David Hambleton as joint and several Liquidator of Sky 1 Pty Ltd and Ors v Tuxford (No.6) [2011] QCAT 557

CITATION: David Hambleton as joint and several Liquidator of Sky 1 Pty Ltd and Ors v Tuxford (No.6) [2011] QCAT 557 PARTIES: David Hambleton as joint and several Liquidator of Sky 1 Pty Ltd (First Applicant) Adam Wallace and Agnieszka Kowalska (Second Applicant) v Stanley Gordon Tuxford APPLICATION NUMBER: OCL024-11 MATTER TYPE: Other civil dispute matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Sandra G Deane, Member DELIVERED ON: 14 November 2011 DELIVERED AT: Brisbane ORDERS MADE: [1] Leave is granted to Adam Wallace and Agnieszka Kowalska to be joined as applicants. [2] To the extent necessary the time limit fixed for making a claim by Adam Wallace and Agnieszka Kowalska under the Property Agents and Motor Dealers Act 2000 is extended. [3] Pursuant to section 530 of the Property Agents and Motor Dealers Act 2000, the Chief Executive of the Department of Employment, Economic Development and Innovation pay to Adam Wallace and Agnieszka Kowalska the sum of $50,000. [4] Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, the Chief Executive shall not pay the amount until the end of the period allowed for appeal, and if there is an appeal, until the appeal is finally decided. [5] Pursuant to section 488(3)(c) of the -- 1 of 7 -- 2 Property Agents and Motor Dealers Act 2000 the respondent Mr Tuxford is the person who contravened in terms of section 470(1) and who is liable for the financial loss of the applicants, Adam Wallace and Agnieszka Kowalska. [6] Upon payment of the sum of $50,000 from the Claim Fund to Adam Wallace and Agnieszka Kowalska, the respondent Mr Tuxford is liable to reimburse the Claim Fund by paying the sum of $50,000 to the Chief Executive of Employment, Economic Development and Innovation. CATCHWORDS: PROPERTY AGENTS AND MOTOR DEALERS – Claim against the fund by liquidator – whether an event which caused financial loss – whether neglect or default of claimant reduces amount payable – joinder of purchaser who suffered loss – extension of time Property Agents and Motor Dealers Act 2000, ss 379, 469, 470, 476, 488, 530 Queensland Civil and Administrative Tribunal Act 2009, ss 42, 61 APPEARANCES and REPRESENTATION (if any): These matters were heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). REASONS FOR DECISION Background [1] The Tribunal has received a number of claims against the claim fund set up under the Property Agents and Motor Dealers Act 2000 (the Act) with the Department of Employment, Economic Development and Innovation (―OFT‖) involving Mr Tuxford and Mr Hutchinson. The claims essentially arise from allegations against Mr Tuxford and Mr Hutchinson in similar circumstances although amounts claimed differ. These claims were referred by OFT to this Tribunal for determination.1 Mr Tuxford and Mr Hutchinson have chosen not to participate in the Tribunal proceedings. 1 Section 476(1) of the Act requires that the Chief Executive refer the claim to the Tribunal if it exceeds $10,000.00. -- 2 of 7 -- 3 [2] Many of the claims are made by Mr Hambleton as liquidator of Sky 5 Pty Ltd in respect of claims admitted in the liquidation and in respect of which some dividends have been paid. [3] This claim is made by Mr Hambleton as liquidator of Sky 1 Pty Ltd for $50,000 and is made in respect of a contract entered into by Adam Wallace and Agnieszka Kowalska (―the Purchasers‖). No dividends have been paid in the liquidation of Sky 1 Pty Ltd. [4] On 16 March 2007 the Purchasers paid $50,000 by way of cash deposit to Mr Tuxford in relation to a contract to purchase Lot 60 Waverley Views Estate, Pimpama (―the Contract‖). The Vendor was stated as Sky 1 Pty Ltd (first page) and Sky 5 Pty Ltd (Annexure A). [5] Under the Contract the Deposit Holder was stated to be Sky 1 Pty Ltd and the Agent was stated as ―N/A‖. [6] Mr Tuxford signed and provided to the Purchasers a PAMD Form 27c, Selling Agent‘s Disclosure to Buyer. [7] Mr Hutchinson appears to have signed the Contract on behalf of the Vendor. [8] Liquidators were appointed to Sky 1 Pty Ltd effective 26 February 2008. [9] The Purchasers lodged a proof of debt in the liquidation which has been accepted. The liquidator has therefore acknowledged that the vendor was Sky 1 Pty Ltd. [10] Sky 1 Pty Ltd defaulted on the Contract and the Purchasers became entitled to have the deposit refunded. [11] The deposit has been disbursed and was not available to be refunded to the Purchasers. License and Corporate and Business Name Details [12] Mr Tuxford held a Real Estate Agent Principal‘s Licence from 29 October 2004 and valid until 29 October 2010. [13] Mr Hutchinson held a Real Estate Agent Principal‘s Licence from 17 April 2002 which expired 17 April 2008 and a real estate corporation licence from 17 April 2002 which expired 17 April 2007. [14] Sky (Group) Pty Ltd appointed Mr Tuxford as its agent by a PAMD Form 22a dated 17 June 2006 in respect of lot 84 Dunraven Drive, Pimpama as part of a continuing appointment in respect of Waverley Heights Estate, Pimpama. Mr Hutchinson signed the form on behalf of Sky (Group) Pty Ltd. [15] There is no evidence before the Tribunal as to the directorships or shareholding of Sky (Group) Pty Ltd or whether an entity in that name actually existed. [16] Sky 5 Pty Ltd and other Sky corporate entities (but not Sky 1 Pty Ltd) appointed Mr Tuxford as their agent by a PAMD Form 22a dated 18 June 2006 in respect of Lots 1 – 98 ―Waverley Views‖, Pimpama. -- 3 of 7 -- 4 [17] Mr Hutchinson was appointed a director of Sky 1 Pty Ltd on 19 November 2004 and remained a director at all relevant times. Mr Hutchinson was one of two equal shareholders of Sky 1 Pty Ltd at all relevant times. [18] Sky 1 Pty Ltd did not hold a real estate corporation licence and did not maintain a trust account under the Act. [19] Land Equity Pty Ltd entered into contracts with Sky 5 Pty Ltd and other Sky corporate entities for the sale of land in the Waverley Views Estate which was required to be subdivided. [20] There is no evidence that Sky 1 Pty Ltd entered into contracts with Land Equity or any other entity to purchase relevant lots in Waverley Views Estate. There is evidence that Sky 1 Pty Ltd entered into contracts with various persons to ‗on-sell‘ lots in Waverley Views Estate. These on-sale contracts were effectively subject to the plan of subdivision registering and settlement of the relevant preceding contracts. [21] Land Equity gained registration of the relevant lots in April 2009. Law [22] Section 488 of the Act provides that the Tribunal may allow a claim for compensation only if it is satisfied, on the balance of probabilities: a) that an event mentioned in section 470(1) of the Act happened; b) the claimant suffered financial loss because of the happening of the event. [23] The events are actions by a relevant person. [24] Section 469 of the Act provides that relevant person includes a licensee, former licensee and a person who is not a licensee but who acts as a licensee. [25] Further pursuant to section 488 of the Act 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 and any amount ordered to be paid to the claimant as compensation to the claimant under sections 530A, 572D or 592A of the Act. [26] If the Tribunal allows the claim wholly or partly it must decide the amount of the loss and name the person liable. [27] Section 530 of the Act provides that the Tribunal may make the following orders in relation to a claim against the fund— a) an order allowing the claim, wholly or partly, or rejecting the claim; b) an order stating that a named person is liable for a claimant's financial loss and the amount of the loss; c) an order about recovery of an amount payable in relation to a claim; -- 4 of 7 -- 5 d) an order that no amount is recoverable in relation to a claim. Discussion and Decision [28] A claim may be allowed, either partly or wholly, only if, on the balance of probabilities, an event described in section 470(1) of the Act happened, and the claimant suffered financial loss because of the happening of the event. Further, if the claim is allowed wholly or in part, the matters referred to in section 488(3) of the Act must be considered. Was there an event? [29] Section 470(1)(d) of the Act provides that a person may claim against the fund where the person suffers loss because of a contravention of section 11 of the Land Sales Act 1984 by a licensee appointed by the owner of land to which that Act applies or a relevant person employed by the licensee. [30] There is no specific evidence that Mr Tuxford was a licensee appointed by Sky 1 Pty Ltd, the vendor, however Mr Tuxford acted as if he was. It is more likely than not that Mr Tuxford was so appointed. [31] Mr Tuxford contravened section 11 of the Land Sales Act 1984 in failing to ensure the Contract provided for an appropriate deposit holder and that the deposit moneys were paid to such a person. [32] Section 470(1)(a) of the Act provides that a person may claim against the fund where the person suffers loss because of a contravention by a relevant person of Chapter 12, part 1. Section 379 of the Act (which is in Chapter 12, part 1) provides that a licensee must immediately upon receipt of a deposit pay it into the licensee‘s trust account. [33] There is no specific evidence as to what happened to the cash. There is no evidence that the money was paid into an appropriate trust account. [34] During an OFT interview Mr Tuxford asserted that all payments regardless of type were forwarded or paid to Mr Hutchinson. [35] On the balance of probabilities Mr Tuxford contravened chapter 12, part 1 in failing to pay deposit moneys into a trust account. [36] Mr Gregory Fulton, a former employee of Mr Hutchinson gave evidence that Mr Hutchinson handled all financial aspects of the Waverley Views Estate property sales and that all matters associated with any sales or contracts of the Waverley Views Estate were handled directly between Mr Tuxford and Mr Hutchinson. [37] There is insufficient evidence to find that: a) Mr Hutchinson was acting as a relevant person in relation to the sale of this lot at Waverley Views Estate. b) Sky 1 Pty Ltd was a relevant person under the Act. -- 5 of 7 -- 6 Did the Event Cause Financial Loss? [38] If the deposit had been deposited to an appropriate trust account in accordance with the Land Sales Act 1984 or the Act the moneys deposited would have been available to be repaid to the Purchasers when the Contract did not complete. [39] Accordingly the Tribunal finds that Sky 1 Pty Ltd and the Purchasers suffered financial loss as a consequence of the events. Section 488(3) Matters [40] In relation to the claim by Sky 1 Pty Ltd , I find that Sky 1 Pty Ltd would not have suffered any loss but for the neglect or default of Sky 1 Pty Ltd. [41] On the balance of probabilities Mr Hutchinson as agent for Sky 1 Pty Ltd directed Mr Tuxford to instruct the Purchasers to pay the moneys to him and then forward them to Mr Hutchinson. [42] Mr Hutchinson was a licensed real estate agent and was in a position to know what steps ought to be taken by companies of which he was a director to ensure deposits were secured pending completion of contracts for sale, where the company was the named vendor. [43] Sky 1 Pty Ltd failed or neglected to ensure that the contracts executed by it provided in accordance with section 11 of the Land Sales Act 1984 for an appropriate deposit holder. [44] Sky 1 Pty Ltd failed or neglected to ensure that the amounts to be received by it were deposited to an appropriate trust account. [45] In written submissions received from OFT on 4 August 2011 OFT submits that: a) the appropriate claimant in this proceeding should be the Purchasers; b) it does not oppose the Tribunal extending time to allow the Purchasers to make a claim. [46] In written submissions received from the liquidators on 4 August 2011 the liquidators submit that if the Tribunal is against their submissions that the claim should be allowed then the Tribunal should exercise its powers to substitute the Purchasers as claimant. [47] In these circumstances I order that the Purchasers are joined as applicants2 and to the extent necessary I extend the time limit fixed for making a claim by the Purchasers under the Act.3 [48] There is no evidence of any default or neglect on the part of the Purchasers or that amounts of compensation have been ordered to be paid under sections 530A, 572D or 592A of the Act. 2 Section 42 QCAT Act. 3 Section 61 QCAT Act. -- 6 of 7 -- 7 Section 490 Matters [49] Mr Tuxford contravened the Act and is therefore responsible for the financial loss. [50] There is insufficient evidence to find that Mr Hutchinson contravened the Act. Orders [1] Leave is granted to Adam Wallace and Agnieszka Kowalska to be joined as applicants. [2] To the extent necessary the time limit fixed for making a claim by Adam Wallace and Agnieszka Kowalska under the Property Agents and Motor Dealers Act 2000 is extended. [3] Pursuant to section 530 of the Property Agents and Motor Dealers Act 2000, the Chief Executive of the Department of Employment, Economic Development and Innovation pay to Adam Wallace and Agnieszka Kowalska the sum of $50,000. [4] Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, the Chief Executive shall not pay the amount until the end of the period allowed for appeal, and if there is an appeal, until the appeal is finally decided. [5] Pursuant to section 488(3)(c) of the Property Agents and Motor Dealers Act 2000,the respondent Mr Tuxford is the person who contravened in terms of section 470(1) and who is liable for the financial loss of the applicants, Adam Wallace and Agnieszka Kowalska [6] Upon payment of the sum of $50,000 from the Claim Fund to Adam Wallace and Agnieszka Kowalska, the respondent Mr Tuxford is liable to reimburse the Claim Fund by paying the sum of $50,000 to the Chief Executive of Employment, Economic Development and Innovation. -- 7 of 7 --