CONSUMERAFFAIRSVICTORIA
ENFORCEABLE UNDERTAKING
Pursuant to section198 of the Australian Consumer Law and Fair Trading Act 2012
The commitments in this Undertaking are offered to the Director of ConsumerAffairs Victoria by:
Village Real Estate (Newport) Pty Ltd
ACN 167 214 762
of20 Hall Street, Newport, VIC 3015
– and –
Martin John Rankin
Date of Birth 8 October 1968
in his capacity as Director of Village Real Estate (Newport) Pty Ltd
– and –
Hussein Saad
Date of Birth 20 August 1987
in his capacity as Director and Officer in Effective Control of Village Real Estate (Newport) Pty Ltd
The Director of Consumer Affairs Victoria
- The Director of Consumer Affairs Victoria (“the Director”) is a public official whose office is provided for under section107 of the Australian Consumer Law and Fair Trading Act 2012 (“the ACLFTA”).
- The holder of that office is responsible for the administration of the ACLFTA, together with Victoria’s other consumer protection legislation, including the Estate Agents Act 1980(“EAA”) and the Australian Consumer Law (“the ACL”), which has been enacted as a law of Victoria under Part 2.2 of the ACLFTA and known as the Australian Consumer Law (Victoria) (“the ACL (Vic)”).
- Schedule 1 of the ACLFTA provides that the EAAis a Consumer Act under the ACLFTA.
- Under section 198 of the ACLFTA, the Director may accept a written Undertaking from a person in connection with:
a)a matter in relation to which the Director has a power or function under the ACLFTA; or
b)a matter relating to a contravention of any other Consumer Act.
Background
- Village Real Estate (Newport) Pty Ltd ACN 167 214 762 (“the Company”) is a licensed estate agent with the licence number 075899L.
- The Company’s registered office and principal place of business is at 20 Hall Street, Newport, VIC 3015.
- Mr Martin Rankin is a Director of the Company. Mr Rankin is a licensed estate agent with licence number 075371L. Mr Rankin was the Officer in Effective Control (“OIEC”) of the estate agency business of the Company from 24 October 2014 to 21 April 2016,
- Mr Hussein Saad is a Director of the Company. Mr Saad is a licensed estate agent with licence number 074404L and the current Officer in Effective Control of the Company appointed to this role on 21 April 2016.
Legislation
- On 1 January 2011, the ACL, set out in Schedule 2 to the Competition and Consumer Act 2010 (C’th), came into effect. Part 2.2 of theACLFTAapplies the ACL as a law of Victoria, which is known as the ACL (Vic).
- Section 18 of the ACL (Vic) provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
- Section 30(1) of the ACL (Vic), inter alia provides that a person must not, in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land:
a)make a false or misleading representation concerning the price payable for the land.
ConsumerAffairsVictoria Investigation
- In February 2016, CAV received a complaint about the Company. The complainant alleged that the property located at 25 Pilgrim Street, Seddon (“the property”) had been advertised at a price significantly lower than its selling price.
- Between February 2016 and August 2016, CAV inspectors conducted a range of enquiries which identified that the property had been marketed by the company online, including on and with a price that was less than the Company’s genuine belief as to the likely selling price of the property and less than the price that the Company believed the vendor was willing to accept.
Contraventions of the ACL (Vic)
Sections 18 and 30
- On 15 December 2015, the Company was engaged to sell theproperty. An agent’s representative of the company completed the Exclusive Auction Authority and stated an agent’s estimate of selling price of $770,000 to $847,000.
- In mid and late December 2015, the Company attempted to sell the property “off-market” prior to the marketing campaign leading to auction. On 19 December 2016, a written offer to purchase the property was submitted by a prospective purchaser for the sum of $900,000. This offer was relayed to the vendors of the property, who advised the Company that the offer was significantly less than what they would accept.
- On 20 December 2015, the vendors further advised the Company that they would not consider any offer lower than $950,000.
- During January and February 2016, the marketing campaign commenced and the property was advertised on various internet websites. In particular, the company placed the following advertisements on
a)Between 12 January and 28 January 2016, the property was advertised with a price of “$770,000+”.
b)Between 28 January 2016 and 6 February 2016, the property was advertised with a price of “$800,000+”.
- In respect of the price representations made in advertisements referred to in paragraph 17 above, at the timethe representations were made the Company knew that the vendors were not willing to sell the property at or close to the price suggested, and that the property was unlikely to sell at that price, given:
a)the offer of $900,000 that was rejected by the vendors referred to in paragraph 15 above
b)the instructions given by the vendors to the company referred to in paragraph 16 above
c)the vendors had obtained a bank valuation for the property, of which the Company was aware, that was considerably higher than $900,000
d)the Company had, on 5 December 2015, sold a comparable property next door, being 27 Pilgrim Street, for $900,000. 27 Pilgrim Street possessed similar featuresof a similar standard,but was situated on less land that the property
e)the Company agreed that the property was of a better standard than 27 Pilgrim Street
f)prior to marketing the property, the Company had appraised the property’s value as around $950,000.
- On 6 February 2016, the property was auctioned and the vendors set a reserve price of $950,000. The property sold for $995,000.
Acknowledgment of the Contraventions
- The Company acknowledges that, by engaging in the conduct referred to in paragraphs 13 to 18 above, the Company contravened sections 18 and 30 (1) of the ACL(Vic).
- The Company, Mr Rankin in his capacity as Director, and Mr Saad in his capacity as Director and OIEC, seek to address these contraventions by offering this Enforceable Undertaking to the Director.
The Enforceable Undertakings
Compliance program
- The Company and its directors, Mr Saad and Mr Rankin, hereby undertake to the Director, pursuant to section 198 of the ACLFTA, that it will, at its own expense, establish within three(3) months of the date of the execution of the undertaking, a compliance program which meets the requirements in Annexure “A”and maintain the compliance program for three (3) years from the date on which it is established.
- The Companyprovide to the Director, within three months of signing this undertaking, a signed affidavit from the OIEC, verifying that it has implemented the compliance program.
Publication of Notice
- Mr Saad and Mr Rankin, personally and on behalf of the company, undertake to the Director, pursuant to section 198 of the ACLFTA, that they will, within 14days of the commencement of this Undertaking, cause to be displayed prominently and conspicuously for a continuous period of 3months at or near each the reception desk in each of its existing or new premises from which it carries on real estate services, a Notice in the form of Annexure“B” below to this Undertaking. Each such Notice:
a)be a minimum size of 30cm x 42cm (A3 size);
b)use a minimum type size of 12point Times New Roman or equivalent; and
c)be in full colour.
Contribution to the Victorian Consumer Law Fund
The Company, undertakes, that within 30 days of the commencement of this undertaking it will pay the sum of $15,000to the Victorian Consumer Law Fund, created under section 134 of the ACLFTA. The Company will make 4 (four) payments of $3750 per payment, in accordance with the following payment schedule:
a)$3750 payable by 31 January 2017
b)$3750 payable by 28 February 2017
c)$3750 payable by 31 March 2017
d)$3750 payable by 30 April 2017.
Commencement and Duration of the Undertaking
- The Enforceable Undertaking commences when:
a)it is executed by Mr Rankin and Mr Saad, personally and on behalf of the Company; and
b)It is accepted and executed by the Director; and
c)notice is given, in writing, by the Director’s staff to the Company or its representative, of the happening of the matters contained in paragraph 25(b).
- The term of the Enforceable Undertaking shall be for a period of 3 years from the date the Enforceable Undertaking is accepted by the Director.
Public Nature of Undertaking
- The Company, Mr Rankin and Mr Saad acknowledge that:
a)the Director will register this Enforceable Undertaking in the Register of Undertakings and make this Enforceable Undertaking available for public inspection pursuant to section200 of the ALCFTA
b)the Director and/or the Minister for ConsumerAffairsVictoria may, from time to time, publicly refer to this Enforceable Undertaking
c)this Enforceable Undertaking in no way derogates from the rights and remedies available to the Director arising from any conduct described in this Enforceable Undertaking that arises from conduct outside the relevant period or from future conduct (including the right to pursue compensation for or in the name of any consumer)
d)this Enforceable Undertaking in no way derogates from the rights and remedies available to any other person or entity (including any other regulatory agency) arising from any conduct described in this Enforceable Undertaking that arises from conduct outside the relevant period or from future conduct; and
e)this Enforceable Undertaking in no way derogates from the obligation of the Company, its officers, employees, and agents to fully comply with the provisions of the Act and associated regulations.
EXECUTION
VILLAGE REAL ESTATE (NEWPORT) PTY LTD
ACN 167 214 762
Signed by:......
(PRINT NAME) ______
in his capacity as proper officer on behalf ofVillage Real Estate (Newport) Pty Ltd.
In the presence of:Witness: ......
(PRINT NAME) ______
EXECUTION
MARTIN JOHN RANKIN
Date of Birth: 8/10/1968
Signed by:......
Martin John Rankin
in his personal capacity.
In the presence of:Witness: ......
(PRINT NAME) ______
HUSSEIN SAAD
Date of Birth: 20/8/1987
Signed by:......
Hussein Saad
in his personal capacity.
In the presence of:Witness: ......
(PRINT NAME) ______
Accepted by:
The Director of ConsumerAffairsVictoria, pursuant to section198 of the ACLFTA.
Dated: ……………………………………………2016
......
Simon Cohen
Director of Consumer Affairs Victoria
Annexure “A”
COMPLIANCE PROGRAM
The Company will establish a Compliance Program that complies with each of the following requirements:
Appointments
1.The Company will:
(a)appointa Director or a Senior Manager with suitable qualifications or experience in corporate compliance as Compliance Officer with responsibility for ensuring the Compliance Program is effectively designed, implemented and maintained;
(b)Appointa qualified, internal or external, compliance professional with expertise in the Australian Consumer Law (Victoria) (the Compliance Advisor). The Company shall instruct the Compliance Advisor to conduct a risk assessment in accordance with the following:
- Identify the areas where the Company is at risk of breaching:
- Section 18 of Part 2-1 (Misleading or deceptive conduct); and
- section 30 of Part 3-1, Division 1 (False or misleading representations) of the ACL (Vic)
(c)identify where there may be gaps in the Company’s existing procedures for managing these risks; and
(d)provide recommendations for action having regard to the assessment.
2.The Company will issue a policy statement outlining the Company’s commitment to trade practices compliance (Compliance Policy). The Compliance Policy is:
(a)is written in plain language;
(b)contains a statement of commitment to compliance with the Act (including the ACL (Vic));
(c)contains a strategic outline of how commitment to compliance will be realised within the Company;
(d)contains a requirement for all staff to report any Compliance Program related issues concerns to the Compliance officer;
(e)contains a guarantee that whistle-blowers will not be prosecuted or disadvantaged in any way for making a genuine report and that their reports will be kept confidential and secure;
(f)contains a clear statement that the Company will take action internally against any persons who are knowingly or recklessly concerned in a contravention of the applicable legislation administered by Consumer Affairs Victoria (including the ALC (Vic) and will not indemnify them.
Complaints Handling System
3. The Company will ensure that the Compliance Program includes a complaints handling system. The Company shall use its best endeavours to ensure this system is consistent with AS/ISO 1002:2006 Customer satisfaction- Guidelines for complaints handling in organisations, though tailored to the Company’s circumstances. The Company will ensure that staff and customers are made aware of the complaints handling system.
Training
4. The Company will ensure that the Compliance Program provides for regular (no less than once a year) and practical training for all directors, officers, employees, representatives and agents, whose duties could result in them being concerned with conduct that may contravene:
(a)Section 18 of Part 2-1 (Misleading or deceptive conduct) of the ACL (Vic);
(b)Section 30 of Part 3-1, Division 1 (False or misleading representations in respect of land) of the ACL (Vic); and
(c)The EAA including but not limited to sections 47A-47D of the EAA.
5.The Company must ensure that the training is conducted by a suitably qualified compliance professional or legal practitioner with expertise in the ACL (Vic).
6.The Company will ensure that the Compliance Program includes a requirement that awareness of ACL(Vic) compliance issues forms part of the induction of all new directors, officers, representatives and agents, whose duties could result in them being concerned with conduct that may contravene the matters referred to in paragraphs 4(a)-(c) above.
Record keeping
7.The Company shall, keep in permanent form and in a manner than can be expeditiously produced, records as to the following matters:
(a)Estimated selling prices of each property listed for sale by the Company;
(b)Price representations made by the Company in connection with properties listed for sale by the Company;
(c) Offers, whether verbal or written, made by prospective purchasers in connection with properties listed or sale by the Company.
Supply of documents to the Director
8.The Company shall, at its own expense, within 3 months of the date of the execution of this Undertaking, cause to be produced and provided to the Director copies of each of the documents constituting the Compliance Program and implement promptly and with due diligence any recommendations that the Director may make that are reasonably necessary to ensure that the Company maintains and continues to implement the Compliance Program in accordance with the requirements of the undertaking.
Annexure “B”
NOTICE TO BE DISPLAYED
1