Does a poor auction turnout entitle the seller to terminate an exclusive agency before its due date?

That question confronted Ray White Surfers Paradise in relation to Hope Island sellers who also alleged conduct which contravened PAMDA.

Damian and Roxanne Chadwick had enlisted RW to sell their $2.75 mil Beechwood Drive home by auction by way of a 60 day exclusive starting 5 May 2012 in the context that they suspected Westpac would repossess the property on 30 June, if it hadn’t been sold sooner.

As their 31 May auction came and went without success, complaints of unsatisfactory marketing emerged.

Agent Sean Kaddatz was, they claimed, directly responsible for grossly under-value offers by having talked the property down by notifying potential bidders that repossession was imminent.

Whites had also failed to provide them with “weekly reports, offers, activity, valuations and feedback from potential purchasers” and had advised them to withdraw their property from auction due to unrealistic price expectations.

The Chadwicks’ solicitor notified Ray White of those complaints by letter of 28 June – just days before the exclusive appointment was to expire – at the same time advising that Westpac had entered into possession as a result of which the exclusive agency was thus “at an end”.

The following day an interstate purchaser – who had inspected the property in May through Hum & Fea Real Estate – signed a $2.7 mil offer to buy, which the sellers duly accepted.

Sometime later RW discovered that Melissa Panepinto had been the buyer and that a competitor, not Westpac, was responsible for the sale.

Their lawsuit for the commission was defended by the allegation that PAMDA s 135 (1) had not been complied with in that the agency had not discussed the various matters referred to therein including the consequences of the property being sold by a third party during the period of an exclusive agency.

QCAT adjudicator Christine Trueman ruled – against the “concise, structured but at times inconsistent evidence” of the sellers -that Kaddatz had provided the relevant warnings by following a checklist and that the exclusive agency appointment was valid.

She was also incredulous “that following a termination letter on 28 June, they were able to arrange a sale in one day”. It was clear, in her view, that Ms Panepinto inspected and made a signed offer during the exclusive appointment period.

In circumstances where the deficiencies in service were denied by agency head Andrew Bell, the tribunal ruled that – although the sellers were genuinely unhappy with the marketing performance – such conduct did not constitute a breach entitling termination of the exclusive agency agreement.

The total commission of $29k exceeded the jurisdiction of the tribunal. The Chadwicks were ordered to pay Ray White $25k – the maximum extent of the tribunals jurisdiction – plus interest and filing fees.

Orchid Avenue Realty Pty Ltd t/as Ray White Surfers Paradise v Chadwick & Anor [2014] QCAT 441 Adjudicator Trueman 20/08/2014


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