A recent judgment of the District Court of Queensland in Brisbane (11 November 2010) has reiterated the strict way in which PAMD Form 22a’s are construed by the courts if there is a dispute between the vendor and the agent concerning payment of commission.

In the case of Yong Internationals Pty Ltd v Gibbs & Ors [2010] QDC423, Judge Samios dismissed the plaintiff agent’s claim for commission and held that the PAMD Form 22a was invalid.  The agent had failed to complete the section entitled “how this service is to be performed”.  This would appear to be the equivalent of clause 4.1.1 of the standard PAMD Form 22a which is usually headed “performance of service“.  It is not uncommon for this section of the 22a to be left blank.

This recent decision was thought to take any discretion out of the equation for courts when they consider a Form 22a which has sections that have not been completed.  This is not the case.  The case merely restates the previous views of the court that unless there has been ‘substantial compliance’ with the Legislation, the Form 22a will be non-compliant, and therefore unenforceable.

In a previous case in the District Court of Queensland of Decker v Anderson & Anor [2008] QDC283, there was a similar defect in the agent’s Form 22a.  Although Section 4.1 of the form had not been completed, information that was missing could be gleaned from other sections of the form and the court held that, on this basis, there was ‘substantial compliance’ with the legislative requirements and the Form 22a was held to be enforceable.

Both cases trace back to a Supreme Court decision of Active Property Marketing Services v Joelco Pty Ltd [2007] QSC167 (13 July 2007).  Although the remarks of the sitting Judge were obiter (i.e. not bearing on the decision), it was held that the failure to state ‘how the service was to be performed’ would render the Form 22a invalid and prevent the agent from recovering commission.

The most simple way to avoid getting into trouble with the validity of your PAMD Form 22a is to properly complete it!  Although it may well be stating something very obvious when you are required to describe how you will “perform the service”, if you don’t complete this section or have this information somewhere else in the form, your claim for commission could well be in jeopardy.  Furthermore, Section 140 of PAMDA provides that it is an offence for an agent to sue for or recover commission in circumstances where he or she has not been properly appointed in accordance with a validly executed PAMD Form 22a.  The maximum penalty for a breach of Section 140 is 200 penalty units.

If you have any questions or queries in relation to any commission disputes or any other issues, please do not hesitate to contact Holly Gilholme, our Property & Commercial Department Manager on 07 5506 8202 or hgilholme@attwoodmarshall.com.au.
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Dan

Dan