The Real Estate and Business Agents Supervisory Board v Hajac Nominees Pty Ltd
[2000] WASCA 352
•17 NOVEMBER 2000
THE REAL ESTATE AND BUSINESS AGENTS SUPERVISORY BOARD -v- HAJAC NOMINEES PTY LTD & ORS [2000] WASCA 352
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASCA 352 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:143/1999 | 7 JUNE 2000 | |
| Coram: | MURRAY J PARKER J WHEELER J | 17/11/00 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| PDF Version |
| Parties: | THE REAL ESTATE AND BUSINESS AGENTS SUPERVISORY BOARD HAJAC NOMINEES PTY LTD DR GEOFFREY GILD ELIZABETH GILD |
Catchwords: | Professions and trades Real estate Agent Claim against Fidelity Fund for pecuniary loss Whether "defalcation by a licensee" Whether in the course of the business of the licensee Whether involving a "real estate transaction" Proposal to buy land by medium of a company |
Legislation: | Real Estate and Business Agents Act, 1978 (WA) s 4(1), s 116 |
Case References: | Nil Armagas Ltd v Mundogas SA [1986] 1 AC 717 Australia & New Zealand Banking Group Ltd v Law Society of New South Wales [1976] 1 NSWLR 686 Baker v Law Institute of Victoria [1974] VR 388 Boland's Trustee v Steel Brothers & Co Ltd [1901] 1 Ch 279 Deputy Commissioner of Taxation v Mutton (1988) 12 NSWLR 104 Diamond v Bank of London & Montreal Ltd [1979] 1 QB 333 Fountain v Alexander (1982) 150 CLR 615 Hellier v Hinton, unreported; SCt of WA; Library No 980712; 14 December 1998 Heraudeau & Anor v Law Institute of Victoria [1991] 2 VR 518 HIH Casualty & General Insurance Limited v Turner & Anor (1998) 10 ANZ Insurance Cases 61-416 Law Institute of Victoria v Baker [1974] 48 ALJR 160 Lloyd v Grace, Smith & Co [1912] AC 716 Lumsden v Auctioneers & Agents Committee [1999] 2 Qd R 599 Macaura v Northern Assurance Co Ltd [1925] AC 619 National Commercial Banking Corporation of Australia Ltd v Batty (1986) 160 CLR 251 Orsi v Legal Contribution Trust [1976] WAR 74 Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 120 ALR 12 Petrou v Hatgzigeorgiou (1991) Aust Torts Reports 81-071 Re Real Estate and Business Agents Supervisory Board; ex parte Cohen (1999) WASCA 47; (1999) 21 WAR 158 Secretary, Department of Foreign Affairs & Trade v Boswell (1992) 36 FCR 367 State Superannuation Board (NSW) v Federal Commissioner of Taxation (1988) 82 ALR 63 Technical Products Pty Ltd v State Government Insurance Office (Queensland) (1989) 167 CLR 45 Walker v European Electronics Pty Ltd (In Liq) (1990) 23 NSWLR 1 Workers Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : THE REAL ESTATE AND BUSINESS AGENTS SUPERVISORY BOARD -v- HAJAC NOMINEES PTY LTD & ORS [2000] WASCA 352 CORAM : MURRAY J
- PARKER J
WHEELER J
- Appellant (Defendant)
AND
HAJAC NOMINEES PTY LTD
First Respondent (First Plaintiff)
DR GEOFFREY GILD
ELIZABETH GILD
Second Respondents (Second Plaintiffs)
Catchwords:
Professions and trades - Real estate Agent - Claim against Fidelity Fund for pecuniary loss - Whether "defalcation by a licensee" - Whether in the course of the business of the licensee - Whether involving a "real estate transaction" - Proposal to buy land by medium of a company
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Legislation:
Real Estate and Business Agents Act, 1978 (WA) s 4(1), s 116
Result:
Appeal dismissed
Representation:
Counsel:
Appellant (Defendant) : Mr K J Martin QC &
Ms A M I Schoombee
First Respondent (First Plaintiff) : Mr P J Hannan
Second Respondents (Second Plaintiffs): Mr P J Hannan
Solicitors:
Appellant (Defendant) : Legal Services Unit,
Ministry of Fair Trading
- First Respondent (First Plaintiff) : Hammond King Touyz
Second Respondents (Second Plaintiffs): Hammond King Touyz
Nil
Case(s) also cited:
Armagas Ltd v Mundogas SA [1986] 1 AC 717
Australia & New Zealand Banking Group Ltd v Law Society of New South Wales [1976] 1 NSWLR 686
Baker v Law Institute of Victoria [1974] VR 388
Boland's Trustee v Steel Brothers & Co Ltd [1901] 1 Ch 279
Deputy Commissioner of Taxation v Mutton (1988) 12 NSWLR 104
Diamond v Bank of London & Montreal Ltd [1979] 1 QB 333
Fountain v Alexander (1982) 150 CLR 615
Hellier v Hinton, unreported; SCt of WA; Library No 980712; 14 December 1998
Heraudeau & Anor v Law Institute of Victoria [1991] 2 VR 518
HIH Casualty & General Insurance Limited v Turner & Anor (1998) 10 ANZ Insurance Cases 61-416
(Page 3)
Law Institute of Victoria v Baker [1974] 48 ALJR 160
Lloyd v Grace, Smith & Co [1912] AC 716
Lumsden v Auctioneers & Agents Committee [1999] 2 Qd R 599
Macaura v Northern Assurance Co Ltd [1925] AC 619
National Commercial Banking Corporation of Australia Ltd v Batty (1986) 160 CLR 251
Orsi v Legal Contribution Trust [1976] WAR 74
Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 120 ALR 12
Petrou v Hatgzigeorgiou (1991) Aust Torts Reports 81-071
Re Real Estate and Business Agents Supervisory Board; ex parte Cohen (1999) WASCA 47; (1999) 21 WAR 158
Secretary, Department of Foreign Affairs & Trade v Boswell (1992) 36 FCR 367
State Superannuation Board (NSW) v Federal Commissioner of Taxation (1988) 82 ALR 63
Technical Products Pty Ltd v State Government Insurance Office (Queensland) (1989) 167 CLR 45
Walker v European Electronics Pty Ltd (In Liq) (1990) 23 NSWLR 1
Workers Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642
(Page 4)
1 MURRAY J: The appellant ("the Board") is a statutory body corporate under the Real Estate and Business Agents Act 1978 (WA), s 6. By s 8A, apart from its function of advising the Minister upon the administration of the Act generally, it has the function of administering the scheme of licensing and registration of real estate and business agents established under the Act. There is a registry and inspectorate which has wide powers of investigation and enquiry under the guidance and direction of the Board. The Board itself has substantial disciplinary powers.
2 By s 107 of the Act a Real Estate and Business Agents Fidelity Guarantee Fund is established. As is usual in such cases, there are various sources of revenue available for payments into the Fidelity Fund, but the principal source of money are the sums paid to the credit of the Fund by agents and sales representatives by way of contribution or levy in accordance with the Act: s 109(a). The Fund is administered by the Board. Section 116(1) provides:
"Subject to this Act, the Fidelity Fund shall be held and applied for the purpose of reimbursing persons who may suffer pecuniary loss or loss of property by reason of any defalcation by a licensee during any period when he was the holder of a current triennial certificate, but reimbursing only to the extent of the defalcation of the licensee."
3 Section 117(1) provides:
"The Board may receive and settle any claim against the Fidelity Fund at any time after the defalcation in respect of which the claim arose has occurred, but no person is entitled, without the leave of the Board, to commence any action in relation to the Fidelity Fund, unless the Board has disallowed his claim and unless and until the claimant has exhausted all relevant rights of action and other legal remedies available against the defaulting licensee or any other person in respect of the loss suffered by the claimant."
4 If the Board allows a claim upon the Fund, by s 119 it is subrogated, to the extent of the payment made, to all rights and remedies of the claimant against the licensee in relation to whom the claim arose. The procedure would therefore appear to be that a claimant might choose to first pursue a claim upon the Fidelity Fund. If the claim is allowed, the Board has its right of subrogation to itself pursue the defaulting licensee. If the claim is refused the claimant is obliged to pursue any cause of
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- action open against the licensee and exhaust that remedy before it may commence an action against the Board for an order that the Board meet the claim made upon the Fund.
5 As to the procedure followed in this case, the evidence is that the respondents made a claim upon the Fund on 3 April 1998 to be paid, relevantly for present purposes, the sum of $100,000. The Board disallowed the claim on 31 July 1998. There is no suggestion that the respondents did not exhaust all relevant rights of action and other legal remedies available against the entity they contended was the defaulting licensee, and they then commenced an action against the Board in the District Court by a writ dated 23 December 1998. The matters in issue in that action and this appeal arose in the following way.
The Facts
6 The second respondents are husband and wife. Dr Gild is a general medical practitioner. The first respondent is the Trustee of his Family Trust. In about May or June of 1997 Dr Gild met a Ms Paterson. She was a friend of a friend of Dr Gild. She said she was a real estate agent who specialised in making a lot of money for her clients. She said she was with an agency called "Ideal Realty". She boasted of her clients and deals. Among others she mentioned the name of a Mr Young. Dr Gild told her that he was interested in making property investments and "would like a good professional real estate agent like her to represent and assist me in purchasing real estate."
7 Ideal Realty is a business name. It was used by a company called "Ideal Realty Pty Ltd". It was deregistered on 24 June 1997. Ms Paterson was a director of the company from 20 November 1988 until the date of its deregistration. She was also the secretary of the company until that date. The other director at that time was a Mr Drown. Another of the original directors was a Mr Studman. He ceased to be a director on the day before he died on 4 December 1995. At that time Ms Paterson and Mr Studman were the only shareholders. They held the issued shares equally. A Mrs Kelly was an employee of Ideal Realty. She seems to have worked there in a secretarial capacity. She described herself in evidence as the "general dogsbody". She said that until Mr Studman's death, he and Ms Paterson ran the agency together. After that its activities were controlled entirely by Ms Paterson.
8 At the relevant time Ms Paterson was registered with the Board as a real estate and business sales representative employed by Ideal Realty Pty
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- Ltd. It was that company which was the registered real estate and business agent until its company registration lapsed. A Mr Stirling, himself a licensed real estate and business agent, nominated himself to be the person in bona fide control of the business of the licensee: the Act, s 29 and s 31.
9 Very shortly after Dr Gild met Ms Paterson, she introduced to him the prospect that he might join in the purchase of vacant land in Dianella owned by the Grand Lodge of Freemasons. Ms Paterson explained that it was an investment property which could be resold quickly at a profit. She had some potential purchasers in mind. Dr Gild would be able to acquire a 25 per cent interest in the property. Ms Paterson herself would take up a similar interest and the other proposed investor was the Mr Young whom she had previously mentioned. He would take a 50 per cent interest. They should be able to obtain the property for around $4m. Dr Gild was interested. It was explained that a deposit of 10 per cent of the proposed purchase price would be required. Dr Gild's share of the deposit was therefore the sum of $100,000.
10 A company would be established to be the vehicle by which the purchase would be made. The company would be the owner of the land for the short time before it was resold and the investors' beneficial interest in the property would be represented by their shareholding in the company, which would be proportionate to the respective amounts of their investments.
11 Dr Gild was shown a form of contract for the sale of the land by offer and acceptance in which the purchaser was shown as Cityform Corporation Pty Ltd. The contract was signed on behalf of the purchaser by Ms Paterson on 3 July 1997, upon which date it was witnessed by Mrs Kelly. Cityform Corporation Pty Ltd did at that time exist. It had been registered on 18 June 1997 as a shelf company, its sole director and secretary being shown as a Mr Matcham.
12 So that the deposit might be paid, Dr Gild was asked to contribute his $100,000. He did so by cheques drawn on 22 and 24 June 1997. Most of the cheques were drawn by Hajac Nominees, although there was one drawn on the joint account maintained by Dr and Mrs Gild. The major source of the funds was a Family Trust operated by Dr Gild's parents from whom Hajac Nominees had borrowed the money. Ms Paterson told Dr Gild that the money was to be paid into an account in the name of Wavelock Pty Ltd and there held in trust so that the vendor might be assured of the financial capacity of the prospective purchaser. She said
(Page 7)
- that this account was the one used by Ideal Realty to hold deposits in respect of real estate transactions pending acceptance of offers by vendors. Wavelock Pty Ltd did at that time exist. There were three issued shares, two of which were held by Ms Paterson and the other by a Mr Cohen. Ms Paterson and Mr Cohen were the directors of the company and the secretary was shown as Mr Studman, even after his death in 1995.
13 Shortly after the $100,000 was paid Dr Gild obtained a photocopy of the two deposit slips by way of receipt and a letter of receipt signed by Ms Paterson, but undated, under the letterhead of Glendower House Pty Ltd. That letter described the proposed purchase generally as I have set it out, mentioned that the property would be suitable for the construction of a retirement village and confirmed that the proposal was that upon acceptance of the offer to purchase "the parcel of land will be on-sold to a known development and building company for the sum of $4.7m." The attraction of such a deal if it could be brought to fruition is obvious enough - a profit of least 100 per cent made on the $100,000 invested in a very short space of time. Glendower House Pty Ltd was yet another company which existed at that time, the shares in which were held equally by Ms Paterson and Mr Studman, or more strictly, his estate. Again, despite the death of Mr Studman, he and Ms Paterson were shown as the directors and she was the secretary of the company.
14 I should note in passing that the respondents' contribution to the proposed transaction was made by 24 June, the very day upon which Ideal Realty Pty Ltd was deregistered, but that, I think, is a matter of no consequence. The purported transaction, whatever be its true character relative to the statutory scheme of the Real Estate and Business Agents Act, was then in place.
15 However, Dr Gild did become concerned that the transaction did not appear to be proceeding further. He expressed his concern to Ms Paterson. She arranged a lunchtime meeting with the vendors' representative, a Mr Ellis. Mr Ellis remembered the meeting and accepts that he may have then said, as was the case, that the owner of the property still had the offer under consideration and that there was a more than 50 per cent chance that a sale would proceed. In the end, he says, the offer was declined. He does not say when that occurred.
16 However, Dr Gild was reassured, although Mr Young, the other proposed investor whom he was told would attend, did not do so. Mr Young for his part confirms that he was engaged in discussions about the proposed purchase by Ms Paterson. He made no payment towards the
(Page 8)
- deposit. He says that the details with which he was provided by Ms Paterson were "insufficient for me to proceed". He lost interest in the proposed transaction and had nothing further to do with it. He makes no mention of any invitation to a luncheon meeting.
17 Dr Gild continued to enquire of Ms Paterson how the matter was proceeding. She continued to reassure him. Finally, in December 1997, after his return from holidays, Dr Gild was shown a copy of an article in a newspaper which suggested that Ms Paterson had defrauded Mr Cohen, her fellow director in Wavelock Pty Ltd. When he took this up with Ms Paterson she said that there was no truth in the allegations and after consulting her solicitors, she would take proceedings against Cohen. In the meantime, she could not return to Dr Gild his $100,000 as he demanded because, while legal proceedings between her and Cohen were continuing, the money must remain in Wavelock's account.
The Proceedings Below
18 Dr Gild instructed solicitors and obtained judgment by default against Wavelock Pty Ltd, inter alia for the payment of the $100,000, but investigation has shown that the company is without the means to satisfy any portion of the judgment debt. Ms Paterson, it appears, has been declared bankrupt and as I have mentioned, it is accepted that the respondents have, as required by the Act, s 117, exhausted all relevant rights of action and other legal remedies available to them in respect to the loss suffered.
19 Their claim upon the Fidelity Fund was rejected by the Board, which advised by letter dated 19 August 1998 that:
"The Board formed the view that in the absence of an authority from the vendor to effect the sale of the property, the defalcation appeared to be that of Ms Paterson. Although Ms Paterson was a registered sales representative for Ideal Realty Pty Ltd there is no evidence to indicate that the principal of Ideal Realty Pty Ltd was employed or had knowledge of the dealings between your client and Ms Paterson. The Board was satisfied that the defalcation occurred in Ms Paterson's personal capacity and not in the course of her employment with the licensee, Ideal Realty Pty Ltd. Accordingly, the Board formed the view that a proper basis of recovery under the fidelity fund legislation had not been established."
(Page 9)
20 In the District Court, however, Wisbey J took a contrary view and gave judgment for the respondents in the sum of $100,000, to be paid out of the fund. His Honour found that there was a defalcation because Ms Paterson received the money in her capacity as a sales representative for Ideal Realty Pty Ltd. The money should have been paid into a trust account maintained by the licensee but was not, in a course of fraudulent or dishonest dealing which amounted to a defalcation. That defalcation was, his Honour considered, properly to be attributed to the licensee, again because Paterson received it as a real estate sales person and she operated as such under the umbrella of Ideal Realty Pty Ltd, having the effective sole conduct of the real estate business of that licensee.
21 Further, his Honour found that the defalcation did occur in the course of the business of the licensee, despite the lack of instructions to sell the land by the vendor. His Honour considered it to be the case that a real estate agent might act for a vendor or purchaser without holding a signed authority to act. In this case his Honour concluded that Ms Paterson was acting in her capacity as a sales representative employed by the licensee Ideal Realty Pty Ltd, and in all the circumstances it was proper to regard the business as being done by the licensed real estate agent of which it appeared Ms Paterson was a director and the manager. As the defalcation resulted in pecuniary loss to the respondents, it followed that they should recover their loss from the Fidelity Fund.
The Appeal
22 It is against that judgment that the present appeal is brought, alleging that his Honour erred at all points of his reasoning which I have attempted inadequately to summarise above. It is contended that there was no defalcation because there was no real estate transaction, but only the making of payments by the respondents to receive an issue of shares in the company Cityform Corporation Pty Ltd. Further it is argued that the Board was right to consider that there was no involvement of the licensed real estate agent because there was no signed authority provided by the purchasers, without which no commission, reward or other valuable consideration in respect of the licensee's real estate services could be charged.
23 In truth, it is argued, it is proper to see the transaction as one in which Paterson was involved on her own account in a form of joint venture which she was hoping to establish. Under the Act, it is submitted, a sales representative may not have any direct or indirect interest in the transaction other than to be remunerated as an agent, unless the principal
(Page 10)
- has given prior written consent. The money was paid into Wavelock Pty Ltd which had no connection with Ideal Realty Pty Ltd and the Judge "should have found that any misappropriation of funds by Paterson had occurred in circumstances other than in the course of business undertaken by Ideal Realty Pty Ltd."
Defalcation
24 Returning then to the requirements of s 116, the word "defalcation" appears in the Act to be given its ordinary meaning. Section 4(1) defines the term "defalcation by a licensee" as including "criminal or fraudulent conduct" by a licensee, the servants or agents of the licensee, a partner in the business of the licensee, a partner in a firm or, where the licensee is a body corporate, a person who is a director, officer, servant or agent of the body corporate "in the course of the business of the licensee and from which arises pecuniary loss or loss of property to any other person". The bulk of the definition is clearly given over to dealing with the various circumstances in which a defalcation may be attributed to a licensee for the purposes of the Act. That part of the definition which defines the term "defalcation" is that which refers to criminal or fraudulent conduct from which arises pecuniary loss or loss of property to another.
25 It seems to me to be abundantly clear that there was in this case a defalcation by Ms Paterson. There was evidence that she was not genuine when she told Dr Gild that she needed his share of the proposed deposit so that the full amount of the deposit could be paid into Wavelock Pty Ltd and there held in trust to demonstrate to the proposed vendor that the proposed purchaser had the financial substance to complete the purchase. Mr Young did not contribute $200,000 and there is no evidence that Ms Paterson contributed any money. Nor was the money held in trust. Wavelock Pty Ltd had no means to satisfy the judgment obtained by the respondents. Whether or not Ms Paterson at any stage genuinely hoped or proposed that the purchase could be made, there is little doubt that the evidence before Wisbey J revealed that, as his Honour put it, "Paterson misappropriated the money". She did so when she received the cheques and paid them into the account of Wavelock Pty Ltd on 22 and 24 June 1997. There is evidence which strongly suggests that her behaviour was certainly fraudulent and dishonest and it is unnecessary to consider whether there is evidence of the commission of the criminal offence of fraud, contrary to the Criminal Code (WA), s 409.
26 I note that when it rejected the respondents' claim the Board itself took no issue with the proposition that there had been a defalcation.
(Page 11)
- Certainly there can be no issue that Paterson's fraudulent conduct caused pecuniary loss to the respondents. Her fraudulent conduct all occurred before Ideal Realty Pty Ltd was deregistered as a company. Further, as we have seen, the money was paid into the account of Wavelock Pty Ltd on 22 and 24 June 1997 and it was on the latter date that the deregistration occurred. In my opinion the loss was suffered by the respondents when the money was paid to Ms Paterson and paid by her into the account of Wavelock Pty Ltd. That arguably all occurred before deregistration, but even if it is arguable that the loss may have been sustained by the respondents in part after Ideal Realty Pty Ltd was deregistered, that would not negate the conclusion that there had been defalcation by a licensee in the way of fraudulent conduct from which arose pecuniary loss.
Was the defalcation by a licensee?
27 As has been seen, Ms Paterson was at the relevant time a director, and indeed actually the sole operator, of Ideal Realty Pty Ltd, which was the licensee. Her defalcation was therefore that of the licensee in accordance with the definition contained in s 4(1) if it was "in the course of the business of the licensee". There was ample evidence to support the finding of the trial Judge that she acted in that capacity when she obtained and misappropriated the $100,000.
Was the defalcation in the course of the business of the licensee?
28 Ideal Realty Pty Ltd was licensed as both a real estate agent and a business agent under the Act. In s 4(1) there is a definition of "business" which, for present purposes, makes the business of the licensee its business as either a business agent or real estate agent. A business agent is a person whose business is to act as agent for consideration in respect of a "business transaction". Without going to the definition of that term in s 4(1), in my opinion it is clear that the defalcation in this case did not occur in the course of the business of Ideal Realty Pty Ltd as a business agent in respect of a business transaction.
29 I turn then to the question whether the defalcation was in the course of the business of the licensee as a "real estate agent". That term is also defined in s 4(1) relevantly to mean:
"a person whose business either alone or as part of or in connection with any other business, is to act as agent for consideration in money or money's worth, as commission,
(Page 12)
- reward or remuneration, in respect of a real estate transaction as defined by this section…."
30 The term "real estate transaction" is, so far as relevant, itself defined in s 4(1) to mean:
"a sale, exchange, or other disposal and a purchase, exchange, or other acquisition of real estate and any exclusive right whether deriving from the ownership of a share or interest in a body corporate or partnership, or otherwise, to the use or occupation of real estate…."
31 In my opinion it is clear that the defalcation of Paterson, being that of Ideal Realty Pty Ltd, the licensed agent, was in the course of the business of the licensee as a real estate agent. That was the entity whom she purported to represent and did in fact represent and it mattered not, in my opinion, that she proposed also in her personal capacity to take a share of the transaction in question. It is undoubtedly the case that the business of Ideal Realty Pty Ltd fell within the definition of a "real estate agent" and the only question was whether it was in the course of that business that the defalcation occurred.
32 That boiled down to the question whether the particular transaction which was proposed would fall within the definition of a "real estate transaction" and in my opinion it did, simply because it involved the acquisition of real estate.
33 In my opinion it is not to the point that the respondents themselves would not personally or directly acquire title to or an interest in the real estate because, in any event, it appears to have been proposed that they would acquire the exclusive right to the use or occupation of the land derived from the ownership of a share or interest in the body corporate, Cityform Corporation Pty Ltd, which was to be the purchaser and would therefore acquire all the rights of ownership, including the exclusive right to the use and occupation of the land. It is of no moment in my opinion, under the terms of the definition, that that exclusive right of use or occupation would be shared in common with other shareholders of the company which was to be the registered proprietor.
34 In the final analysis it seems to me to be sufficient that the defalcation occurred in circumstances which made it that of the licensee because it was by a director of the company, Ideal Realty Pty Ltd, and that it was in the course of the business of the licensee because Paterson acted as the licensed agent in so far as pecuniary loss was caused to the
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- respondents, in respect of a real estate transaction which involved the acquisition of land. It is not necessary, in my opinion, that the land or any interest therein be acquired by the respondents personally. It was sufficient that their interest would be acquired by means of their interest in the company which was to be the purchaser. In short, there was a defalcation by a licensee established in this case by which pecuniary loss was caused to the respondents in respect of which they are entitled to be reimbursed. In my opinion the appeal should be dismissed.
35 PARKER J: I agree that this appeal should be dismissed for the reasons given by Murray J.
36 WHEELER J: I have had the opportunity of reading the draft reasons of Murray J and agree that the appeal should be dismissed. I have nothing further to add.
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