Murnane v Riley[2017] QCAT 41

REASONS FOR DECISION

Background

1. [1]
   John Murnane and Maureen Murnane are the registered owners of a unit situated in Cairns which they let to others. Mr and Mrs Murnane engaged Petrina Riley t/as Focus on Spence to manage the unit. Mr and Mrs Murnane claim they have suffered financial loss because Ms Riley failed to:

   1. remit all of the net rental payments due to them during the period March 2014 to March 2015 (“the relevant period”);
   2. properly manage the unit so that considerable damage was done to the unit by tenants and;
   3. lodge rental bonds with the Residential Tenancies Authority.
2. [2]
   On 10 September 2015, Mr and Mrs Murnane lodged with the Office of Fair Trading (the OFT) a claim against the claim fund under the Agents Financial Administration Act 2014 (the AFAA) seeking an amount of $16,723.10.
3. [3]
   On 26 November 2015, the OFT assessed the claim and determined that it was out of time.
4. [4]
   On 25 January 2016, Mr and Mrs Murnane applied to the Tribunal to extend the time for them to make a claim against the fund. They have also claimed that they lodged an earlier application with the Tribunal.
5. [5]
   In February 2016, Ms Riley was convicted in the Magistrates Court of offences relating to these matters.
6. [6]
   The Tribunal granted leave for Ms Riley to be represented by her daughter, Ms Kirsty Riley^[1] and for Mr and Mrs Murnane to be legally represented in these proceedings.^[2] Further directions were also made for the filing and exchange of written submissions in relation to the application for an extension of time.^[3] Although not a named party to the proceeding, the Chief Executive is permitted to make submissions in this type of proceeding pursuant to s 123 of the AFAA. The Tribunal further directed that, unless otherwise requested by a party, the application for an extension of time would be determined by the Tribunal on the papers not before 29 November 2016.^[4]

Documents considered by the Tribunal

7. [7]
   I have considered two submissions filed in the Tribunal by Mr and Mrs Murnane^[5]. Neither Ms Riley nor her daughter have filed any submissions with the Tribunal. I have also considered the Chief Executive’s submission in relation to the application to extend time^[6] and a referral of the claim together with the documents held by the OFT in relation to the claim^[7]. Included in those documents are email exchanges between Ms Riley’s daughter and officers of the OFT regarding the criminal proceedings in the Magistrates Court.
8. [8]
   In those emails Ms Kirsty Riley states that it was her understanding that Mr and Murnane were paid restitution of $10,000 following restitution orders having been made by the court. It is Ms Riley’s position that Mr and Mrs Murnane should not be entitled to pursue a claim against the claim fund as they should not recover twice for the same loss.^[8]
9. [9]
   Despite a request from the OFT that Ms Riley provide further details of the alleged payment of restitution, no further information has been received from Ms Riley or her daughter.
10. [10]
    Also included in the documents filed by the OFT are copies of redacted bank statements supplied to the OFT by Mr and Mrs Murnane (the bank account records)^[9] and documents obtained from Ms Riley in relation to her management of the Murnane’s property (Ms Riley’s records).^[10] Ms Riley’s records include trust account receipts, owner ledger, payment breakdown, cashbook receipts, owner’s statements, owner balance summary, cash book receipts, financial year summary covering various dates.

The relevant legislative provisions and submissions of the Chief Executive

11. [11]
    The AFAA came into effect on 1 December 2014 so that Mr and Mrs Murnane’s claim was lodged under that Act. However, some of the actions of Ms Riley that Mr and Mrs Murnane rely on in respect of their claimed financial loss occurred prior to 1 December 2014. The relevant legislation in force at that time was the Property Agents and Motor Dealers Act 2000 (the PAMDA).
12. [12]
    The OFT relies on s 155 of the AFAA to submit that if the claim was not made under the PAMDA when it could have been then, unless the claim made under the AFAA was made within the time limit for making a claim that was set out in the PAMDA, the Tribunal cannot extend the time for making a claim.

155 Claim fund

3. (1)
   The rights and liabilities of the claim fund under the repealed Act (the former fund) are taken to be the rights and liabilities of the claim fund under this Act (the current fund).

…

3. (3)
   A person who could have made a claim against the former fund but did not make the claim before the commencement may make the claim against the current fund under this Act, if the time allowed for bringing the proceeding under the repealed Act has not expired.

13. [13]
    Section 472(2) of the PAMDA set out the relevant time limits for making a claim against the fund:

3. (2)
   A person may make the claim against the fund only if the person makes the claim within the earlier of the following—

1. (a)
   1 year after the person becomes aware that the person has suffered financial loss because of the happening of an event mentioned in section 470(1);

2. (b)
   3 years after the happening of the event that caused the person’s financial loss.

14. [14]
    The OFT’s position is that the Tribunal cannot now extend time for Mr and Mrs Murnane to make a claim against the claim fund because the time limit set out in s 472(2) of the PAMDA expired before they made their claim on 10 September 2015. There being no dispute about the date of their claim and having examined the claim form, I formally find that Mr and Mrs Murnane made a claim against the claim fund on 10 September 2015.
15. [15]
    The OFT relies upon the contents of Mr and Mrs Murnane’s claim forms lodged with the OFT in which they state that they became aware of their financial loss on 5 May 2014. The OFT says that time commenced to run under the PAMDA from that date and as they did not lodge a claim until 10 September 2015 any financial loss incurred between March 2014 and 9 September 2014 cannot now be the subject of a claim against the fund. The OFT submits that neither it nor the Tribunal has jurisdiction to deal with the events in the claim that predate 9 September 2014. The OFT relies on the decision of the Supreme Court of Queensland in Hewitt and Hosking v The Property Agents and Motor Dealers Tribunal and John Gallagher^[11]which considered provisions of the Auctioneers and Agents Act 1971, the Act repealed by the enactment of the PAMDA, and the transition provisions in the PAMDA dealing with claims that could have been made under the repealed Act. Hewitt and Hosking has been followed in decisions of the former Property and Motor Dealers Tribunal.^[12]
16. [16]
    The OFT accepts that the events that occurred from 10 September 2014 have transitioned because that part of the claim was, pursuant to s 472(2)(a) PAMDA, within time when it was lodged. Therefore, the OFT accepts that the claim form would be within time for any losses incurred from 10 September 2014 to March 2015 provided a claimable event has occurred.
17. [17]
    The OFT concedes that if it were found, in the period prior to 1 December 2014, that Ms Riley received rental income from Mr and Mrs Murnane’s tenants and failed to remit to Mr and Mrs Murnane all of the net rent to which they were entitled, a claimable event under s 470(1) and s 573 of the PAMDA occurred:

470 Claims

3. (1)
   A person may make a claim against the fund if the person suffers financial loss because of the happening of any of the following events—

1. (a)
   the contravention of any of the following provisions by a relevant person—

…

• section 573

…

5. (e)
   a 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.

573 Wrongful conversion and false accounts

18. [18]
    As I will make some reference to the provisions for extending time under the PAMDA and the AFAA for completeness I have set out s 511 of the PAMDA and s 122 of the AFAA. Section 511 of PAMDA provides:

511 Tribunal may extend time

19. [19]
    Section 122 of the AFAA provides:

20. [20]
    The Chief Executive has referred the claim to the Tribunal to decide under s 95(1)(b) of the AFAA:

21. [21]
    The Chief Executive submits that the Tribunal can decide the claim more effectively and more efficiently and it is a more appropriate venue within which to do so because findings of fact will need to be made to resolve disputed allegations which may in turn require findings on credibility to be made. The Chief Executive submits that those findings are more appropriately dealt with in a hearing^[13]which the Chief Executive cannot convene^[14].

The submission of Mr and Mrs Murnane

22. [22]
    Mr and Mrs Murnane say that while they stated in their claim form that they became aware of their financial loss on 5 May 2014 that date was in fact the date they first contacted Ms Riley to query why they had not received some rental payments. They say she explained that she had a serious illness and would make the payments. Believing her, they were prepared to give her more time to make the payments. They say that they finally engaged another manager in March 2015 so that that is the date that they “became aware that [they] had suffered financial loss because of the happening of a [relevant event]”.^[15]
23. [23]
    I do not have any evidence as to the details of any other communications whether verbal or written between Mr and Mrs Murnane and Ms Riley. Mr and Mrs Murnane’s bank records show deposits made to their bank account by direct credit on 14 April 2014^[16], again on 22 August 2014^[17] and then on 22 October 2014^[18]. It is my understanding that Mr and Mrs Murnane accept that those deposits were made by Ms Riley.
24. [24]
    Ms Riley’s documents indicate that the rental on the unit was $400 per week^[19]. Further, those documents suggest that in addition to the payments reflected in Mr and Mrs Murnane’s bank account records, Ms Riley paid amounts to Mr and Mrs Murnane on 13 March 2014^[20], 21 May 2014^[21], 23 June 2014^[22] and 11 July 2014.^[23] However, Mr and Mrs Murnane’s bank account records do not reflect that those payments were deposited into their identified account.
25. [25]
    The tax record for the financial year ended 30 June 2015 prepared by Ms Riley appears to cover only the period 30 June 2014 to 7 September 2014 or a period of 10 weeks rental. It refers to rental income totalling $4,000 consistently with it reflecting 10 weeks rental at $400 per week.^[24] The cashbook receipts for September 2014 indicate that the tenants paid $400 by direct credit on 17 September 2014 and 25 September 2014 and 9 October 2014. The tax invoice and owner’s statement for July 2014 to June 2015 indicates that those payments were for rent paid by the tenants for the period up to 7 September 2014 so that the tenant was paying their rent approximately a month in arrears from the beginning of the 2014/2015 financial year.^[25] It is unclear from the bank records and Ms Riley’s records so far provided whether rent was paid by any tenants for the period 8 September 2014 to March 2015.
26. [26]
    I do not have before me the details of the court proceedings against Ms Riley. Therefore, I do not know the dates of the particular offences for which she was charged and/or convicted.

Was Mr and Mrs Murnane’s claim lodged within time?

27. [27]
    In my view the wording of s 472(2)(a) of the PAMDA contemplates that there must be knowledge on the part of Mr and Mrs Murnane that they have suffered financial loss and also that that financial loss was because of the happening of an event mentioned in s 470(1).
28. [28]
    While Mr and Mrs Murnane contacted Ms Riley on 5 May 2014 when they did not receive some rental payments, I am not satisfied, based on the   evidence before me, that they were aware at that time that they had suffered financial loss. As the Tribunal said in Campaigntrack Victoria Pty Ltd v The Chief Executive, Department of Justice and Attorney-General^[26]:

Similarly, in this case, the mere non-payment of an invoice may not constitute financial loss. There is a good argument that the financial loss will not crystallise, and the claimant not be aware, until such time as the real estate agent has refused to or failed to make payment after demand. Until that time there may be an entitlement to claim for moneys, but not necessarily any loss.

29. [29]
    There is no evidence before me that supports a finding that after inquiring about the non-payment of the rental payments on 5 May 2014, Ms Riley refused to make the payments. Indeed Mr and Mrs Murnane submit that they in fact expected that she would make the payments. The fact that they received payments into their account after 5 May 2014 on 22 August 2014 and 22 October 2014 supports their submission as to their expectation. I find that Mr and Mrs Murnane were not aware that they had suffered financial loss on 5 May 2014.
30. [30]
    Further and in any event, I am not satisfied that at that date they were aware that an event mentioned in s 470(1) of the PAMDA had caused any financial loss. They continued to engage Ms Riley as their property manager until March 2015. They subsequently became aware that the police had become involved. I consider it unlikely that Mr and Mrs Murnane would have continued to engage Ms Riley if they were aware that she had contravened s 573 or stolen, misappropriated or misapplied their money and they were not likely to recover it. Again, the fact that they received rental payments after 5 May 2014 supports that finding. I accept that Mr and Mrs Murnane gave Ms Riley the benefit of the doubt and at least until they engaged another manager were hopeful that they would be paid the outstanding rental payments.
31. [31]
    On the current state of the evidence, I am unable to establish a precise date of awareness of financial loss. However, I consider it can be no earlier than March 2015 that Mr and Mrs Murnane could have known that they were unlikely to recover the outstanding rental payments from Ms Riley. As their claim against the fund was lodged within 12 months of March 2015, it was within time for all financial losses alleged to have been incurred by them during the relevant period. Further, as conceded by the Chief Executive, the claim was lodged within three years of the earliest date that a claimable event could have occurred in March 2014.
32. [32]
    When the OFT assessed Mr and Mrs Murnane’s claim as being out of time, they were issued with a “Claim out of time notice”. From the material so far filed in the Tribunal, I do not know when the notice was sent to Mr and Mrs Murnane or when they received it. Assuming the notice was posted to them on the date it was signed, Thursday 26 November 2016, then Mr and Mrs Murnane would likely have received it on or about 30 November 2016 allowing two business days for receipt.
33. [33]
    Section 511 of PAMDA and s 122 of the AFAA both provide/d by reference to other sections,^[27] that the Tribunal may extend time within which to file the claim if the Tribunal is satisfied that the application to the tribunal was made within 14 days after being given the notice. While Mr and Mrs Murnane claim they posted an application to the Tribunal on 12 December 2015, the only complete application that can now be located by the Tribunal is the one filed on 25 January 2016, the application fee having been received by the Tribunal on 2 February 2016. It may be that further evidence could be provided by Mr and Mrs Murnane and otherwise obtained by the Tribunal regarding the circumstances surrounding the claimed lodgement of an application on or about 14 December 2015. However the question is whether that it is necessary in the circumstances of this case.
34. [34]
    I have considered whether a finding that an application was not lodged with the Tribunal within 14 days prevents firstly, a finding that the claim was lodged within time and secondly, the Tribunal or the OFT proceeding with the claim. The Chief Executive does not rely on s 511 of the PAMDA or s 122 of the AFAA. The Chief Executive relies on the transition provisions.
35. [35]
    Further and in any event, the lodgement of the application to the tribunal within time is in my view a condition which must be satisfied before the Tribunal can, in its discretion, extend the time within which to make a claim. As I have concluded that no extension of time is required and the claim was made within time, I do not consider that the time period referred to in s 511 and s 122 is an impediment to me declaring the claim to be lodged within time. I consider in line with the reasoning of the Court of Appeal in Campaigntrack Victoria Pty Ltd v The Chief Executive, Department of Justice and Attorney-General & Ors^[28] that the notice can be declared to be of no effect. The Court of Appeal said^[29]:

…As part of his or her function in processing claims, the Chief Executive may form the view that the claim was not made within the time allowed under s 472. If a claim has not been made within time allowed under s 472 then the Chief Executive must give the “Claim out of time notice” referred to in s 473(5). Significantly, the power to give such a notice depends on the claim in fact being out of time, not simply the Chief Executive’s belief that this is the case.

36. [36]
    Further, the claim against the claim fund has been referred to the Tribunal by the Chief Executive. Therefore, I am satisfied that the Tribunal has jurisdiction under s 77 of the AFAA to hear and decide the claim against the fund made by Mr and Mrs Murnane.
37. [37]
    I therefore make the following orders:

    1. I declare that the claim lodged by John Murnane and Maureen Murnane with the Chief Executive on 15 September 2015 was made within the required time.
    2. I declare the “Claim out of time notice” dated 26 November 2015 issued by the Chief Executive to be of no effect.

Further progress of the claim

38. [38]
    The Chief Executive has referred the claim to the Tribunal. Now that I have determined that the claim was lodged within time, it is appropriate that directions be made regarding the future progress of the referral. To that end I direct that the proceeding be listed for a directions hearing on a date to be advised to the parties.