Liang (Liang Family Trust) v J Properties Group Pty Ltd (in Liquidation) Huang

[2013] QCAT 697

CITATION: Liang (Liang Family Trust) v J Properties Group Pty Ltd (in Liquidation) Huang [2013] QCAT 697

PARTIES:	Mr Hsien-Chung Liang (Liang Family Trust) (Applicant)
v
J Properties Group Pty Ltd (in Liquidation) Jack Huang (Respondent)

APPLICATION NUMBER: GAR246-13

MATTER TYPE: General administrative review matters

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Member Paratz

DELIVERED ON: 24 December 2013

DELIVERED AT: Brisbane

ORDERS MADE:

1. Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is partially allowed in the sum of $15,189.19.

2. Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period the Chief Executive must pay to the Applicant the sum of $15,189.19 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 section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the Respondents, J Properties Group Pty Ltd (In Liquidation) and Jack Huang are named liable for the financial loss of the applicant.

4. Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, J Properties Group Pty Ltd (In Liquidation) and Jack Huang are jointly and severally liable to reimburse the Claim Fund by paying the sum of $15,189.19 to the Chief Executive, Department of Justice and Attorney-General.

CATCHWORDS:

Real estate agent – management of residential property - rental moneys not disbursed from trust account – claim on Claim Fund - claim partially accepted

Property Agents and Motor Dealers Act 2000

Williams v Kaech [2008] QCA 176

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).

REASONS FOR DECISION

1. Mr Jack Huang was a real estate agent, and was a principal of J Properties Group Pty Ltd, which traded as Ray White (Runcorn).

2. Mr Hsien-Chung Liang (Liang Family Trust) was the owner of a property at Auchenflower in Brisbane which consisted of 5 shops and 5 units. It appointed Ray White (Runcorn) to manage the property.

3. A receiver (Ms Julie Williams) was appointed on 7 January 2013 by the Office of Fair Trading, Department of Justice and Attorney-General pursuant to the Property Agents and Motor Dealers Act 2000 (the Act) over the Trust Property of Jack Huang and J Properties Group Pty Ltd trading as Ray White (Runcorn).

4. The records of the Australian Securities and Investments Commission (ASIC) show that Mr Jack Huang was appointed as Director and Shareholder of J Properties Pty Ltd (the company) on 22 July 2003, and this continued until the date of the appointment of the receiver.

5. Mr Hsien-Chung Liang (Liang Family Trust) claimed an amount of $57,938.28 as outstanding for rental income, invoices deducted and not remitted and interest and charges incurred on their loan account. A formal complaint was made to the Office of Fair Trading on 6 February 2013.

6. Details of the amount of $57,938.28 claimed were as follows[1]:-

   Rental income in the sum of $15,176.98

   Excessive cleaning and rubbish removal costs for an unclear amount

   Insurance claim for invoices deducted in the sum of $6,292.00

   Personal loan repayments and charges involved in the sum of $30,276.00

   Brisbane City Council Rates deducted although never paid in the sum of $6,193.30

   [1]        “Insolvency and Turnaround Solutions” Report 28 June 2013, page 10.

7. The receiver met Mr Huang on 8 January 2013 to interview him. Mr Huang could not provide an explanation for the shortfall in the trust account other than two payments to a creditor for building renovation works that were not deducted from the owners account back in 2010.

8. A reconciliation of the payments payable to the claimant and payments made to the owner was prepared. The reconciliation for the period June 2010 to January 2013 revealed the following[2]:-

   Total amount payable to owners for the above period is $165,921.94

   Total amount disbursed to the owners for the above period is $150,732.74

   As such a difference of $15,189.19 was identified.

   [2]        “Insolvency and Turnaround Solutions” Report 28 June 2013, page 10.

9. The receiver concluded that the Claimant’s claim in respect of rental income should be accepted in the sum of $15,189.19 being the value of funds retained and not disbursed from the trust account.

10. In respect of the claim for cleaning and rubbish removal, the receiver concluded[3]:-

    The reconciliation revealed the claimant was charged the sum of $7,830.10 for the period May 2010 to January 2011 and $16,579.77 for the period February 2011 to May 2012. The claimant is under the impression the costs have been charged as at the end of each financial year.

    The above breakdown of the charges revealed the sum of $7,830.10 was for nine (9) months and the sum of $16,579.77 was for sixteen (16) months, therefore the claimants have not been charged excessively.

    [3]        Page 11.

11. In respect of the claim for insurance, the receiver noted that a sum of $6,292.00 had been paid from the trust account to Jae Home Improvements for work performed. The claimant believed these costs should have been covered by insurance. The receiver advised that[4]:-

    Investigations into the matter have revealed the respondent did not pass on the information requested by Raymond Wong and Associates in order for the insurance claim to be lodged.

    [4]        Page 12.

12. The receiver concluded that only funds held in the trust account are claimable, and rejected this claim.

13. In respect of the claim for Personal Loan Repayments Financial loss, the receiver noted[5]:-

    The claimant has claimed the sum of $30,276.00 for personal loan account payments and financial loss incurred. The claimant has an agreement with the respondent that rental funds were to be disbursed to the HSBC loan account for repayments. As these requirements were not met, the claimant incurred bank fees and charges due to international exchange rates when payments were made by himself. As these funds are not held nor were deducted from the PAMD trust account they are not claimable, therefore I reject the claimants claim in the sum of $30,276.00.

    [5]        Page 12.

14. In respect of the claim for Brisbane City Council Rates for $3,860.16, the receiver noted that Brisbane City Council statements for the period July 2011- June 2013 were requested on numerous occasions. The documents were not received, and the receiver rejected the claim due to insufficient evidence to support it.

15. The receiver therefore concluded that the claim should be accepted in the sum of $15,189.19 being the value of funds retained and not disbursed from the trust account, and the remaining balance of $42,749.09 should be rejected.

16. The receiver’s report was forwarded on 28 June 2013 to Mr Huang and the company at their last known addresses and to the addresses shown as the registered office on the ASIC database.

17. I gave Directions on 30 July 2013 which provided for the filing of material in response by Mr Huang and the company by 24 September 2013, and for the matter to be determined on the papers after 22 October 2013. The letters containing the directions were returned to the tribunal marked “return to sender”. The letters were sent to the addresses provided by the department as disclosed by the searches. No material has been filed by Mr Huang or the company.

18. The Registry was advised by an email on 13 August 2013 from Pilot Chartered accountants that the liquidator of J Properties Group Pty Ltd (In Liquidation) will not be participating in these proceedings because:-

    We have been unable to make contact with the company’s director. Mr Jack Huang. We have recently requested the assistance of ASIC to locate Mr Huang; and

    As we have been unable to contact Mr Huang, we have limited company records available to us to investigate the affairs of the company.

19. I also directed that  Mr Hsien-Chung Liang (Liang Family Trust) was to file any material in addition to the material filed with the application by 27 August 2013, and any reply to the response of Mr Huang and the company by 22 October 2013. No material was filed by Mr Hsien-Chung Liang (Liang Family Trust).

20. There is no challenge to the report of the receiver by either the Applicant or any of the Respondents. I accept the report of the receiver, and am satisfied that the financial loss suffered by the claimants is established as $15,189.19.

21. I am also satisfied that Mr Huang, as the executive officer of the company, is a person who is liable to reimburse the fund under s490(2) of the Act, and should be named as a person who is liable for the Claimant’s financial loss pursuant to s530(b) and s488(3)(c) of the Act[6], together with the company.

    [6]        Williams v Kaech [2008] QCA 176.

22. Accordingly I find that:-

    1.Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is partially allowed in the sum of $15,189.19.

    2.Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period the Chief Executive must pay to the Applicant the sum of $15,189.19 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 section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the Respondents, J Properties Group Pty Ltd (In Liquidation) and Jack Huang are named liable for the financial loss of the applicant.

    4.Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, J Properties Group Pty Ltd (In Liquidation) and Jack Huang are jointly and severally liable to reimburse the Claim Fund by paying the sum of $15,189.19 to the Chief Executive, Department of Justice and Attorney-General.