A Gold Coast agent appointed in connection with a development project has finally won a 10 year battle against the Office of Fair Trading concerning disclosure irregularities in his appointment forms 27 B.

The charges – over the 2003 disclosure of fees payable to property spruiker Park Trent from the proceeds of sale of 31 separate lots – were at first dismissed in March 2011 after an eight day Magistrates Court trial.

In 2013 the Court of Appeal ordered a re-trial of the agent’s prosecution to determine whether the manner of disclosure of the marketer’s remuneration was comprehensible from the “formula” disclosed in an annexure to the form.

The charges against the Orchid Ave agency – Cross Country Real Estate – and its two directors, came back before the Southport Magistrates Court in October 2013.

Neither Kellie Cross nor her father and co-director Ron, gave testimony but instead relied on evidence from two employees as to the processes they implemented at the agency to establish under PAMDA s 591 (4), they had taken all reasonable to procure strict corporate compliance.

Warren Evans and William Myers swore the owners had established a vigilant culture of compliance that involved obtaining legal advice, conducting staff training and supervision.

Kellie was acquitted under the section because she had been the actual recipient of the mistaken legal advice concerning the use of the formula in the annexure.

Ron Cross – who simply relied on the implemented systems being followed – could not, in the magistrate’s opinion, satisfy the conditions of the statutory defence. He was convicted.

“It was not sufficient to simply say there is a culture of compliance and that management was generally on the ball about these things”, ruled the magistrate.

Ron’s further appeal – his fourth – came before District Court Judge Nick Samios last week, solely for the purpose of determining whether or not the contract preparation measures established in his real estate office should be regarded as “reasonable steps to ensure” a system of compliance.

“To take advantage of the statutory defence, Cross was not required to show that he personally took any steps,” ruled his honour in support of Ron’s contentions. “In my opinion the magistrate erred in his evaluation by not accepting Cross could rely on his daughter” having sought the requisite advice.

The judge set aside the convictions and entered findings of not guilty on all charges. The agency company had itself pleaded guilty in October 2013 and was convicted.

Such was the complexity of PAMDA that it took an army of lawyers, two trials and four appeals – each coming to different conclusions – to arrive at what appears to be the most appropriate answer. The defendants had also called three other property developers to testify that they – on legal advice – had adopted the very same processes as Cross Country.

PAMDA has gone but not so this issue. To the surprise of many, the disclosure requirements in the Park Trent scenario remain exactly the same under the POA, also administered by the OFT.

Astonishingly though, the current approved PO form 6 does not accommodate what is still required to be disclosed in relation to third party and non-commission benefits!

Cross v Peebles [2014] QDC 270 Samios DCJ 04/12/2014


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