The QOFT and the ACCC handle the same case? How did this happen?
Posted On March 25, 2019
You would think that the Queensland Government could not have been as bad as the ACCC, but let’s see what they did?
After all, it was the exact same property, the exact same purchaser and exact same circumstances that both the ACCC and the QLD OFT investigated.
You would also think that the State and Federal Governments of Australia would operate in a similar manner – or at least co-operate. Yet, we heard how the Federal Government, through the ACCC asked their expert witness to change his valuation so that they could run a test case, which cost the Australian Tax Payer just under $30 Million.
The QLD OFT decided to form a Tribunal which was made up of real estate agents that were not exactly happy that Chris was taking thousands of sales from them and millions of dollars in revenue. So, it was not a big stretch to suggest they were slightly biased and that this was a witch hunt.
The Tribunal heard the exact same case as the ACCC Federal Court case heard and instead of an expert valuer from Sydney, they accepted a valuation from Iain Herriot. This one was for $90,000 and the total investigation of the accuracy and validity of this valuation lasted all of one minute! They merely asked Mr Herriot was he an experienced valuer, and that was it.
Now that might seem OK on the face of it, but the Tribunal went on to award the purchaser the sum of $125,000 and gave them a cheque immediately. So how did they come to this decision when the ACCC found the property to be worth $165,000 and that it was bought at Fair Market Value?
The Tribunal and the agents relied on Mr Herriot’s credibility and accuracy and calculated the compensation to the buyers based on the difference between the valuation and the purchase price being $75,000. Then, being the geniuses that they were, they also gave the purchasers back all of their out of pocket expenses including rates, insurance, stamp duty and all mortgage cost. That came to $50,000. They also chose to disregard all the tax rebates and all of the rent collected. So, not only did the purchasers get the $125,000 as a gift they also got to keep the investment property and all of the rent and all of the tax refunds they’d received since they bought the properties a few years earlier. They even got free stamp duty as the Tribunal gave that back to them as well.
So, in summary, these 8 lucky purchasers got their cheques from the QOFT for $125,000 and kept their investment property. Not a bad return considering they had not actually lost a cent, had not sold the property and were still collecting rent.
The purchasers then sold their property. Bear in mind that this was within 6 months of them receiving $125,000 in compensation from the QOFT and of Mr Herriot supplying a valuation of $90,000 for the property. The property sold on the local market for $175,000 using local agents and local newspapers.
Now the Question we should all be asking Mr Herriot and the QOFT was how did a property increase in value from $90,000 to $175,000 in less than a year? Was the valuation just inaccurate, incompetent or was it fraudulent? How was this allowed to happen? You can read more about this in Chris’s book which can be ordered through his website.
Interestingly, Chris called Peter Beattie, Queensland Premier at the time, and he could not believe that this was happening. He very quickly changed the law so that this could not continue to happen. Sadly, at the same time, he made Chris personally responsible (through law) to repay the QOFT. That law only applies to Chris, so how can they be called the Office of FAIR Trading?