Lin v United Property Specialists Pty Ltd - [2013] QCAT 172

CITATION:

Lin v United Property Specialists Pty Ltd & Anor [2013] QCAT 172

PARTIES:	Shang-Jen Lin (Applicant)
v
United Property Specialists Pty Ltd (First Respondent) Mr Steven Chen (Second Respondent)

APPLICATION NUMBER:

OCL114-12

MATTER TYPE:

Other civil dispute matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Mr David Paratz, Member

DELIVERED ON:

17 April 2013

DELIVERED AT:

Brisbane

ORDERS MADE:

1. Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $155,000.00.

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 $155,000.00 from the Claim Fund, and if there is an appeal, payment must not be made until the appeal is finally decided.

3. Pursuant to section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the Respondents United Property Specialists Pty Ltd (Deregistered) and Steven Chen are named as the persons 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, United Property Specialists Pty Ltd (Deregistered) and Steven Chen are jointly and severally liable to reimburse the Claim Fund by paying the sum of $155,000.00 to the Chief Executive, Department of Justice and Attorney-General

CATCHWORDS:

Real estate agent – moneys received for a future deposit–– agent withdrew monies personally – claim against the fund

Property Agents and Motor Dealers Act 2000

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

Mr Steven Chen was a real estate agent operating on the Gold Coast under the name United Property Specialists.
Mr Shang-Jen Lin was a Taiwanese citizen who wanted to immigrate to Australia. He wanted to buy a residential property on the Gold Coast.
An affidavit by Mr Shang Jen Lin dated 16 July 2012 deposes to the following events:-
(a)He had dealings with Mr Steven Chen by telephone before visiting Australia.
(b)Mr Chen told him he should buy a property with a price of A$500,000, and that it was normal to pay a deposit of 10% which would be held in Mr Chen’s trust account.
(c)On 1 October 2011 Mr Lin met Mr Chen at his office on the Gold Coast and discussed immigration and buying residential properties.
(d)At that meeting Mr Lin gave Mr Chen a bank draft for $500,000 which he had with him.
(e)He believed that Mr Chen would hold the money in the trust account of United Property Specialists Pty Ltd and be used as a deposit on property he would buy.
(f)He agreed to buy a property at 8010B Vista Drive Benowa, and offered $900,000. Mr Chen prepared a Contract and he signed it as purchaser. He believed the $500,000 would be part deposit for the purchase.
(g)After negotiations he increased his offer to $950,000. The seller accepted and signed the Contract on 5 October 2011.
(h)Upon his return to Taiwan he sent the balance deposit of $45,000.
(i)He was not satisfied with a Building & Pest inspection and instructed his lawyers to terminate the Contract. The cancellation was accepted on 25 October 2011.
(j)His lawyers requested the return of the deposit from Mr Chen, but it was not returned.
(k)Mr Chen told him that it was a good time to buy high end property on the Gold Coast. This sounded attractive to Mr Lin who was committed to buying residential property in Australia.
(l)Mr Chen then told him that he should send further funds to his trust account to be ready for a more expensive purchase. Mr Lin agreed to do this, and sent a further $155,000 to the Macquarie Bank account on 2 November 2011.
(m)Mr Chen was evasive, and after several further months, Mr Lin lost confidence in Mr Chen and requested his money back.
(n)No monies were repaid by Mr Steven Chen.
Ms Lin has claimed upon the fund for the non-repayment of the $155,000, forwarded as the further payment for likely deposit monies, as an event causing financial loss.
The Chief Executive referred the claim to the Tribunal for determination pursuant to s 488 Property Agents and Motor Dealers Act 2000 (the Act).
The Office of Fair Trading has obtained bank statements from Macquarie Bank which indicate that on 3 November 2011 the sum of $155,000 was deposited into the account of United Property Specialists Pty Ltd, and that a cheque for $155,000 made out to Steven Chen was drawn on 4 November 2011.
The Chief Executive forwarded a copy of the claim and supporting documentation to Mr Steven Chen’s last known address on 14 August 2012, but received no response.
The Chief Executive submits that the Applicants have demonstrated a claimable financial loss of $155,000.
The applicants have also claimed $1,300 for legal fees, but the Chief Executive submits that as the legal costs can not be itemised against the court Scale of Costs, that they are not claimable from the fund.
Searches disclose that the sole Director and Secretary of United Property Specialists Pty Limited from 8 February 2000 to 27 June 2011 was Steven Chen. The company was deregistered on 27 June 2011.
The company was therefore deregistered at the time that Mr Steven Chen received the monies.
Section 601AD(1) of the Corporations Act 2000 (Cth) provides that a company ceases to exist on deregistration. The property of a deregistered company vests in the Australian Securities and Investments Commission (ASIC).
A company may be reinstated under s 601AH of the Corporations Act. Under s 601AH(5) if a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered.
Section 490(2)(b) of the Act provides that every person who was an executive officer of the corporation when the relevant event happened is a liable person. As Steven Chen was an executive officer of the company, he would be a liable person by operation of that section, if the company had existed at the time of the relevant event
However, as the company had ceased to exist at the time of the event, then the automatic provision of s 490(2)(b) may not apply, unless the company is reinstated.
Section 490(1)(a) provides that the Tribunal can name in its order a person (the responsible person) as being liable for a claimants financial loss.
The financial loss arose because of the actions of Steven Chen. At the time he was purporting to act as an officer of the company. If the company is not liable as it did not exist at the time, then Mr Steven Chen would assume personal liability under normal operation of law for breach of warranty of authority. I therefore consider that he can be named as a responsible person.
The situation of the company is more complex. The company may have assets, so an avenue of recovery against it may be of value. The Chief Executive may have to have seek a court order in conjunction with ASIC, or apply for reinstatement of the company, in order to proceed.
The Chief Executive has proposed that an order be made against the company as a liable person, and that the deregistration be noted on the Order in the interest of recovering a debt from it. I am prepared to accede to this proposal, as the company would have been a liable party if it were still registered, by virtue of its operation of the Trust Fund, and it will be a matter for the Chief Executive to effect such a recovery against the deregistered company.
No material has been provided in relation to the claimed legal fees of $1,300, and I therefore will not allow them.
I am satisfied on the balance of probabilities that Mr Shang-Jen Lin is entitled to claim against the fund under the Act for the amount of $155,000.00, and that United Property Specialists Pty Ltd (Deregistered) and Steven Chen are liable persons under the Act.
Accordingly, I order as follows:-
1.Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $155,000.00.
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 $155,000.00 from the Claim Fund, and if there is an appeal, payment must not be made until the appeal is finally decided.
3.Pursuant to section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the Respondents United Property Specialists Pty Ltd (Deregistered) and Steven Chen are named as the persons 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, United Property Specialists Pty Ltd (Deregistered) and Steven Chen are jointly and severally liable to reimburse the Claim Fund by paying the sum of $155,000.00 to the Chief Executive, Department of Justice and Attorney-General