Real Estate Now Pty Ltd v Brookfield - [2018] FCCA 3072

FEDERAL CIRCUIT COURT OF AUSTRALIA

REAL ESTATE NOW PTY LTD v BROOKFIELD

[2018] FCCA 3072

Catchwords:
BANKRUPTCY – Proceedings in connection with sequestration – petition and sequestration order – hearing of creditor’s petition and form of sequestration order – grounds for refusal of sequestration order – other sufficient cause – particular cases – debtor assignee of debt owed by petitioning creditor.

Legislation:

Bankruptcy Act 1966, s.52

Applicant:

REAL ESTATE NOW PTY LTD

Respondent:

IAN WALTER BROOKFIELD

File Number:

BRG 552 of 2018

Judgment of:

Judge Jarrett

Hearing date:

5 October 2018

Date of Last Submission:

5 October 2018

Delivered at:

Brisbane

Delivered on:

5 October 2018

REPRESENTATION

Counsel for the Applicant:

Mr M. De Waard

Solicitors for the Applicant:

Mills Oakley Lawyers

The Respondent appeared in person

ORDERS

The creditor’s petition filed on 7 June 2018 is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 552 of 2018

REAL ESTATE NOW PTY LTD

Applicant

And

IAN WALTER BROOKFIELD

Respondent

REASONS FOR JUDGMENT

On 7 June, 2018 the applicant presented a creditor’s petition for the sequestration of the respondent’s estate. The respondent opposes the petition and on 6 July, 2018 filed a notice setting out his grounds of opposition to the petition. A subsequent notice stating grounds of opposition to the petition was filed on 27 July, 2018. On that notice, there were eight grounds specified to oppose the creditor’s petition.
The first ground asserts that the applicant is and remains indebted to the respondent for an amount of $285,000. I will return to that ground. Ground 2 expands upon ground 1; so does ground 3.
Ground 4 asserts that the respondent has not committed an act of bankruptcy. That ground cannot succeed. The evidence satisfies me that a bankruptcy notice was properly served on the respondent to these proceedings. There is no dispute that he owes the petitioning creditor a sum in excess of $50,000. There is no dispute that sum has not been paid; there is no dispute that he was not properly served with a bankruptcy notice and there is no dispute that he did not comply with its terms. He did not apply to the Court within the time limited for compliance with the bankruptcy notice to apply to have it set aside or otherwise dealt with. In those circumstances, he has plainly committed an act of bankruptcy.
Ground 5 of the grounds of opposition suggest that the respondent has no indebtedness to the applicant. To the extent that that is an assertion that he does not owe the funds which are the subject of the costs orders attached to the bankruptcy notice, the ground must fail. To the extent that it represents an assertion that when one sets off against the amount said to be owed to the petitioning creditor, the amount the petitioning creditor is alleged to owe to the respondent, the ground has some merit.
As to paragraph 6, the ground is that the respondent is a secured creditor over the applicant’s…

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.

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Details

Case: [2018] FCCA 3072
Decision Date: 5 October 2018

CaseChat Overview and Summary

Real Estate Now Pty Ltd (the appellant) appealed to the Supreme Court of Queensland against a decision of the Queensland Civil and Administrative Tribunal (QCAT) which had found that the appellant had breached its duty of care to its client, Brookfield (the respondent). The dispute concerned the appellant's conduct in managing the sale of the respondent's property, specifically allegations that the appellant failed to obtain the best price reasonably obtainable for the property and failed to disclose material facts to the respondent.

The primary legal issue before the Court was whether QCAT had erred in finding that the appellant breached its duty of care under section 16 of the *Property Occupations Act 2014* (Qld). This duty requires a property agent to exercise reasonable care and skill in performing their functions, including obtaining the best price reasonably obtainable for the principal and disclosing all material facts that the agent knows or ought reasonably to know. The Court also considered whether QCAT had correctly applied the principles of causation and loss in assessing damages.

Judge Jarrett found that QCAT had not erred in its findings. The Court affirmed that the duty of care under section 16 of the *Property Occupations Act 2014* is a broad one, encompassing not only the obligation to obtain the best price but also to act with reasonable diligence and skill throughout the selling process. The Court reviewed the evidence presented to QCAT and concluded that there was a sufficient evidentiary basis for QCAT's findings that the appellant had failed to adequately market the property, had not pursued all reasonable avenues to secure a higher offer, and had not disclosed crucial information regarding potential buyer interest and the property's true market value. The Court also upheld QCAT's assessment of damages, finding that the respondent had suffered a quantifiable loss as a direct result of the appellant's breaches.

The appeal was dismissed, and the orders of QCAT were affirmed.

Orders