St Kilda Estates (No 2) Pty Ltd (ACN 147 530 103) v Melbourne Property Investments Real Estate Pty Ltd (ACN 088 926 014) and the Real Estate Institute Of Victoria Ltd (ACN 004 210 897)
[2021] VSCA 92
•14 April 2021
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCI 2020 0097
ST KILDA ESTATES (NO 2) PTY LTD (ACN 147 530 103) Applicant v MELBOURNE PROPERTY INVESTMENTS REAL ESTATE PTY LTD (ACN 088 926 014) First Respondent and THE REAL ESTATE INSTITUTE OF VICTORIA LTD (ACN 004 210 897) Second Respondent ---
JUDGES: McLEISH, SIFRIS and KENNEDY JJA WHERE HELD: MELBOURNE DATE OF HEARING: 18 March 2021 DATE OF JUDGMENT: 14 April 2021 MEDIUM NEUTRAL CITATION: [2021] VSCA 92 JUDGMENT APPEALED FROM: [2020] VCC 570 (Judge Marks) ---
SALE OF LAND – Estate agents – Regulated estate agent authority – Estate Agents Act 1980 s 49A disclosure requirements – Where agent barred from commission and liable to penalty if authority noncompliant – Whether rebate statement was in a form approved by the Director – Whether heading part of approved form – Estate Agents Act 1980 s 49A(6) – Appeal dismissed.
---
APPEARANCES: Counsel Solicitors For the Applicant Mr P L Ehrlich QC with
Mr J ClaridgeP & B Law For the First Respondent Mr M I Ravech SLF Lawyers For the Second Respondent Mr S J Hibble Gilchrist Connell Legal McLEISH JA
SIFRIS JA
KENNEDY JA:1 This application raises an issue as to whether a rebate statement contained in an exclusive sale authority between a vendor and an estate agent was ‘in a form approved by the Director’ within the meaning of s 49A(6) of the Estate Agents Act 1980 (‘the Act’), notwithstanding that the heading was different to that contained in the form as published by the Director.
2 For reasons expressed below, we have determined that the rebate statement was in an approved form with the result that, although leave will be given, the appeal will be dismissed.
Background[1]
[1]This summary is based on the agreed ‘Summary for Court of Appeal’ dated 4 March 2021.
3 The facts were not in dispute at trial. The trial solely concerned a preliminary question of law.
4 On 15 April 2015 the applicant (as vendor) signed an exclusive sale authority (‘the ESA’) with the first respondent (as estate agent) to sell various units developed and constructed by the applicant at 86–88 Alexandra Street, St Kilda East.
5 The first respondent was at all material times a member of the Real Estate Institute of Victoria (the second respondent or ‘REIV’) and was thereby entitled to purchase and use various forms published by REIV. The ESA was such a form.
6 Item 6 of the ESA provided as follows (‘the ESA rebate statement’):
Item 6. Rebate Statement – Section 48A-E of the Act
*The Agent will not be, or is not likely to be, entitled to any rebates. A rebate includes any discount, commission, or other benefit, and includes non-monetary benefits.
(*If entitled to a rebate, complete and attach the rebate statement approved by the Director of Consumer Affairs Victoria, at the time of signing this Authority. The statement can be downloaded at first respondent marketed and sold one of the applicant’s units (unit 5) pursuant to the ESA and, on the first respondent’s case, it became contractually entitled to commission of $124,025.
8 The commission was not paid, and the first respondent sued for the unpaid commission.
9 By order 1 of consent orders made on 18 November 2019, the following preliminary question was set down for trial:
Is the rebate statement contained in Item 6 of the Exclusive Sale Authority between the [the first respondent] and the [applicant] dated 15 April 2015 in a form approved by the Director within the meaning of s 49A(6) of the Estate Agents Act 1980?
10 By reasons delivered on 8 May 2020 the primary judge determined that the answer to the preliminary question was ‘yes’, and made orders thereafter on 24 August 2020 in favour of the first respondent.
Legislation
11 Part IV of the Act contains a range of provisions governing the conduct of estate agents (and their representatives).[2] Section 50 deals with commission and relevantly provides:
[2]See generally Advisory Services Pty Ltd v Augustin [2018] VSCA 95, [38]–[39] (Santamaria, McLeish and Niall JJA) (‘Advisory’).
50Commission
(1)An estate agent is not entitled to sue for or recover or retain any commission or money in respect of any outgoings for or in respect of any transaction unless—
…
(b)the agent has complied with section 49A(1) with respect to the engagement or appointment to undertake the transaction and is not in breach of section 49A(2) with respect to the engagement or appointment;
12 Section 49A then relevantly provides as follows:
49A Offence not to give certain information about commission
(1)An estate agent must not obtain, or seek to obtain, any payment from a person in respect of work done by, or on behalf of, the agent or in respect of any outgoings incurred by the agent unless—
(a)the agent holds a written engagement or appointment that is signed by the person (or the person’s representative); and
(b)before obtaining the person’s signature to the engagement or appointment, the agent (or an agents’ representative employed by the agent) informed the person (or the person's agent or representative) that the commission to be paid to the agent under the engagement or appointment and any money to be paid by the person in respect of outgoings were subject to negotiation; and
(c)the engagement or appointment contains—
(i)details of the commission and outgoings that have been agreed; and
(ii)if a fee is to be calculated on a percentage basis, a statement of that fee expressed as both a percentage and as the dollar amount that would be payable on the reserve price or any other relevant amount set out in the engagement or appointment; and
(iii)a rebate statement that complies with subsection (4); and
(iv)a statement in a form approved by the Director as to where a complaint concerning any commission or outgoings in the engagement or appointment can be made; and
(v) anything else required by the Director; and
(d) the agent (or an agent’s representative employed by the agent) gave the person a copy of the signed engagement or appointment.
Penalty: 100 penalty units
…
(4)A rebate statement complies with this subsection if it is in a form approved by the Director and it contains—
(a)a statement of whether or not the agent will be, or is likely to be, entitled to any rebate in respect of—
(i) any outgoings; or
(ii)any prepayments made by the person engaging or appointing the agent (the client) in respect of any intended expenditure by the agent on the client’s behalf; or
(iii)any payments made by the client to another person in respect of the work; and
(b) if such an entitlement will, or is likely to, occur, details of—
(i) the goods or services to which the rebate relates; and
(ii) the name of the person providing the rebate; and
(iii)the amount of the rebate that will be attributable to the engagement or appointment, or if that amount is not known at the time the statement is made, an estimate (in dollars) of the amount; and
(c)a statement that the agent is not entitled to retain any rebate and must not charge the client an amount for any expenses that is more than the cost of those expenses; and
(d)any other statements or details required by the regulations.
…
(6)An estate agent whose rebate statement contained in an engagement or appointment is in a form approved by the Director does not fail to comply with subsection (4) merely because the rebate statement does not contain—
(a) the statement referred to in subsection (4)(a); or
(b) the statement referred to in subsection (4)(c).
(7)Subsection (6) applies only to a rebate statement contained in an engagement or appointment entered into before the day after the day on which the Justice Legislation Miscellaneous Amendment Act 2018 receives the Royal Assent.[3]
[3]The Justice Legislation Miscellaneous Amendment Act 2018 received Royal Assent on 25 September 2018.
13 Beyond the requirement (in s 49A(1)(c)(iii)) that the engagement or appointment should contain a ‘rebate statement’ that complies with sub-s (4), a ‘rebate statement’ is not specifically defined, although a ‘rebate’ is defined.[4]
[4]A rebate includes any discount, commission or other benefit: Estate Agents Act 1980 s 4(1) (definition of ‘rebate’).
14 Section 49A(6) was introduced in response to the decision of this Court in Advisory Services Pty Ltd v Augustin (‘Advisory’).[5] In Advisory, the Court found that the correct construction of s 49A(4)(c) was that the statements described therein must be contained in a rebate statement irrespective of whether the agent will be, or is likely to be, entitled to any rebate or to charge any amount by way of expenses. By reason of s 49A(7), s 49A(6) applies retrospectively and ‘cures’ non-compliance with s 49A(4) if the rebate statement was ‘in a form approved by the Director’.
[5][2018] VSCA 95.
15 The parties agree in this case that the information required by s 49A(4)(c) was not included in the ESA rebate statement. They also agree that this does not matter provided the ESA rebate statement is ‘in a form approved by the Director’.
16 Two forms approved by the Director of Consumer Affairs Victoria (‘the Director’) as at the time of the ESA are reproduced below in Annexure A (‘the Short Form’) and Annexure B (‘the Long Form’).
17 The ESA rebate statement reproduced the body of words (omitting instructions) in the Short Form. The critical difference is that it did not reproduce the heading: ‘Rebate statement – No Rebate will be received’. Rather, as recorded above, the heading reads: ‘Rebate Statement – Section 48A-E of the Act’.
Nature of the application for leave to appeal
18 Proposed ground 1 of the application for leave to appeal reads as follows:
The learned [primary] judge erred in finding that the rebate statement contained in item 6 of the exclusive sale authority between the [applicant] and the first respondent dated 15 April 2015 was in a form approved by the Director within the meaning of s 49A(6) of the Estate Agents Act 1980.
The learned [primary] judge should have found that the rebate statement was not in a form approved by the Director and on that basis dismissed the proceeding with costs.
19 Proposed ground 2 then alleged that ‘further to ground 1’ the primary judge ‘erred’ by reason of her conclusions at paragraphs 26, 27, 29, and 30. Further, it alleged that the primary judge should have found that the heading on the Short Form was part of the rebate statement within the meaning of s 49A(6) of the Act.
20 Proposed ground 3 alleged that the learned primary judge erred at paragraph 60 in reasoning that there was ‘substantial compliance with the Short Form’.[6] The proposed ground then alleged:
The learned [primary] judge should have found that the heading was intended to inform the consumer that ‘no rebate was to be received’ by the estate agent – thus, from the Director’s perspective, negating any need for the rebate statement to otherwise include the statements referred to in subsections (4)(a) and (4)(c) of section 49A of the Estate Agents Act1980.
As such, the learned [primary] judge should have found that the heading ‘Rebate Statement – No Rebate will be Received’ was an essential part of the rebate statement approved by the Director within the meaning of section 49A(6) of the Estate Agents Act 1980 such that there had not been substantial compliance.
[6]Emphasis in original.
21 Although expressed as independent grounds, as explained below, the key question in the case was whether the ESA rebate statement was ‘in a form approved by the Director’ for the purposes of s 49A(6). For reasons expressed below, the concept of ‘substantial compliance’ is not of assistance. Rather, we have considered the proposed grounds together.
Reasons of primary judge
22 The primary judge first determined that she was satisfied that the ESA rebate statement was in a form approved by the Director and that the heading to the Short Form was not part of the form of the rebate statement approved by the Director.[7] More specifically, she stated the following:
[7]Melbourne Property v St Kilda Estates [2020] VCC 570, [11], [23] (‘Reasons’).
26I do not consider that the heading of the Short Form was an integral part of the form of the rebate statement approved by the Director. Similarly, the heading of the Long Form – which simply states Rebate Statement, is not part of the form of that rebate statement approved by the Director. The headings are titles. They are not themselves part of form of the rebate statements approved by the Director.
27I consider that the ‘form’ of the rebate statement which the Director approved as set out in the Short Form consisted of:
•the words ‘The agent will not be, or is not likely to be, entitled to any rebates. A rebate includes any discount, commission, or other benefit, and includes non-monetary benefits’; and
•the requirement that signatures be included on the same page as the rebate statement if that statement was on a separate page in an agency authority – (Instructions: If this statement forms a separate page in an agency authority, provision for signatures should be included).
28The ‘form’ of the rebate statement approved by the Director as set out in the Long Form included different information (including all the words in the boxed square in the Long Form, commencing with the words: Important Information for Vendors/Landlords.)
29But the headings to those Forms were no more part of the ‘form’ of the rebate statements approved by the Director, than the boxed instructions on the Short Forms. Neither the boxed instructions nor the heading to the Forms were required to be replicated in the rebate statements set out in exclusive sales authorities in order for those rebate statements to be in the form approved by the Director under s 49A(6).
30It was not necessary for the Short Form to be effectively copy-pasted into a sales authority, in order for the rebate statement in that authority to be in the form approved by the Director.[8]
[8]Emphasis in original.
23 Her Honour went on to note that, although the applicant initially argued that the ESA rebate statement needed to be in complete agreement with the Short Form, citing Re LA,[9] it later accepted that substantial agreement was sufficient.[10] She also agreed with the second respondent’s submissions that the applicant’s submission ‘conflated’ the phrase ‘in a form approved by the Director’ with ‘in the Form prescribed by the Director’.[11]
[9](1993) 41 FCR 151. This case was disapproved in Nicovations Australia Pty Ltd v Secretary, Department of Health [2016] FCA 394, [72]–[74] (Robertson J).
[10]Reasons [38].
[11]Ibid [40].
24 The primary judge considered that the issue which required determination in this case was not raised in Advisory.[12] Other examples of the phrase ‘form approved by the Director’ were also not of assistance.[13]
[12]Ibid [42].
[13]Ibid [43]–[45].
25 Her Honour considered that her finding that the ESA rebate statement was in a form approved by the Director determined the matter. However, if she was wrong, she was satisfied that the ESA rebate statement substantially complied with the Short Form approved by the Director.[14]
[14]Ibid [12], [47].
26 Her Honour reiterated that the applicant accepted that substantial compliance was sufficient.[15] She considered that strict compliance with a form prescribed by an Act was generally not required unless a contrary intention appeared, and that there was no contrary intention here.[16] She also cited s 53 of the Interpretation of Legislation Act1984 which reads:
[15]Ibid [48].
[16]Ibid [49].
53 Strict compliance with prescribed forms not necessary
Where a form is prescribed by an Act or subordinate instrument for any purpose, any form in or to the like effect of the prescribed form shall, unless the contrary intention appears, be sufficient in law.
27 The primary judge described the approach of Gibbs J in Equipment Investments Pty Ltd v M J Dowthwaite & Co Pty Ltd[17] that a divergence would be substantial if it caused the statement to convey less information than the form requires, or to confuse or mislead.[18]
[17](1969) 16 FLR 23.
[18]Reasons [51].
28 Her Honour continued:
55However, I am satisfied that substantially the same information – or information to ‘like effect’ – as in the Short Form is conveyed by the ESA rebate statement.
56Although the heading of the Short Form (unlike the ESA rebate statement) conveys that ‘No rebate will be received’, the wording in the body of the Short Form (like the ESA rebate statement) conveys that the ‘The agent will not be, or is not likely to be, entitled to any rebates’. (It also specifies that if the agent is entitled to a rebate, a (different) rebate statement should be completed and attached at the time of signing the ESA).
57In the course of the hearing I asked Mr Ehrlich QC for the vendor whether the words ‘the agent will not be entitled to any rebates’ were any different to saying, ‘no rebate will be received’. He answered, ‘No’.
58He went on to draw the distinction, that unlike in the heading, which only says ‘no rebate will be received’, the body of the Short Form gives an alternative: that the agent is not ‘likely to be entitled to’ any rebates. But he said ‘the consumer is not told which’ of the alternatives it is, whereas with the Short Form Heading the consumer is told that it is the first of the alternatives. He said:
… the heading. It says Rebate statement: No rebate will be received. Now in my respectful submission that’s a better outcome for a consumer than not being told’
59But the consumer is not told by the heading of the Short Form that it is the first of the two alternatives which applies. The consumer is given a heading that picks up one of two alternatives set out below it, and both those alternatives remain in play. (If anything, that is a worse outcome for the consumer).
60In any event, since both alternatives are included in the ESA rebate statement, I am satisfied there was substantial compliance with the Short Form.[19]
[19]Emphasis in original.
Submissions
Applicant’s submissions
29 The applicant submitted that the approved forms were forms ‘prescribed by the Director’. The Parliament had delegated the process of approving forms to a person holding statutory office. It submitted that such a phrase as a form ‘approved by’ was commonly used in other Acts of Victoria and other jurisdictions which delegate the approval of forms to statutory officers. It raised concerns as to repercussions for other forms, and particularly cited the approved forms under the Transfer of Land Act 1958. The applicant suggested that the respondents’ construction meant that headings on the myriad of approved conveyancing forms used in Victoria are not part of the forms approved by the Registrar of Titles.
30 The applicant highlighted the language of s 49A, and particularly the contrast between the ‘form approved by the Director’ and what ‘statements’ the rebate statement should, or should not, contain (as used in ss 49A(4)(a) and 49A(4)(c)). It contended that while ‘form approved by the Director’ was a reference to the actual physical form or document, the other references were to the words required to be included as ‘statements’.
31 In oral submissions, Senior Counsel accepted that the first step of his argument was that sub-s (6) required a physical ‘capital F Form’. He submitted that the language of the provisions (both sub-ss (4) and (6)) established that the ‘form approved’ was a reference to a ‘capital F Form’, since ‘words don’t contain other statements’ but documents do.
32 The applicant also suggested that the case was analogous with Tamboli v The Agent, Great Indian Peninsula Railway Company, Bombay (‘Tamboli’).[20]In that case a question arose as to whether a note limiting liability for negligence was in ‘a form approved by the governor-general in council’ for the purposes of s 72 of the Indian Railways Act 1890 (UK). The applicant suggested that the Privy Council proceeded on the basis that the ‘form approved’ was the same as the ‘form prescribed’, and that the form was a thing, rather than a body of words. The question instead was to identify the essential parts of the form to ascertain if there had been substantial compliance (which was answered affirmatively in that case).
[20](1927) LR 55 IA 67 (‘Tamboli’).
33 The applicant suggested that the consequence of the respondents’ construction was that sub-s (6) applies regardless of what heading was used, even if the heading said that a ‘rebate will be received’. Senior Counsel rejected the suggestion that his construction raised issues as to what was properly to be included in the ‘form’. Rather the applicant’s case was that ‘the form is the form’. A ‘capital F Form’ was hence clearer such that all of the document is part of the form and the question is, rather, whether something is an essential part of that form.
34 The applicant then pointed to various features in the Short Form itself which suggested that the heading was part of the form, including:
the Short Form was referring to itself as a Form (‘this statement’) such that the heading was part of ‘this statement’;
the Short Form was permitted to be used as a standalone form as demonstrated by the instructions (ie that: ‘If this statement forms a separate page in an agency authority, provision for signatures should be included’), as well as the signature panels; and
there was no asterisk next to the heading and the permission to copy-paste the Short Form into the body of an authority gave no permission to replace the heading.
35 However, in oral submissions Senior Counsel accepted that the form could be used other than as a standalone form, and also conceded that the instructions to the agent did not need to be reproduced if the form was copy-pasted.
36 The applicant rejected the respondents’ submission at trial that the heading was a mere descriptor addressed to the user (estate agent) to differentiate it from the Long Form, since it may be used as a standalone form and was therefore not intended to be used without a heading. In oral submissions, the applicant also suggested that headings were not just there as descriptors, given that the Short Form did not come into existence until some six years after the Long Form.
37 The applicant contended that without the words ‘no rebate statement will be received’ the very purpose of the Short Form was destroyed. It suggested that the Director was proceeding on the basis that it was not necessary to include the statements contained in sub-ss (4)(a) and (4)(c) because the consumer was being told that no rebate will be received. This was made clear by the first instruction to the effect that the statement should not be used if there was a possibility that an agent may receive a rebate. Further, unless this purpose was recognised, there was no need for the creation of the Short Form at all because the Long Form would have sufficed.
38 The applicant thereby suggested that the heading ‘qualified’ the words in the body of the form by telling consumers that the agent was not entitled to a rebate (as opposed to saying that the agent ‘is not likely to be’ so entitled, as said in the body of the Short Form). It suggested that the applicant was in an even less informed position than the vendor in Advisory given there was nothing to inform it that no rebate was to be received.
39 The applicant suggested that the Long Form was a standalone form and was clearly a prescribed form. It accepted that the heading of the Long Form was not an essential part of that form, and that there would be substantial compliance even without the heading since the first line immediately below the heading describes it as a ‘rebate statement’. However, everything on the page was otherwise part of the rebate statement.
40 The applicant also criticised various paragraphs in the primary judge’s reasons consistent with proposed ground 2. This included criticism of paragraph 26 in that it was not clear what distinction was being made between a ‘part’ of a form and an ‘integral part’ of a form. The applicant also submitted that paragraphs 29 and 30 were in error because they conflated the instructions (which are directed to the user ie the estate agent) with the heading (which is directed to the consumer). The applicant complained that some of the conclusions did not speak to submissions made, and that there was no discernible chain of reasoning for various conclusions. It also contended that none of the conclusions were said to arise from the text, context and purpose of ss 49A(4) and 49A(6).
41 In relation to proposed ground 3, the applicant submitted that no question of substantial compliance can arise given the purpose of the heading as already identified. Thus, the primary judge should have found that the heading was intended to inform the consumer that no rebate was to be received, negating any need for the rebate statement to otherwise include the statements at sub-ss (4)(a) and (4)(c).
First respondent’s submissions
42 The first respondent contended that the primary judge was correct in finding that the applicant’s contention conflates the phrase ‘form approved by the Director’ with a ‘form prescribed by the Director’ ie the applicant was incorrect in suggesting that a rebate statement must be in a prescribed ‘capital F Form’ as, for example, with the prescribed forms included in the Supreme Court (General Civil Procedure) Rules 2015. Moreover, as the primary judge found, other usages do not assist in construing the phrase for the purpose of s 49A(6). It thereby rejected the suggestion that upholding the primary judge would have some consequence for other forms approved for use in Victoria.
43 The first respondent submitted that it did not logically follow from the mere fact that the Short Form was permitted to be used as a standalone form that the heading was part of the approved rebate statement. The contrary submission begged the question as to what part of the form constituted that statement. The first respondent also submitted that the references to the expression ‘contains’ did not mean that the heading must constitute a part of the rebate statement.
44 The first respondent rejected a suggestion that the applicant was in a ‘less informed position’ than the vendor in Advisory. Thus the words ‘the agent will not be entitled to any rebates’ were incorporated within the body of the ESA rebate statement, and Senior Counsel for the applicant had accepted that those words were not different to saying that ‘no rebate will be received’.
45 Further, the first respondent submitted that it was implicit in the reasoning of the primary judge (at paragraphs 53 to 59) that the heading on the Short Form was a mere descriptor designed to differentiate that form from the Long Form. This must be so because (as the primary judge observed) the words in the body of the form are actually inconsistent with the heading to the extent that the language of the body admits of the possibility of entitlement to a rebate, whereas the language of the heading does not. The first respondent submitted:
If the language of both were included in the Director approved rebate statement, the inconsistency could lead to confusion and the consumer would be worse off. Rather than confuse, the heading was designed to assist the consumer by identifying the Short Form as the document which embodied a rebate statement that could only be included in an agency authority (as the instructions on the Short Form indicate) if entitlement to a rebate was not anticipated, and should not be used (as the instructions on the Short Form also indicate), otherwise.
46 In oral submissions, counsel submitted that a ‘form approved by the Director’ meant a form of words. If a form in the ‘capital F Form’ sense was required the Act would have specified that. He submitted that the headings do not constitute the ‘rebate statement’. Rather, the rebate statement in the Short Form was constituted by the bolded words between the boxes commencing ‘The agent will not be …’ (as s 49A(4)(a) requires).
47 The first respondent submitted that the Act did not contemplate a definite position; rather it contemplated that the possibility of a rebate existed. The heading was therefore inconsistent with what the Act required (insofar as it did not allow for the possibility of a rebate), and therefore should not be taken to be part of the Director’s approved form. If the heading was part of the rebate statement then there would also be no need for the words between the two boxes (as mirrored in the Act).
48 Counsel emphasised that the heading was instead a descriptor which reflected that the Short Form was to be used where it was anticipated that no rebate will be received (though there was a possibility of it being received), such that a simpler form only was necessary. By way of comparison, the Long Form could be used in any circumstance so the heading did not need to be qualified.
49 In relation to proposed ground 3, the first respondent submitted that the primary judge was correct in finding that, if the heading was found to be part of the approved form, then the rebate statement, when read with the words contained in the body of that statement, still conveyed the message (as contemplated by s 49A(4)(a)) that no rebate would be, or was likely to be, received by the agent. Thus, the ESA rebate statement conveyed the same message notwithstanding the absence in the heading of the words ‘No rebate will be received’.
50 In oral submissions, counsel submitted that there was substantial compliance by reason of the relevant words between the two boxes which provided the information necessary under the Act. He suggested that there was implicit endorsement of the concept of substantial compliance at paragraph 13 of Advisory.
Second respondent’s submissions
51 The second respondent submitted that the applicant had reframed the question and conflated the phrase ‘in a form approved by the Director’ with ‘in the “Form” approved by the Director’ (ie that the applicant was suggesting the provision makes reference to a prescribed ‘capital F Form’). The second respondent suggested that this was contrary to the applicant’s previous position. It maintained that the heading to the Short Form was not part of ‘a form approved by the Director’ as required by s 49A(6) of the Act.
52 In oral submissions counsel submitted that the rebate statement is a ‘form of words’ and not a ‘capital F Form’. Counsel also suggested that, if the applicant’s position was accepted, then the proposition would lead to confusion as to what the ‘form’ actually is, eg whether instructions and/or headings were to be included.
53 The second respondent submitted that the case advanced by the respondents was entirely in accordance with Parliament’s intention, namely to protect a real estate agent who has legitimately performed work from being denied commission.
54 In relation to proposed ground 3, the second respondent suggested that the applicant was raising new arguments on appeal. In any event, it submitted that substantial compliance was available as a matter of law.
Analysis
55 In order to determine this application it is necessary to answer the following questions:
First, what is the appropriate construction of the phrase ‘in a form approved by the Director’ in s 49A(6) of the Act?
Secondly, is the ESA rebate statement ‘in a form approved by the Director’ under s 49A(6) as properly construed?
56 As noted above, a number of complaints were made that there were new arguments being raised on appeal. In particular, complaint was made that the applicant was raising fresh arguments. Such a complaint has little force in a statutory construction case such as this one. In any event, we have generally considered the applicant’s submissions on their merits regardless of any alleged change in position.[21]
[21]Senior Counsel for the applicant took the Court to various passages in the transcript and rejected any suggestion that there was a change in position.
57 Turning then to question 1, it is important to consider the particular terms and context of the relevant provision. The applicant’s reliance on other statutory regimes was of no assistance in this context. Rather, the principles relevant to statutory construction require consideration by the Court of the ordinary and grammatical meaning of the words used, taking into account both context and legislative purpose.[22]
[22]Victoria v Thompson (2019) 58 VR 583, 589 [27]–[28] (Beach and Osborn JJA and Kennedy AJA); [2019] VSCA 237, citing R v A2 [2019] HCA 35, [33]–[34] (Kiefel CJ and Keane J).
58 Two particular issues of construction arose in this case. The first issue was whether the reference to a ‘form approved by the Director’ in s 49A(6) was intended to be a reference to a form of words, rather than a ‘capital F Form’ (where the latter was a separate physical form intended to be reproduced, completed, and lodged ‘as is’). The second, allied issue was the extent to which everything appearing in the Short Form (including the heading) needed to be reproduced in order to be in ‘a form approved by the Director’ for the purposes of s 49A(6).
59 In relation to the first issue of construction, for the reasons which follow, we are not satisfied that the reference to a ‘form approved by the Director’ in s 49A(6) is intended to be a reference to a physical ‘capital F Form’.
60 First, the Act does not intend that a ‘rebate statement’ is to be a separate physical document. Rather, pursuant to s 49A(1)(c), it is the engagement or appointment which ‘contains’ the rebate statement. The intended incorporation of the rebate statement into the appointment is further emphasised by the terms of ss 49A(6) and 49A(7) — which both refer to a rebate statement ‘contained in’ an engagement or appointment.
61 Secondly, as is self-evident, the rebate ‘statement’ is clearly intended to be a ‘statement’ ie it is intended to contain a form of words for inclusion in the written engagement. As a ‘statement’, it also constitutes one of a number of other ‘statements’ intended to be contained in the engagement or appointment under s 49A(1)(c).
62 Thirdly, the ordinary meaning of a ‘statement’ is consistent with the rebate statement constituting a form of words. Thus, the Macquarie Dictionary definition of ‘statement’ (also cited by the primary judge at paragraph 24) includes ‘something stated’, and ‘a communication … in speech or writing setting forth facts, particulars, etc’.[23]
[23]Macquarie Dictionary (online at 24 March 2021) ‘statement’ (defs 1, 2).
63 Finally, we consider that a statement of words can itself contain further statements, contrary to the applicant’s submissions. The subject of both ss 49A(4) and 49A(6) is the rebate ‘statement’ (ie the rebate statement is the ‘it’ in s 49A(4)). Section 49A(4) then makes provision for what ‘statements’ the rebate statement is to contain. Section 49A(6) is only capable of application once an assessment has been made as to what ‘statements’ the rebate statement does, or does not, contain.
64 Overall, then, we consider that ‘a form approved by the Director’ referred to in s 49A(6) is a necessary form of words to be included in the rebate statement and incorporated within the written engagement, rather than a ‘capital F Form’.
65 In relation to the second issue of construction, since Project Blue Sky Inc v Australian Broadcasting Authority[24] it is not appropriate to apply any distinction between mandatory and directory requirements.[25] Care should also be taken in using the concept of ‘substantial compliance’,[26] particularly, as here, where no issue of invalidity arises. Rather, the critical issue as to what is intended to be part of the approved form involves a question of statutory construction. This is a case where, as Dawson J put it in Hunter Resources Ltd v Melville, ‘[e]ither there was compliance or there was not’.[27]
[24](1998) 194 CLR 355; [1998] HCA 28 (‘Project Blue Sky’).
[25]Ibid 390–1 [93] (McHugh, Gummow, Kirby and Hayne JJ).
[26]Ibid 389–91 [92]–[93] (McHugh, Gummow, Kirby and Hayne JJ). Contrary to the suggestion of the first respondent, we do not consider that the issue of substantial compliance was considered in Advisory [2018] VSCA 95, see [13] (Santamaria, McLeish and Niall JJA) where the Court simply records, without approval, the finding of the primary judge that substantial compliance would have sufficed.
[27](1988) 164 CLR 234, 249, cited in Project Blue Sky (1998) 194 CLR 355, 390 [92].
66 In considering what intention the provisions evince in the present case, as confirmed in Advisory, a strong and consistent theme of consumer protection runs through Pt IV of the Act which may suggest that there is a need for exact duplication. Nevertheless, as submitted by the second respondent, s 49A(6) was a remedial provision, clearly directed towards protecting agents. Thus, in the second reading speech the relevant Minister stated:
It is therefore appropriate and necessary to retrospectively validate rebate statements that were used in good faith to ensure that estate agents who have legitimately performed work are paid.[28]
[28]Victoria, Parliamentary Debates, Legislative Assembly, 21 June 2018, 2146 (Martin Pakula).
67 This suggests that the need for consumer protection must be balanced against the need to appropriately remunerate agents who have legitimately performed work in reliance on something approved by the Director. In such circumstances, provided that there is no practical effect of a failure to reproduce every aspect of the approved form of words, we are satisfied that Parliament intended to preserve an agent’s contractual entitlement. More particularly, we conclude, consistently with this intention, that, provided that the rebate statement conveys the same information as is contained in the approved form, then the rebate statement will be ‘in a form approved by the Director’ for the purpose of s 49A(6).
68 In turning, then, to the second question, it is important to examine the Short Form itself having regard to our construction that the legislature intends that a form of words be included which conveys the same information as that contained in the approved form. Applying this construction, it is clear that the words contained therein which constitute the relevant statement are those commencing ‘The agent will not be’ as appears between the two boxes. We also agree with the primary judge that, consistent with the instructions, the form of words needs to be verified by signature to ensure that the rebate ‘statement’ is made by the agent, and communicated to the vendor (if it is contained in a separate page).[29] As properly conceded by the applicant, the form of words does not otherwise need to include the instructions, which are clearly directed to the agent alone.
[29]Reasons [27].
69 However, we consider that the heading is also directed to the agent alone, and is not part of the approved form of words. Thus, we are unpersuaded that any of the matters raised by the applicant establish that the heading was part of the words approved. The fact that the instructions refer to ‘this statement’ supports the notion that the form is constituted by a statement. The absence of an asterisk is not significant. We also disagree with the characterisation that the form can be ‘standalone’. To the contrary, consistent with the Act and the instructions, although the form may constitute a separate page, that page will still be placed ‘in’ an engagement or appointment.
70 More significantly, we are unable to be satisfied that the heading is necessary to ‘qualify’ the statement contained in the form. To the contrary, the critical words contained between the boxes expressly allow for the possibility of a rebate; ie as well as providing for the possibility that an agent ‘will not be’ entitled to a rebate, they also allow for an alternative that an agent ‘is not likely to be’ entitled to any rebate. There is no basis for the suggestion that the heading is intended to, and does, render one of these alternatives redundant. Instead, as the primary judge observed (at paragraph 59):
But the consumer is not told by the heading of the Short Form that it is the first of the two alternatives which applies. The consumer is given a heading that picks up one of two alternatives set out below it, and both those alternatives remain in play. (If anything, that is a worse outcome for the consumer).
71 In Advisory the Court also stated:
… Despite the heading ‘No rebate will be received’, the text went on to say, as s 49A(4)(a) contemplates, only that no rebate would be, or was likely to be, received. This fell well short of saying that a rebate could not be retained.[30]
Although not directly on point, this observation is consistent with our view that the relevant words in the body of the form (which raise two alternatives) have effect ‘despite the heading’ such that the heading does not qualify those words.
[30]Advisory [2018] VSCA 95, [50].
72 The applicant also raised a concern that any heading at all might be substituted if the correct heading was not used. This could extend to a heading that ‘a rebate will be received’. However, apart from the fact that this is not raised in the present proceeding, the suggested heading would clearly both qualify and confuse the message intended to be conveyed by the approved form. A finding that the approved form does not necessitate inclusion of the heading is not a licence for insertion of a heading which is misleading and contrary to the approved form of words.[31]
[31]It was not suggested that the heading in this case (‘Rebate Statement – Section 48A-E of the Act’) was in any way misleading.
73 It is further unhelpful to speculate as to why the Short Form was created when the Long Form already dealt with all scenarios. The suggestion that the heading was inserted so that the Director could be sure that compliance with s 49A(4)(c) was unnecessary (given no rebate is to be received) is speculative. Rather, we accept the respondents’ suggestion that the heading was intended to be a descriptor only for the agent to identify which form of words to incorporate within the engagement. Once introduced, the simpler Short Form was available for use where no rebate was anticipated.
74 We were otherwise not generally assisted by the extrinsic materials, nor the decision in Tamboli. In Tamboli, it was found that attestation by two witnesses to the execution of a document in an approved form was not part of the form prescribed, even though the form contemplated this by providing the necessary space. The applicant emphasised statements by the Court that attestation was not ‘an essential part of the form’, to suggest that the correct question here is whether the heading is an ‘essential part’, not whether it is ‘part’. However, this reliance is misplaced given the Court actually found that attestation was ‘not part of the document prescribed’.[32]
[32]Tamboli (1927) LR 55 IA 67, 71.
75 We are therefore satisfied that the ESA rebate statement is in the approved form notwithstanding the substitution of the heading. The statement conveys the same information as that contained in the Short Form.
76 For these reasons, the primary judge’s finding that the heading on the Short Form was not part of the approved form of rebate statement was correct. We are also not satisfied that there was any substance in the criticisms of her reasons.
77 Given that we are satisfied that the ESA rebate statement was in a ‘form approved by the Director’ pursuant to s 49A(6) (as properly construed), the answer to question 2, above, is also ‘yes’. Proposed grounds 1 and 2 are thereby not established, while proposed ground 3 does not arise.[33]
[33]See [65] above.
78 We also consider that s 53 of the Interpretation of Legislation Act 1984 has no application given that we are not concerned with a prescribed form, in the sense of a physical document. In any event, even if s 53 did apply, this would only confirm our conclusion that the ESA rebate statement was in the approved form.
79 In such circumstances, although leave will be given, the appeal will be dismissed.
ANNEXURE A
ANNEXURE B