Garwood v Tiralees Pty Ltd
[2012] QCAT 541
•30 October 2012
| CITATION: | Garwood v Tiralees Pty Ltd and Ors [2012] QCAT 541 |
| PARTIES: | Raylene Garwood |
| v | |
| Tiralees Pty Ltd as trustee for the Harvey Family Trust Ms Laura Harvey Mr Leon Harvey Ms Susan Harvey |
| APPLICATION NUMBER: | OCL049-12 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Senior Member |
| DELIVERED ON: | 30 October 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | [1] Pursuant to s 488 of the Property Agents and Motor Dealers Act2000, the claim is allowed in the sum of $4,991.02. [2] Pursuant to s 489 of the Property Agents and Motor Dealers Act2000, at the expiration of the appeal period, the Chief Executive must pay to Raylene Garwood the sum of $4,991.02 from the Claim Fund, and, if there is an appeal, payment must not be made until after the appeal is finally decided. [3] Pursuant to s 488(3)(c) of the Property Agents and Motor Dealers Act2000, Tiralees Pty Ltd as trustee for the Harvey Family Trust, Ms Laura Harvey, Mr Leon Harvey and Ms Susan Harvey are named as the persons responsible for the financial loss of Raylene Garwood. [4] Upon payment from the Claim Fund and pursuant to ss 490 and 530 of the Property Agents and Motor Dealers Act2000, Tiralees Pty Ltd as trustee for the Harvey Family Trust, Ms Laura Harvey, Mr Leon Harvey and Ms Susan Harvey are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $4,991.02 to the Chief Executive, Department of Justice and Attorney General. |
| CATCHWORDS: | PROPERTY AGENT – where agent manager of rental property – where agent failed to account for rent received – where arrears in mortgage, rates and body corporate fees – whether recoverable as financial loss caused by event Property Agents and Motor Dealers Act 2000, ss 470, 488, 490(2) |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
Tiralees Pty Ltd, trading as Townsville Property Management, managed two rental properties for Squadron Leader Garwood. The Harveys were directors of Tiralees Pty Ltd. Laura Harvey and the company were licensees.
Moira Carter, of BRI Ferrier, was appointed receiver over the trust property of Tiralees on 3 August 2010.
Squadron Leader Garwood arranged for the rent to be paid directly into her account, to cover mortgage expenses. In 2009, Squadron Leader Garwood received notice from her bank that she had insufficient funds to cover mortgage payments. She discovered that Tiralees had not been paying rent as instructed. She made a claim on the statutory claim fund for $44,073.81. Ms Carter, as receiver, had notice of the claim.
In considering a claim against the fund, I must be satisfied[1] that an event as mentioned in section 470(1) happened and that Squadron Leader Garwood suffered financial loss because of the event.
[1] Section 488(2) Property Agents and Motor Dealers Act 2000.
I must also take into account any amount Squadron Leader Garwood might reasonably have received or recovered if not for her neglect or default and any amount ordered to be paid to Squadron Leader Garwood as compensation to the claimant under sections 530A, 572D or 592A of PAMDA[2].
[2] Section 488(3)(a).
Finally, in allowing a claim I must decide the amount of Squadron Leader Garwood’s financial loss and name the person who is liable for the loss[3].
[3] Section 488(3)(b) and (c).
The event
Ms Carter reports that the trust account records for Tiralees were in disarray at the time of her appointment. She reconstructed the records and deduced that the company failed to account to Squadron Leader Garwood for rent received. Ms Carter also concluded that the trust account does not hold enough funds to account to Squadron Leader Garwood. The inescapable conclusion is that Tiralees has misapplied trust account funds.
The misappropriation or misapplication of trust funds is an “event” under s 470(1). I am satisfied that there is an “event” within s 470(1).
Financial loss
I am satisfied that Squadron Leader Garwood suffered a financial loss because of Tiralees’ misapplication of trust money.
Ms Carter provided a reconciliation of the amount owing to Squadron Leader Garwood. She concludes that the financial loss is $4,831.02. That amount is calculated as follows:
Rent received $21,780.00 Payments to Squadron Leader Garwood 6,913.68 Commission due 1,796.87 Expenses 8,106.43 Administration fees 132.00 16,948.98 $4,831.02
Squadron Leader Garwood has claimed for unpaid rates, body corporate fees and insurance. Ms Carter states that some of those expenses were paid. The items that were not paid cannot be claimed from the fund. Squadron Leader Garwood always had an obligation to pay the expenses of the property. They should have been paid from the $4,831.02. To claim both 4,831.02 and the unpaid expenses is, in effect, a double claim.
Squadron Leader Garwood claims for water damage repair and the cost of air conditioning repairs. There is no evidence that these costs were caused by Tiralees’ misappropriation of trust money. The costs may have been incurred because of Tiralees’ poor management of the rental properties but this is not a claim that can be recovered from the fund.
Squadron Leader Garwood also claims for mortgage interest, interest on late Council rates, mortgage late payment fees, a personal loan and interest on the personal loan.
The personal loan is a capital sum and not money that Squadron Leader Garwood has lost through Tiralees’ conduct. I accept that interest for late payments and penalty fees might be considered “financial loss because of” the misappropriation of trust money. However, Ms Carter has calculated a misappropriation of $4,831.02 whereas Squadron Leader Garwood is claiming additional costs and interest because of a shortfall of almost $30,000. I cannot reconcile the discrepancy and, therefore, I am unable to find that the amounts claimed are attributable to the actions of Tiralees. I can identify approximately $160 in interest paid on body corporate levies and I am prepared to add this sum to the claim.
I am satisfied that $4,991.02 is a proper assessment of Squadron Leader Garwood’s loss.
Other matters
I am required to take into account any amount Squadron Leader Garwood may have received or recovered if not for her neglect or default.
There is no evidence to suggest that Squadron Leader Garwood would have been able to receive or recover any amount to reduce her loss if she had taken any different action.
Who is liable for the loss?
As licensees, Tiralees and Laura Harvey are liable for the loss.
Section 490(2) provides that a person is liable to reimburse the fund if the person is:
a) A responsible person;
b) If the responsible person was a corporation, each person who was an executive officer of the corporation.
As directors of Tiralees, Laura Harvey, Leon Harvey and Susan Harvey were executive officers of the company. Because I have found that the company is a responsible person, it follows that they must also be named as responsible persons.
Orders
Pursuant to s 488 of the Property Agents and Motor Dealers Act2000, the claim is allowed in the sum of $4,991.02.
Pursuant to s 489 of the Property Agents and Motor Dealers Act2000, at the expiration of the appeal period, the Chief Executive must pay to Raylene Garwood the sum of $4,991.02 from the Claim Fund, and, if there is an appeal, payment must not be made until after the appeal is finally decided.
Pursuant to s 488(3)(c) of the Property Agents and Motor Dealers Act2000, Tiralees Pty Ltd as trustee for the Harvey Family Trust, Ms Laura Harvey, Mr Leon Harvey and Ms Susan Harvey are named as the persons responsible for the financial loss of Raylene Garwood.
Upon payment from the Claim Fund and pursuant to ss 490 and 530 of the Property Agents and Motor Dealers Act2000, Tiralees Pty Ltd as trustee for the Harvey Family Trust, Ms Laura Harvey, Mr Leon Harvey and Ms Susan Harvey are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $4,991.02 to the Chief Executive, Department of Justice and Attorney General.
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