Jals Pty Ltd v Excalibur Property Services & Wilkes

Case •

[2010] QCAT 510

•

4 October 2010

CITATION:Jals Pty Ltd v Excalibur Property Services & Wilkes [2010] QCAT 510

PARTIES: Jals Pty Ltd
v
Excalibur Property Services Pty Ltd
Mr Michael Francis Wilkes
APPLICATION NUMBER:   OCL060-10  
MATTER TYPE: Other civil dispute matters
HEARING DATE:     4 October 2010
HEARD AT:  Brisbane
DECISION OF: Ms Susan Gardiner
DELIVERED ON: 4 October 2010
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 JALS Pty Ld the sum of $12,389.62.

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 respondents Excalibur Property Services Pty Ltd and Michael Francis Wilkes are the persons who misapplied in terms of section 470(1)(e) the marketing costs and rental payments and who are liable for the financial loss of the applicant.

  1. Upon payment of the sum of $12,389.62 from the Claim Fund to the applicant, the respondents Excalibur Property Services Pty Ltd and Michael Francis Wilkes are liable jointly and severally to reimburse the Claim Fund by paying the sum of $12,389.62 to the Chief Executive of Employment, Economic Development and Innovation.
CATCHWORDS :  Property Agents and Motor Dealers Act 2000 s470; claim against fund for misuse of trust funds; real estate agent; claim allowed, real estate agent and company named as persons responsible

REASONS FOR DECISION

  1. Excalibur Property Services Pty Ltd was a licensed real estate agent and operated two real estate agencies, Raine and Horne Ascot and Ivan Lazarou Real Estate.  The sole director of Excalibur Property Services Pty Ltd is Michael Francis Wilkes.  Mr Wilkes was also a licensed real estate agent and the sole director of another company, The Art of Property Pry Ltd the registered business name for which is “Elders New Farm”.
  1. JALS Pty Ltd owned a property at Hendra which was rented under a signed tenancy agreement.  Under the same agreement, the tenant was to pay rent to a particular nominated National Australia Bank (NAB) account.  
  1. The rental tenancy agreement was signed by the nominated agent for JALS Pty Ltd, The Art of Property Pry Ltd trading as Elders New Farm.  The address for service of JALS Pty Ltd in the tenancy agreement however was not Elders New Farm but was listed as Ivan Lazarou Real Estate.  There was no documented agency agreement between JALS Pty Ltd and Elders New Farm signed by both parties.
  1. Between 2 September 2009 and 13 November 2009, three payments of rent totalling $11,550.00 were paid into the NAB account by the tenant.  The particular NAB account was one of three trust accounts operated by Excalibur Property Services Pty Ltd.  JALS Pty Ltd alleges that these rent payments were never received by the company.
  1. On 2 February 2009, G.W.Enterprises Pty Ltd (the builder of the rented property) paid $1,335.45 on behalf of JALS Pty Ltd to Excalibur Property Services Pty Ltd to market of the property for sale.  This sales listing did not go ahead as the property was rented.  JALS Pty Ltd alleges that the funds for the sales listing were never used or returned to either G.W.Enterprises Pty Ltd or JALS.
  1. On 4 March 2010, JALS Pty Ltd lodged a claim against the claim fund set up under the Property Agents and Motor Dealers Act 2000 (PAMDA Act) with the Department of Employment, Economic Development and Innovation (“the Department”). JALS Pty Ltd claims the amounts referred to above, in a total amount of 12,885.45.
  2. Notice of that claim was given to Excalibur Property Services Pty Ltd and Mr Wilkes on 9 January 2009.  Twenty-eight days having elapsed from that notice and with no response or settlement being received from any person, on 4 June 2010 the claim was referred by the Department to this Tribunal for determination. 

Claim

  1. The claim is under section 470 of the PAMDA Act. JALS Pty Ltd claims to have suffered a financial lost as a result of its dealings with the respondents who held real estate licences under the PAMDA Act. In particular, the claim is for a stealing, misappropriation or misapplication by the relevant persons of property entrusted to the person as agent for someone else in the person’s capacity as a relevant person[1].  It is an offence under the PAMDA Act to dishonestly convert an amount to the licensee’s own or someone else’s use[2].  For these purposes a relevant person is defined as a licensee[3].

    2. [1] section 470(1)(e) of the PAMDA Act

    [2] section 573 of the PAMDA Act

    [3] section 469 of the PAMDA Act

  2. A directions hearing was held on 10 August 2010 attended by Mr Wilkes.  The Tribunal directed that the respondents file and serve any further statements of evidence by 4.00pm on 20 August 2010 and that the application be determined on the papers.  No further material has been received from either respondent.
  1. Section 488 of the PAMDA Act sets out the process for deciding the claim.  The Tribunal must be satisfied that:
    1. An event as mentioned in section 470(1) happened; and
    2. The claimant suffered financial loss because of the event.
  1. 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[4] and any amount ordered to be paid to the claimant as compensation to the claimant under sections 530A, 572D or 592A of the PAMDA Act[5]. 

    2. [4] section 488(2) of the PAMDA Act

    [5] section 488(3 (a) of the PAMDA Act

  1. Finally in allowing a claim the Tribunal must decide the amount of the claimant’s financial loss and name the person who is liable for the loss[6].

    2. [6] section 488(3)(b) and (c)  of the PAMDA Act

The Event and the Loss

  1. Mr Rohan Youngman was appointed by the Queensland Office of Fair Trading over the trust accounts of Excalibur Property Services Pty Ltd on 2 November 2009.   From evidence Mr Wilkes gave to the Receiver, it appears that The Art of Property Pry Ltd (Elders New Farm) had never operated a trust account.
  1. The conclusion reached by the Receiver in his forensic accounting report dated 12 April 2010 was that the company names and registered business names appeared to have been used interchangeably.  The Receiver made no differentiation between the corporate and business names as they all appeared, in his view, to trade utilizing the three trust accounts.
  1. After investigating the claims of JALS Pty Ltd for a refund of the unspent marketing fees and for rental monies not received, the Receiver’s 12 April 2010 report concludes:
    1. The marketing costs of $1,335.45 are returnable in full;
    2. Gross rentals of $11,550.00 were received by Excalibur Property Services Pty Ltd between September 2009 and November 2009;
    3. Commissions and other fees in the amount of $2,037.76 were deducted from these gross rentals;
    4. Expenses of $495.93 were incurred on behalf of JALS Pty Ltd for the maintenance of the property between September 2009 and November 2009.  The Receiver’s evidence is that the expenses appear, on the basis of commercial reality and on the advice of Mr Wilkes, necessarily incurred to let the property and incurred with the knowledge of Mr Jules Anderson on behalf of JALS Pty Ltd;
    5. The net rents received in relation to the property were $9,016.31;
    6. None of the above amounts have been paid to JALS Pty Ltd as at the date of the report.

Other matters to be considered

  1. 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

There is no valid binding agency agreement between JALS Pty Ltd and Elders New Farm as there is no agreement signed by both parties.  The evidence of the Receiver that the expenses of $495.93 appear to be necessarily incurred to let the property and incurred with the knowledge of Mr Anderson on behalf of JALS Pty Ltd is accepted.

  1. The amount owing to JALS Pty Ltd by Excalibur Property Services Pty Ltd and Michael Francis Wilkes is found to be the sum of the following: the net rents ($9,016.31); the commission ($2037.76) and the unspent marketing payment ($1,335.45). These amounts total $12,389.62 and JALS Pty Ltd has suffered this financial loss. Excalibur Property Services Pty Ltd and Michael Francis Wilkes are relevant persons for the purposes of section 470(1)(e) of the PMADA Act.
  1. Excalibur Property Services Pty Ltd and Michael Francis Wilkes are named as the persons who are responsible for this loss.

ORDERS

  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 JALS Pty Ld the sum of $12,389.62.

  1. 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.

  1. Pursuant to section 488(3)(c) the respondents Excalibur Property Services Pty Ltd and Michael Francis Wilkes are the persons who misapplied in terms of section 470(1)(e) the marketing costs and rental payments and who are liable for the financial loss of the applicant.

  1. Upon payment of the sum of $12,389.62 from the Claim Fund to the applicant, the respondents Excalibur Property Services Pty Ltd and Michael Francis Wilkes are liable jointly and severally to reimburse the Claim Fund by paying the sum of $12,389.62 to the Chief Executive of Employment, Economic Development and Innovation.


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