Australia: E-Alert: Costs charged by resident manager upheld by Court of Appeal – Body Corporate Management Rights Update

Last Updated: 20 July 2017
Article by Robert Lyons

The Queensland Court of Appeal recently ended a long-running saga in which a resident manager of a Gold Coast apartment Complex had been prosecuted through the Queensland Civil and Administrative Tribunal. While a relief for the resident manager, the decision in Peterson Management Services Pty Ltd v Chief Executive, Department of Justice and Attorney General [2017] QCA 89 is a major win for management rights operators in Queensland. Although the decision relates to the now repealed Property Agents and Motor Dealers Act 2001 (PAMDA), it still has relevance to the current legislation, ie the Property Occupations Act 2014.

What happened?

Peterson Management Services Pty Ltd (Peterson) conducted a caretaking and letting business at the resort. It entered into a letting appointment with a number of apartment owners. As is common practice, the form of appointment contained a schedule of lump sum fees for particular services that Peterson would undertake for the owners.

The Department alleged that Peterson had committed the following breaches of the PAMDA:

  1. General cleaning charge – the letting appointments disclosed fixed sum 'general cleaning charges' to be charged by Peterson, for instance, the general cleaning charge for a 1 bedroom unit was stated to be $64.90. However, these charges were more (in some cases over double) the cost actually incurred by Peterson in engaging a third party cleaner to undertake the cleaning.
    The Department alleged that Peterson breached section 133 of the PAMDA, which provided that a letting appointment must disclose: '(i) the fees, charges and any commission payable for the service; and (ii) the expenses, including advertising and marketing expenses, the agent is authorised to incur in connection with the performance of each service or category of service.'According to the Department, section 133 was breached because the letting appointments did not disclose what component of the general cleaning charges was actual expenses incurred by Petersen and what component was a 'reward' or a mark-up charged for arranging the service. The Department argued that the intention of the PAMDA is that a letting agent's charge for services, and the expenses charged by third parties engaged to perform the services, should be distinctly stated so that the apartment owner has the opportunity to negotiate or decline the services offered.
  2. Foxtel charge – the circumstances of this alleged breach were the same as above. The letting appointments disclosed a fixed monthly charge for Foxtel connection to the apartments. However, the fixed monthly charge was more than the amount that Foxtel charged Peterson per month.
  3. Commission charged from Wotif bookings – The letting appointments allowed Peterson to claim a commission of 12% + GST on apartment bookings. The apartments were made available for hire via the Wotif website. When a guest paid for an apartment via the Wotif website, Wotif would collect a 10% commission and then remit the balance to Peterson. Peterson charged the owners 12% commission on the amount of rent collected by Wotif from the guest, and not on the balance rent that Wotif remitted to Peterson. The Department alleged that this was a breach of section 139 of the PAMDA because Peterson charged commission on a rental amount more than the rental amount that Peterson actually collected. Section 139 read as follows '(1) This section applies to a real estate agent who performs, for the payment of a commission, a service of selling or letting property or collecting rents. (2) The real estate agent must not claim commission worked out on an amount more than the actual sale price of the property or the amount collected.'

What did the Court of Appeal say?

The Court found that Peterson had not committed any of the above breaches.

  1. In relation to the general cleaning charge and Foxtel charge, the Court found that the lump sums stated in the appointment complied with the disclosure requirements of the PAMDA. The crux of the Court's reasoning is that the apartment owners received the services that they had contracted for at the price that they had agreed to pay. The letting appointments needed to disclose itemised expenses for performing the services (ie the costs charged by the external contractor and the costs charged by Foxtel) only if Peterson wanted to recover those charges from the apartment owners. Peterson did not seek to do that – rather it offered a fixed fee for the services and took the risk that over the life of the letting appointments it could outsource those services at its cost and still make a profit. As the Court stated, 'the nature and expenses of the labour, materials and other things the applicant obtained to provide the service was a matter for it to arrange.'
  2. In relation to the commission charged on Wotif receipts, the Court found that the apartment owners had authorised Peterson to appoint Wotif and Wotif was therefore the agent of Peterson. As such, the amount received by Wotif from a guest was 'the amount collected' within the meaning of section 139. On that basis, it was proper for Peterson to charge its commission on the full amount collected by Wotif. Section 139 does not differentiate between rent collected directly by a letting agent and rent collected by Wotif or another provider on behalf of the letting agent.

Points to take away

Firstly, the decision relates to the now repealed PAMDA. Caution should be adopted in applying this decision to the operation of the current Property Occupations Act 2014.

Secondly, the decision affirms common practice in the management rights industry of providing fixed fee charges that do not contain itemised breakdowns. Like any other business, the Court acknowledged that letting agents are able to outsource the services that they have agreed to provide for a fixed fee, with the intention of making a profit, provided that the fee is properly disclosed in the appointment. Nonetheless, letting agents should ensure that their appointments are carefully drafted so that their fees and charges are properly described in the appointment and not listed as 'expenses.' If any 'expenses' are to be passed on to the apartment owner (as opposed to being absorbed in the fixed fee), those expenses must be clearly itemised.

For apartment owners, the case demonstrates that consumer protection legislation only goes so far. If you are an apartment owner, it is your responsibility when negotiating with the letting agent to consider all proposed charges and to investigate whether you are getting a good deal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Robert Lyons
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions