Fleming v Skelton
[2011] QCAT 242
•16 May 2011
| CITATION: | Fleming v Skelton [2011] QCAT 242 |
| PARTIES: | Phillip Fleming t/a Physiosonic Pty Ltd |
| v | |
| Mr Desmond John Skelton |
| APPLICATION NUMBER: | OCL055-10 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Ms Susan Bothmann, Member |
| DELIVERED ON: | 16 May 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. Pursuant to section 530 of the Property Agents and Motor Dealers Act 2000, the Chief Executive of the Department of Employment, Economic Development and Innovation pay to the applicant Phillip Fleming the sum of $8,148.13. 2. Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, the Chief Executive shall not pay the amount until the end of the period allowed for appeal, and if there is an appeal, until the appeal is finally decided. 3. Pursuant to section 488(3)(c) the respondent Desmond John Skelton is named as the person who misapplied, in terms of section 470(1)(e), the rental payments and who is liable for the financial loss of the applicant. 4. Upon payment of the sum of $8,148.13 from the Claim Fund to the applicant, the respondent Desmond John Skelton is liable to reimburse the Claim Fund by paying the sum of $8,148.13 to the Chief Executive of Employment, Economic Development and Innovation. |
| CATCHWORDS: | Claim against fund for misuse of trust funds – real estate agent – agent absent from Australia – partial claim allowed Property Agents and Motor Dealers Act 2000, s 470 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
History
Desmond John Skelton was a licensed real estate agent at the relevant time in relation to this claim and operated a real estate agency by the name of D J Skelton Real Estate at an address in Robina Queensland.
Phillip Fleming owned an investment property in the name of Physiosonic Pty Ltd at unit 2 7 Silvermaple Street Robina in Queensland. In September 2006 Mr Fleming engaged Mr Skelton to manage the property for him. He signed a Management Agreement and a PAMD form 20a which among other matters cited a management fee of 5 percent. Mr Fleming did not receive copies of these documents. The property was rented to a tenant located by Mr Skelton (the tenant) and on 24 August 2006 the tenant paid the respondent the sum of $1,800.00 being four weeks by way of bond, and the first week’s rent of $450.00. The tenant received a receipt from the respondent for the sum of $2,250.00 showing rent paid from 4 September 2006 to 10 September 2006. The tenant has indicated in a Statutory Declaration that he did not receive a copy of the Lease, a Form 2, a Bond Lodgement form or an Entry Condition Report. He also enquired subsequently to the Residential Tenancy Authority and was advised they never received any notice of him having paid a bond for the property.
Between August 2006 and July 2007 the respondent collected rent from the tenant in the sum, allegedly, of approximately $18,550.00. Mr Fleming claims he only received the sum of $11,003.07. Mr Fleming also claims that because the respondent was negligent in his duties as letting agent he should not be entitled to the commissions and other charges deducted by him.
On 16 September 2008 the applicant lodged a claim against the claim fund set up under the Property Agents and Motor Dealers Act2000 (PAMDA Act) with the Department of Employment, Economic Development and Innovation (“the Department”). Mr Fleming claims the amount of $10,433.93 being made up of unaccounted rent, $7,650.00; management fees paid of $1,046.93; letting fees of $495.00; cost of replacing locks at $145.00 and the cost of work undertaken by Robina Realty (being the agents Mr Fleming engaged subsequent to dismissing the respondent) of $1,100.00.
Notice of that claim was sent to the respondent on 10 September 2009. Twenty-eight days having elapsed from that notice and with no response or settlement being received from any person, on 7 June 2010 the claim was referred by the Department to this Tribunal for determination.
Claim
The claim is under section 470 of the PAMDA Act. The applicant claims to have suffered a financial loss as a result of his dealings with the respondent who held real estate licence number 3061717 under the PAMDA Act issued on 29 October 2004 and which expired on 29 October 2007. In particular, the claim is for a stealing, misappropriation or misapplication by the relevant person of property entrusted to the person as agent for someone else in the person’s capacity as a relevant person pursuant to section 470(1)(e) of the PAMDA Act. It is an offence under the PAMDA Act to dishonestly convert an amount to the licensee’s own or someone else’s use: section 573. For these purposes a relevant person is defined as a licensee under section 469.
A directions hearing was held on 10 August 2010 at which no parties attended. The Tribunal directed that the applicant file his statement of evidence by 3 September 2010 and that the respondent file and serve any statement of evidence by 24 September 2010 and that the application be determined on the papers. A further directions hearing was held on 30 March 2011 at which the claimant appeared in person. No material has been received from the respondent. Subsequent information has suggested to the Tribunal that Mr Skelton has departed the country.
Section 488 of the PAMDA Act sets out the process for deciding the claim.
The Tribunal must be satisfied that an event as mentioned in section 470(1) has happened; and that the claimant suffered financial loss because of that event.
The Tribunal must also take into account any amount the claimant might reasonably have received or recovered if not for the claimant’s neglect or default pursuant to section 488(2) of the PAMDA Act. The Tribunal must also consider any amount ordered to be paid to the claimant as compensation to the claimant under sections 530A, 572D or 592A of the PAMDA Act as provided in section 488(3)(a) of the PAMDA Act.
When allowing a claim in whole or in part the Tribunal must decide the amount of the claimant’s financial loss and name the person who is liable for the loss as provided in section 488 (3)(b) and (c) of the PAMDA Act.
The Event and the Loss
Christine Savage was appointed pursuant to section 477 of the PAMDA Act to investigate the claim. She provided her report on 8 January 2010. She summarised the events in the same terms as outlined above.
After investigating the claims of the applicant for a refund of the rental monies not received, and considering the documentary evidence that is available Ms Savage’s report concludes:
(a) The total rent paid by the tenant to the respondent and able to be verified amounts to $16,600.00. Commissions, GST and sundries amounted to $1,448.80. The sum of $11,003.07 was received by the claimant. Therefore the financial loss to the claimant is $4,148.13.
(b) Regarding the sum of $1,046.93 being management fees paid to the respondent and claimed by the claimant as a loss, as well as the sum of $495.00 letting fee, Ms Savage took the view that these amounts are not within a claimable event as flowing from the contravention of any of the sections associated with the claim under section 470 of PAMDA Act.
(c) In relation to the claim for replacement of the locks and the costs associated with the preparation of documents related to this claim she took the same view.
(d) She found that because the sum of $4,000.00 was claimed as cash payments made by the tenant and could not be substantiated there was insufficient evidence to accept that these monies had been paid to the respondent.
(e) The total loss to the claimant was therefore $4,148.13.
The Tribunal concurs with Ms Savage in relation to the fees and charges paid to the respondent, that they are not appropriately included in the claim. It also finds that the costs paid by the claimant to the replacement real estate agents he engaged are not properly included in the claim which can be recovered from the fund. However, it considers the situation with the cash rental payments is different. The tenant made a statutory declaration dated 13 December 2007 in which he declared that he advised the respondent he was going on holiday on 28 November 2006. He states Mr Skelton came to his home that night and collected the sum of $2,400.00 in cash, representing six weeks rent at $400.00 per week. The tenant had advised that Mr Skelton had agreed that the tenant could pay a reduced rent of $400.00 per week, from $450.00. The claimant’s evidence is that he was never asked or advised about this arrangement. The tenant further declares that he had been promised a receipt by post but ultimately he never received a receipt. The tenant returned in mid January 2007 and attended at Mr Skelton’s home after hours and paid him a further $1,600.00 in cash, being a further four weeks rent. Again he declared he did not receive a receipt.
As Ms Savage points out in her report, section 573 of PAMDA Act provides that it applies to licensees who in the performance of their licensees’ activities, receives (Tribunal emphasis) an amount belonging to someone else. Ms Savage and the Tribunal find that the respondent acted as a relevant person and contravened the section. If the funds declared to have been paid by the tenant were paid to the respondent they would be within the claim.
The Tribunal has no reason to disbelieve the sworn statement of the tenant. There is no evidence the tenant failed to pay rent for any period during the tenancy. It was indeed foolish, in the Tribunal’s view, for the tenant to fail to insist upon receiving a receipt but at the relevant time the Tribunal can accept that nothing hinged on it from the tenant’s point of view. He continued to experience quiet enjoyment for months afterwards. On the balance of probabilities the Tribunal accepts that the total sum of $4,000.00 was paid in cash by the tenant in the way declared and misappropriated by the respondent.
The Tribunal has excluded expenses incurred by the claimant and has determined not to deduct expenses charged by the respondent to the claimant for management and letting fees. Given the difficulty in determining what the agreed rate of commission between the respondent and the claimant was as a percentage, the Tribunal finds that the full $4,000.00 can be treated as funds due to the claimant.
Other matters to be considered
There has been no relevant neglect or default by the claimant identified and no amounts of compensation ordered to be paid under sections 530A, 572D or 592A of the PAMDA Act.
Conclusion
The amount owing to the claimant by the respondent Desmond John Skelton is therefore found to be the sum of $8,148.13. The respondent has stolen, misappropriated and misapplied the amount owing to the claimant by not paying this amount to the claimant. The claimant has suffered this financial loss through this action of stealing. Desmond John Skelton is the relevant person for the purposes of section 470(1)(e) of the PAMDA Act.
Desmond John Skelton is named as the person who is responsible for this loss.
ORDERS
Pursuant to section 530 of the Property Agents and Motor Dealers Act 2000, the Chief Executive of the Department of Employment, Economic Development and Innovation pay to the applicant Phillip Fleming trading as Physiosonic Pty Ltd the sum of $8,148.13.
Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, the Chief Executive shall not pay the amount until the end of the period allowed for appeal, and if there is an appeal, until the appeal is finally decided.
Pursuant to section 488(3)(c) the respondent Desmond John Skelton is named as the person who misapplied, in terms of section 470(1)(e), the payments and who is liable for the financial loss of the applicant.
Upon payment of the sum of $8,148.13 from the Claim Fund to the applicant, the respondent Desmond John Skelton is liable to reimburse the Claim Fund by paying the sum of $8,148.13 to the Chief Executive of Employment, Economic Development and Innovation.
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