De Vries v My House is Your House Pty Ltd & Anor [2011] QCAT 121

CITATION: De Vries v My House is Your House Pty Ltd and Carranza [2011] QCAT 121 PARTIES: Ms Debbie De Vries v My House is Your House Pty Ltd (Under External administration) and Francisco Carranza APPLICATION NUMBER: OCL185-10 MATTER TYPE: Other civil dispute matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Sandra Deane, Member DELIVERED ON: 31 March 2011 DELIVERED AT: Brisbane ORDERS MADE: [1] Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in full in the sum of $48,805. [2] Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period the Chief Executive must pay to Ms De Vries the sum of $48,805 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 section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the Respondents, My House is Your House Pty Ltd (Under External administration) and Mr Carranza are named as the persons liable for the financial loss of Ms De Vries. [4] Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and -- 1 of 5 -- 2 Motor Dealers Act 2000, the Respondents, My House is Your House Pty Ltd (Under External administration) and Mr Carranza are jointly and severally liable to reimburse the Claim Fund by paying the sum of $48,805 to the Chief Executive of Employment, Economic Development and Innovation. CATCHWORDS: Claim against fund for misuse of trust funds – real estate agent – claim allowed – real estate agent and company named as persons responsible Property Agents and Motor Dealers Act 2000, ss 470, 488, 489, 490, 530, 573 APPEARANCES and REPRESENTATION (if any): This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION Background [1] Ms De Vries made a claim against the statutory fund (the Claim Fund) established under the Property Agents and Motor Dealers Act 2000 (the Act) for financial loss in relation to property and her dealings with My House is Your House Pty Ltd (House) and Mr Francisco Carranza. [2] House was a company involved in the business of selling listed properties. Mr Carranza was a director of House. [3] On 30 July 2010, pursuant to section 417(1)(a) of the Act, a Receiver was appointed over House’s trust accounts. The Receiver has since been appointed as Liquidator of House. [4] Both of the Respondents are parties whose actions are alleged to give rise to the claim. [5] In December 2010 the Office of Fair Trading referred the claim to the Tribunal for determination. [6] The Tribunal received a copy of the Office of Fair Trading claim file which included material from Ms De Vries and the Receiver’s Report dated 14 October 2010. [7] The Tribunal directed that Mr Carranza file and serve statements of evidence upon which he seeks to rely by 22 March 2011. No material was filed by Mr Carranza. -- 2 of 5 -- 3 Law [8] 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. [9] 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. [10] If the Tribunal allows the claim wholly or partly it must decide the amount of the loss and name the person liable. [11] 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; d) an order that no amount is recoverable in relation to a claim. [12] Section 573 of the Act applies if a licensee, in the performance of the activities of a licensee, receives an amount belonging to someone else. A licensee who dishonestly converts the amount to the licensee’s own or someone else’s use commits a crime. Evidence [13] Ms De Vries relied upon the file of material provided by the Office of Fair Trading. [14] The evidence before the Tribunal is as follows: a) Mr Carranza was appointed a director of House on 12 December 2007 and remained a director at all relevant times; b) Mr Carranza held a Real Estate Agent’s Licence at all relevant times; c) House held a Real Estate Agent’s Licence at all relevant times; d) Ms De Vries entered into a contract to sell a property located at 19 Elusive Road, Coomera; e) Under the contract House, as deposit holder, received an initial deposit of $2,000 on 17 March 2010 and the balance of the deposit of $66,000 on 2 June 2010; f) Both sums were paid into House’s trust account; -- 3 of 5 -- 4 g) Upon settlement of the sale contract House became entitled to commission in the sum of $19,195 (incl GST) and was obliged to pay to Ms Vries the balance of the deposit in the sum of $48,805; h) The Receiver’s Report states that Ms De Vries’ claim was discussed with Mr Carranza at the initial interview who is said to have advised that it was a valid claim; i) The Receiver’s Report also states that based upon the Receiver’s investigation she has located documents to support the claim and she accepts the claim for $48,805 representing funds which ought to have been paid to Ms De Vries; j) As at 30 July 2010, the date of appointment of the Receiver, the effective balance of House’s trust account was $400.25; k) The Receiver’s Report states that during an interview at her office Mr Carranza stated words to the affect ―he was aware his actions were deceptive but he had no choice‖; l) During an interview with a department officer Mr Carranza admitted misappropriation of funds held on behalf of Ms De Vries; m) The Receiver’s Report also states that Mr Carranza attended an interview at the Receiver’s office during which he admitted that he had used House’s funds to pay personal debts. Discussion and Decision [15] The claim may be allowed, either partly or wholly, only if, on the balance of probabilities, an event described in section 470(1) 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) must be considered. Was there an event? [16] The Tribunal accepts that moneys were paid into House’s trust account and were not paid to Ms De Vries and were not available to be paid to Ms De Vries, the trust account balance being less than the amount which ought to be paid to Ms De Vries. [17] The Tribunal accepts that the trust funds were used by Mr Carranza to pay personal debts. [18] The Tribunal is therefore satisfied that on the balance of probabilities there was a contravention of section 573 of the Act in that there was a dishonest conversion of an amount belonging to someone else to a licensee’s own use by a person who is a licensee or a person having charge or control of a licensee’s business and therefore an event within the meaning of section 470(1)(a) occurred. -- 4 of 5 -- 5 Did the Event Cause Financial Loss? [19] If Mr Carranza had not used trust funds for his own use the moneys deposited and to which Ms De Vries became entitled would have been available to be paid when the contract completed. [20] Accordingly the Tribunal finds that Ms De Vries suffered financial loss as a consequence of the event. Section 488(3) Matters [21] The Tribunal is satisfied that there has been no relevant neglect or default by Ms De Vries identified and there is no evidence that any amounts of compensation have been ordered to be paid under sections 530A, 572D or 592A of the Act. [22] The Tribunal accepts that Ms De Vries has suffered a financial loss in respect of loss of the deposit in the sum of $48,805. Section 490 Matters [23] The Tribunal accepts that House’s trust funds were used by Mr Carranza to pay personal debts. [24] The Tribunal is satisfied that House and Mr Carranza are persons liable for the financial loss. Orders [25] Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in full in the sum of $48,805. [26] Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period the Chief Executive must pay to Ms De Vries the sum of $48,805 from the Claim Fund, and if there is an appeal, payment must not be made until after the appeal is finally decided. [27] Pursuant to section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the Respondents, My House is Your House Pty Ltd (Under External administration) and Mr Carranza are named as the persons liable for the financial loss of Ms De Vries. [28] Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, the Respondents, My House is Your House Pty Ltd (Under External administration) and Mr Carranza are jointly and severally liable to reimburse the Claim Fund by paying the sum of $48,805 to the Chief Executive of Employment, Economic Development and Innovation. -- 5 of 5 --