The Queensland Supreme Court of Appeal in the following case affirmed the decision of the court at first instance that no commission was recoverable by a real estate agent because the Property Agents and Motor Dealers Act 2000 approved Form 22a was not substantially completed.
FactsThe respondent seller appointed the appellant real estate agent to sell its vacant land situated in Redbank Plains, Queensland. The appointment was made using the approved Form 22a ("Appointment of Real Estate Agent (Sales and Purchases)").
A contract for the sale of the property was then entered into for a sale price of $9 million. Pursuant to the contract, the buyer was required to pay a non-refundable amount of $300,000 towards the purchase price. However, the contract never proceeded as the sellers purported to give notice of termination of the contract on the grounds that the buyer had not obtained development approvals pursuant to the Special Conditions of the contract. The buyer commenced proceedings against the seller for specific performance of the contract. The parties reached an agreement for settlement in which the seller retained the $300,000 paid by the purchaser. The real estate agent then claimed its commission of $226,139 but the seller refused to pay on the basis that cl 4.1 (which stipulates how the real estate agent will perform the services) of the Form 22a had not been completed.
The primary judge found against the real estate agent determining that the real estate agent’s appointment was not valid as a result of the failure to fully complete the Form 22a and the real estate agent was therefore not entitled to the commission.
It was common ground between the parties at first instance that substantial compliance with the requirements of the Form 22a was sufficient. On appeal, the real estate agent argued that there had been substantial compliance and that the failure to complete cl 4.1 of the form had not adversely affected the seller’s interests. This was because the Form 22a contained information throughout it concerning how the service was to be performed.
Decision The Queensland Supreme Court of Appeal in dismissing the real estate agent’s appeal, looked at s 49 of the Acts Interpretation Act 1954 (Qld) which stipulates that if a form prescribed or approved under an Act requires specified information to be included in the form, the form is not properly completed unless the requirement is complied with. The Form 22a was one such form. The required information was not included in cl 4.1 of the form and the appointment was therefore not properly completed for the purposes of s 49.
Section 140 of the Property Agents and Motor Dealers Act prohibits an agent from recovering a commission unless the agent has been properly appointed. As the agent was not properly appointed, it was not entitled to sue for or recover any commission.
The court also held that the requirement to state how the service is to be performed in s 133(3)(a) of the Property Agents and Motor Dealers Act and in cl 4.1 of the form is of considerable practical importance in defining the role of the agent and apprising the client of the services to which the client is entitled and of the way in which those services are to be performed. There could be no substantial compliance with the Form 22a without cl 4.1 being completed. The omission was substantial.
Citation: Yong Internationals Pty Ltd v Gibbs & Ors [2011] QCA 161.
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