date, are out of pocket in respect of the expenses incurred on behalf of the Prestis. As Mr Maloney stated, if they do not sell the house, they do not get paid. They had also tried without success to compromise with the Prestis on the costs to be paid. Mr. Maloney also rejected any suggestion that the salesman named Russell, who was handling this matter was not properly experienced or was unregistered. According to him it was simply a bad time to be selling, with 30% of the houses on the market at that time not selling.
Also at issue, was the fact that on the day the respondents sought to withdraw the house from sale, they were informed that there was a potential buyer for the house, hence their decision to postpone renting to tenants. That potential buyer did not follow through, and the Prestis were skeptical about the entire situation, believing in fact, that such a buyer did not exist but had no real evidence to support their claim. In the circumstances, I have to accept Mr Maloney’s evidence that there was a potential buyer at the time, who was trying to arrange finance.
The buyer was stated to be a Sudanese couple who were unwilling to give evidence before a tribunal. The respondents did however, tender in evidence a series of e-mails that detail these events, but also confirm that the offers made prior to the respondents requesting that the house being taken off the market were not sufficient to move the respondents to sell at that price. See Exhibit 1 - A series of e-mails.
Whilst I accepted the above evidence, I also accepted as fact that the potential buyer or buyers names were never provided to the respondents, which was a clear breach, but one that did not affect the validity of the original agreement.
According to the e-mails, Maloney’s were going to supply the buyer’s details to Brian Curtis once finance was approved, to enable him to issue a contract of sale.
Whilst that sale did not eventuate and the respondents did in fact take the house off the market and re-rent to tenants, Mr. Maloney maintained that at the time they were not actively marketing the house and that there was no reason to bring through a dummy bidder, as there was no upside for them whatsoever to do so. I accepted that to be the truth.
Mr. Maloney also stated that at the time his company hadn’t been paid so the “least I had to do with them the better….the relationship broke…”.
Asked by me what had happened to his buyer, Mr. Georgalis stated that they were struggling to arrange finance and that “Robyn gave me a deadline…. ‘Make it happen by 5 o’clock Friday or don’t bother talking to us again’” The buyers believed the situation they were in was too hard, and withdrew their interest.
Next, I invited Mr. Presti to address me on the issues raised by the officers from the Department of Fair Trading. He confirmed that they had not given him any written advice but had provided him with a copy of the relevant legislation which was a copy of Part 6 of the Agents Act 2003. That Part deals with Agency Agreements. The document contained hand written comments, to the effect that the agreement must contain certain information and or details, and if it does not the agreement does not comply with the Act.
Whilst I would agree with that statement, I do not believe that failure to comply with the Act would necessarily result in the agreement being rendered unenforceable.
I went through the alleged deficiencies as pointed out to me, including the lack of Maloney’s licence number on the agreement and the expressed view that the wording in the agreement form used by the applicant company was deficient in that it failed to specify whether the agreement was an exclusive agency, or a sole agency agreement. Maloney’s agreement purported to appoint them as sole and exclusive agents.
No-one was willing or able to argue that this wording was contrary to the Acts intention, but in any event I did not believe that any perceived technical defects in the agreement were a breach of any of the essential terms of the contract, or were of such a nature as to give rise to a claim of damages by the Prestis for any such breach. To my mind, the agreement between the parties was valid and enforceable. Mr Presti basically admitted that he was using the information supplied by the Departmental officers in an attempt to have the contract rendered or declared invalid, and thus avoid having to pay the advertising and other associated costs. That attempt failed.
Whether or not Maloney’s could be prosecuted for breaching the Act, if in fact their agreement was in breach, is another matter entirely, and one I do not have to comment on.
In my view, which I stated at the time, the parties signed an agreement with the respondents agreeing to the marketing schedule and it is related expenditure, which was incurred relatively early in the dealings between the parties. Subsequently an account was rendered in accordance with the agreed terms of that contract, which the Presti’s neglected or refused to pay for reasons already outlined. However, I found no reason to dismiss Maloney’s claim in respect of these amounts, and entered judgment accordingly in the sum of $3,366.00, together with costs of $112.00
Further, I also ordered that the counterclaim be dismissed, as I believed it was the respondent’s decision, and theirs alone to make, not to tenant their premises and leave it on the market on the chance that a buyer would purchase the property. No-one could, or did, guarantee that a sale would in fact, eventuate, and one did not before the house was eventually withdrawn from sale.
After consideration of the Presti’s stated inability to pay the judgment debt, I allowed them three months grace.
P R Thompson
Member
4 June 2009
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO: XD08/82151
APPLICANT: MALONEY’S THE ESTATE AGENT PTY LTD
RESPONDENTS: JASON PAUL PRESTI & ROBYN CARMEN MUSCAT-PRESTI
TRIBUNAL MEMBER: MR P THOMPSON
DATE OF HEARING: 10 February 2009 PLACE: CANBERRA
DATE OF DECISION: 10 February 2009 PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
0
0
0