Robertson v Airstrike Industrial Pty Ltd
[2013] QCAT 107
•6 March 2013
| CITATION: | Robertson v Airstrike Industrial Pty Ltd [2013] QCAT 107 |
| PARTIES: | Mrs Janice Robertson Mr Charles Robertson (Applicants) |
| V | |
| Airstrike Industrial Pty Ltd (Respondent) |
| APPLICATION NUMBER: | OCL041-10 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 30 July 2012 and 1 August 2012 and written submissions received 3 September 2012 |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr Jim Allen, Member |
| DELIVERED ON: | 6 March 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Each party shall file two (2) copies and give one copy to the other party of submissions in regard to the costs incurred by Airstrike Industrial Pty Ltd in regard to the hypothetical loss case on or before 4.00 p.m. on 15 March 2013. 2. The Tribunal will make its final order not before 18 March 2013. |
| CATCHWORDS: | PROPERTY AGENTS –CLAIM AGAINST THE CLAIM FUND – FALSE OR MISLEADING REPRESENTATION – COSTS Property Agents and Motor Dealers Act 2000 ss 470, 472, 488, 490, 530, 574. To v Chief Executive Department of Tourism etc[2006] QDC 381 Re Demagogue Pty Ltd v Ramensky [1992] FCA 557 Go & MJT Nominees Pty td v Hollywells Homewares Pty ltd & Ors [2010] QSC 169 Wood and ors v Chief Executive, Department of employment, economic Development and Innovation and ors [2011] QCAT 241. |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Mr and Mrs Robertson were represented by Mr Clutterbuck of Counsel instructed by McLaughlins Lawyers |
| RESPONDENT: | Airstrike Industrial Pty Ltd was represented by Mr Heath, solicitor of Carter Newell |
REASONS FOR DECISION
Mr and Mrs Robertson own premises located at Unit 1, 3 Dalton Street, Upper Coomera from which they conduct a take away food business known as “Robbo’s Tasty Tucker”. The contract for purchase of the premises was dated 18 October 2006 for a price of $352,000 including GST and settlement occurred in October 2007. The property was purchased off the plan from the developer, Virgo Corporation Pty Ltd and the real estate agent was Airstrike Industrial Pty Ltd trading as Airey Industrial. Mr Graeme Salt was the agents representative that Mr and Mrs Robertson dealt with.
The business has not been successful and the value of the property appears to have fallen substantially since purchase. As a result Mr and Mrs Robertson have made a claim against the claim fund under the Property Agents and Motor Dealers Act 2000 on the ground that Mr Salt made false or misleading representations to them at the time of their purchase in regard to the road access to the industrial estate and they have suffered financial loss as the result of that representation.
Legislation
A claim against the fund may be made by a person who has suffered financial loss because of the happening of any one of a number of events[1]. This includes the contravention of section 574 of the Act, that is the requirement that a licensee or registered employee must not represent in any way to someone else anything that is false or misleading in relation to the letting, exchange or sale of property. Airstrike Industrial has acknowledged that it is a licensee, that is a Real Estate agent licensed under the Act and Mr Salt has acknowledged that he is a registered employee.
[1] S 470 of the Property Agents and Motor Dealers Act 2000
A claim against the fund must be made within the earlier of one year after the person becomes aware that they have suffered financial loss because of the happening of an event mentioned in s.470(1) and three years after the happening of the event that caused the person’s financial loss[2]. Mr Heath submitted that having regard to the manner in which the Robertson’s claim has been structured it is open to the Tribunal to conclude that the applicants first gained an appreciation of their loss by the first anniversary of the settlement of the contract, namely 31 October 2008 and, therefore, the claim against the claim fund, lodged on 3 September 2009, has been brought within time. However, if the Tribunal concludes that the relevant event that caused the applicant’s loss is the making of a particular representation to the Robertsons by Mr Salt prior to 3 September 2006 then the claim should have been made against the claim fund before 3 September 2009, and s.472 of the Act has not been satisfied. It is clear from the evidence that a series of representations were made by Mr Salt culminating in first the signing of a letter of offer by both parties which was signed by the Robertson’s on 28 August 2006 and Virgo Corporation on 12 September 2006 and the signing of the contract on 18 October 2006. There is insufficient clarity around which particular iteration of the representation was the final one and so in fairness the Robertson’s should be allowed up to the date of the signing of the contract and so the requirements of section 472 have been met.
[2] S 472 of the Property Agents and Motor Dealers Act 2000
The Tribunal may allow the claim, wholly or partly or reject the claim[3]. The Tribunal may allow the claim only if satisfied, on the balance of probabilities, that an event mentioned in s. 470(1) happened; and the claimant suffered financial loss because of the happening of the event[4]. If the Tribunal allows the claim, wholly or partly, the Tribunal must take into account any amount the claimant might reasonably have received or recovered if not for the claimant’s neglect or default[5], decide the amount of the claimant’s financial loss[6]; and name the person who is liable for the claimant’s financial loss[7]. The Tribunal may also make an order about the recovery of an amount payable in relation to a claim[8]. The payment may be recovered from a person named as liable for the loss and if a corporation is named this will include its executive officers[9], as defined in the Act.
[3] S 488(2) and S530 (a)of the Property Agents and Motor Dealers Act 2000
[4] S 488(3) of the Property Agents and Motor Dealers Act 2000
[5] Ss 488 (3)(a)(i) of the Property Agents and Motor Dealers Act 2000
[6] SS 388(3)(b) of the Property Agents and Motor Dealers Act 2000
[7] S 488(3) and 530(b) of the Property Agents and Motor Dealers Act 2000
[8] S 530 (c ) of the Property Agents and Motor Dealers Act 2000
[9] S 490 of the Property Agents and Motor Dealers Act 2000
A claim against the fund as a result of the alleged contravention of s574 of PAMDA was considered by McGill DCJ in To v Chief Executive Department of Tourismetc[10] and detailed submissions were made by Mr Heath in respect of the application of that decision to this case. Judge McGill stated that “In order to show for the purposes of s 470 that there has been a contravention of s 574, it is necessary to show that the appellant has committed an offence defined by it, the only difference being that the standard of proof is only on the balance of probabilities: s481(2); s488(2)[11]” and further that “in my opinion in order to recover compensation it is necessary to show that if the appellant had been charged she would have been convicted of the offence, and that involves showing, for the reason that I have stated, that there was no defence under s 24 (of the Criminal Code - Mistake of Fact ), in respect of which there was some onus on the appellant[12].
[10] [2006] QDC 381
[11] At para 39
[12] At para 42
Judge McGill also held in regard to intention that “It is not a matter of adopting or implying into the section some requirement of mens rea; under the Criminal Code there is generally no requirement of mens rea as such in Queensland criminal law. The effect of Kehoe, in my opinion, is that Part V of the Criminal Code does apply to the offence created by s 574, except to the extent that some particular provision impliedly applies to the contrary. There is no express provision to the contrary in the section.[13]
[13] At para 46
This then also brings in the defence under section s23 (of the Criminal Code -Intention-motive). Judge McGill held that “therefore, the appellant would not be liable for a representation which was made independently in the exercise of her will, or for an event which occurred by accident… Intention is not expressly declared to be an element of the offence, and therefore the result intended to be caused is immaterial.[14]
[14] At para 47
Mr Clutterbuck was concerned that Mr Heath was attempting to raise defences which had not previously been pleaded under sections 23 and 24 of the Criminal Code in reliance on the decision in To and submitted that decision should not be relied upon based on similar provisions in the Trade Practices Act 1974 (Cth) which require the Court to view the evidence in determining whether in fact a “breach” has taken place independently of the criminal sanctions and determine the matter on the balance of probabilities. It was submitted that, as here, it is a civil action for the recovery of compensation (see s.77 by way of analogy of the TPA). The application, for contravention is assessed (for recovery of compensation) on the balance of probabilities. He cites a decision[15] of Justice Pincus in support of this. In the circumstances the onus of proof is said to be different and it is submitted, that the criminal sanctions, bear no effect upon the onus of proof in this case, and the defences relied upon by the respondent (if so permitted) do not apply.
[15] The Heating Centre Pty Ltd v Trade Practices Commission (1986) 9 FCR 153 at page 160
It is clear that the matters necessary to prove a claim against the fund as a result of the contravention of section 574 of the Act were considered by Judge McGill in To v Chief Executive, Department of Tourism etc. Mr Clutterbuck has asked the Tribunal not to follow Judge McGill’s decision. He cited the decision of Justice Pincus discussed above in support of this. When that decision is considered it is noted that it is an appeal against penalty for a breach of s48 of the Trade Practices Act 1974. Section 48 is found in Part IV of that Act and under section 78 a criminal proceeding does not lie against a person by reason of a contravention of Part IV. The section which is referred to as being analogous to the current application, s.77 is for the recovery of a pecuniary penalty in the Court. This is clearly not analogous to a claim for compensation as a result of contravention of a section such as s.574 which constitutes an offence. The Tribunal agrees that the onus of proof is on the balance of probabilities in accordance with s488 (2) of the Act as stated by Judge McGill.
The Tribunal accepts that the proper law in regard to interpreting s. 470, where there is an alleged contravention of s.574 is as set out by Judge McGill in To and this has been confirmed by Member Howard in her decision in Wood v and ors v Chief Executive, Department of employment, Economic Development and Innovation and Ors [2011] QCAT 241. The question as to whether there is any defence available to Airstrike Industrial will be a matter for consideration by the Tribunal.
The statements made by Mr Salt
The Robertson’s case is predicated upon representations alleged to have been made by Mr Salt as to future arrangements with respect to access and traffic flow to the industrial estate. Mr Salt is said to have said or used words to the effect that:-
a)Access to the estate via Kristins Lane was only a temporary arrangement;
b)Dalton Street was going to be extended through to Day’s Road. “once the new road is through, your premises will be first cab off the rank and you’ll be laughing”;
c)Once Dalton Street was connected to Days Road, access via Kristins Lane would be closed off;
d)Once access via Kristins Lane was closed off, the only way into the estate would be along Dalton Street, straight past the property being considered by the Robertsons.
[13] These words were alleged to have been said by Mr Salt to Mr and Mrs Robertson in person during a meeting with Mr Salt, and to them on the land, in or about late May of 2006. Though at the hearing the Robertsons accepted that based on the evidence from Mr Salt’s diary the first time the representations were made was on 19 July 2006. Mr Salt also denied that he ever attended at the site with Mr and Mrs Robertson, though they confirmed this was their recollection.
[14] Mr Salt is alleged to have made a further representation in discussions after an expression of interest was submitted by saying words to the effect that “once Dalton Road is through to Days Road, you’ll be laughing.”
[15] Airstrike Industrial admitted in the defence that Mr Salt said words to the effect of paragraph 12(a), 12(c) and the first sentence in 12(b) but that he informed the Robertson’s that the plans for Dalton Street to be connected to Days Road “were in the future”. Mr Salt was also said to have relied upon decision notices published by the Gold Coast City Council and a project brief prepared by the developers of the land. Where Mr Salt stated to the Robertsons that “your premises would be the “first cab off the rank” this was said to refer to the fact that the Robertsons proposed premises would be at the front of a 34-unit industrial complex to be built on the land and so would be well positioned to take advantage of trade from other occupants of that complex, and was not directed to the connection of Dalton Street to Days Road. In making the statement in 14(c) it is said to remain the case that future development in the Coomera Industrial Precinct is predicated on the connection of Dalton Street to Days Road. Airstrike Industrial denies that Mr Salt made the statement in 14(d). Airstrike industrial denies that Mr Salt said words or a phrase to the effect of the words in paragraph 14.
[16] Mr and Mrs Robertson concede that Mr Salt did not give them any express representation as to the time when Dalton Street would be connected to Day’s Road and this is confirmed by Airstrike Industrial.
[17] In their affidavits Mr Robertson[16] and Mrs Robertson[17] stated that Mr Salt had stated access via Kristins Lane was a short term temporary arrangement. At the hearing they both accepted that he had not used the word short term but he continually used the word temporary. Mr Robertson stated that the words short term was his inference based on Mr Salt continuing to say that “the entrance to the complex was temporary” and he took this to mean a short time. This statement was in the context of Mr Salt showing them plans and brochures for the development neither of which showed any connection from Dalton Street to Days Road.
[16] Exhibit 7
[17] Exhibit 1
[18] It is clear that Mr and Mrs Robertsons affidavit are very similar and this matter was extensively raised by Mr Heath. This goes to whether they are able to corroborate each other. The fact of the matter though is that Mr Salt is not denying that certain statements were made to the Robertsons. The only need for corroboration is as to whether those statements were made at the site as alleged by Mr and Mrs Robertson or at his office as alleged by Mr Salt. The fact is the primary statements as too temporary access and the connection of Dalton Street to Days road were made and that is not in issue and it does not matter where they were made.
[19] In his evidence at the hearing Mr Salt stated when asked what he had told the Robertsons that “Dalton Street would be extended in the future across two adjoining properties and we did not have a time frame for it” and further “that it was always going to be temporary access off Kristins Lane”.
[20] Statements were provided by Mr Isaac[18] and Mr Torrington[19] two other purchasers in the development. While their evidence that Mr Salt had made specific representations about when Dalton Road was to be connected to Days Road was denied by Mr Salt in his affidavit[20] he accepted that he had made some statements to each of them in regard to the connection of Dalton Street to Days Road.
[18] Exhibit 4
[19] Exhibit 8
[20] Exhibit 14
Has Mr Salt contravened s. 574 of the Act by the making of false or misleading representations?
The Robertsons allege that Mr Salt did not qualify, restrict or limit his statement as to when Dalton Street would connect with Days Road. Nor did he draw Mr and Mrs Robertson’s attention to certain facts, matters and circumstances set out below:-
a)That there was no actual Local Government proposal to extend Dalton’s Street to connect with Days Road in existence at the time Mr Salt was making the alleged representations;
b)That the connection of Dalton Street to Days Road might be complicated or delayed due to the Road being planned to cross privately owned land;
c)That in order to build the proposed extension of Dalton Street to connect with Days Road that privately owned land would have to be resumed either in the course of the Local Government Authority of approving development applications on those parcels of land or by the Local Government Authority undertaking compulsory acquisition proceedings against the owners of those properties;
d)That if the owners of any of the parcels of land which the proposed road would have to cross undertook any development or building that did not require development approval from the local government authority then the proposal to extend Dalton Street to connect with Days Road would be severely and adversely affected;
e)That the Local Government Authority was relying upon contributions from owners of the parcels of land which the proposed road would have to cross to fund construction of the extension of Daltons Street to connect with Days Road; and
f)That if no development activity took place on any of the parcels of land which the proposed road would have to cross, then this was likely to cause substantial delay to the proposed extension of Dalton’s Street to connect with Days Road.
[22] It was submitted on behalf of the Robertson’s that those matters were matters that were, or ought to have been within Mr Salt’s knowledge and were never communicated to them.
[23] The representations are, said to be, essentially, the failure of the agent to bring to the Robertson’s attention, the lack of approval that was within his knowledge, in relation to the connection of Dalton Street to Days Road which affected the business conducted and the sale of the property when he was duty bound, so to do (PAMD (Real Estate Agency practice Code of Conduct) Regulation 2001 Pt. 2 “General Rules of Conduct”. It is noted that Mr Heath alleges that Mr Salt complied with the requirements of the code as the statements he made were true.
[24] Airstrike Industrial denies that Mr Salt had any obligation to qualify, restrict or limit his statement to the Robertsons concerning the connection of Dalton Street to Days Road, because the statement were true having regard to the approval of plans by the Gold Coast City Council, which plans are predicated on the extension of Dalton Street, and which did not include any representation as to when Dalton Street would be connected to Days Road. In the circumstances Mr Salt had no obligation to qualify, restrict or limit his statement, either in fact or at law. Mr Salt disclosed to the Robertsons all facts known to him and Airstrike International regarding the connection of Dalton Street to Days Road. There was no representation as to when Dalton Street would be connected to Days Road. That any reasonable purchasers in the Robertsons position would have conducted their own due diligence inquiries, including retaining solicitors and/or town planners to advise them in relation to the matters raised in paragraph 21. It was denied in the defence that the matters in paragraph 21 were or ought to have been within Mr Salt’s knowledge, because they were not. That he was not qualified or accredited to advise them of those matters.
[25] The Robertson’s claim is predicated on a misrepresentation by silence in that the matters mentioned in paragraph 21 should have been brought to their attention and were not. Reliance was placed by both parties on the decisions in Go & MJ Nominees Pty ltd v Hollywells Homewares Pty Ltd[21] and Re Demagogue Pty Ltd v Ramensky[22] in regard to what constitutes a representation by silence. In Go a potential tenant was led to believe when shown the plans for a shopping centre that there would be two entrances to the shopping centre and this would provide them with passing trade. In fact the second entrance did not have council approval and this was known to the lessor and not disclosed, that case was a retail shop lease case. Re Demagogue involved the off the plan purchase of a residential unit where a representation was made that there would be access to the property and it was not disclosed that the access was via a road licence which had been granted to the developer. It was held that this was unusual and should have been disclosed.
[21] [2010] QSC 169
[22] [1992] FCA 557
[26] It has been asserted here by Mr Heath that Mr Salt was under an obligation to disclose the temporary nature of the access via Kristins Lane and that Dalton Street would be connected to Days Road. This appears from Mrs Jones’s, a director of the developer Virgo Corporation Pty Ltd, affidavit[23] and Mr Chard’s affidavit[24], he was employed as project manager of the development of this site and an adjoining site. It is stated in Mr Chard’s affidavit that there was a requirement to disclose the temporary nature of the Kristins Lane access, in the development approval for the land owned by the Clyplyn Group. The only decision notices before the Tribunal were those annexed to Mr Salts affidavit and none of those disclosed any requirement to disclose in the contract the temporary nature of the access via Kristins Lane as was submitted by Mr heath and in fact no such disclosure appeared in the Robertson’s contract.
[23] Exhibit 6
[24] Exhibit 13
[27] Significantly, Mr Salt stated when asked by Mr Heath “did the fact that Dalton Street was going to be connected to Days Road feature in any advertising that you published in respect of the Coomera Business Park, “No it didn’t, it didn’t appear on our brochure, it didn’t appear on the sign, it didn’t appear in any newspaper advertising because we had no time frame. We didn’t promote this as a selling point.
[28] The statement made by Mr Salt has two parts firstly that there was temporary access to the site from Kristins lane and then that once Dalton Street was connected to Days Road that temporary access would be closed. Both Mr and Mrs Robertson understand the use of the word temporary to mean short term. So that while Mr Salt may not have made any direct representation as to the time when Dalton Street would be connected to Days road they would have understood that it was to occur within a short time by his use of the words temporary access.
[29] It is said that this is their inference but it is an inference that could have only been drawn from statements made by Mr Salt because as he has said himself the connection of Dalton Street to Days Road was not mentioned in any of the material prepared for the sale of the development as it was not known when the connection would occur. Mr and Mrs Robertson had no other source for them to make any inferences about when Dalton Street would be connected to Days road except fro the statements made by Mr Salt.
[30] Mr Salt has in his affidavit provided partial copies of decision notices in respect of the development which use the word temporary in regard to the access to the estate from Kristins Lane. The fact that this access is across private land and is not a made road clearly reinforces the temporary nature of it. It is also clear from the decision notices that development of this land and the rest of the land along the Kristins lane corridor was predicated on each developer dedicating part of the land for the connector road, that is the Dalton Street to Days Road connection. The statement that the connection to Kristins lane is a temporary access road is indeed true but only in relation to it not being a dedicated road it is not true in a temporal sense.
[31] It is this that makes the statement misleading because Mr and Mrs Robertson were lead to believe that the access was temporary in regard to it being short term as in the temporal sense and they associated its short term nature to the timing of the connection of Dalton Street to Days Road. Mr Salt has acknowledged that there was no time frame for the connection of Dalton Street to Days Road and as such he should have ensured when he spoke to Mr and Mrs Robertson in regard to it that he did not use terminology which could lead them into error, which according to Judge McGill makes the representation misleading as mentioned above. He should have qualified his statement by at least saying that it was unknown when the connection would occur as it would require other developers to finalise their developments before the road would be connected.
[32] Mr Heath has in his submissions raised the defence of mistake of fact under section 24 of the Criminal Code on the basis that Mr Salt was acting under an “honest and reasonable, but mistaken belief in the existence” of a certain state of facts. The raising of this defence is in accordance with Judge McGills decision in To which has been accepted by the Tribunal. The Tribunal also notes Mr Clutterbucks objections that this defence was not raised in the defence which was filed or at the hearing. It is clear that the flow of evidence which Mr Heath sought from Mrs Jones Mr Chard and Mr Salt at the hearing was in support of this defence at the hearing and Mr Clutterbuck had sufficient notice to raise the issue in his submissions to the Tribunal.
[33] The basis of the defence is that Mr Salt had a reasonable expectation, as at mid-2006, that the connection of Dalton Street to Days Road would be effected and he had no basis to conclude that the conditioning of the development of the adjoining sites would be a problem and so that the Kristins Lane entrance would be temporary. Further that the delay in the creation of the industrial collector road, Dalton Street to Days Road, were unexpected and unusual, insofar as they were the result of an unfortunate confluence of vents.
[34] The problem with this defence is that on Mr Salt’s own evidence at the time he made the statements in question he had no expectation of when Dalton Street would be connected with Days Road. While he had grounds to believe that it was intended that the connection would occur in the future he had no grounds to believe that it would occur at any particular time as the developer of the estate had no control over the completion of the connecting road. This was because the land over which the other parts of the road needed to be built was owned by at least two other parties and it was for them to put in their part of the road at the time when they developed their land. While the access from Kristins was temporary access as a term of art in the development approval, Mr Salt certainly had no reasonable ground for believing that the access provided by Kristins Lane was temporary in terms of time and it was the use of the term temporary access and its ordinary meaning which mislead the Robertsons. Mr Slat therefore had no honest and reasonable belief that the connection of Dalton Street to Days Road would occur in the short term and so the defence is not made out.
[35] The Tribunal finds in accordance with the decision in To that if Mr Salt had been prosecuted under section 574 of the Act for making a false or misleading statement in regard to his statements in respect of Kristins Lane being temporary access and the connection of Dalton Street to Days Road he would have been found to have contravened the section and the defence of mistake under section 24 would not have been made out. Mr Salt’s contravention of section 574 constitutes the happening of an event for the purposes of s. 470 of the Act.
Have Mr and Mrs Robertson suffered financial loss because of the happening of the event
[36] The Robertson’s claim is a “no transaction” one, that is but for the misrepresentation they would not have entered the transaction. This is on the basis that Mr and Mrs Robertson were intending that the premises be used as an industrial food takeaway which was known to Mr Salt as the unit was marketed for that purpose and that for them passing trade was a very important consideration in their purchase. Mrs Robertson evidence was that “if access to the estate was by Dalton Road all workers entering and exiting the estate would pass our premises and be far more inclined to eat at our business. At present all access to and from the estate is via Kohl Street (off Kristins lane), not past our premises. Workers within the estate therefore have quick and easy access to other food vendors such as the local BP service station (which includes a McDonalds)”. Mr and Mrs Robertson claim that if they had known that the connection of Dalton Street to Days Road was not to occur in a reasonable time they would not have entered the transaction.
[37] Mr Heath raised an issue in regard to the Robertson’s reliance that the road would be built within a certain time of the contract settling and that there was no benchmark against which anyone could measure when the contract would settle as at mid-2006 as there needed to be the creation of a Community Titles Scheme before that could occur. This issue was raised in cross-examination of both Mr and Mrs Robertson at the hearing. The Robertsons had stated that they expected that the road would be connected within 6-12 months of the contract settling and Mr Heath suggested that this was impossible because no contract had yet been entered at the time of the representations and it was subject to the creation of the Community Titles Scheme.
[38] Clearly Mr and Mrs Robertson had entered into a contract for an off the plan purchase of the premises and settlement would occur when the Community Titles Scheme had registered and while the actual date was unknown this was a date which would be fixed in time. At the time the contract settled they would be required to pay the balance purchase price and fitout their business if they had not already done so. It would be at this point after settlement that they would begin trading and that they would have made their financial commitment. The completion of the road was only relevant in terms of being within a period of time after settlement of the purchase and it was not a particular date but a date to be fixed by the settlement date which was important.
[39] The defence alleges that the fact that the Robertson’s business is unprofitable is due to their inefficiency and ineptitude in running the business and lists certain instances of this. These allegations were not subject to proof by Airstrike Industrial and they are not accepted by the Tribunal. The Robertson’s evidence was that they had previous experience in owning a milk bar and a noodle bar and had managed a Hotel. They had also according to the joint expert report[25] expended $174,448 in respect of plant and equipment and fit out for the takeaway business. Clearly they had business experience in the area of retail food sales and in general business management. There was no evidence that they had not appropriately fitted out the premises. The efforts which the Robertsons have gone to in promoting the business are set out in Mrs Robertsons affidavit. While Mr Heath questioned Mrs Robertson about the fact the shop was not opened at a time when there have been potential custom from parents dropping their children at a ballet school there was no conclusive evidence that the Robertsons had contributed to any loss by their own actions. The Tribunals accepts that the Robertsons have not contributed to their loss by not making appropriate efforts to profitably operate their business.
[25] Exhibit 16
[40] The Tribunal is satisfied based on the above discussion that Mr and Mrs Robertson entered the transaction as a result of the representation made by Mr Salt and that any loss they suffered is because of that event on the basis of a “no transaction” claim.
[41] The experts evidence as to the amount of the loss which has been accepted by both parties is summarised in the Joint Experts Report of Mr Paul Vincent and Ms Linda Bundesen[26] and the Expert Valuers Report of Amy Hamilton and John Kendall[27]. The calculation of the loss in relation to the “no transaction” claim is set out in the joint experts report as follows:
[26] Exhibit 16
[27] Exhibit 17
All cash flows out (purchase price of property, purchase of plant and equipment and trading losses (exclusive of depreciation)
Purchase Price of the property (excluding GST) $320,000
Stamp duty on the purchase price 9,025
Legal and other fees on Purchase (estimated) 1,000
Plant and equipment (as per invoices supplied 174,488
Trading losses 69,638
Total of all cash flows out $574,151
Less: all cash flows in nil
Less: Current value of the property 225,000
(from exhibit 17)
Less: current value of plant and equipment 27,275
Total claim in relation to “No Transaction” $321,876
[42] The Tribunal notes that the amount of Mr and Mrs Robertson loss is $321,876 and the maximum amount that can be recovered from the fund for a single claim is $200,000[28]. Mr and Mrs Robertson have agreed to limit their claim to the amount that can be recovered under the Act.
Any amount that Mr and Mrs Robertson might reasonably have received or recovered if not for their neglect or default.
[28] Ss. 492(2) of the Property Agents and Motor Dealers Act 2000 and Reg 55(1) of the Property Agents and Motor Dealers Regulations 2001
[43] If the Tribunal allows a claim it must take into account any amount the claimant might reasonably have received or recovered if not for their neglect or default[29]. This requirement is predicated on the transaction having been entered and the claimant having acted to their own detriment and not mitigated their loss. It does go to the issue of what the claimant could have done to avoid having entered the transaction in the first place. There was no evidence raised as to any amount that Mr and Mrs Robertson might have recovered but for their neglect or default and so there is no amount which needs to be taken into account under this section.
[29] Ss.488(3)(a)(i) of the Property Agents and Motor Dealers Act 2000
[44] There were though two issues which were raised by Mr Heath in regard to actions which Mr and Mrs Robertson might have taken and the contract itself. They are the fact that Mr and Mrs Robertson did not conduct or engage lawyers or town planners to conduct any searches in respect of the matters in regard to the connection of Dalton Street to Days Road and the effect of clause 13 of the contract for sale which is an acknowledgment that the contract contains the entire agreement and there has not been any inducement by any representations made by or on behalf of the seller.
[45] Mr and Mrs Robertson evidence was that Mr Salt held himself out as a real estate agent qualified in the area of the sale of industrial property and they relied on his representation and did not consider it necessary to conduct searches to satisfy themselves of the truth of his representation. Cases such as Ramensky and Go make it clear that while that there is no duty to disclose as such when a representation is made it must not be false or misleading. Here the representation made by Mr Salt was misleading and the Robertsons have relied on it to their detriment. There is no requirement that they have done any searches or otherwise sought advice which would have corrected the error.
[46] Mr Heath cross-examined both Mr and Mrs Robertson in regard to clause 13 and while they accepted that it was part of the contract neither of them had any specific knowledge of it. Mr Clutterbuck cited the decision of Keane J in Downey & Anor v Carlson Hotels Asia Pacific Pty Ltd[30] which makes it clear that if reliance is to be placed on such a clause the misrepresentation must be cured in the contract. Upon a reading of the contract it is clear that it does not cure the misrepresentation as no mention is made of the connection of Dalton Street to Days Road or the temporary nature of the access from Kristins Lane. The Tribunal is satisfied that clause 13 of the contract is not a bar to Mr and Mrs Robertsons claim.
[30] (2005) QCA 199
The person who is liable for Mr and Mrs Robertson’s financial loss
[47] The Tribunal is required to name the person liable for Mr and Mrs Robertsons financial loss[31]. The person or persons named are liable to reimburse the fund[32]. In this case Mr Graeme Salt made the representation which has been held to be misleading and has resulted in Mr and Mrs Robertson loss and he was employed at the time by Airstrike Industrial Pty Ltd who were the agents engaged in the sale of the property. A relevant person is a licensee, Airstrike Industrial or a licensees employee, Mr Salt. In this case Mr Salt has made the misrepresentation while employed by Airstrike Industrial and the company would have benefitted in terms of its commission from Virgo Corporation and Mr Salt would also benefitted as the employee who made the sale. As Airstrike Industrial Pty Ltd is a corporation its executive officers are also liable.[33] According to the ASIC search for the company dated 26 October 2010 submitted to the Tribunal with the original referral by the Department the sole director and secretary of Airstrike Industrial during the period in question was Mr Shane Airey. Therefore Airstrike Industrial Pty Ltd, Mr Shane Airey and Mr Salt are jointly and severally liable for the Robertson’s financial loss.
[31] S488(3)(c) and S530(b) of the Property Agents and Motor Dealers Act 2000
[32] S 490 and s530(c) of the Property Agents and Motor Dealers Act 2000
[33] S490(1)(2)(b)
Costs
[48] The claim has been allowed to Mr and Mrs Robertson to the maximum extent available under the fund and therefore they will not be entitled to any further amount in respect of their legal costs. Mr Heath mooted at the hearing that costs had been incurred in relation to an alternative “hypothetical loss claim” and Airstrike industrial would be seeking those costs irrespective of whether the claim was allowed or not.
[49] Therefore before finalising the amount to be allowed to Mr and Mrs Robertson each party will be given an opportunity to make submissions in regard to costs limited to the above issue in accordance with the above directions. The Tribunals final order will be made after those submissions if any have been considered.
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