Cooper v JLRT [2014] QCAT 261

CITATION: Cooper v JLRT Pty Ltd [2014] QCAT 261 PARTIES: Stephen Cooper Teresa Cooper (Applicants) v JLRT Pty Ltd James Lyons Realty Pty Ltd James Lyons (Respondents) APPLICATION NUMBER: GAR443-14 MATTER TYPE: Other civil dispute matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe, OAM DELIVERED ON: 10 June 2014 DELIVERED AT: Brisbane ORDERS MADE: 1. Pursuant to s 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $63,941. 2. Pursuant to s 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period, the Chief Executive must pay to Stephen and Teresa Cooper the sum of $63,941 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 Act 2000, James Lyons Realty Pty Ltd and James Robert Lyons are named as the persons responsible for the financial loss of Stephen and Teresa Cooper. 4. Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, James Lyons Realty Pty Ltd and James Robert Lyons are liable (and if more than one, jointly and severally) to -- 1 of 5 -- 2 reimburse the Claim Fund by paying the sum of $63,941 to the Chief Executive, Department of Justice and Attorney General. CATCHWORDS: PROPERTY AGENT – CLAIM FROM THE FUND – where deposit for expression of interest paid to agent – where purchasers claimed return of deposit – where no funds in account – whether misappropriation of funds – who was responsible person Property Agents and Motor Dealers Act 2000, ss 470, 488, 490(2) APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION [1] In November 2012, Mr and Mrs Cooper saw a sign for the construction and sale of business studios at Tingalpa. The agent was Chase Commercial – James and Ben Lyons. [2] Mr Cooper contacted James Lyons. On 9 January 2013, he signed an expression of interest for the purchase of a unit and deposited $5,000 into the Chase Commercial trust account. [3] Mr Cooper followed up the expression of interest by a phone call on 19 February 2013. Later that day, Lyons told Mr Cooper there was a new expression of interest and the developer was asking for 10% of the purchase price to secure interest. [4] On 22 February 2013, Mr and Mrs Cooper transferred $15,000 to Chase Commercial trust account. [5] The $20,000 paid to Chase Commercial was returned to Mr and Mrs Cooper on 27 February 2013. [6] On 23 February 2013, and again 27 February 2013, Mr and Mrs Cooper paid $20,000 to James Lyons Realty Pty Ltd trust account in accordance with the new expression of interest requirements. [7] Mr and Mrs Cooper made a final payment of $19,400 to James Lyons Realty Pty Ltd on 1 March 2013. Mr and Mrs Cooper had neither a signed expression of interest nor trust account receipts. -- 2 of 5 -- 3 [8] Construction commenced. Mr and Mrs Cooper observed that changes they asked for were incorporated into the building, so they were not concerned about the lack of paperwork. [9] In June 2013, Mr and Mrs Cooper received information that put them on notice that there might be a problem with their funds. By their lawyer’s letter of 17 June 2013 to Lyons, Chase Commercial and the developer’s agent, Mr and Mrs Cooper asked for confirmation that James Lyons Realty Pty Ltd held their funds in trust. They asked for a copy of the expression of interest signed by the developer. They did not receive a response from Lyons. Neither Chase Commercial nor the developer’s agent was aware of the amended expression of interest or Mr and Mrs Cooper’s deposits. Mr and Mrs Cooper have not recovered their funds. [10] Mr and Mrs Cooper made a claim on the statutory claim fund for $63,941. Lyons and James Lyons Realty Pty Ltd received notice of the claim [11] In considering a claim against the fund, I must be satisfied1 that an event as mentioned in section 470(1) happened and that Mr and Mrs Cooper suffered financial loss because of the event. [12] I must also take into account any amount Mr and Mrs Cooper might reasonably have received or recovered if not for their neglect or default and any amount ordered to be paid to Mr and Mrs Cooper as compensation to the claimant under sections 530A, 572D or 592A of PAMDA2. [13] Finally, in allowing a claim I must decide the amount of Mr and Mrs Cooper’s financial loss and name the person who is liable for the loss3. The event [14] The stealing, misappropriation or misapplication by an agent of property entrusted to that person as agent for someone else in their capacity as agent is an “event” under s 470(1)(e). [15] I have evidence of the three transfers by Mr and Mrs Cooper to an account in the name of James Lyons Realty Pty Ltd. The total of the transfers is $59,400. I have a copy of the bank statements from James Lyons Realty Pty Ltd which show the receipt of that money. They also show a series of internet transfers, none of which was authorised by Mr and Mrs Cooper. The material before me does not disclose the fate of the missing funds. [16] Misappropriation of funds is an “event” under s 470(1). I am satisfied that Lyons misappropriated the trust account money and that this is an “event” within s 470(1). 1 Property Agents and Motor Dealers Act 2000 (Qld) s 488(2). 2 Ibid s 488(3)(a). 3 Ibid s 488(3)(b) and (c). -- 3 of 5 -- 4 Financial loss [17] I am satisfied that Mr and Mrs Cooper suffered a financial loss because of Lyons breach of s 470(1)(e). [18] Mr and Mrs Cooper have claimed the deposit to Lyons plus $4,541.27 legal costs they incurred in attempting to recover their money. They have provided a copy of their lawyers invoice, together with the narrative, and copies of much of the correspondence sent on their behalf. I am satisfied that Mr and Mrs Cooper reasonably incurred these costs and that they are properly claimed from the fund. [19] I am further satisfied that $63,941 is a proper assessment of Mr and Mrs Cooper’s loss. Other matters [20] I am required to take into account any amount Mr and Mrs Cooper may have received or recovered if not for their neglect or default. [21] There is no evidence to suggest that Mr and Mrs Cooper would have been able to receive or recover any amount to reduce their loss if they had taken any different action. Who is liable for the loss? [22] The funds were paid to James Lyons Realty Pty Ltd. That entity is responsible for the loss. [23] Section 490(2) provides that a person is liable to reimburse the fund if the person is: a) A responsible person; b) If the responsible person was a corporation, each person who was an executive officer of the corporation. [24] As a director of James Lyons Realty Pty Ltd, James Robert Lyons was an executive officer of the company. Because I have found that the company is a responsible person, it follows that he must also be a responsible person. [25] The only connection between James Lyons Realty Pty Ltd and JRLT Pty Ltd is that the latter was the sole shareholder of the former. There is no evidence that JRLT Pty Ltd received any of the money or that it was actively involved in the transaction. It is not a responsible person within the meaning of s 490(2). Orders [26] Pursuant to s 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $63,941. -- 4 of 5 -- 5 [27] Pursuant to s 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period, the Chief Executive must pay to Mr and Mrs Cooper the sum of $63,941 from the Claim Fund, and, if there is an appeal, payment must not be made until after the appeal is finally decided. [28] Pursuant to s 488(3)(c) of the Property Agents and Motor Dealers Act 2000, James Lyons Realty Pty Ltd and James Robert Lyons are named as the persons responsible for the financial loss of Mr and Mrs Cooper. [29] Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, James Lyons Realty Pty Ltd and James Robert Lyons are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $63,941 to the Chief Executive, Department of Justice and Attorney General. -- 5 of 5 --