A Queensland real estate agency has defeated a buyer’s $200k lawsuit for breaches of industry codes of practice that require agents to act honestly and diligently.
Charles and Janice Robertson made the allegations over agent Graeme Salt’s failure to make sufficient enquiries about the construction of a proposed road connection to the take-away food location they signed up to buy at $352k in October 2006.
Salt – of Airstrike Industrial – told them the road used to gain access to the Coomera Business Park industrial site “was only a temporary arrangement” and that at some time in the future, “permanent access to Dalton Street would be via Days Road”.
The change to road access meant the only way into the industrial estate would be past the premises on which the buyers decided would be a perfect location for Robbo’s Tasty Tucker.
“Once Dalton Road is through to Days Road, you’ll be laughing,” Salt is alleged to have assured them.
By February 2011 when their dispute first aired, Dalton Street was still a dead end and the connection to Days Road was nowhere near being started. The business languished.
The Robertsons claimed Salt had misled – by not referring to any time period – to believe the road would be in by the time settlement would become due in October 2007.
Although the new road was shown on subdivision plans approved by the Gold Coast City Council, Salt ought to have known – they contended – and informed them that the road connection might be complicated or delayed by land resumptions and other factors.
In April 2013 the Queensland Civil and Administrative Tribunal upheld their claim based on false and misleading statements contrary to PAMDA s574 and allowed a payout from the Claim Fund at $200k which it ordered Salt and agency owner Shane Airey to reimburse.
That decision was overturned on appeal in March 2014. The court took the view that an implication of an imminent start to the road works could not fairly be drawn from Salt’s use of the words “only temporary”.
The Robertsons – whose own legal tab by then was over $130k – were ordered to pay $36k of the agency’s total legal costs of more than $200k.
On further appeal to the Court of Appeal, the Robertsons claimed that – by failing to investigate the likely delay in the construction of a permanent road connection – Salt had breached Code of Conduct requirements that agents must act “honestly, fairly and professionally” and “exercise reasonable skill care and diligence”.
Justice David Jackson – in delivering the lead judgment – disagreed, noting that Code of Conduct obligations did not appear to create any duty of care to buyers. Rather in his view, the agent’s duty was to the seller as his client.
Interestingly the obligation to act “honestly, fairly and professionally” contained in the PAMDA Code of Conduct has not been replicated in the Conduct Standards that now apply under the Property Occupations Act.