Lumsden v the Auctioneers & Agents Committee

The applicant, Rogan Graham Lumsden, sought a statutory order for review of a decision by the respondent, The Auctioneers and Agents Committee, to disallow his claim for $11,582 against the Auctioneers and Agents Fidelity Guarantee Fund. The circumstances of the claim were not in dispute: Lumsden had entered into sales agreements with Golden Beach Properties Pty Ltd and paid deposits to Liomas Holdings Pty Ltd, trading as Richardson and Wrench Caloundra. The deposits were not invested as authorised by the contracts and were subsequently misappropriated. The respondent rejected the claim based on section 119(4) of the Auctioneers and Agents Act 1971, which excludes claims for money to which section 104(1)(b) applies.

The primary legal issue was whether section 104(1)(b) applied to the applicant’s deposits. Section 104(1)(b) requires that if money is received in respect of a sale, the sale is to be completed more than 60 days after receipt, and the money is received with a direction to be invested, then the money must be paid into a special trust account for investment. The applicant argued that sub-section 104(1)(b) did not apply because there was no direction accompanying the receipt of the money, as required by sub-section 104(1)(b)(iii).

The court found that the word “with” in sub-section 104(1)(b)(iii) meant “expressing simultaneous occurrence and association,” requiring the direction to be given at the same time as the money was received. In this case, the direction was given two days later when the contract was created. Therefore, sub-section 104(1)(b) did not apply, and sub-section 104(1)(a) was complied with. The court held that the respondent’s rejection of the claim was based on an erroneous interpretation of the legislation. The court set aside the respondent’s decision and remitted the claim to the respondent to be dealt with according to law. The respondent was ordered to pay Lumsden’s costs of and incidental to the application.