Cukovski v S W Flanagan Pty Ltd and Ors [2012] QCAT 667

CITATION: Cukovski v S W Flanagan Pty Ltd and Ors [2012] QCAT 667 PARTIES: Boris Cukovski v S W Flanagan Pty Ltd (externally administered) Stephen Flanagan Donna Lee Flanagan APPLICATION NUMBER: OCL067-12 MATTER TYPE: Other civil dispute matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Peta Stilgoe, Senior Member DELIVERED ON: 19 December 2012 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 $22,097.23. [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 Boris Cukovski the sum of $22,097.23 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, S W Flanagan Pty Ltd and Stephen Flanagan are named as the persons responsible for the financial loss of Boris Cukovski. [4] Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, S W Flanagan Pty Ltd and Stephen -- 1 of 4 -- 2 Flanagan are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $22,097.23 to the Chief Executive, Department of Justice and Attorney General. CATCHWORDS: PROPERTY AGENT – where misappropriation of trust money – where property manager no longer a licensee – where no evidence property manager continued on that role or continued to act as licensee – whether property manager liable for the loss 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] Mr Cukovski appointed Mossman First National Real Estate as his managing agent for a block of shops in Mossman. [2] Mossman First National Real Estate was the trading name of S W Flanagan Pty Ltd. Mr Flanagan was the sole director of the company. The company held a corporate license from May 2006 to May 2009. Mr Flanagan was a real estate principal from May 2009 to May 2011. Ms Flanagan was a real estate salesperson, and property manager, from November 2006 to November 2009. A liquidator was appointed to the company on 9 June 2010. [3] Mr Cukovski says that Mossman First National Real Estate has collected rent on his behalf and not paid it to him. He also says that expenses that were marked as paid were not, in fact, paid. He made a claim on the statutory claim fund for $22,412.85. Each of the company, Mr Flanagan and Ms Flanagan received notice of the claim. [4] In considering a claim against the fund, I must be satisfied1 that an event as mentioned in section 470(1) happened and that Mr Cukovski suffered financial loss because of the event. [5] I must also take into account any amount Mr Cukovski might reasonably have received or recovered if not for his neglect or default and any amount 1 Section 488(2) Property Agents and Motor Dealers Act 2000. -- 2 of 4 -- 3 ordered to be paid to Mr Cukovski as compensation to the claimant under sections 530A, 572D or 592A of PAMDA2. [6] Finally, in allowing a claim I must decide the amount of Mr Cukovski’s financial loss and name the person who is liable for the loss3. The event [7] 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). [8] The Chief Executive appointed Mr Sweeney of Calabro SV Consulting as receiver of the trust property on 27 May 2011. Mr van der Velde, of the same firm, took over as receiver on 28 October 2011. Mr van der Velde has provided a report to the Chief Executive dated 25 November 2012 which shows: a) Six deposits from tenants, totalling $10,029.90 were not recorded in the ledger. b) $9,502.04 in receipts which were due and owing to Mr Cukovski were not paid to him. c) $3,029.02 was deducted from Mr Cukovski’s ledger for payment of electricity but the payment was not made. [9] I am satisfied that there has been a misappropriation or misapplication of trust money which is an “event” within s 470(1). Financial loss [10] The total of the amounts misappropriated or misapplied is $22,560.96. Mr van der Velde has rightly pointed out that agents’ fees of $463.73 were properly payable and this amount should be deducted from Mr Cukovski’s claim. [11] I am satisfied that Mr Cukovski suffered a financial loss of $22,097.23 because of breach by S W Flanagan Pty Ltd. [12] I am further satisfied that $22,097.23 is the assessment of Mr Cukovski’s loss. Other matters [13] I am required to take into account any amount Mr Cukovski may have received or recovered if not for their neglect or default. [14] There is no evidence to suggest that Mr Cukovski 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? [15] S W Flanagan Pty Ltd, as licensee, is responsible for the loss. Mr Flanagan, as principal licensee, is also liable for the loss. 2 Section 488(3)(a). 3 Section 488(3)(b) and (c). -- 3 of 4 -- 4 [16] Section 469 of PAMDA provides that, for the purposes of a claim against the fund, “licensee” includes a person who is not licensed but who acts as a licensee. [17] The relevant misappropriation or misapplication occurred in 2010. Ms Flanagan was no longer a licensee. Mr van der Velde has provided his report on the assumption that Ms Flanagan continued to act as a property manager, even though she was unlicensed. [18] I have no evidence to support Mr van der Velde’s assumption that Ms Flanagan continued to act as a licensee. There is no document signed by her. There is no statement or admission from her. In the absence of that evidence, I am not satisfied that Ms Flanagan acted as a licensee. It follows that I am not satisfied that she is a person liable for Mr Cukovski’s loss. Orders [1] Pursuant to s 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $ 22,097.23. [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 Boris Cukovski the sum of $22,097.23 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, S W Flanagan Pty Ltd and Stephen Flanagan are named as the persons responsible for the financial loss of Boris Cukovski. [4] Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, S W Flanagan Pty Ltd and Stephen Flanagan are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $22,097.23 to the Chief Executive, Department of Justice and Attorney General. -- 4 of 4 --