SUPREME COURT OF QUEENSLAND

[1] HOLMES JA: I agree with the reasons of Fraser JA and the orders he proposes.

[2] FRASER JA:  The applicant, Mr Williams, applies pursuant to s 118(3) of the District Court of Queensland Act 1967 (Qld) for leave to appeal against an order in the District Court refusing him leave to appeal against a decision of the Commercial and Consumer Tribunal made on 26 October 2007.

The proceedings in the Tribunal

[3] The tribunal found that Thymania Pty Ltd held a real estate "corporate licence" under the Property Agents and Motor Dealers Act 2000 (Qld) which entitled it to carry on its real estate agency business in Tully in North Queensland.  Mr Williams was an executive and the sole director of Thymania Pty Ltd.  Thymania Pty Ltd employed one Sharyn Louise Cicolini, who was also known as Jo Collins and as Sharon Collins ("Ms Collins").  On behalf of Thymania Pty Ltd, Mr Williams authorised Ms Collins to be the sole signatory of the trust account operated by Thymania Pty Ltd in the course of its real estate agency business.

[4] Ms Collins' duties on behalf of Thymania Pty Ltd as its property manager included responsibility for the receipt and disbursement of trust monies and of maintaining all trust account records. 

[5] Ms Collins negotiated a contract for the sale by her husband of a shopping arcade to Mr and Mrs Kaech.  The contract named Thymania Pty Ltd as the vendor’s agent.  Ms Collins directed Mr and Mrs Kaech to pay the $60,000 deposit under that contract to Thymania Pty Ltd as stakeholder.  She caused that money to be deposited into the trust account of Thymania Pty Ltd.  She then dishonestly misappropriated that money by causing it to be paid out of that trust account without any authority to do so and to an account she nominated.

[6] The tribunal accepted that Ms Collins had no express authority to represent Thymania Pty Ltd in those dealings.  She engaged in that conduct, not only without the knowledge of Mr Williams, but against his express wishes.  He had put in place a "quality assurance scheme" which required all appointments of Thymania Pty Ltd to act as a real estate agent to be recorded electronically.  After Ms Collins first told Mr Williams that her husband’s shopping arcade was for sale, he told her that he did not want the sale to go through the real estate agency business under any circumstances.  She agreed to that course.  The following day he checked the records of the business.  His search failed to identify any relevant appointment to act as a real estate agent.  He also made enquiries of some of his staff members who told him they were not aware of any such appointment.

[7] Mr and Mrs Kaech obtained a default judgment in the Supreme Court at Cairns against Thymania Pty Ltd for the amount of the deposit plus interest and costs, totalling $64,172.93, on 6 June 2005, but Mr and Mrs Kaech were unable to recover any money under that judgment.

[8] The Property Agents and Motor Dealers Act 2000 (Qld) in some circumstances entitled persons who had been defrauded by real estate agents to make a claim against a fund established by the Parliament.  Subsection 470(1) provided that a person may make a claim against the fund if the person suffered financial loss because of the happening of specified events.  Those events included contravention of various provisions of the Act[1] and "stealing, misappropriation or misapplication by a relevant person of property entrusted to the person as agent for someone else in the person's capacity as a relevant person”[2] (The expression "relevant person" includes a licensee and its employees and agents: s 469.) 

[9] Such claims (where they are not “minor claims”, that is claims not exceeding $1,000) were referred to the tribunal under s 485, which was given jurisdiction to decide them by s 488.  Section 488(3)(c) obliged the tribunal to name the person liable for the claimant’s loss.  Section 490 provided that the responsible person and "if the responsible person is a corporation - each person who was an executive officer of the corporation when the relevant event mentioned in s 470(1) happened” were jointly and severally liable to reimburse the fund to the extent of the amount paid to the claimant.  Section 530 empowered the tribunal to make orders in relation to the claim against the fund including "(b) an order stating that a named person is liable for a claimant's financial loss and the amount of the loss".

[10] The tribunal recorded in its reasons that Mr Williams did not challenge findings made in an earlier tribunal hearing that Ms Collins (a “relevant person” as an employee of a licensee, Thymania Pty Ltd) was guilty of both a contravention of the Act specified in s 470(1)(a) and a misappropriation of the character specified in s 470(1)(e) and that those events had caused Mr and Mrs Kaech’s financial loss. Mr Williams did not dispute that Mr and Mrs Kaech had established their claim against the fund under s 470.  Mr Williams contended, however, that he and Thymania Pty Ltd were not liable for Mr and Mrs Kaech’s loss.

[11] The tribunal rejected that contention.  It held that Thymania Pty Ltd was a “relevant person” as a licensee and that it was liable to Mr and Mrs Kaeach on two bases: it had been adjudged liable in the Supreme Court and it was in any event vicariously liable for the fraud of Ms Collins.

[12] In relation to the second basis of liability, the tribunal held that, in accordance with established principles of agency, in order to attract vicarious liability on the part of the employer, the employee’s dishonesty “must consist of acts to which the ostensible performance of his master’s work gives occasion or which are committed under cover of the authority the servant is held out as possessing or of the position in which he is placed as a representative of his master".[3]

[13] Applying that principle, the tribunal held:

"22Here the dishonest conduct of [Ms Collins] was committed under cover of the authority which [Mr Williams] himself acting on behalf of [Thymania Pty Ltd], expressly delegated to [Ms Collins] authorising her to deal with the trust account. The dishonest conduct occurred in the very matter which [Ms Collins] was employed by [Thymania Pty Ltd] to do honestly and was reasonably incidental to the performance of [Ms Collins'] authorised duty of disbursement of trust account monies. I am satisfied that [Thymania Pty Ltd] is vicariously liable for the conduct of [Ms Collins]. In other words, it is [Thymania Pty Ltd] who is in law responsible for the financial loss of [Mr and Mrs Kaech]. [Mr Williams] is therefore properly named under s 530 as a person liable for the financial loss of the applicants."

[14] Accordingly, the tribunal ordered that the Chief Executive of the Department of Justice and Attorney-General would pay $92,005.69 ($60,000 together with interest and costs) to Mr and Mrs Kaech out of the claim fund and that Mr Williams, Ms Collins and Thymania Pty Ltd were jointly and severally liable for the financial loss of Mr and Mrs Kaech in that sum.

The District Court proceedings

[15] Mr Williams sought to appeal to the District Court against the tribunal’s order against him.  Such an appeal requires leave and is limited to grounds of error of law or excess, or want, of jurisdiction: Commercial and Consumer Tribunal Act 2003 (Qld), s 100(1).

[16] The District Court judge refused to grant leave.  His Honour held that it had not been demonstrated that there was a reasonable likelihood of an appeal succeeding by demonstration of an error of law in the tribunal.  No error was demonstrated either in the finding of the tribunal that the default judgment in the Supreme Court entitled the tribunal to name Thymania Pty Ltd as a person liable for Mr and Mrs Kaech's loss or in the conclusion of the tribunal that Thymania Pty Ltd was in any event vicariously liable for the wrong committed by Ms Collins.  As an executive officer of Thymania Pty Ltd, Mr Williams was made liable by s 490(2) of the Act.

The application for leave to appeal

[17] Mr Williams did not argue that the tribunal erred in holding that he was an “executive officer” of Thymania Pty Ltd at the relevant time.  Nor did he argue that the tribunal erred in concluding (as he is recorded as having conceded in the tribunal) that Ms Collins had caused the  financial loss by her contravention of a provision of the Act specified in s 470(1)(a) and her misappropriation within the terms of s 470(1)(e).

[18] The only remaining question then is whether or not Thymania Pty Ltd was liable for Ms Collins’ contravention of the Act or her misappropriation.  If Thymania Pty Ltd was liable, Mr Williams was properly found liable as its executive officer.  Section 490 does not allow an executive officer of a corporation to escape liability for its misconduct even if the executive officer proves that he or she took all reasonable steps to prevent the corporation’s misconduct.

[19] Mr Williams disputed the tribunal’s conclusions that Thymania Pty Ltd was liable for Mr and Mrs Kaech’s loss but he did not dispute any of the facts found by the tribunal.  Mr Williams accepted in his oral submissions that Ms Collins acted throughout the transaction as though she was in charge of the business of Thymania Pty Ltd; that she was then present at its office; that by virtue of her employment by Thymania Pty Ltd she was in a position to engage in the conduct found by the Tribunal; that the contract of sale to Mr and Mrs Kaech showed "Thymania Pty Ltd" as the agent on the front page of the contract; that Mr and Mrs Kaech sent their deposit money to Thymania Pty Ltd; that Ms Collins caused that money to be deposited in that company's trust account; that she caused it to be taken out of that trust account; and by that means she misappropriated it.

[20] Mr Williams contends though that, because Ms Collins’ misconduct was contrary to Thymania Pty Ltd’s instructions and was done entirely for Ms Collins’ own benefit, the tribunal erred in concluding that Thymania Pty Ltd was liable for her fraud.

[21] I am unable to accept that contention.  The passage in the judgment of Dixon J in Deatons Pty Ltd v Flew quoted by the tribunal supported its conclusion.  If an employer authorises its employee, whilst acting honestly, to do acts of the kind that the employee does when acting dishonestly, then the employer may be held vicariously liable for the employee’s dishonest acts even if they were neither authorised by the employer nor done for its benefit.  That has been part of the law since 1912.[4]  That it remains the law has recently been confirmed by the High Court.[5]

[22] I am not persuaded that it is fairly arguable that the tribunal erred in law in concluding that the facts of this case brought it within the principle.

[23] Mr Williams also contends that the tribunal had no jurisdiction and that the allegations of vicarious liability against Thymania Pty Ltd are wrong because the sale to Mr and Mrs Kaech was a "private sale", by which he refers to a sale negotiated by Ms Collins for her husband and without an appointment by him of Thymania Pty Ltd as agent in accordance with the Property Agents and Motor Dealers Act 2000 (Qld).  This is a reference to s 133 of the Act, which prohibits a real estate agent from acting as a real estate agent for a client unless the client first appoints the real estate agent in writing (or a previous appointment by the client is "assigned" to the real estate agent.) 

[24] The point is not fairly arguable.  The existence of a written appointment of the licensee under s 133 is not a criterion of the definition of "relevant person" in s 469 and nor is it relevant under s 490 in determining who is responsible for a claimant’s financial loss.  Neither the entitlement of Mr and Mrs Kaech to make a claim against the fund nor the liability to them of Thymania Pty Ltd turned upon the question whether or not Thymania Pty Ltd had been appointed in writing in accordance with s 133.  Proof that there was no appointment in writing would simply establish that Ms Collins had caused Thymania Pty Ltd to contravene s 133 by acting as the vendor’s agent without obtaining an appointment in writing.

[25] Mr Williams also contends that the District Court did not have sufficient regard to his evidence that was accepted by the tribunal.  He contends that his evidence demonstrated his innocence of any wrongdoing and established that Ms Collins was the fraudster.  There is also no substance in this proposed ground of appeal.  The District Court was empowered to give leave to appeal to it from the tribunal’s decision only upon grounds of error of law or want or excess of jurisdiction.  There was no right to challenge findings of fact.  In any event, acceptance of the veracity of Mr Williams’ evidence does not falsify the tribunal’s conclusions, for the reasons I mentioned earlier. 

Conclusion

[26] Leave to appeal will usually be granted only where there is a reasonable argument that there is an error to be corrected and an appeal is necessary to correct a substantial injustice caused to the applicant by the error.[6]  In my respectful opinion, the District Court judge made no error in refusing leave to appeal from the decision of the tribunal.  I would refuse leave to appeal.  The applicant should be ordered to pay the respondents’ costs of the application to be assessed on the standard basis.

[27] MACKENZIE AJA: I agree with the reasons of Fraser JA and with the orders he proposes.