Commissioner for Consumer Affairs v Piantadosi

[2018] SASCFC 38

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Permission to Appeal in Private)

COMMISSIONER FOR CONSUMER AFFAIRS v PIANTADOSI & ORS

[2018] SASCFC 38

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Lovell and The Honourable Justice Doyle)

18 May 2018

APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - OTHER MATTERS

Application for permission to appeal against a decision of a single Judge of the District Court pursuant to s 43(3) of the District Court Act 1991 (SA) against a finding that certain monies paid to an agency were trust money for the purposes of the Land Agent’s Act 1994 (SA).

Held, granting permission to appeal:

(1) The appeal against the finding of fact is inextricably connected with the questions of law which arise on the appeal.

District Court Act 1991 (SA) s 43(3); Land Agent's Act 1994 (SA) s 30, referred to.
Commissioner for Consumer Affairs v McMurray (2017) 138 SASR 1, considered.

COMMISSIONER FOR CONSUMER AFFAIRS v PIANTADOSI & ORS
[2018] SASCFC 38

Full Court:   Kourakis CJ, Lovell and Doyle JJ

1. THE COURT:  This is an application for permission to appeal pursuant to s 43(3) of the District Court Act 1991 (SA) against certain findings of fact made by a Judge of the District Court sitting in the Administrative and Disciplinary Division of that Court.

2. The Judge allowed an appeal from the decision of the Commissioner for Consumer Affairs determining that the appellants were entitled to compensation in the sum of $54,500 and not the amount of $254,500 which payment they had made to an agent whose defaults were covered by the Indemnity Fund.  The issue on which the Judge set aside the Commissioner’s decision and ordered payment of the full amount was whether the additional amount of $200,000 had been received by the agent “as an agent when acting as an agent”.

3. Section 30 of the Land Agents Act 1994 (SA) (the Act) provides that a person who has suffered a pecuniary loss as a result of a fiduciary default by an agent may make a claim for compensation to the Commissioner. The amount of the claim cannot exceed the sum of the actual pecuniary loss suffered in consequence of the default and any reasonable legal expense less any amount that the claimant has or may receive in reduction of the loss. A fiduciary default is defined by s 12(1) of the Act to mean a defalcation, misappropriation or misapplication of trust money while the money is in the possession or control of an agent. Trust money is defined as “money … that is received by an agent when acting as an agent”.

4. A financial advisor, Charter Hill, recommended that the Piantadosis’ superannuation fund purchase an apartment in Melbourne.  Nova Real Estate Pty Ltd (Nova) was the agent for the vendor of an apartment in a tower complex in Melbourne.  Only $54,000 was required for the purposes of a deposit under the relevant sale contract.  Nova recommended that the Piantadosis’ also advance the balance of the purchase price so that it could be invested with another entity called Lending Solutions.  The respondents made the additional payment of $200,000 to Nova on the basis that it would be invested at a relatively high (5.5 per cent) interest rate.   

5. In Commissioner for Consumer Affairs v McMurray[1] this Court held that a similar arrangement was a loan of the additional funds and was not received by the agent “when acting as an agent.”   The Judge in the District Court in this matter distinguished that case on the basis that there was no documentation unequivocally assigning the additional money as a loan, and because it had not been established that the respondents could have requested the immediate return of the amount of $200,000.  The Judge found that the additional payment of $200,000 was impressed with a trust such that it could be applied only for the purchase of the subject property.   The Judge found that there had been a fiduciary default within the meaning of that term in the Act “because the $200,000 was applied in part performance of the covenant to purchase and settle contained in the agreement of sale and because that payment is only referable to the contract of sale itself”.

   [1] (2017) 128 SASR 1.

6. The grounds of appeal are as follows:

   a.The learned Judge erred in fact and in law in that he wrongly found that the $200,000 was “trust money” within the meaning of section 12(1) of the Land Agents Act 1994.  His Honour erred in that he made findings of fact which were contrary to the evidence, or the weight of the evidence, namely:  

   i.      “…that the $200,000 deposit was impressed with a trust earmarking it as money to be applied solely to the purchase of the subject property so long as it remained deposited into the agent’s account” (Judgment at [34]); and

   ii.     “It is not established that the Piantadosis could have requested the return of the $200,000…” (Judgment at [32]).

   In making these findings his Honour:

   iii.    failed to place sufficient, or any, weight on the evidence that one of the respondents contacted Nova Real Estate Pty Ltd (Deregistered) (Nova) and queried iv. whether it would be appropriate for Nova to hold the $200,000 payment so her superannuation could benefit from the high interest rate;

   iv. failed to place sufficient weight on the how the $200,000 was received by the agent as required by section 12(1) of the Land Agents Act 1994;

   v.     wrongly found on the evidence that the payment of the $200,000 was irreversible and failed to find that the respondents could have invested the $200,000 in an alternative investment with a financial institution of their choice.

   b.The learned judge erred in fact and law in failing to find that the putative agent received the sum of $200,000 so the respondents’ superannuation would benefit from the high interest rate, and therefore received it in a capacity other than being an agent.

   c.The learned Judge erred in law in that he wrongly distinguished the decision of the Full Court of the Supreme Court in Commissioner for Consumer Affairs  v  McMurray (2017) 128 SASR 1 on a factual basis (Judgment at [31-34]). The Judge erred in that he:

   i.      placed too much weight on the absence of a ‘Deposit Investment Letter’ or a ‘Certificate of Deposit’; and

   ii.     placed no weight, or insufficient weight, on the absence of a contractual obligation in relation to the circumstances in which the $200,000 was received.

   d.The learned Judge erred in that he applied the reasoning of the Full Court in Commissioner for Consumer Affairs v McMurray (2017) 128 SASR 1 too narrowly to the present case (Judgment at [34-35]). His Honour erred in that he:

   i.      wrongly characterized the decision in McMurray as limited to circumstances where the evidence demonstrates a loan or investment has occurred; and

   ii.     failed to apply the statement of the Full Court in obiter dicta at [70] per Blue J (Parker and Hinton JJ concurring) which circumstances describe the present case.

   e.The learned Judge erred in law in that he put an onus on the Commissioner for Consumer Affairs to establish that a statutory requirement for compensation was not met (Judgment at [32]), namely that it was “…not established that the Piantadosis could have requested the return of the $200,000…”

7. The appeal against the finding of fact is inextricably connected with the questions of law which arise on the appeal. 

8. We would grant permission to appeal.