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Thursday, 20 October 1983
Page: 2057

Mr MacKELLAR(8.29) —Tonight I want to raise a matter which was brought to me initially by constituents of mine in Warringah but which in fact has greater ramifications as a large number of people have been affected by the situation which I am about to describe. I refer to the activities of people who sell real estate, in this particular instance in Queensland, and the way in which people seeking-let us be perfectly honest about it-a pecuniary advantage have been inveigled into committing a very large amount of money, in many cases money which they do not have, in investments on the promise that the units will be sold before the commitments come up for payment. These investors believe they will not have to pay these large amounts of money which appear on the contracts. We have a situation in which individuals are exposed, or expose themselves, to the blandishments of high pressure salesmen and find themselves committed in many cases for hundreds of thousands of dollars on the basis that the salesman has said to them: 'Have no doubts; you will never have to pay this amount of money. The units will be sold, you will make great capital gain and we will all do very well out of it'. I realise that the people involved in this situation were not forced into it. They entered into the situation of their own free will and they must have realised the risks involved. I do not try to defend the people in any sense because, as I have said, they entered into these arrangements of their own free will; they were not forced in to them. But once in this situation they find themselves in very great difficultly indeed. In many cases, and in the case I am about to describe, the information they were given was plainly wrong. Many of these individuals were plainly misled by the real estate agents who entered into this scheme with them.

I refer to a particular group in Sydney, R. B. Foster Real Estate Pty Ltd, and a Mr Harold Londy who trades under the name of International Investment and Property Consultants of 22 Macleay Street, Potts Point. I am informed that this is a division of R. B. Foster Real Estate Pty Ltd, a company which I understand is registered in New South Wales. Last year some constituents came to me complaining about the way they alleged they had been misled by this company and this gentleman. I pointed out to them that there were recourses at State law to the problems with which they found themselves saddled, but in the time since, although they have tried very hard to get some response from the New South Wales Government, there has been no real response to give them any hope at all of getting out of the very difficult situation in which they find themselves. I therefore took up the matter in July last year with the then Acting Attorney- General. I sought information from him as to whether there was any provision under Commonwealth law for assisting people in these predicaments. I received a response from the Acting Attorney-General dated 5 October last year saying:

This matter was referred to the Trade Practices Commission . . . in May 1982. Commission staff considered that although the complaint might possibly come within section 52 only of the Trade Practices Act (although by no means clearly so) the remedies available to the Commission (injunction or corrective advertising) clearly were unsuitable in the circumstances of the complaint. The Commission has no power to obtain redress such as damages for complainants-this can be done only by private legal action by the persons involved.

Furthermore, on the basis of the Commission's case selection criteria (as set down by Ministerial direction on 25 May 1981) it was considered that the conduct complained of was more appropriate to private action which, if successful, would directly assist . . .

Following receipt of that letter I assisted my constituents in taking up the matter with the State authorities in New South Wales. I quote from an answer by the Hon. D. P. Landa to a question he was asked in the New South Wales Parliament. The question read:

I ask the Attorney-General, Minister of Justice . . . Is the Minister aware of the activities of R. B. Foster Real Estate Pty Limited, which has been granted a corporate licence by the Council for Auctioneers and Agents to sell real estate in New South Wales? Is the Minister aware of alleged losses by the clients of that agency possibly exceeding $4 million sustained prior to the agency being granted a corporate licence last year? What steps will the Minister take to protect New South Wales consumers until this matter is resolved?

The Minister, Mr Landa, replied:

I shall certainly take the fullest steps possible to see that the investors are protected, and to see that every effort is expended to recoup the moneys that have been lost or improperly obtained. I hope to receive detailed advice from the Council of Auctioneers and Agents, and also from the officers of the Corporate Affairs Commission, to see that no stone is left unturned to protect the investors who have been unfortunately caught by this company.

Now that was a fairly direct statement but, unfortunately, the Minister has not followed through. Whilst the matter has been pursued in the New South Wales Parliament there have been two occasions recently on which the Minister has said that although the agency will be kept under close surveillance in the future, nothing will be done. The fact of the matter is that this agency has been granted a licence and is still operating in New South Wales, although in a letter dated 11 July this year, Mr Landa said, in part:

Investigations by both the Council and the Department of Consumer Affairs support the view that . . .

he named my constituent-

predicament arose because Mr Londy manipulated them into the purchase of two home units.

The words 'manipulated them into the purchase of two home units' are the Minister's own words. Despite saying that, the Minister has not gone on with the job and my constituents and many others are still left with this enormous debt burden to try to overcome. This agency, this company, does not only operate in New South Wales and Queensland, but in addition it also operates overseas. Agents for the company travel to places such as Hong Kong setting up businesses, discussions and opportunities for investors from such places as Hong Kong, Malaysia and other Asian nations to invest in these units, particularly those in Queensland. It seems to me that this situation clearly calls for close investigation in a co-ordinated way by both State and Federal authorities. A great number of people who have been manipulated by these smart operators now find themselves with enormous debt burdens. People who do not have the resources required to honour their commitments will be bankrupted. I think it is a very tragic situation when people-lured, I admit by the possibilities of making capital gains, making large amounts of money-now find themselves with their whole life's efforts totally threatened. People will have to divest themselves of all their assets. They will be totally bankrupt and, in many cases at a later stage of their lives, they will find themselves in a situation which is totally hopeless for the future. I ask the Government to co-operate with both the New South Wales Government and the Queensland Government in closely investigating this company which, I believe, has a horrific history of exploitation of individuals both in New South Wales and in Queensland. A co-ordinated effort is needed by the authorities at Federal and State levels to prevent this sort of exploitation which leads inevitably to misery for those who are caught in the web.