Crown Estates Pty Ltd v Fitzpatrick [2015] QCAT 37

CITATION: Crown Estates Pty Ltd v Fitzpatrick [2015] QCAT 37 PARTIES: Crown Estates Pty Ltd t/as Total Property Management (Applicant) v Michelle Fitzpatrick (Respondent) APPLICATION NUMBER: MCDO1384-14 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 30 September 2014 HEARD AT: Brisbane DECISION OF: Adjudicator Bertelsen DELIVERED ON: 29 January 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. The application is dismissed for lack of jurisdiction. 2. The counter-application is dismissed. CATCHWORDS: Minor civil dispute jurisdiction – debt – principal and agent – liability for injury – assignment of appointment of agent – agreement to assignment – substantial compliance – efficacy of continuity of appointment Property Agents and Motor Dealers Act 2000 (Qld), s 135A, s 140 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 11 APPEARANCES: APPLICANT: Peter Watts, director, Crown Estates Pty Ltd RESPONDENT: Michelle Fitzpatrick -- 1 of 8 -- 2 REPRESENTATIVES: APPLICANT: Crown Estates Pty Ltd represented by Mr Makelainen, solicitor of Craig Ray & Associates RESPONDENT: Michelle Fitzpatrick represented by Mr Abaza, solicitor of Andrew Abaza Solicitors REASONS FOR DECISION Applications [1] By application filed 26 June 2014 the applicant Total Property Management seeks the sum of $5,000 being the deductible paid by it consequent upon the settlement of a personal injuries claim brought by the tenant of premises 161 Thynne Road, Morningside and in respect of which Total Property Management asserts it is entitled to be indemnified by the respondent Ms Fitzpatrick as owner pursuant to an appointment to agent. [2] By response and counter-application filed 7 August 2014 the respondent Ms Fitzpatrick claimed $25,000 in respect of unaccounted for bond monies and commissions to which she asserted Total Property Management had no entitlement pursuant to s 140 of the Property Agents and Motor Dealers Act 2000 (Qld) (‘PAMDA’). Background and Evidence [3] Ms Fitzpatrick owned three properties: a) 161 Thynne Road, Morningside; b) 9 Wambaya Street, Belmont; and c) 3 Thredbo Close, Belmont. [4] As of 2006, the rental of these three properties was being managed by Bowden Partners Pty Ltd as trustee for Bowden Partners Trust of Wynnum Road, Morningside pursuant to a PAMDA Form 20A appointment of agent. [5] The appointment of agent applicable to 161 Thynne Road, Morningside stated at clause 11.1 The lessor indemnifies the agent and therefore must pay the agent for liability, loss or costs the agent suffers or incurs from all actions, claims, demands, damages and expenses arising out of or in respect of its capacity as agent of the lessor. [6] On 18 April 2007 Bowden Partners wrote to Ms Fitzpatrick informing her relevantly: As of 15 May 2007 Bowden Partners will be changing company structure and the management of your property will change to Crown Estates Pty Ltd t/as Bowden Partners rather than Bowden & Partners Trust t/as Bowden -- 2 of 8 -- 3 Partners. This structural change will in no way change the day to day functioning of the existing property management department. All contact details for Bowden Partners will remain the same. Your property management team will remain unaltered. Due to legislation, we are required to inform you of these changes and we enclose a form from the REIQ notifying you of the company change. [7] The form referred to was a document entitled ‘Assignment of Appointment’; referred to the property situated 161 Thynne Road, Morningside; stated the appointment of agent was being transferred to Crown Estates Pty Ltd as assignee as of 15 May 2007; that: If the agent does not receive this notice by the date of the transfer it is taken to be that the client has agreed to the transfer of this appointment to the proposed assignee. [8] The assignment of appointment was apparently signed by one Terry Bowden for Bowden & Partners. According to Mr Watts, director of Crown Estates Pty Ltd the assignment of appointment was a pre-printed REIQ form. He said Mr Bowden as seller of the Bowden & Partners business retained McCullough Robertson as his sale lawyers. Mr Watts being a lawyer himself Crown Estates Pty Ltd acted on its own behalf in its purchase. [9] Ms Fitzpatrick recalled receiving the letter of 18 April 2007 but said she was away on holiday at the time and had health issues. [10] Thereafter, according to Mr Watts, director of Crown Estates Pty Ltd trading as Total Property Management Ms Fitzpatrick utilised the services of his agency at the Morningside premises as Bowden Partners through to 2009 and thereafter as Total Property Management the rebranded trading name through to 2011 at which time the Morningside agency was closed with the management of Ms Fitzpatrick’s three properties and others being moved to a single location at Caxton Street, Paddington. Ms Fitzpatrick retained Bowden Partners/Total Property Management as her property managers for a period of some 6 years 4 months from May 2007 through September 2013 on which date by written notice she terminated Total Property Management’s management of her three properties. Indemnity Claim for $5,000 [11] The property 161 Thynne Road, Morningside is an old style pre-war wooden house. During a routine inspection on 18 March 2011 by Crown Estates representative Tahnee Loring a number of maintenance concerns were identified one of which was ‘ceiling leaks from corner of toilet room’. [12] Shortly after the inspection, Ms Loring contacted Ms Fitzpatrick regarding amongst other things the leak. Ms Loring was told to organise a quote as Ms Fitzpatrick wanted to know the cost before proceeding. On 5 April 2011 First Response Plumbing was requested to quote on the leak in the toilet room. A quote for the repair was received from First Response Plumbing on 11 May 2011. According to Ms Loring the reason for the delay in the quote was because First Response Plumbing ‘could not get in -- 3 of 8 -- 4 contact with the tenants’. On 12 May 2011, the quote was emailed to Ms Fitzpatrick seeking approval for repairs to be carried out. On 14 May 2011 Ms Fitzpatrick emailed Ms Loring approving the quote. On 26 May 2011 a work order was sent to First Response Plumbing to effect repairs. Ms Fitzpatrick stated that she had found out through loss adjusters that water ingress in the toilet room had been the subject of a tenant complaint back on 15 April 2010. A copy of the tenant maintenance request form dated 15 April 2010 was produced to the Tribunal. [13] In the meantime on 9 May 2011 tenant Jessica Page slipped and fell on the toilet floor injuring herself. Ms Page subsequently brought a personal injury claim in the District Court against Crown Estates and Ms Fitzpatrick (and their respective insurers). The claim was settled with each of Crown Estates and Ms Fitzpatrick through their insurers contributing proportionately to the settlement sum. [14] Ms Makelainen for Crown Estates argued that the settlement of the District Court claim excluded liability for the claim for the deductible; that QCAT was not determining the claim for negligence and could not look beyond the terms of settlement; that Crown Estates in paying the excess on its own insurance policy, pursuant to the appointment of agent, legitimately imposed a liability on Ms Fitzpatrick. He asserted the claim was within QCAT’s jurisdiction in that it was a contractual dispute whether or not a valid assignment had occurred. [15] Mr Abaza for Ms Fitzpatrick asserted that Crown Estates claim was not a debt pursuant to s 11 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’); that a claim under an indemnity was not a claim to recover a debt or liquidated demand of money because such was dependent on an event of loss not caused or contributed to by the person seeking to rely on the indemnity. Ms Fitzpatrick’s Claim against Total Property Management - $25,000 [16] Ms Fitzpatrick’s claim for bond and commissions was initially premised on there being no licenced agent entitled to retain expenses for performance of activities for which a licence was required. [17] An appointment of agent in respect of 161 Thynne Road, Morningside was produced to the Tribunal. It was a continuing appointment dated 30 March 2006. [18] Ms Fitzpatrick did not take issue with the initial appointment of agent in 2006 but rather the assignment in April 2007. [19] Section 135A of PAMDA provided for present purposes that: (3) At least 14 days before the real estate agent assigns the appointments the agent must give each client written notice of the proposed assignment. (4) The notice must state the following — -- 4 of 8 -- 5 (a) the proposed assignee’s name; (b) the appointments are to be assigned without changing the terms of the appointment; … (5) If a client agrees to the assignment and the real estate agent assigns the appointment under this section, the appointment is taken, for section 133, to be an appointment by the client of the proposed assignee and to continue to have effect according to its terms. [20] Despite recalling receiving Bowden Partners letter of 18 April 2007 enclosing the assignment of appointment she said she never agreed to the assignment. Ms Fitzpatrick stated that despite a search by Mr Abaza there was no provision in PAMDA which provided in terms ‘if the agent does not receive this notice by the date of the transfer, it is taken to be that the client has agreed to the transfer of this appointment of the proposed assignee’. [21] Mr Abaza pointed to Mr Watts being a director of Crown Estates Pty Ltd at the time of assignment and being a practicing solicitor at the same time and subsequently so to 2010. [22] Mr Abaza also pointed out apparent irregularities in the ABN numbers applicable to various entities Crown Estates Pty Ltd, Crown Estates (Sales) Pty Ltd and trusts. [23] An historical business name extract produced indicated the holder of the business name Total Property Management as being Crown Estates (Sales) Pty Ltd for the period 1 January 2007 to 17 November 2010 and Crown Estates Pty Ltd from 1 January 2010 onwards. [24] The authenticity of the assignment of appointment was questioned. Ms Fitzpatrick stated that she was never really happy with Crown Estates management of her properties; that she felt she was not being looked after properly. [25] Mr Watts stated that his and his agencies relationship with Ms Fitzpatrick was good for years; that the house 161 Thynne Road, Morningside was a feature article in his newsletter in mid-2011. [26] Ms Fitzpatrick further claimed $690, which she said was part of bond monies recovered for house clean-up for 161 Thynne Road, Morningside paid by her to Brizzy Rubbish Removals, but which was not then accounted for to her on receipt of that sum by Crown Estates from the bond. A tax invoice dated 25 May 2011 for $690 directed to Total Property Management was produced to the Tribunal. Also produced was Crown Estates statement of debits and credits for the period 30 June 2011 to 29 July 2011 directed to Ms Fitzpatrick and recording that on 6 July 2011 a payment of $690 was made from rents received to Brizzy Rubbish Removals. Conclusions -- 5 of 8 -- 6 Indemnity Claim for $5,000 [27] A debt for the purposes of the minor civil dispute jurisdiction is a sum of money owning by one party to the other pursuant to and arising out of an agreement or acknowledgement to pay as between the parties. Here the alleged liability arises out of Crown Estates liability to pay its own insurer a deductible. Ms Fitzpatrick was never privy to contractual arrangements between Crown Estates and its insurer a propos a policy deductible. Such policy deductible could have been $1,000 or $10,000. Was it the case that Ms Fitzpatrick pursuant to a statutory appointment of agent was to be liable for any sum of money that might be payable by Crown Estates to a third party i.e. its own insurer? Such is not in the nature of a debt as contemplated for determination as a minor civil dispute. [28] Clause 11 of the appointment of agent clearly contemplates liability for loss arising out of the direct relationship between lessor and agent not as between agent and its insurers such as to transfer that liability to the lessor Ms Fitzpatrick in this instance. [29] Additionally the settlement of Ms Page’s District Court action brought about finality of proportionate liability of each of the parties. The fact that it was in respect of a third party claim is of no consequence in that the admitted liability as between the parties through their insurers was finalised once and for all. If additional liability was being pursued it could have and should have been included as part of the liability proportions on the settlement of Ms Page’s claim for the reason that was the event (Ms Page’s fall) that gave rise to the deductible in the first place. [30] It is not good enough to come along after the event and say there is now a further adjustment to be made in respect of the liability of each of the parties. [31] Even if it could be successfully argued that the claim was within the minor civil dispute jurisdiction there was delay in attending to the leak in the toilet room. Any sort of leak would suggest a degree of urgency. Here the leak was identified on 18 March 2011 but the work order for repair was not issued until 26 May 2011 over two months later. Taking into account that there was an initial complaint with respect to the leak made on 15 April 2010 as evidenced by the tenant maintenance request form Crown Estates dilatory approach is inexcusable. In any event, a notice of entry could easily have been issued to gain access for prompt assessment of the cost of repairs. It is not reasonable to expect an indemnity clause to stand (even if one assumes clause 11 has that effect) in circumstances where Crown Estates failed to act promptly to attend to a maintenance issue. It is trite to say that routine inspections identifying maintenance issues are designed to avoid claims by tenants of the type that in fact occurred here. [32] The Tribunal finds there is no jurisdiction to hear Crown Estates claim; that even if there was Crown Estates by virtue of its being a party to the deed of settlement in respect of Ms Page’s claim and the admitted proportionate -- 6 of 8 -- 7 liability accepted by each of Crown Estates and Ms Fitzpatrick the issue of liability arising pursuant to the appointment of agent was fully finalised. Finally rejection of the claim for the deductible is capped off by Crown Estates failure to act promptly and thus avoid a claim by Ms Page in the first place. Ms Fitzpatrick’s Counter-Claim [33] The liability for payment of bond and commission moneys arose according to Ms Fitzpatrick because there was no effective assignment of appointment in April/May 2007; that it was only ever a proposal that was never accepted. [34] The letter of 18 April 2007 was clear. It was received by Ms Fitzpatrick. It stated that ‘management of your property will change to Crown Estates Pty Ltd’. The letter made it clear that life would go on as normal; that due to legislation an REIQ form notifying of changes was enclosed. The form was an assignment of appointment. [35] In accord with s 135A PAMDA the assignment was given 14 days beforehand, recorded the assignee’s name and stated that the terms of appointment would remain unchanged. If Ms Fitzpatrick agreed the assignment would proceed. In this regard the assignment stated: If the agent does not receive this notice by the date of the transfer, it is taken to be that the client has agreed to the transfer of this appointment to the proposed assignee. [36] On Ms Fitzpatrick’s own evidence there was no provision in PAMDA for such a term. In fact PAMDA said nothing about how agreement to an assignment was to be effected. It seems the void was filled by the REIQ providing a form of assignment. The Tribunal accepts that more than likely Ms Fitzpatrick received the assignment of appointment for the reason that Crown Estates Pty Ltd took over management of her properties pursuant to a sale agreement from May 2007 and which continued for a period of 6 years and 4 months to 30 September 2013. As a matter of common sense one can only conclude that if Ms Fitzpatrick did not overtly instruct Crown Estates to continue management of her properties she clearly acquiesced in the management of her properties by Crown Estates because with no objection from her it did so for the next 6 years and 4 months. Her conduct indicated agreement to the assignment. Her engagement of Crown Estates in that time was self-evident of a continuing principal and agent relationship. [37] Ms Fitzpatrick gave evidence that during the course of the six plus years she felt she was not being looked after properly; that she intended to move on. Mr Watts thought his agencies relationship with Ms Fitzpatrick was good. He featured her house in his newsletter. [38] It seems that the relationship soured after the leaking toilet episode of 2011. No evidence was produced to back up Ms Fitzpatrick’s suggestion that she was not being looked after properly. As an owner deriving rent -- 7 of 8 -- 8 from three properties her conduct would appear illogical and contradictory certainly not businesslike. [39] The historical business name extract produced generally accords with Mr Watts statements namely that Crown Estates Pty Ltd traded as Total Property Management after 2009. The extract records Crown Estates Pty Ltd as the business name holder of Total Property Management from 1 January 2010. [40] Discrepancies in ABN’s might have been indicative of some confused accounting somewhere along the line but no more. The company Crown Estates Pty Ltd was incorporated in 2003. It was clearly the assignee of the property management rights in this instance. Mr Watts directorship of Crown Estates Pty Ltd whilst he may have been at the same time a practicing solicitor is not the issue here. [41] Some argument took place with respect to an alleged failure on the part of Crown Estates to account to Ms Fitzpatrick for $690 on 6 July 2011. All that was produced to the Tribunal was Crown Estates statement for the period 30 June 2011 to 29 July 2011 recording payment of the Brizzy Rubbish Removals invoice for $690 on 6 July 2011. No evidence was produced to the Tribunal to support the contention that Crown Estates had retained $690 from the bond if ever or when ever it might have been paid to Crown Estates. In fact there was simply no evidence as to the eventual disposition of the bond moneys. That being the case there is no basis here for Crown Estates to pay $690 to Ms Fitzpatrick. [42] The Tribunal concludes that commissions were properly payable and that on the evidence the case for unaccounted for bond has not been established. -- 8 of 8 --