Brack v Jewell

[2010] QDC 54

[2010] QDC 54

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 60 of 2007

JULIE BRACK	Plaintiff
and
PETER CHARLES JEWELL & ORS	Defendant

BRISBANE

..DATE 15/02/2010

ORDER

CATCHWORDS

Court order required proceeds of sale of a property to be paid into plaintiff's solicitor's trust account less conveyancing costs - conveyancing costs did not extend to Council rates, a parking fee for attendance at court by the real estate agent or sums paid (without explanation) to the defendants by the agent and by their solicitors in the sale

HIS HONOUR:  The court makes an order in terms of the initialled draft which requires the defendants to pay to the trust account of the plaintiff's lawyers $3821.66 of the remaining amount of net sale proceeds of a property at 3 Tallow Street, Inala.  The money is to be held in the trust account until the court determines the issues in the proceeding.  There is also a costs order on an indemnity basis. 

Ms Jewell, who represented herself and the second defendant, tells the court that they are without funds.  I have explained to her that that doesn't affect the court's obligation to make orders to ensure that moneys go where existing court orders made by consent say they ought to go.  Whether Mr Sharma, who appeared on the other side, will have problems enforcing the order for the payment of money is another question.

The costs are on an indemnity basis which in my opinion is justified.  In some respects, at least, I think there's no justification, not even a plausible argument for retention by the Jewells of the money. 

There are some messy aspects of the proceeding given that the named plaintiff has died.  Ms Jewell says that she's had difficulty eliciting from Mr Sharma identification of who is or are his client or clients, given that she understands executors under the named plaintiff's will may have stepped down. 

I accept from the bar table the explanation that the underlying fight is with a sister of Ms Jewell who takes everything under the will.  The will may or may not be challenged.  There is a complaint at the heart of the proceeding that Ms Jewell, perhaps with the cooperation of the second defendant, who may have got the described property in his name in consequence, misused a power of attorney which she had to enrich herself (or for Jewell) at the expense of the named plaintiff (or her estate).  None of those are questions for me. 

The Jewells were anxious to complete a sale of the property which brought the parties to court, given that Mr Sharma had lodged a caveat.  Judge McGill made an order on the 4th of November 2009 which was a consent order subsequently varied to make it clear that the only deductions to be made from that part of the sale proceeds to be placed in Mr Sharma's trust account, pending the outcome of the proceedings, related to a single mortgage in favour of an identified mortgagee, Pepper. 

There seems to have been some suggestion that there was an additional mortgage or charge on the property, not a registered one, which would have to be discharged too to allow completion to take place.  From Mr Sharma's point of view, that was a questionable "charge" and a device to enable the defendants or perhaps their lawyers to obtain funds. 

Judge McGill's order, as corrected, required the plaintiff to take steps to remove the caveat and also that "the defendants pay all related costs and expenses out of the net sale proceeds."  It may be that part of the $4209.56 which Mr Sharma says hasn't gone into his trust account has something to do with release fees of $124 which Ms Jewell says she paid to obtain release of the caveat.  The order does make it clear that its the defendant's responsibility to pay those costs.

The next paragraph of the order of Judge McGill ordered - and by consent - that net sale proceeds after taking into account the agent's commission, and bond, for $1160, the outstanding Pepper mortgage and reasonable conveyancing costs be deposited into Sharma Lawyers' trust account.  The sale was for $298,000. 

As Mr Sharma sees things, the $50,274.94 deposited to his trust account by Huang Doan, the solicitor who acted for the defendants in the conveyance, fell short of what ought to have been paid over.  On his calculations, the only permissible deductions were $233,280.50 outstanding mortgage, $8690 agent's commission, $1160 bond, and $385 conveyancing costs. 

Huang Doan's letter of 2nd December 2009 to Mr Pepper is in the nature of a settlement statement.  It shows payments of $192.50 and $48.40 to Kemp, Strang and Prime Legal Services over and above the mortgage amount mentioned above.  There is no reason for the court to have misgivings about this document and I will infer that those were payments that went to the mortgagee or its solicitors.  The $385 amount appears there, also $784.20 paid to P & J Jewell. 
I haven't been offered any adequate justification for that money to have gone in the way it did rather than to Mr Sharma's trust account.  I'm not persuaded that it's got anything to do with removal of the caveat although before the court in Exhibit 2 the court has a document from Mr Sharma referring to an amount of that order in relation to the caveat aspect. 

$2893.46 was paid to Brisbane City Council on account of rates.  Although the Jewells contend that that's conveyancing costs and have some material from a real estate agent or the like supposedly supporting what's said about rates, it seems to me that that's not by any stretch of the imagination a conveyancing cost.  It's a holding cost of the property.  At relevant times it would have included Council charges for services such as water and sewerage. I declined to adjourn the matter to permit the Jewells to call a real estate agent to give evidence about the characterisation of Council rates in this context. 

That amount ought not to have been withheld from the funds that went to the trust account.  Nor should a further amount of $150, which is explained by the agent's statement contained in a letter of 17th of November 2009 to Mr Jewell.  That letter indicates that $116 was paid to the Jewells.  Also that the agent took for himself a $34 "parking fee for court hearing". 

It's explained to the court that the Jewells asked Mr MacDiarmid to be available at court for a different hearing at which he might possibly have given evidence.  I can understand why he took the opportunity to reimburse himself for his parking fee, but there's no basis on which - although it was charged by the agent for the purpose indicated - it can be regarded as a conveyancing cost.

Adding together the items that I've mentioned produces the total of $2821.66 referred to in the order.  Mr Sharma explains that he's not here to quibble over every last dollar but is taking seriously his role as trustee and his “responsibility” to ensure that everything gets into his trust account that ought to be there.  There could be a mystery about the balance which he suggests may still be missing but I'm unable to resolve that with confidence today. 

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