Schwass v Tomkins
[2012] QCAT 81
•28 February 2012
| CITATION: | Schwass and Anor v Tomkins [2012] QCAT 81 |
| PARTIES: | Mr Melvyn Barry Schwass Mrs Rina Schwass |
| v | |
| Mr Cecil Tomkins t/as Prime Real Estate |
| APPLICATION NUMBER: | GAR299-11 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Senior Member |
| DELIVERED ON: | 28 February 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] Pursuant to s 488 of the Property Agents and Motor Dealers Act2000, the claim is allowed in the sum of $15,531.80. [2] Pursuant to s 489 of the Property Agents and Motor Dealers Act2000, at the expiration of the appeal period, the Chief Executive must pay to Mr and Mrs Schwass the sum of $15,531.80 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 s 488(3)(c) of the Property Agents and Motor Dealers Act2000, Mr Tomkins is named as the persons responsible for the financial loss of Mr and Mrs Schwass. [4] Upon payment from the Claim Fund and pursuant to ss 490 and 530 of the Property Agents and Motor Dealers Act2000, Mr Tomkins is liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $15,531.80 to the Chief Executive, Department of Justice and Attorney General. [5] Mr Tomkins pay Mr and Mrs Schwass $20 compensation for his failure to attend the compulsory conference by 17 March 2012. |
| CATCHWORDS: | REAL ESTATE AGENT – where rent received not paid to owners – where no rent received but agent promised to pay rent on behalf of the tenant – whether an event within s 470 – whether a representation within s 574 Property Agents and Motor Dealers Act 2000, ss 470, 488, 490(2), 574 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
Mr and Mrs Schwass engaged Mr Tomkins to manage the letting of their five units and a commercial tenancy in Paradise Island Resort. In April 2011, it became apparent to Mr and Mrs Schwass that Mr Tomkins: had not paid them all of the rent collected; banked a cheque to their account that was dishonoured; had failed to collect rent from a tenant; and had not accounted to Mr and Mrs Schwass for rent received. Mr and Mrs Schwass assert that Mr Tomkins’ real estate agent’s licence was suspended in April 2011. I have no information to the contrary.
I listed this matter for a compulsory conference on 14 February 2012. Mr Tomkins did not attend. I rang the number listed for Mr Tomkins on the file and it went to message bank. My call was not returned. I am satisfied that notice of the compulsory conference was sent to Mr Tomkins at his last known address. That correspondence has not been returned.
At the compulsory conference, I obtained Mr and Mrs Schwass’ written consent to make a decision adverse to Mr Tomkins’ interests. As a precaution, I caused the tribunal to advise Mr Tomkins of my intention to determine the proceedings based upon the material filed to date and inviting him to make written submissions. The tribunal has received no reply from Mr Tomkins. As foreshadowed, I therefore intend to decide this application based on the material already filed in the tribunal.
Mr and Mrs Schwass made a claim on the statutory claim fund for $18,217.00. Mr Tomkins received notice of the claim by letter from the Office of Fair Trading dated 19 September 2011.
The tribunal is required to determine whether there should be a payment from the fund. Section 488 of the Property Agents and Motor Dealers Act2000 sets out the process for deciding the claim. The Tribunal must be satisfied that:
a)An event as mentioned in section 470(1) happened; and
b)The claimant suffered financial loss because of the event.
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[1] and any amount ordered to be paid to the claimant as compensation to the claimant under sections 530A, 572D or 592A of PAMDA[2].
[1] Section 488(2).
[2] Section 488(3)(a).
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[3].
[3] Section 488(3)(b) and (c).
The event
The stealing, misappropriation or misapplication of property entrusted to a person as agent for the claimant in his capacity as a relevant person is an “event” under s 470(1)(e).
There is clear evidence that Mr Tomkins received rent from a number of tenants and failed to pass the rent on to Mr and Mrs Schwass. They have provided a copy of a handwritten list from Mr Tomkins showing that he collected, but did not pass on, $14,855. I am satisfied that Mr Tomkins’ failure to account to Mr and Mrs Schwass for those funds is a misappropriation or misapplication of funds within the meaning of PAMDA and, therefore, is an “event” within s 470(1).
Financial loss
[10] I am satisfied that Mr and Mrs Schwass suffered a financial loss because of Mr Tomkins’ breach of s 470(1)(e).
[11] I am satisfied that $14,855 – the amount that Mr Tomkins did not pass on to Mr and Mrs Schwass – can be claimed from the fund.
[12] The balance of $3,362 relates to rent for Unit 102B that was never received by Mr Tomkins. Mr and Mrs Schwass say that the tenant was a close personal friend of Mr Tomkins and that Mr Tomkins promised he would pay the tenant’s rent “over the next couple of months.” The tenant moved into the premises in December 2010 and vacated in March 2011. Mr and Mrs Schwass claim compensation from the fund for 15 weeks, the whole period.
[13] Mr and Mrs Schwass’ bank records show that they received a payment for Unit 102B of $896.60 on 1 February 2011 and a further payment of $672.50 on 16 February 2011 which was “the last rent received for this unit”. $896.60 represents four weeks’ rent, less commission. $672.50 is roughly equivalent to three weeks’ rent, less commission. Mr and Mrs Schwass’ claim should be reduced by the amounts they did receive.
[14] The loss of the balance of $1,792.90 was not caused by a breach of s470(1)(e). The only basis on which this rent can be recovered from the fund is if it falls within s 574; that Mr Tomkins represented something that was false or misleading in relation to the letting of the property.
[15] It is arguable that Mr Tomkins’ representation that he would pay the rent for this tenant is a representation that falls within s 574 if it can be established that, at the time he made that statement, Mr Tomkins had no reasonable basis for making that statement.[4] The onus lies with Mr Tomkins[5] to show that he did have a reasonable basis for making that promise to Mr and Mrs Schwass. He has failed to discharge that onus.
[4] Section 574(4).
[5] Section 574(5).
Other matters
[16] I am required to take into account any amount Mr and Mrs Schwass may have received or recovered if not for their neglect or default.
[17] I am troubled by the lack of evidence surrounding the $3,362 rent not paid by Mr Tomkins’ alleged friend. For example:
a)When did Mr Tomkins promise to pay the rent?
b)At what point, if at all, did Mr and Mrs Schwass query why they had not received any rent?
c)Did they instruct Mr Tomkins to take action against the tenant? If not, why not?
[18] I am not satisfied that Mr and Mrs Schwass were entitled to rely on Mr Tomkins’ representations for the full period in which rent was not paid. Even when they engage a letting agent, owners have an obligation to look to their own affairs. I can understand that it may take some time to realise rent is not being paid and then instruct an agent to take action, and this is why rent for December and January was unpaid. I cannot accept that, once Mr and Mrs Schwass were aware that the tenant had not been paying rent, they did not pay close attention to payments after February 2011.
[19] I am satisfied that, If they had kept a closer eye on matters, and not left it to Mr Tomkins in circumstances where he had already demonstrated default, Mr and Mrs Schwass would not have lost rent for the period from 16 February 2011 to 18 March 2011, a period of five weeks. I therefore find that Mr and Mrs Schwass are entitled to reimbursement from the fund for three weeks’ rent, being $676.80 ($240 x 3 – 6%).
[20] As I have previously indicated, Mr and Mrs Schwass attended the compulsory conference but Mr Tomkins did not. It is appropriate that Mr Tomkins pay Mr and Mrs Schwass some compensation for that day’s attendance. Mr and Mrs Schwass have provided a copy of their parking receipt in the amount of $20.00. I direct Mr Tomkins to pay this amount to Mr and Mrs Schwass by 17 March 2012 but I will not add that amount to their claim against the fund.
Who is liable for the loss?
[21] Mr Tomkins is the person responsible for the loss and, therefore, the person liable to reimburse the fund.
Orders
[22] Pursuant to s 488 of the Property Agents and Motor Dealers Act2000, the claim is allowed in the sum of $15,531.80.
[23] Pursuant to s 489 of the Property Agents and Motor Dealers Act2000, at the expiration of the appeal period, the Chief Executive must pay to Mr and Mrs Schwass the sum of $15,531.80 from the Claim Fund, and, if there is an appeal, payment must not be made until after the appeal is finally decided.
[24] Pursuant to s 488(3)(c) of the Property Agents and Motor Dealers Act2000, Mr Tomkins is named as the person responsible for the financial loss of Mr and Mrs Schwass.
[25] Upon payment from the Claim Fund and pursuant to ss 490 and 530 of the Property Agents and Motor Dealers Act2000, Mr Tomkins is liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $15,531.80 to the Chief Executive, Department of Justice and Attorney General.
[26] Mr Tomkins must pay Mr and Mrs Schwass $20 compensation for his failure to attend the compulsory conference by 17 March 2012.
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