The Australian Competition and Consumer Commission has instituted legal proceedings in the Federal Court, Canberra against Metropolis Real Estate Pty Ltd alleging that it made false, misleading and deceptive representations to a client regarding the fee for acting as the agent on a property sale.
The ACCC has also taken action against Mr Storm Brearley, the principal of Metropolis Real Estate, for his involvement in the conduct.
In commencing proceedings the ACCC alleges that Metropolis Real Estate misled and deceived a client by quoting a flat fee of $5,000 and then after settlement withholding an additional 10 per cent from the vendor for Goods and Services Tax.
The ACCC's price exploitation and the New Tax System guideline states that prices should be quoted 'GST inclusive' to end-user consumers.
The ACCC previously approached Metropolis Real Estate outlining the allegations and seeking to resolve this matter administratively. However, the company declined to do so.
The ACCC is seeking:
declarations that by making representations about the agent's commission, but charging an additional amount for GST, Metropolis Real Estate has contravened sections 51A, 52 and 53 (e) of the Trade Practices Act 1974;
- an injunction restraining Metropolis Real Estate from representing GST-exclusive prices for its Real Estate Services
- an order directing Metropolis Real Estate to refund $500 being the value of Metropolis' GST liability in relation to the transaction concerned
- an injunction requiring the employees and agents of Metropolis Real Estate to attend a trade practices compliance seminar
- findings of fact
- in the alternative to the order sought for a refund, an order that Metropolis Real Estate compensates the purchaser for any loss or damage suffered
- costs
A directions hearing has been set down for the Federal Court, Canberra on Friday 19 October 2001.