Settlement Agents Supervisory Board v L J Hooker Settlements Pty Ltd - [2009] WASCA 89

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: SETTLEMENT AGENTS SUPERVISORY BOARD -v- L J HOOKER SETTLEMENTS PTY LTD [2009] WASCA 89

CORAM: MARTIN CJ
PULLIN JA
NEWNES AJA

HEARD: 10 FEBRUARY 2009

DELIVERED : 19 MAY 2009

FILE NO/S: CACV 22 of 2008

BETWEEN: SETTLEMENT AGENTS SUPERVISORY BOARD
Applicant
AND
L J HOOKER SETTLEMENTS PTY LTD
Respondent

ON APPEAL FROM:
For File No              :  CACV 22 of 2008
Jurisdiction              :  STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Coram  :JUDGE J CHANEY (ACTING PRESIDENT)

MR M ANDERSON (SENIOR SESSIONAL MEMBER)
MS J TOOMER (SESSIONAL MEMBER)

Citation :SETTLEMENT AGENTS SUPERVISORY BOARD and L J HOOKER SETTLEMENTS PTY LTD [2008] WASAT 27
File No :VR 38 of 2007

Catchwords:

Settlement agents - Whether cause for disciplinary action - Unit trust structure - Real estate agents issued with units - Real estate agents referring business to settlement agency - Settlement agency profits distribution in proportion to unit holding - Whether issue of units constitutes reward for referring business - Whether payment of profits constitutes reward for referring business

Leave to appeal - Criteria

Legislation:

Settlement Agents Act 1981 (WA), s 3, s 44(7), s 44(8), s 83

Result:

Leave to appeal granted
Appeal dismissed

Category: B

Representation:

Counsel:

Applicant: Mr S W O'Sullivan
Respondent: Mr M H Zilko SC & Mr E W Nielsen

Solicitors:

Applicant: Settlement Agents Supervisory Board
Respondent: Nielsen & Co

Case(s) referred to in judgment(s):

Chalmers v The Commonwealth of Australia [1946] HCA 37; (1946) 73 CLR 19
Paridis v Settlements Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361
Precup v Inco Ships Pty Ltd [2007] AATA 1991
R v Post Master General (1876) 1 QBD 658
Rahhal v Minister for Immigration & Citizenship (No 2) [2008] FMCA 935
Secretary to the Department of Premier & Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331
Settlement Agents Supervisory Board and Strand Settlements Pty Ltd [2005] WASAT 350
Thompson v Primary Producers Improvers Pty Ltd [2004] NTCA 12

MARTIN CJ:

Summary

The applicant, the Settlement Agents Supervisory Board (the Board) commenced proceedings in the State Administrative Tribunal (the Tribunal) against the respondent, L J Hooker Settlements Pty Ltd (L J Hooker Settlements), pursuant to s 83 of the Settlement Agents Act 1981 (WA) (the Act). L J Hooker Settlements is a settlement agent licensed by the Board to carry on business as such pursuant to the provisions of the Act. It carries on business as the trustee of a unit trust known as the L J Hooker Settlements Unit Trust (the Trust). All the holders of units in the Trust are, or are associated with, L J Hooker real estate offices. Each L J Hooker real estate office operates as a franchise under the L J Hooker group and pays franchise fees to L J Hooker Ltd. Each real estate office lists and sells real estate. The profits derived by L J…

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: [2009] WASCA 89
Decision Date: 19 MAY 2009

CaseChat Overview and Summary

The Settlement Agents Supervisory Board (SASB) initiated proceedings against L J Hooker Settlements Pty Ltd (Hooker), seeking to establish if the settlement agency's practices warranted disciplinary action. The dispute centred on Hooker's issuance of units in a trust structure to real estate agents, who then referred business to the settlement agency. Profits from the settlement agency were distributed to unit holders in proportion to their unit holdings. The SASB argued that the issuance of units and the payment of profits constituted rewards for referring business, which would be improper. The Federal Court of Australia was tasked with determining whether Hooker's practices contravened the Settlement Agents Act 1991.

The primary legal issue before the court was whether Hooker's unit issuance and profit distribution arrangements constituted a reward for referring business, thus contravening the Settlement Agents Act. The court needed to ascertain if the issuance of units to real estate agents who referred business to Hooker amounted to a reward and if the distribution of profits to those unit holders constituted a further reward. Additionally, the court had to consider the criteria for granting leave to appeal.

The court found that Hooker's practices did not constitute a reward for referring business, as the unit issuance and profit distribution were not contingent on the referral of business. The court held that the trust structure and distribution of profits were not designed to incentivise referrals, and therefore, did not contravene the Settlement Agents Act. The court also noted that the appeal's prospects were limited, but granted leave to appeal on the basis that the case involved a novel interpretation of the Act. Ultimately, the appeal was dismissed as it did not succeed on its merits.

Orders

Orders of the court

Leave to appeal granted Appeal dismissed

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MS J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: MS J

Full text does not contain this section.