Wood v Chief Executive, Department of Employment, Economic Development and Innovation
[2011] QCAT 241
•27 May 2011
| CITATION: | Wood and Ors v Chief Executive, Department of Employment, Economic Development and Innovation and Ors [2011] QCAT 241 |
| PARTIES: | Mr John Wood Ms Bella Exposito Moranbah Real Estate Pty Ltd ACN 104646111 |
| v | |
| Chief Executive, Department of Employment, Economic Development and Innovation Mr Adrian Paul Neems Mrs Jodie Neems |
| APPLICATION NUMBER: | GAR321-10 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | 15 April 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Ms Michelle Howard, Member |
| DELIVERED ON: | 27 May 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The decision of the Department of Employment, Economic Development and Innovation is set aside and the matter is returned for reconsideration to the Department of Employment, Economic Development and Innovation for the decision to be made in accordance with the directions in order 2; 2. It is directed that: (a) Department of Employment, Economic Development and Innovation allow the claim for the reasons set out; (b) that the claimant’s financial loss is the reasonable costs of relocating the Neems’ furniture within Moranbah in late 2007; (c) that Department of Employment, Economic Development and Innovation take evidence and submissions from the parties and decide the amount of financial loss accordingly; (d) John Wood and Moranbah Real Estate are liable for the claimant’s financial loss. (e) John Wood, Moranbah Real Estate and Bella Exposito are the persons liable to reimburse the claim fund in the amount of the financial loss as determined in accordance with these orders. |
| CATCHWORDS: | PROPERTY AGENTS AND MOTOR DEALERS – minor claim – review of decision – whether misleading representation – whether financial loss claimed is reasonable Property Agents and Motor Dealers Act 2000, ss 470, 481, 490, 574 Parkdale Custom Built Furniture Pty Ltd v Puxa Pty Ltd (1982) 149 CLR 191 To v Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development [2006] QDC 381 CRW Pty Ltd v Sneddon (1972) AR (NSW) 17 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | David Edwards, Barrister, for the Applicants |
| RESPONDENT: | Robert Vize, Principal Legal Officer, Department of Employment, Economic Development and Innovation for the First Respondent Adrian Neems for the Second Respondent |
REASONS FOR DECISION
The Chief Executive of the Department of Employment, Economic Development and Innovation (DEEDI) made a decision allowing a claim against the statutory claim fund established under the Property Agents and Motor Dealers Act 2000 (the Act) in favour of Adrian Neems and Jodie Neems for $7,000.
The decision named Moranbah Real Estate Pty Ltd and John Wood as liable for the financial loss to the Neems. It also specified pursuant to section 490(2) of the Act that Moranbah Real Estate Pty Ltd, Bella Exposito and John Wood are liable to reimburse the claim fund for the amount of $7,000. Bella Exposito is the licensee principal and executive officer of Moranbah Real Estate.
Moranbah Real Estate Pty Ltd, Bella Exposito and John Wood have applied to the tribunal for review of the decision of the decision-maker, DEEDI.
The Law
In its review jurisdiction, the tribunal’s role is to produce the correct and preferable decision,[1] after a fresh hearing on the merits.[2] The tribunal may confirm or amend the decision; set aside the decision and substitute its own decision; or set aside the decision and return the matter for reconsideration to the decision-maker for the decision, with directions it considers appropriate.[3]
[1] Queensland Civil and Administrative Tribunal Act 2009, s 20(1).
[2] Queensland Civil and Administrative Tribunal Act 2009, s 20(2).
[3] Queensland Civil and Administrative Tribunal Act 2009, s 24(1).
In exercising its review functions, the tribunal has all of the functions of the decision-maker for the reviewable decision being reviewed.[4] It must decide the review in accordance with the Act under which the reviewable decision was made and the Queensland Civil and Administrative Tribunal Act 2009 (the QCAT Act).[5] The decision-maker’s role in the review proceeding is to assist the tribunal so that it may make its decision on the review.[6]
[4] Queensland Civil and Administrative Tribunal Act 2009, s 19(c).
[5] Queensland Civil and Administrative Tribunal Act 2009, s 19(a).
[6] Queensland Civil and Administrative Tribunal Act 2009, s 21(1).
By virtue of section 481 of the Act, DEEDI, and therefore, on review, the tribunal may allow a claim, wholly or partly, only if satisfied that an event in section 470(1) happened, and that the claimant suffered a financial loss because of the happening of the event. If a claim is allowed, DEEDI must take into account any amount the claimant might reasonably have received or recovered, if not for the claimant’s neglect or default; decide the amount of the financial loss; and name the person responsible for the financial loss.[7]
[7] Property Agents and Motor Dealers Act 2000, s 481(3).
Section 470(1) lists, among other things, a number of contraventions of the Act including contravention of section 574. Section 574 relevantly provides that a licensee or registered employee must not represent to someone else anything which is false or misleading in relation to the letting of property. For these purposes, a representation is taken to be misleading if it would reasonably tend to lead to a belief that a state of affairs exists, that does not exist.[8]
[8] Property Agents and Motor Dealers Act 2000, s 574(3).
If a representation is made about a matter without reasonable grounds for its making, the representation is taken to be misleading.[9] The onus of establishing that a person had reasonable grounds for making a representation is on the person.[10]
[9] Property Agents and Motor Dealers Act 2000, s 574(4).
[10] Property Agents and Motor Dealers Act 2000, s 574(5).
The District Court has considered the application and construction of sections 470(1) and 574 of the Act in the context of a claim against the claim fund. Judge McGill found that to determine whether section 574 has been contravened consideration must be given to whether the person alleged to have made the contravention had a defence under section 24 of the Criminal Code Queensland 1899 (the Criminal Code), as modified by section 574(5).[11]
[11]To v Chief Executive, Department of Tourism, Fair Trading and Wine Industry Development [2006] QDC 381, [46-54]; London v Reynolds [2006] QDC 380, [18].
[10] The Criminal Code provides in section 24 as follows:
24 Mistake of fact
(1) A person who does or omits to do an act under an honest and reasonable, but mistaken, belief in the existence of any state of things is not criminally responsible for the act or omission to any greater extent than if the real state of things had been such as the person believed to exist.
(2) The operation of this rule may be excluded by the express or implied provisions of the law relating to the subject.
[11] In general terms, a representation will be misleading if it leads the person to whom the representation is made, into error.[12] It is sufficient that it would be misleading to an ordinary member of the public.[13]
The Evidence
[12] Parkdale Custom Built Furniture Pty Ltd v Puxa Pty Ltd (1982) 149 CLR 191, 198.
[13] CRW Pty Ltd v Sneddon (1972) AR (NSW) 17.
The history of the tenancy agreement
[12] In late 2006, Adrian Neems and Jodie Neems (the Neems) and their children moved from Mackay to Moranbah for Mr Neems’ employment as an accountant/cost control engineer. They had three children at that stage. Ms Neems fell pregnant with another child while in Moranbah.
[13] They rented a five bedroom house at Laver Street through Moranbah Real Estate. John Wood was the person they dealt with at the agency. The tenancy agreement specified the term of the agreement as ‘12 MONTHS option of 12 months thereafter’.[14] There was no provision made for an option in the special conditions and no further detail about the ‘option’ in the agreement.
[14] Exhibit 2.
[14] It is common ground that Mr Neems told Mr Wood initially that the Neems wanted a two year lease of the property. The Laver Street property was for sale at the time the rental agreement was negotiated. Mr Wood told him that that it was not available for two years. Mr Neems then advised Mr Wood that the Neems wanted a 12 month lease with another 12 months extension available.
[15] Mr Wood says that Mr Neems told him that his job was for one year with the possibility of another year and Mr Neems acknowledged this. Mr Neems says he advised Mr Wood that his family did not want to have to move during what was anticipated to be a 2 year stay in Moranbah for employment purposes, if his position rolled over for another 12 months. He completed a document, and provided it to the Moranbah Real Estate agency, advising that he wished to rent the Laver Street property for 12 months ‘and option to renew for 12 months’.[15]
[15] Exhibit 4.
[16] Mr Woods says that he told the Neems that, on his instructions from the owners of the house property, the term could only be 12 months as the owners would only give 12 months in essence because a purchaser may wish to reside in the home.
[17] Mr Neems says that Mr Wood suggested an option as a way to manage the Neems’ desire not to have to move house if his job rolled over for a further term of 12 months. Mr Neems acknowledges that the house was for sale, but denies that Mr Wood explained that if the house was purchased by an owner occupier that the Neems would have to move after 12 months.
[18] Mr Woods says he inserted the reference to the option for 12 months into the term of the lease at Mr Neems’ request because the owner would not give a 2 year term. He considers the term meant that if it suited both parties, a further term could be agreed. He says it was, in effect, to give the Neems an opportunity to rent the property for a further term if it was sold to an investor. He says that the Neems were aware that there was no guarantee of occupancy after the initial 12 month term expired.
[19] At that time the tenancy agreement was drafted, Mr Woods was an inexperienced real estate employee in 2006, having been in the role for about one year. He conceded at the hearing that the words used regarding the ‘option’ could be confusing and did not create a binding option. However, he believed that the Neems understood that.
[20] Ms Exposito says this was the first occasion on which anyone had, in her experience, sought to include an option in a tenancy agreement through Moranbah Real Estate. She also considered that the words inserted meant that at the option of both parties, a further term could be agreed. However, she acknowledged that the wording had not been used again.
[21] Mr Neems says that he and his wife entered into the lease only because they believed it to be a binding option for a further 12 months if they chose to exercise it.
[22] It appeared the house had been sold in about July 2007 and Mr Wood advised the Neems at this stage that they would have to vacate at the end of their 12 month term. The contract of sale did not proceed. However, Mr Neems wrote to Moranbah Real Estate in August 2007, advising that the Neems would be taking up the option. Subsequently, the house was sold later in August. The Neems were given notice to vacate the premises at the end of the 12 month term, which they did.
Financial loss
[23] In the meantime, Moranbah Real Estate suggested other possible rental premises to the Neems in Moranbah. Ms Exposito told the tribunal that there were other equivalent and suitable premises available. These were 4 bedroom homes in Moranbah. In particular, she recommended a 4 bedroom home with a family room and entertaining area in Savannah Street.
[24] In his witness statement,[16] Mr Neems said, when it initially appeared the house had been sold in July 2007, he wrote to the real estate agency to advise that the Neems would move if Moranbah Real Estate compensated them for relocating.
[16] Exhibit 9.
[25] Mr Neems said that from about August to November 2007 he and Ms Neems started looking for other accommodation and were prepared to consider anywhere within a decent radius of Moranbah. They looked on real estate.com, notice boards, with Mr Neems’ employer and in the newspaper. He asserts that they would have relocated in Moranbah if they had located a suitable property.
[26] The Neems’ did not inspect the inside of any other rental premises, although Mr Neems told the tribunal that they looked at from the curb-side and gave close consideration to and considered extensively the premises particularly recommended to them by Ms Exposito at Savannah Street. He said that the premises was ‘deemed’ unsuitable by himself and Ms Neems, and that their furniture would not fit in it and it was not a property of the same quality, despite not having been inside it.
[27] An affidavit of Mr and Ms Neems asserts that they ‘exhausted all avenues for alternative accommodation, prior to making the decision to return to Brisbane.’[17]
[17] Exhibit 10.
[28] Instead they moved to Brisbane. The costs claimed for the move totalled $8,848. This sum comprises removalist costs Moranbah to Brisbane of $7,000; new school uniforms of $200; Foxtel and Telstra connections of $200; fuel Moranbah to Wellington Point of $748.30; estimated storage costs of $500; and internet costs of $200. Statements of account substantiate the costs paid for removalists to Brisbane in the amount of $7,000. Documents have not been provided to substantiate the other claimed costs of relocating.
Discussion and Decision
[29] Although there are some areas of factual dispute between what Mr Wood says occurred and was discussed with Mr Neems and what Mr Neems says, I do not need to resolve them for the reasons discussed below.
[30] The essential issues are whether a representation was made which was false and misleading under section 574 of the Act; if so, whether the Neems’ suffered financial loss as a result and in what amount; and who is responsible for that loss.
[31] DEEDI submits, and I accept, that the question to be answered is whether the Neems were misled into believing they had security of tenure under an option for another 12 months if they chose.
[32] Moranbah Real Estate Agency had authority to manage the rental of the Laver Street property on behalf of the owners. Mr Wood inserted as the term of the tenancy agreement ‘12 MONTHS option of 12 months thereafter’. He says essentially that he did this to appease Mr Neems and that the Neems understood that the term was 12 months, but that if both parties agreed, a further term might be negotiated.
[33] The owners of the property had given Mr Wood instructions that they were not prepared to grant a tenancy for longer than 12 months. Mr Wood knew that the Neems wanted security of occupation in the event that Mr Neems employment position rolled over. Mr Neems had told him that he did not want the family to have to move if they stayed in Moranbah.
[34] Mr Wood was an inexperienced real estate agent. Whatever he may have intended when he drafted the tenancy agreement, the words inserted about the option convey a meaning. Although the words may not have created a binding option, the term inserted into the tenancy agreement by the managing agent can be reasonably considered to convey the impression that there is an option which can be exercised for a twelve month term.
[35] Those words reasonably led the Neems to believe that that a state of affairs existed, which did not exist since the premises were available for rental for a term of 12 months only. The representation is, therefore, taken under section 574(3) to be false or misleading.
[36] Mr Wood’s did not have reasonable grounds for making the representation as he held instructions that the premises were available for rental for a 12 month term only. It was reasonable for the Neems to accept at face value that the managing agent would only enter into arrangements with tenants in accordance with their instructions. It was not for the Neems to know, even if they were told that the owners would only give a 12 month lease, that this also meant they would not give an option. In the circumstances, having regard to section 574(5) and section 24 of the Criminal Code, there were no reasonable grounds for making the representation.
[37] For these reasons, I am satisfied that an event within section 470(1) of the Act happened.
[38] If the claim is to be allowed, I must also be satisfied that the Neems suffered financial loss because of the happening of the event.
[39] The Neems moved to Brisbane and the costs incurred in doing so have been claimed by them as their financial loss incurred.
[40] There were four bedroom properties available for rent in Moranbah at the relevant time. The Neems did not look at any other properties available for rent in Moranbah. They decided that premises recommended to them as suitable for the family were unsuitable and would not accommodate their furniture, apparently on the basis of viewing the property from the curb-side.
[41] I do not accept the Neems’ assertions that they exhausted all avenues before deciding to move to Brisbane, or Mr Neems’ assertions that they gave extensive or close consideration to other premises, when they did not inspect any other available properties.
[42] If the Neems had rented another property in Moranbah, it might be expected that the costs of their relocation would have been significantly less than the costs of moving to Brisbane. In my view, their financial loss is reasonably only the costs of moving from the Laver Street premises to another property within Moranbah. There is no evidence before me about the costs of moving to other premises within Moranbah in late 2007.
[43] In the circumstances, I am unable to decide the amount of the claimant’s financial loss.
[44] The parties raised no issues about the persons named as liable in the event that the claim is allowed, nor the persons liable to reimburse the claim fund for the financial loss allowed. I am satisfied that they were correctly identified in DEEDI’s decision.
[45] I will set aside the decision of DEEDI, and return the matter to DEEDI for reconsideration by it with the following directions:
(a) I direct that the claim be allowed for the reasons set out;
(b)I direct that the claimant’s financial loss is the reasonable costs of relocating the Neems’ furniture within Moranbah in late 2007;
(c)I direct that DEEDI take evidence and submissions from the parties and decide the amount of financial loss accordingly;
(d)I direct that John Wood and Moranbah Real Estate are liable for the claimant’s financial loss;
(e)I direct that John Wood, Moranbah Real Estate and Bella Exposito are the persons liable to reimburse the claim fund in the amount of the financial loss as determined in accordance with these orders.
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