Wei Liu v Al Maha Pty Ltd

[2019] NSWDC 106

District Court

New South Wales

Medium Neutral Citation:	Wei Liu v Al Maha Pty Ltd [2019] NSWDC 106
Hearing dates:	27 & 28 November 2018 and 28 March 2019
Date of orders:	05 April 2019
Decision date:	05 April 2019
Jurisdiction:	Civil
Before:	Strathdee DCJ
Decision:	(1)   Verdict and judgment for the plaintiff in the sum of $226,840.00. (2)   Defendant to pay the plaintiff’s costs as agreed or assessed. (3)   Liberty to apply to my associate within 7 days if an alternate costs order is sought.
Catchwords:	CIVIL – commercial actions – real estate agents commissions – power imbalance between the parties – statutory scheme
Legislation Cited:	District Court Act 1973 Property, Stock and Business Agents Act 2002 (NSW) Property, Stock and Business Agents Regulation 2003 (NSW)
Category:	Principal judgment
Parties:	Wei Liu (Plaintiff) Al Maha Pty Ltd (Defendant)
Representation:	Counsel: Mr Norrie (for the Plaintiff) Mr Sahade (for the Defendant) Solicitors: Revolance Legal (for the Plaintiff) Diamond Conway (for the Defendant)
File Number(s):	2016/00305475

Judgment

1. By Amended Statement of Claim filed 20 November 2017 the plaintiff seeks payment of all outstanding commissions alleged to be owed to her by the defendant totalling $226,840.00.

2. On 27 November 2018 the matter was referred to me by the List Judge for hearing.

3. At the commencement of the hearing, Counsel for the defendant submitted that the District Court did not have jurisdiction to hear the matter, or make any rulings or orders as the proposed amendments to confer on the District Court the jurisdiction to hear “any action arising out of a commercial action in which the amount claimed does not exceed the Court’s jurisdictional limit” had not yet received Royal Assent.

4. The legislation required to make such amendment was passed through Cabinet on 19 October 2018.

5. I did not adjourn the proceedings to wait for such assent as it was imminent, and that by the time that I gave judgement, it was expected that the amendment would have been made, and it would be retrospective.

6. The amendments to s 44 District Court Act 1973 (as passed in the Justice Legislation Amendment Act (No 3) 2018) commenced on 28 November 2018 – the second day of this trial. The amendment was intended to clarify that the District Court has, since 2 February 1998, had jurisdiction to hear such commercial matters. The amendment was made retrospectively.

7. Accordingly, I have the jurisdiction to hear and make orders in these proceedings.

8. The plaintiff tendered a chronology (Exhibit A), written submissions (Exhibit B), Court Book containing affidavits (Exhibit C), a bundle of emails (Exhibit D) and 3 further emails (Exhibit E).

9. Contained in Exhibit C were 2 affidavits of the plaintiff dated 26 June 2017 and 23 January 2018 respectively. It also contained an Affidavit of Antoine Bechara (“Bechara”) affirmed 31 October 2017. Bechara is a director of Al Maha.

10. When the matter recommenced on 28 March 2019, defendant’s counsel withdrew the tender of the affidavit of Bechara. Plaintiff’s counsel then tendered, without objection, paragraphs 1, 2 and 4 of that affidavit.

Those paragraphs read as follows:

‘1.   I am director of AL MAHA PTY LTD (“Al Maha”), the defendant and am authorised to make this affidavit on its behalf.

2.   I have been involved in the property development industry for more than 30 years and therefore have considerable experience.

3.   Al Maha is a privately owned property development company which undertakes various projects in Sydney. At tab 1 of exhibit AB-A is a copy of the ASIC’s register in relation to the Al Maha.’

11. The defendant tendered a chronology (Exhibit 1) and some copies of text messages (Exhibit 2).

BACKGROUND

12. The plaintiff is a real estate agent.

13. The defendant is a property development company.

14. On 17 June 2014, the plaintiff and the defendant entered into an agreement (“the Agency Agreement”) whereby the plaintiff would assist the defendant in advertising and selling off-the-plan apartments located at 32-72 Alice Street, Newtown NSW 2042. (Affidavit of Wei Liu 26 June 2017 – part of Exhibit A (Affidavit of Wei Liu 26 June 2017 para 2)).

15. Under the Agency Agreement, the defendant agreed to pay the plaintiff a commission of 4.4% of the purchase price for each apartment sold and settled, with payment being made as follows:

1. 50% of the commission was due and payable in the first week following the month of unconditional exchange of contract for each apartment sold; and

2. The balance of the commission was payable upon settlement of the apartment. (Affidavit of Wei Liu 26 June 2017 para 3)

16. On 15 June 2016, the Agency Agreement was varied for apartment B301 by oral agreement such that the commission was 5.5% (and not 4.4%). (Affidavit of Wei Liu 26 June 2017 para 6)

17. Throughout 2014 and in accordance with the Agency Agreement, the plaintiff procured the sale of the following ten (10) apartments:

B301;

C508;

C206;

C306;

B106;

B404;

C307;

C310;

A109; and

D202.

18. The plaintiff issued the defendant with the relevant tax invoices for the apartments which had been sold. (Affidavit of Wei Liu 26 June 2017 para 4)

19. On 18 July 2016, the plaintiff sent the defendant a final tax invoice for the outstanding commissions amounting to $226,840.00. (Affidavit of Wei Liu para 11)

20. The defendant failed to pay the final tax invoice. (Affidavit of Wei Liu 26 June 2017 pg 12)

21. On 23 September 2016, the plaintiff, through her legal representatives, issued the defendant with a letter demanding payment of the outstanding commissions amounting to $226,840.00 within fourteen (14) days. (Affidavit of Wei Liu 26 June 2017 pg 13)

22. The defendant failed to comply with this letter. (Affidavit of Wei Liu 26 June 2017 pg 14)

23. On 20 November 2017, the plaintiff filed a Further Amended Statement of Claim seeking the outstanding commissions amounting to $226,840.00.

24. On 16 January 2018, the defendant filed an Amended Defence. In the Amended Defence, the defendant denied that it was liable to pay the outstanding commissions due to non-compliance with the requirements of the Property, Stock and Business Agents Regulation 2003 (NSW) (“the Regulations”). The defendant also alleged misleading and deceptive conduct in breach of the Australian Consumer Law.

25. On 4 June 2018, the plaintiff filed a Reply to the Amended Defence. In the Reply to the Amended Defence, the plaintiff conceded particular requirements of the Regulations were not complied with and sought an order under s 55A of the Property, Stock and Business Agents Act 2002 (NSW) (“the Act”).

CONSIDERATION

The Agency Agreement

26. It is not contentious that the Agency Agreement dated 17 June 2014 was drafted by the Defendant, was written on the defendant’s letterhead and was signed by Antoine Bechara, on behalf of Al Maha, and the plaintiff.

27. The Agency Agreement recorded the following:

‘Re: Agency Agreement - 32-72 Alice Street, Newtown

A1 Maha Pty Ltd agrees to pay Wei Liu 4.4% inclusive of GST as the commission of unit sales for the above address

Half (50%) of the agreed commission will be paid to Wei Liu upon unconditional exchange of each unit

The payment of above commission will be made on [sic] the first week of the following month of the exchange and will form part of the agreed total commission payment

The balance of the commission will be payable upon settlement of the units

Wei Liu will have to provide a valid tax invoice to be eligible for any payment.’

28. It is not in dispute that the sale of 10 units was procured by the plaintiff pursuant to the Agency Agreement. (Amended Defence para 3)

29. The plaintiff issued tax invoices seeking payment of the relevant commissions. It is also not in dispute that the plaintiff issued the relevant tax invoices. (Amended Defence para 3)

30. The Amended Defence pleads that the non-payment of the outstanding commissions amounting to $226,840.00 occurred because the agency agreement was in contravention of the Act, and due to misleading or deceptive conduct in breach of the Australian Consumer Law.

31. On the third day of the trial, in the course of submissions, counsel for the defendant conceded that the only issue that they rely on in defence of the plaintiff’s claim, is that the Agency Agreement does not comply with s 55 of the Act. He abandoned all other arguments contained within the defence.

32. Section 55 of the Act provides that there is no entitlement to commission or expenses without agency agreement and provides as follows;

‘(1)   A licensee is not entitled to any commission or expenses from a person for or in connection with services performed by the licensee in the capacity of licensee for or on behalf of the person unless:

The services were performed pursuant to an agreement in writing (an agency agreement) signed by or on behalf of:

the person, and

the licensee, and

the agency agreement complies with the particular requirements of the regulations, and

a copy of the agency agreement signed by or on behalf of the licensee was served by the licensee on that person within 48 hours after the agreement was signed by or on behalf of the person.’

33. The plaintiff seeks relief under s 55A of the Act.

34. Section 55 A of the Act provides for relief from disentitlement to commission and expenses and provides as follows:

‘(1) A court or tribunal before which relevant proceedings are taken may order that commission or expenses are wholly or partly recoverable by a licensee who would otherwise not be entitled to the commission or expenses (under section 55) because of:

(a) a failure by the licensee to serve a copy of the relevant agency agreement on the person within 48 hours after it was signed by or on behalf of the person, or

(b) a failure of the relevant agency agreement to comply with the requirements of the regulations.

…

(3) A court or tribunal is not to make such an order in circumstances of a failure of the agency agreement to comply with the requirements of the regulations unless satisfied that:

(a) the failure is a minor failure, and

(b) no loss has been suffered as a result of the failure by the person for whom or on whose behalf the services concerned were performed, and

(c) failure to make the order would be unjust.’

35. The defendant did not go into evidence.

36. The plaintiff gave evidence before me over the course of 3 days. She was vigorously cross-examined by experienced counsel. The majority of her evidence was through a Mandarin interpreter, although on occasion she answered a question before it had been translated, and occasionally answered in English.

37. It was put to the plaintiff that when she completed her real estate agent’s licence course, that would have all been done in English. She agreed that was the case.

38. I accept that the plaintiff can speak fairly good English. The bundles of printouts of text messages and emails in English are clearly indicative of her level of English fluency. However, I accept that English is her second language, and I do not draw any adverse conclusions on her utilization of an interpreter. Giving evidence in Court can be an intimidating exercise, and the fact that she wishes to have an interpreter may well have been because she was cautious in answering questions that she may not have properly understood absent the interpreter.

39. I accept the plaintiff as a witness of truth.

40. Counsel for the defendant argues that the Act sets up a code of practice for real estate agents, and provides for very strict guidelines, whereby agency agreements are to be prepared and served. He refers my attention to s 55(c) of the Act whereby a copy of the Agency Agreement must be served on the proposed vendor within 48 hours of signing the agreement. He submits that this was not done in the present circumstances.

41. He submits that the Real Estate Institute of NSW produces a standard form of Agency Agreement which is widely used in the industry. He submits that the plaintiff would have been well aware of these forms, and she chose to not utilise them. He submits therefore that s 55A of the Act cannot be enlivened. It was further submitted that to receive the protection of s 55A of the Act, the onus is on the plaintiff to satisfy me that she is entitled to such relief.

42. Counsel for the plaintiff submits that the plaintiff ought be given protection under s 55A(2) of the Act on the basis that the defendant is a sophisticated property developer, and the plaintiff had only received her real estate agent’s licence some 5 months before the agreement was entered into. This creates an unusual set of circumstances, and makes these proceedings different to “ordinary” cases of the claims for commission.

43. The defendant did not give evidence, nor was any evidence tendered in support of its position.

44. There is no dispute that the defendant paid the plaintiff commission for a number of units that she sold, and it appears obvious that these payments were in accordance with the Agency Agreement. There has been nothing put to me as to why the defendant stopped paying the commissions.

45. The defendant paid a number of the commissions due to the plaintiff, and then for reasons not explained, stopped doing so. The emails and text messages tendered exemplify that the plaintiff was attempting to contact Bechara on many occasions, with generally limited success.

46. For the defendant to now rely on a breach of the Act as his defence to paying commissions in accordance with the Agency Agreement, which he had been doing for a considerable period is, in my mind, disingenuous.

FINDINGS

47. Based on all the evidence before me, and having regard to the submissions made by both parties, I make the following findings:

1. The plaintiff came to an agreement with the defendant to sell units off the plan in the development situated at 32-72 Alice Street, Newtown NSW.

2. The agreement was in the form of the document as evidenced at page 114 of the affidavit of the plaintiff affirmed 26 June 2017.

3. The agency agreement was prepared by the defendant.

4. The agency agreement was on the defendant’s letterhead.

5. The defendant and the plaintiff both signed the Agency Agreement.

6. Subsequent to the signing of the agreement, the plaintiff sold units for the defendant and the defendant paid her some commissions in accordance with the agreement.

7. Not all of the commission entitlements accruing pursuant to the agency agreement have been paid. $126,170.00 of the commissions provided for under the agency agreement have been paid. The outstanding amount of unclaimed commission is $226, 840.00.

8. The agreement was not in Standard Form.

9. The agreement breaches s 55 of the Act, in that a copy of it was not provided to the defendant within 48 hours of the signing of the agreement. (s 55(1)(c))

10. The defendant is a corporation that has been involved in property development for some 30 years, and as such is a sophisticated defendant.

11. The plaintiff had been in the real estate industry for 5 odd years, and had only been a licenced real estate agent for a period of months before the Agency Agreement was entered into. English is not the plaintiff’s first language.

12. There is a significant power imbalance between the plaintiff and the defendant.

13. Such power imbalance, in my view enlivens the protection provided under s 55A of the Act, and I am satisfied that were I to fail to make an order so as to afford the plaintiff the protection of the Act, that order would be unjust.

ORDERS

48. I make the following orders:

1. Verdict and judgment for the plaintiff in the sum of $226,840.00.

2. Defendant to pay the plaintiff’s costs as agreed or assessed.

3. Liberty to apply to my associate within 7 days if an alternate costs order is sought.

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Decision last updated: 08 April 2019