Sheryl and David McMullen v Pottsville Beach Real Estate Pty Ltd
[2014] NSWCATCD 12
•16 January 2014
NSW Civil and Administrative Tribunal
New South Wales
Medium Neutral Citation: Sheryl and David McMullen v Pottsville Beach Real Estate Pty Ltd [2014] NSWCATCD 12 Hearing dates: 11 October 2013, 16 December 2013 Decision date: 16 January 2014 Jurisdiction: Consumer and Commercial Division Before: K Holwell, General Member Decision: The application is dismissed
Catchwords: Money order for alleged breach of management contract Legislation Cited: Property Stock and Business Agents Act 2002
Consumer Claims Act 1998Category: Principal judgment Parties: Sheryl McMullen, David McMullen (applicant)
Pottsville Beach Real Estate Pty Ltd (respondent)File Number(s): GEN 13/17907
reasons for decision
APPLICATION
By an application filed 4 April 2013 the applicants sought a money order in the sum of $9,950.00 alleging financial losses as a consequence of (a) the respondent not arranging tenants for the applicants' units; (b) the respondent not explaining parts of the management agreement and (c) the failure of the respondent's systems and internal processes.
JURISDICTION
The Tribunal has jurisdiction to hear and determine this application pursuant to the legislation referred to above. The applicants are consumers. The respondent is a supplier of services in regard to the management of rental premises. The parties entered into agreements in respect of such management. The claim is a consumer claim and it is brought within the time limits in the legislation.
PROCEEDINGS
A directions hearing was held on 19 April 2013. The case could not be settled on that day and it was set down for hearing. Owing to the unavailability of one of the parties the hearing did not take place until 11 October 2013 and 16 December 2013. Thereafter the decision was reserved pending the giving of these reasons. The hearing was sound recorded.
EVIDENCE
Oral evidence was given by Ms. McMullen, Ms. Seiler and Ms. Robinson. A considerable number of documents were tendered. It is not practical to recount all the evidence of the witnesses and the contents of the documents. In making findings I shall endeavour to refer to the main features of the evidence. Findings are made on the balance of probabilities. The applicant has the onus of proof.
FINDINGS
The applicants own three units at Elanora. Only two of the units (units 2 and 3) are the subject of these proceedings. Prior to June 2013 the rental of units 2 and 3 was managed by the Owner Property Group. That firm was purchased by the respondent and from 30 June 2013 the applicants became customers of the respondent.
In May 2013 the applicants received a brochure and related material from the respondent in respect of the potential management of the units. That brochure states that the units would be advertised at the following sites: Real Holidays, Pottsville Beach First National, Real Estate.com, Home Away and Stayz if the applicants subscribe to the latter.
On 30 June 2013 the parties entered into written management agreements. They state that the units were to be advertised only at realestate.com.au and on a window card presumably at the respondent's office.
The applicants' claim that the respondent failed to advertise the units for rental at the sites referred to in the brochure cannot be maintained because (a) the brochure is not an agreement between the parties and (b) the advertising referred to in the brochure was superseded by the advertising that was agreed by the parties when the management agreements were made.
There is a further complication in that the agreement for unit 3 provided for the applicants to pay the respondent $150.00 for advertising on an online booking system but on the agreement for unit 2 the requirement for this payment was crossed out. There cannot be an allegation about unit 2 online booking because it was removed from the agreement. In regard to the agreement re unit 3 the only online advertising agreed to by the parties was at realestate.com.au. That was the only online booking that the respondent was contracted to perform. The applicants subsequently advertised at "Rent a Home" and "Home and Away" but those sites are not mentioned in the agreement and are not part of the contract between the parties. The applicants were not charged for any online advertising.
I am satisfied that the respondent only had to advertise the units via the window card and at realestate.com.au and that advertising was performed.
The applicants' claim that realestate.com.au should not have been an advertising site because it only relates to permanent rentals cannot succeed. The applicants have obtained this information after the agreements were made. The applicants agreed to this site for advertising when the agreements were made.
The applicants' claim that the respondent should have advertised on other sites (such as the ones they used in 2013) cannot succeed because the agreements specified where the advertising was to be placed.
The applicants' claim that the respondent did not advise them as to various parts of the agreement cannot succeed. The respondent does not have that obligation. The obligation is on the applicants to satisfy themselves through legal advice or otherwise as to the terms of the contract they signed.
The agreements were terminated on 1 January 2013. The term of the agreement was six months. In that period the respondent's employee Jess Stafford was primarily responsible for the letting of the units. Ms Stafford is no longer employed by the respondent and did not give evidence. However on one of the documents there is a handwritten note from Ms Stafford dated 5 July 2012 which states "Advised ownershad a house swap booking for the Xmas period - initially there was a permanent tenant in one of the flats - they were advertising just to generate more interest - all bookings to be run past the owner before taking any deposit". I accept that this file note is genuine. On 7 August 2013 the applicants provided the respondent with a document outlining inter alia that they would advise block out times for house-swap people when known, that the house swap people would be in unit 3, that short term rental people would be in unit 2 and that the applicants were to be advised by email of details of all prospective clients, either holiday or short term, before accepting bookings. The units had a sign on the front fence indicating that they were for rent with a contact number for the applicants if a person was interested.
The applicants were overseas between July and November 2012. On 3 August 2012 Ms McMullen sent an email to Ms Stafford requesting details of where the units were listed on web sites for holiday and short term rental. Ms Stafford replied stating that the units were advertised in the window display and on a holiday brochure. She said that she would advertise them as a short term permanent rental and holiday rental. The applicants must have been aware on 3 August 2012 that the advertising was limited to the window display and the holiday brochure. They must have been aware that the units were not advertised on the web sites they subsequently went to in 2013.
The respondent was unable to obtain any bookings for the applicants between July and December 2012. This was probably due to the limited amount of advertising agreed to in the management agreements. Ms Stafford had her concerns. On 11 October 2012 she sent an internal email as follows:
"I am worried about the holiday letting at "...". The management agreement states the property is not to be listed on our normal web portals and advertising tools. I have displayed the property in our window and have it in our booking diary for any potential guests however with these restrictions in place I'm not getting any enquiries. The owner has also given me some restrictions due to "owner bookings" in place for their family and because they are involved in a "house swap" situation. I have been instructed to make the property unavailable for the peak Christmas period for their use. They also have complex guidelines about different tariffs for the number of guests at the property and options of short term rental which is confusing and restricting opportunities for guests."
I am satisfied that the problems outlined by Ms Stafford were genuine. I am satisfied that there was a condition placed by the applicants that no tenant could be accepted unless approved by the applicants. The applicants were to be emailed with details of the prospective tenants. No tenants were obtained and presumably the applicants were not emailed with details of potential tenants. The applicants, whilst overseas for the majority of the term of the agreements with the respondent, must have known that there were no tenants but did nothing about it. If there was no success with the rental via the provisions in the management agreement the applicants should have contacted the respondent to make other arrangements for the advertising of the units. They did not act until returning to Australia in November 2012. It is clear that the applicants secured tenants after January 2013 using the "Rent A Home" and "Home and Away" sites. However, as previously outlined the respondent was not contracted to use these sites.
I am satisfied that the respondent is not in breach of contract and it has not been negligent. The units were advertised in the restricted way provided for in the agreements and no tenants came forward.
If in another place this finding is challenged I need to say that even if the respondent was liable to the applicant it would be impossible to determine the quantum of the claim because of the following:
(a) The applicants say they received $14,514.62 in rental income between July 2011 and June 2012. The tax records show income of $14,473.00 and expenses of $52,480.00 resulting in a tax loss of $38,007.00.
(b) There is no expert evidence (accounting or otherwise) as to the likely rental receipts in the period July 2012 to December 2012. The Tribunal cannot by guesswork or otherwise try to extrapolate a likely amount having regard to what was receipted before or after this period. That is because likely rentals may be affected by various factors. The onus is on the applicants to provide appropriate evidence as to the quantum of the claim.
(c) The applicants' tax records for the period July 2012 to June 2013 show rental receipts of $4,354.00 and claimed expenses of $45,703.00 resulting in a tax loss of $41,359.00.
(d) Whilst receipt of additional moneys between July 2012 and December 2012 would have increased the rental receipts amount there would still have clearly been a significant tax loss for that year.
ORDER
The application is dismissed.
Kim Holwell
General Member
Civil & Administrative Tribunal of New South Wales
16 January 2014
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Registrar
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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
Decision last updated: 16 May 2014
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