Piggott v Siti Real Estate Pty Ltd
[2013] QCAT 188
| CITATION: | Piggott & Ors v Siti Real Estate Pty Ltd & Ors [2013] QCAT 188 |
| PARTIES: | Benjamin Piggott & Glenn Trinick (Insolv) as joint trustees in Bankruptcy for the estate of Michel Voets (a bankrupt No. WA 749/8/7) Benjamin Piggott & Glenn Trinick (Insolv) as joint trustees in Bankruptcy for the estate of Kim Voets (a bankrupt No. WA 1222/8/0) James Drum Daniel Drum |
| v | |
| Siti Real Estate Pty Ltd (Deregistered) Siti Financial Services Pty Ltd trading as Siti Real Estate (in Liquidation) Derek Augustine Kevin O’Neill (A Bankrupt) Michael Steele |
| APPLICATION NUMBER: | OCL103-12 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Mr David Paratz, Member |
| DELIVERED ON: | 11 April 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 $316.73. 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 Applicants the sum of $316.73 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 Siti Real Estate Pty Ltd (Deregistered) and Siti Financial Services Pty Ltd trading as Siti Real Estate (in Liquidation) and Derek Augustine Kevin O’Neill (A Bankrupt) 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, the Respondents, Siti Real Estate Pty Ltd (Deregistered) and Siti Financial Services Pty Ltd trading as Siti Real Estate (in Liquidation) and Derek Augustine Kevin O’Neill (A Bankrupt), are jointly and severally liable to reimburse the Claim Fund by paying the sum of $316.73 to the Chief Executive, Department of Justice and Attorney-General. |
| CATCHWORDS: | Real estate agent – rental guarantee – whether guarantee shown – responsible person Property Agents and Motor Dealers Act 2000 ss 488, 489, 490, 530 |
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
Siti Real Estate operated from Springwood in Brisbane.
Michel Voets and Kim, Daniel and James Drum agreed to buy a house and land package at Lot 22 Heit Court from Robgail Developments Pty Ltd through the Real Estate Agency on 15 January 2008.
In a document dated 1 July 2010 submitted to the Chief Executive titled ‘Statement of Claim’ they describe the transaction as follows:
The agreement included purchase of the land, to build the house on the said property (using Dodmark Buildings) and a rental guarantee for a term of 5 years from date of house completion. The rental to us was set @ $380 per week less rental expense, and reviewed after 3 years.
They state that on 30 September 2008:
Keys handed over and contract signed with Siti Real Estate – Guaranteed rent @ $380 less management fees for 5 years to be reviewed in 3 years. Did not receive signed copy.
A letter from Redlands Conveyancing Service (a division of Clapins Lawyers) to the Drums and Mr Voets, dated 9 November 2007, notes that they were acting on their behalf, and that they had received the Contract of sale from Robgail Developments Pty Ltd. It notes that the contract was due to settle on 3 December 2007 (this should presumably have been referring to 2008).
A copy of a PAMD Form 20a ‘Appointment of Agent – Letting and Property Management” dated 1 August 2008 signed by Kim Drum and Michel Voets, and by Daniel Drum and James Drum on 5 August 2008 has been provided. It is not signed by Siti Real Estate.
The Form 20a appointed Siti Real Estate as agent to let the property.
Clause 4.3, which is titled ‘Listed rental charge’, was completed as ‘Rental guarantee $380 per week reviewed at 3 years’.
A Lease Agreement dated 18 September 2008 was entered into between Kim Drum, Daniel Drum and James Drum and Michel Voets as Lessor and Siti Financial Services Pty Ltd for a period of ‘5 years from handover date’ at a rental of $380 per week.
No copy of any agreement of 15 January 2008 or 30 September 2008 has been provided.
Clapins lawyers advised F Voets and K Drum by a letter dated 19 February 2009 that they had been appointed to act for Siti Real Estate Pty Ltd in regard to the assignment of its various letting arrangements, and that its client was discontinuing its operations as a property manager.
The National Australia Bank held a mortgage over the property. Default was made, the bank sold the property as mortgagee in possession, and settlement was effected on 31 July 2009.
The property was sub-let to Hera and Dhammika Ranasinghe on or about 18 September 2008. They left the property on 13 March 2009, as the bank required vacant possession.
A claim under the Property Agents and Motor Dealers Act 2000 (the Act) was made in PAMD Form 50 by Michel Voets and Kim, Daniel and James Drum against Siti Real Estate on 5 May 2010. The claim was for $231,220 made up as follows:
(a)5 yr rental guarantee income $99,180
(b)Bank repossess loss app. $80,000
(c)Bank interest incurred $41,569
(d)Bond kept approx (4 weeks) $1,440
(e)Legal fees and cleaning (360) $3,256
(f)Less payments $5,775
A Request for claim to proceed was lodged on 28 April 2011, noting a new claim amount of $193,025.05.
A Compliance Officer was appointed to review the claim as Inspector, and delivered a report dated 21 September 2012.
The Inspector noted that no details were provided as to the composition of the amended claim. The claim was made on the basis that the bank repossessed the property due to payments not being passed on by Siti Real Estate Pty Ltd and because it misrepresented the rental guarantee.
The liquidators for Siti Financial Services Pty Ltd trading as Siti Real Estate advised that the liquidator was unfunded and could not settle the claim. Derek O’Neill advised that he was bankrupt, and that any enquiries had to be referred to his Trustee.
The searches and investigations conducted by the inspector disclosed that:
(a)Siti Real Estate Pty Ltd was a licenced Real Estate Corporation from 13 July 2007 until the 13 October 2010.
(b)Siti Financial Services Pty Ltd was licensed as a corporation from 27 April 1999 until the 22 May 2002.
(c)The Business Name extract for ‘Siti Real Estate’ noted the corporation carrying on business as ‘Siti Financial Services Pty Ltd” from 20 November 2000 to 20 March 2002.
(d)The sole Director of Siti Real Estate Pty Ltd was Derek O’Neill from 28 December 2001 to 22 May 2011.
(e)The members of Siti Real Estate Pty Ltd were Kevin O’Neill and Michael Steele.
(f)Siti Real Estate Pty Ltd held a licence as a Real Estate Agent from 13 July 2007 until 13 October 2010.
(g)The Trust Account was with National Australia Bank Ltd. The trust account was under the name Siti Financial Pty Ltd trading as Siti Real Estate. The licence used to open the trust account was the licence for Siti Real Estate Pty Ltd.
(h)Both Siti Real Estate Pty Ltd and Siti Financial Services Pty Ltd used the Trust Account.
The Inspector concluded that a breach of section 385(4) of the Act had occurred because rent was paid by the tenant into the Trust Account, an for the period from January to February 2009 Siti Financial Services Pty ltd did not account to the claimants for the rent received. She calculated the amount of rent not paid as $316.73.
The Inspector also concluded that a breach of section 574 of the Act occurred because Siti Real Estate Pty Ltd represented to the claimants that they would be guaranteed $380 per week rent as return. She calculated the rent unpaid under the guarantee to the date that the mortgagee took possession as $1,182.09. She did not allow beyond that date as she described the appointment to act as effectively at an end also at that time.
The Inspector did not allow any costs associated with the default on the loan, interest on the loan and associated legal fees, as costs not claimable on the fund. She also did not allow any amounts for bond money and cleaning as that should have been followed up with the Residential Tenancies Authority who held the bond.
The Tribunal gave directions on 31 October 2012 for the filing of material by the Applicants and Respondents, and directed that if no application was made for an oral hearing that the application would be decided on the papers not before 11 February 2013.
No further material has been filed by any of the Applicants or Respondents.
The material before me is not comprehensive, as no copy of the original contract of sale, and no document specifically as to a guarantee of rental, has been provided.
It may be that the rental guarantee was included in the Contract of Sale. The guarantee may have been provided by the developer, Robgail Developments.
If the guarantee was provided by the developer, then a claim may not arise against the agent. In Schwass v Ralacom Pty Ltd atf The Ralacom (No 2) Unit Trust (under external administration) trading as Paradise Island Resort [2011] QCAT 204, the learned member considered a similar claim and noted:-
[16] Ms Williams report informs that her investigations reveal that Mr and Mrs Schwass held rental guarantee income agreements with Take it Easy in which Take it Easy agreed to provide a minimum rental income to them of $2,383.33 per month for Unit 102 and for Unit 128.
[17] The claim from Mr and Mrs Schwass indicates they consider that they are due disbursements under this agreement from the funds held in the Ralacom trust account.
[18] This is clearly erroneous. Take it Easy has no relationship with Ralacom and therefore no entitlement to any use of the funds held in the Ralacom trust account in respect of any agreement Take it Easy made have made.
The Inspector appears to have accepted that the PAMDA Form 20a was sufficient to establish a representation by Siti Real Estate that it would pay under a rental guarantee. However, apart from there being no signed copy of the Form in evidence, I am not satisfied that the Form in itself does have that effect.
Section 114(3)(b)(ii) of the Act refers to the ‘listed rental charge’ in relation to the commission payable to the agent. The effect of clause 4.3 of the Form therefore is to set the amount upon which commission is charged. In itself, that clause does not indicate any undertaking by the agent to actually pay the rent, or guarantee it.
It is likely that the trustees of the two Applicants who are in bankruptcy have not considered it commercially worthwhile to pursue the claim, and to submit further material, in light of the inspectors report which recommended a payment of only $1,498.82 out of a claim of $193,025.05.
Further, the agent did obtain a lease for 3 years at $380 per week from Siti Financial Services Pty Ltd, although the situation is confused because Siti Financial Services Pty Ltd traded as Siti Real Estate.
I am satisfied on the balance of probabilities that the amount of rent taken into the trust account of $316.73, and not paid to the claimants, is due to them, as found by the Inspector, and that a claim on the fund to that extent is allowable in accordance with s 488 of the Act.
The evidence is confused as to which company was accounting for the rent to the Applicants. Siti Financial Services Pty Ltd received the rent from the sub-tenants for the period January to March 2009 and deposited it to the Trust Account. Siti Real Estate Pty Ltd made payments for rent from the trust account to the applicants in the period from October 2008 to January 2009.
In the circumstances, I am satisfied that both companies are liable for the rent that was not paid from the trust account, as both had access to it and control of it.
I am satisfied that Mr O’Neill is shown to have come within the description in s 490(2)(b) of the Act of a liable person, as he was an executive officer of Siti Financial Services Pty Ltd.
However, I cannot discern on the current material how Mr Steele can be shown to come within that description. Mr Steele was a member of the company, but no material indicates that he was an executive officer or otherwise liable.
I am not satisfied that a claim in respect of a rental guarantee is made out.
Accordingly, I make orders for payment out of the fund for the amount of $316.73 in respect of rent that was collected and not passed on, and that this be recoverable initially from the fund, and subsequently from the companies and Mr O’Neill.
I order as follows:
1.Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is partially allowed in the sum of $316.73.
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 Applicants the sum of $316.73 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 Siti Real Estate Pty Ltd (Deregistered) and Siti Financial Services Pty Ltd trading as Siti Real Estate (in Liquidation) and Derek Augustine Kevin O’Neill (A Bankrupt) 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, the Respondents, Siti Real Estate Pty Ltd (Deregistered) and Siti Financial Services Pty Ltd trading as Siti Real Estate (in Liquidation) and Derek Augustine Kevin O’Neill (A Bankrupt), are jointly and severally liable to reimburse the Claim Fund by paying the sum of $316.73 to the Chief Executive, Department of Justice and Attorney-General.
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