Graham v JLRT Pty Ltd
[2014] QCAT 260
•10 June 2014
| CITATION: | Graham v JLRT Pty Ltd [2014] QCAT 260 |
| PARTIES: | Stephen Graham Karen Graham (Applicants) |
| v | |
| JLRT Pty Ltd James Lyons Realty Pty Ltd James Lyons (Respondents) |
| APPLICATION NUMBER: | GAR434-14 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Senior Member Stilgoe, OAM |
| DELIVERED ON: | 10 June 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Pursuant to s 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $200,000. 2. Pursuant to s 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period, the Chief Executive must pay to Stephen and Karen Graham the sum of $200,000 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 Act 2000, James Lyons Realty Pty Ltd and James Robert Lyons are named as the persons responsible for the financial loss of Stephen and Karen Graham. 4. Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, James Lyons Realty Pty Ltd and James Robert Lyons are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $200,000 to the Chief Executive, Department of Justice and Attorney General. |
| CATCHWORDS: | PROPERTY AGENT – CLAIM FROM THE FUND – where deposit for contract to purchase paid – where contract terminated – where purchasers claimed return of deposit – where no funds in account – whether misappropriation of funds – who was responsible person 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
In December 2012, James Lyons contacted Mr and Mrs Graham with an opportunity to buy a commercial property at Capalaba. On 3 January 2013, Mr and Mrs Graham received a letter from Lyons to the vendor, which was an offer to purchase at $1,855,000 plus GST nominating a deposit of $92,728 plus GST. Mr and Mrs Graham amended the offer by deleting GST, signed it, returned it to Lyons and arranged for a deposit of $92,728 to the trust account of James Lyons Realty Pty Ltd.
On 29 January 2013, Mr and Mrs Graham signed the contract, subject to finance. On 31 January, Lyons rang Mr Graham to advise that the vendor did not accept the 5% deposit. Lyons told Mr Graham that a further 5% was required. Mr and Mrs Graham paid $89,880 into Lyons’ trust account on 31 January 2013.
On 7 March 2013, Lyons rang Mr Graham to tell him the vendor wanted a further 5% deposit. Lyons told Mr Graham that one of the vendor’s directors was getting divorced and the extra deposit would satisfy the vendor’s wife and her lawyers. Mr and Mrs Graham paid a further $91,365 that day.
Finance was not approved. On 7 June 2013, Mr and Mrs Graham terminated the contract and claimed the return of their deposit. The same day, their conveyancing lawyer received the news that there was no money in Lyons’ trust account. The deposit has not been returned.
Mr and Mrs Graham made a claim on the statutory claim fund for $273,973. Lyons and James Lyons Realty Pty Ltd received 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 Mr and Mrs Graham suffered financial loss because of the event.
[1] Property Agents and Motor Dealers Act 2000 (Qld) s 488(2).
I must also take into account any amount Mr and Mrs Graham might reasonably have received or recovered if not for their neglect or default and any amount ordered to be paid to Mr and Mrs Graham as compensation to the claimant under sections 530A, 572D or 592A of PAMDA[2].
[2] Ibid s 488(3)(a).
Finally, in allowing a claim I must decide the amount of Mr and Mrs Graham’s financial loss and name the person who is liable for the loss[3].
[3] Ibid s 488(3)(b) and (c).
The event
The stealing, misappropriation or misapplication by an agent of property entrusted to that person as agent for someone else in their capacity as agent is an “event” under s 470(1)(e).
The trust account bank statements show the three deposits by Mr and Mrs Graham. They also show a series of internet transfers, none of which was authorised by Mr and Mrs Graham. The material before me does not disclose the fate of the missing funds.
Misappropriation of funds is an “event” under s 470(1). I am satisfied that Lyons misappropriated Mr and Mrs Graham’s money and that this is an “event” within s 470(1).
Financial loss
I am satisfied that Mr and Mrs Graham suffered a financial loss because of Lyons’ breach of s 470(1)(e).
I am further satisfied that $273,973is a proper assessment of Mr and Mrs Graham’s loss. However, as the maximum claim on the fund is $200,000, I am unable to allow a claim for the full amount of Mr and Mrs Graham’s loss.
Other matters
I am required to take into account any amount Mr and Mrs Graham may have received or recovered if not for their neglect or default.
There is no evidence to suggest that Mr and Mrs Graham would have been able to receive or recover any amount to reduce their loss if they had taken any different action.
Who is liable for the loss?
The funds were paid to James Lyons Realty Pty Ltd. That entity is responsible 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 a director of James Lyons Realty Pty Ltd, James Robert Lyons was an executive officer of the company. Because I have found that the company is a responsible person, it follows that he must also be a responsible person.
The only connection between James Lyons Realty Pty Ltd and JRLT Pty Ltd is that the latter was the sole shareholder of the former. There is no evidence that JRLT Pty Ltd received any of the money or that it was actively involved in the transaction. It is not a responsible person within the meaning of s 490(2).
Orders
Pursuant to s 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $200,000.
Pursuant to s 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period, the Chief Executive must pay to Mr and Mrs Graham the sum of $200,000 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 Act 2000, James Lyons Realty Pty Ltd and James Robert Lyons are named as the persons responsible for the financial loss of Mr and Mrs Graham.
Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, James Lyons Realty Pty Ltd and James Robert Lyons are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $200,000 to the Chief Executive, Department of Justice and Attorney General.
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