Tran v Turner[2023] QCAT 290

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

Introduction

1. [1]
   On 9 September 2021 thirty-three individuals made eighteen applications to the Tribunal for an extension of time within which to make a claim against the claim fund under the Agents Financial Administration Act 2014 (Qld) (AFA Act).  The number of each proceeding and the names of the applicants are set out in columns one and three respectively of the table in paragraph [3] of these reasons for decision.
2. [2]
   These reasons for decision are delivered in each of the proceedings.

Material

3. [3]
   The applicants filed with the applications the following material:

1. (a)
   a folder labelled QCAT APPLICATION MATERIAL containing the following documents:

1. (i)
   the applications;

2. (ii)
   an application for leave to be represented in the proceedings; and

3. (iii)
   an authority to act as agent for the applicants;

2. (b)
   a folder labelled CONTRACTS containing the contracts of sale and sale details for each contract.  The lot numbers and date of the contracts are set out in columns two and four of the following table:

3. (c)
   a folder divided into parts, as follows:

Background

4. [4]
   The second respondent (formerly Brookwater Resort Investments Pty Ltd) was the owner lot 1 on SP 275442 LG Ipswich title reference 50959072 (land).  The land was being developed for a golf and spa resort (development) by Brookwater Resort Residential Pty Ltd (Brookwater Resort Residential).
5. [5]
   The land, the applicants assert, was to be subdivided into lots 1011 to 1424 on SP 275443, with common property.  There was provision for further staged development of the land.
6. [6]
   Each of the applicants entered into a contract of sale with Brookwater Resort Residential for the purchase of a lot in the development.  The names of the purchasers, the number of the lot and the date of the contracts are set out in columns two, three and four respectively of the table in paragraph [3] of these reasons for decision.
7. [7]
   A deposit was paid by each applicant under the contracts of sale.  They allege the monies have been misappropriated or stolen.  The solicitors for the applicants assert their clients became aware they had suffered financial loss either on about 30 June 2017 when the second respondent lost title to the land or in mid to late 2019 consequent on reports on the development in the media.
8. [8]
   On 5 August 2021 the applicants made what is described as a “motherhood claim” against the claim fund under the AFA Act.  The Office of Fair Trading, on 26 August 2021, gave to each applicant a claim out of time notice.

Legislation

9. [9]
   Section 85 of the AFA Act imposes a general time limit for making a claim against the claim fund.  Section 85(1) provides:

This section applies to a claim against the fund other than a claim because of, or arising out of, a marketeering contravention relating to the purchase of a non-investment residential property.

10. [10]
    The time limits are set out in section 85(2).  It provides a person may make the claim against the claim fund for financial loss for the happening of an event only if the person makes the claim within the earlier of the following:

11. [11]
    “Event” in section 85(2)(b) of the Act, in my opinion, means an event described in section 82 of the AFA Act.  It includes the misappropriation or stealing by a relevant person of property entrusted to the person as agent for someone else in the person’s capacity as a relevant person.^[1]
12. [12]
    Relevant person is defined in the dictionary in schedule 1 to the Act.  It means the following:

13. [13]
    Agent is likewise defined in the dictionary.  It includes:

14. [14]
    An exception applies if a person starts a proceeding in a court to recover the persons financial loss within the time permitted to make a claim under section 85(2).  Then, the person may make the claim within three months after the proceeding in the court ends.^[2]  Mr Le, the applicant in proceeding number OCL092-21, has commenced a proceeding in the District Court of Queensland against the first respondent and Brookwater Resort Residential.  It is not suggested by the solicitors for Mr Le the exception has application to Mr Le he having made a claim against the claim fund before the proceeding in the court has ended.
15. [15]
    The power in the Tribunal to extend the time within which to make a claim is found in section 122(1) of the AFA Act.  It may do so if it is satisfied that:

16. [16]
    No appeal lies against the Tribunal’s decision under the subsection.^[3]
17. [17]
    Section 61 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act), giving a tribunal general power to extend a time limit, does not apply for a proceeding to which the section applies.^[4]

Directions

18 December 2022

18. [18]
    The Tribunal, on 18 December 2022, gave the parties leave to be represented by lawyers in the proceedings.  Additionally, it gave directions for the following:

1. (a)
   service of the documents on the Chief Executive of the Department of Justice and Attorney-General (Chief Executive) and the respondents;
2. (b)
   the substitution of PBGC Pty Ltd for Brookwater Resort Investments Pty Ltd  as second respondent to the proceedings;
3. (c)
   the filing and serve of submissions in response to the applications by the respondents;
4. (d)
   the filing and service of the submissions in reply by the applicants;
5. (e)
   the filing and service of submissions by the Chief Executive; and
6. (f)
   the determination of the applications on the papers.

19. [19]
    The applicants filed submissions on 18 March 2022.  The respondents did not file submissions.  The Chief Executive did so on 18 May 2022.
20. [20]
    The applicants’ submissions are summarised below, under the heading Applicants’ submissions.  The Chief Executive’s submissions are summarised under the heading Chief Executive’s submissions.

13 April 2022

21. [21]
    On 13 April 2022 the Tribunal gave directions extending the time for compliance with the directions given on 18 February 2022.

27 July 2022

22. [22]
    The Tribunal, on 27 July 2022, gave directions for deciding the applications on the papers.

Submissions

Applicants’ submission

23. [23]
    Part 4 of the folder labelled CLAIM filed with the applications contains particulars of the events giving rise to the claims against the claim fund.  The events are said to be almost identical for each claim.
24. [24]
    It is unclear when the monies paid by the applicants under the contracts of sale were misappropriated or stolen.  The applicants, it is submitted, likely became suspicious about the development following the publication of articles in the media in about December 2017.  They likely became aware the monies had been misappropriated or stolen in 2019 or 2020, at different times for each applicant, and became aware they had suffered financial loss when they became aware the monies had been misappropriated or stolen.
25. [25]
    The reasons for not making the claims within the time allowed are set out in paragraph 5.1 of the applicants’ submissions.  They are:

1. (a)
   The subterfuge as outlined above orchestrated by and at [the first respondent’s] behest.
2. (b)
   Active pressure (and reassurances) from [the first respondent] direct or through agents when [the applicants] raised concerns about progress and where was their money.
3. (c)
   The belief the [Office of Fair Trading] would provide them with an avenue of redress.
4. (d)
   Delays caused by the investigations of the [Office of Fair Trading] which was approximately 2 years (2017 to 2019)?  Some of the [applicants] gave detailed statements.  A copy of one such statement is in Exhibit 22 (lot 1302).
5. (e)
   The statements attributed to the [Office of Fair Trading] as a result of the investigations and relayed to at least some of the [applicants] being in effect that:

1. (i)
   It was reported in the Brisbane Times on 4 December 2019 that the [Office of Fair Trading] dropped its investigations and wrote to [the applicants] along these lines:

1. (A)
   Mum and dad investors must take private court action if they want to recover their deposits.

2. (B)
   The [Office of Fair Trading] did not have standing to seek orders for the return of deposits.

3. (C)
   Matters relating to contracts such as these for the purchase of an off the plan development are civil matters and parties to the contract are required to take their own legal action.

The report also stated that:

4. (D)
   [Queensland Police Service] had been conducting a separate investigation for more than a year but that there would be no restitution for victims [as a result or part of those proceedings].

5. (E)
   The [Office of Fair Trading] would not be able to prove misleading conduct in this case.

6. (F)
   Investors whose deposit cash was placed in Hickey Lawyer’s trust account believe they will have legal rights to demand the return of their money when “Sunset” clauses expire over the next couple of years.

7. (G)
   Melbourne-based Financier Lendings Pty Ltd repossessed the land from Brookwater Resort Investments in October 2016.

8. (H)
   [The first respondent] was marketing the stage 2 as recently as May 2019.

1. (I)
   [The first respondent] and his lawyers deny any wrongdoing.

Exhibit 21 is a copy of that article.

2. (ii)
   The [Office of Fair Trading] did write letters to some of the [applicants] along these lines Exhibit 22 also includes is a copy of some of the letters and emails.

3. (iii)
   The [Office of Fair Trading] in their website materials states that a claim cannot be made against the claim fund if you are dealing with a property developer (or their employees).

4. (iv)
   The [Office of Fair Trading] we understand also held the view that a claim could not be made because the monies were not put in a trust account and it involved the developer and it appears the [Office of Fair Trading] had conveyed this view to some of the claimants?

6. (f)
   Language barriers and the need for translations/translators.
7. (g)
   The complexity of the sham.
8. (h)
   The complexity of Australian laws and the court system.
9. (i)
   The perceived high cost of the court system.
10. (j)
    The uncertainty of the legal position for each [applicant], potential risks of court action and high risk of no recovery (i.e., throwing good money after bad).
11. (k)
    The limited funds available given the significant losses incurred by each [applicant] (bar for lots 1232 and 1312).
12. (l)
    The lack of trust in Australians engendered by the actions of [the first respondent] and others.
13. (m)
    Various other reasons.

26. [26]
    In their submissions filed 25 March 2022, the applicants set out what is described as the essential facts giving rise to the claims against the claim fund.  The reasons are couched in almost identical terms to the reasons set out in the applicants’ submissions filed with the applications.
27. [27]
    The applicants concede section 81(1) of the AFA Act applies to the claims against the claim fund.  The misappropriation or stealing of the monies happened more than three years before they made claims against the fund.  The loss, however, it is submitted, is suffered on termination of the contracts of sale.  If that be the case, the applications to the Tribunal are premature, unless the contracts have been terminated.
28. [28]
    The event entitling the applicants to make a claim against the claim fund is financial loss suffered because of the misappropriation or stealing of the monies paid under the contracts of sale.  The event, in my opinion, happened on the misappropriation or stealing of the monies, more than three years before they made claims against the fund.
29. [29]
    It follows that neither limb of section 85(2) of the AFA Act is satisfied.  The claims against the claim fund were not made within the time limited by the section.
30. [30]
    Specific mention is made of Mr Lee (lot 1344).  As I have said, on 17 July 2020 he commenced a proceeding in the District Court of the Queensland against Residential North and Central Pty Ltd (formally Brookwater Resort Residential) and the first respondent.  He claims against the defendants $264,000.00 paid under the relevant contract of sale, interest, and costs.  By paragraph 42 of the statement of claim in the proceeding, Mr Lee alleges he rescinded the contract on 21 June 2019.
31. [31]
    It would appear the parties have not taken a step in the proceeding since 19 August 2020.
32. [32]
    The lawyers for Mr Lee concede the proceeding was commenced outside the time permitted to make a claim under section 85(2) of the AFA Act.  Further, Mr Lee has made a claim against the claim fund before the proceeding has ended.

Chief Executive’s submissions

33. [33]
    On 18 May 2022 the Chief Executive filed submissions.  It is submitted the claims against the claim fund were not submitted within the time permitted under section 85(2) of the AFA Act.  I agree.
34. [34]
    The applications to extend the time within which to make the claims were made within the time mentioned in the notices under section 88(5)(b) of the Act, it is conceded.  Again, I agree.
35. [35]
    Under the heading The Application Generally, the Chief Executive submits the Tribunal must consider the merits of the claims against the claim fund, citing the decisions in Harper v Reddell t/a All Wheels^[5]; Fleming t/a Physiosonic Pty Ltd v Des Skelton Real Estate^[6]; David Hambleton as joint and several liquidator of Sky 5 Pty Ltd (in liquidation) v The Chief Executive, Office of Fair Trading Department of Justice and Attorney General & Anor^[7], particularly because it is futile to entertain unmeritorious claims on public monies, citing Crawford v lkinofo^[8]; Thomley v Hi Surf Resort t/as Beachcomber & Ors^[9].  The applicants are not required to show the claims will succeed or have “... very good prospects of success ...”, citing Potter, P. & H. v Klar Pty Ltd t/a L J Hooker Maryborough, Wetton, A. & Tully, M.^[10] but the Tribunal will need to be satisfied the claims have prima facie merits, citing McNabb v Ivanoff^[11]; Bain, B. & Morgan, E. v Ferrantino, R^[12].
36. [36]
    The prima facie merits, it is submitted by the Chief Executive, is established by the matters set out in paragraph 13 of the Chief Executive submissions.  I agree.
37. [37]
    The Chief Executive, under the heading Relative Hardship, submits the applicants “… will face a greater hardship than the respondent will …”  Again, I agree.
38. [38]
    Under the heading Justice of the Matter Generally, the Chief Executive points to the extent of the applicants delay.  It is explained, the submissions continue, “… by a lack of understanding of the legal processes in Australia and the belief a claim could not be made against the Claim Fund as the claim was against a property developer.”  I agree.

Discussion

39. [39]
    The exercise of the power to extend the time within which to make a claim against the claim fund is conditioned on the Tribunal being satisfied of the matters in section 122(1) of the AFA Act.  The notices under section 88(5)(b) were given by the Chief Executive to each of the applicants on 26 August 2021.  The time mentioned in each notice was “... 14 days of receiving this notice ...”  The applications were file in the Tribunal on 19 September 2021 and, hence, were made within the time mentioned in the notices.
40. [40]
    The matters to which the Tribunal is to have regard in deciding whether it is satisfied it is appropriate to extend time are set out in section not 122(1)(b) of the AFA Act.  They are addressed under the following headings:

1. (a)
   reasons for not making the claims within the time allowed (section 122(1)(b)(i) of the AFA Act);
2. (b)
   the applications generally (section 122(1)(b)(ii) of the AFA Act);
3. (c)
   hardship (section 122(1)(b)(iii) of the AFA Act); and
4. (d)
   the justice of the matters generally (section 122(1)(b)(iv) of the AFA Act).

Reasons for not making the claims within the time allowed (section 122(1)(b)(i) of the AFA Act)

41. [41]
    The reasons for not making the claims within the time allowed are set out in paragraphs 5.1 of the applicants’ submissions filed with the applications, repeated in paragraph 2.1 of the applicants’ submissions filed 25 March 2022 and set out in paragraph [25] of these reasons for decision.  I accept reasons.
42. [42]
    The applicants, as the material filed shows, were repeatedly misled by the first respondent and others about the progress of the development and the whereabouts of the monies paid under the contracts of sale.  The intervention of the Office of Fair Trading and the applicants’ belief it would provide them with an avenue of redress is understandable.
43. [43]
    Of particular significance are language barriers and the complexity of Australian laws and the court system.
44. [44]
    I am satisfied the applicants have given a reasonable explanation for why they did not make the claims against the claim fund within the time allowed.

The applications generally (section 122(1)(b)(ii) of the AFA Act)

45. [45]
    On the evidence presently available, I am satisfied the monies paid by the applicants under the contracts of sale were either misappropriated or stolen.
46. [46]
    The payment of the monies under the contracts is well documented.  Despite the complexity of the sham, it is clear the monies are not where they should be and have been misappropriated or stolen.
47. [47]
    I am satisfied on the material filed in the Tribunal the applicants prima facie have valid claims to the monies paid by them under the contracts.

Hardship (section 122(1)(b)(iii) of the AFA Act)

48. [48]
    The respondents have not filed material on the hardship that an extension of time would place on them.
49. [49]
    The applicants submit they have been deprived of monies lawfully belonging to them by the deliberate and wrongful acts of the respondents thereby causing them hardship.  I agree.
50. [50]
    I am satisfied each of the applicants would suffer significant hardship if an extension of time was refused.

Justice of that the matters generally (section 122(1)(b)(iv) of the AFA Act)

51. [51]
    The claims were not made within the time allowed under section 85(2) of the AFA Act.  The explanation for the delay, as I have said, is accepted.
52. [52]
    The applicants applied for an extension of time within which to make claims against the claim fund within the time mentioned in the notices given under section 88(5)(b) of the AFA Act, as I have found and is conceded by the Chief Executive.
53. [53]
    The justice of the matters generally requires their claims against the claim fund be considered.  I am satisfied it is appropriate to extend the time within which the applicants may make claims against the claim fund.

Conduct of the claims

54. [54]
    As the Chief Executive correctly submits, if the Tribunal decides to extend the time within which claims must be filed, it may also decide the claims.^[13]  Alternatively, the Tribunal may refer the claims to the Chief Executive for decision, citing The Chief Executive, Department of Justice and Attorney-General v Crampton Automotive Pty Ltd trading as Toowoomba Holden, Mark Crampton, Gary Sweeton^[14].
55. [55]
    The Chief Executive submits “… there could be complex questions of fact and law relating to jurisdiction, relevant person, event and financial loss which might be better considered by way oral hearing …”  Section 100(4) of the AFA provides the Chief Executive must decide a claim without a hearing.
56. [56]
    In that the circumstances, it is further submitted by the Chief Executive, the Tribunal should decide the claims.
57. [57]
    It is appropriate the parties be afforded an opportunity to provide submissions on the future conduct of the claims now time has been extended.  The orders made will include orders for the filing and service of submissions on the future conduct of the claims and, unless a party gives notice requiring an oral hearing, the future conduct be decided by the Tribunal on the papers.

Decision

58. [58]
    In each proceeding, the Tribunal orders as follows:

1. (a)
   pursuant to section 122(1) of the AFA Act, the time within which each of the applicants may make a claim against the claim fund is extended to 5 August 2021, the date on which each applicant made a claim;
2. (b)
   the parties, by 4.00pm on 15 August 2023, file and serve on each other by email submissions on the future conduct of the claims, including, without limitation, whether the claims should be referred to the Chief Executive for decision or decided by the Tribunal; and
3. (c)
   unless a party, by 4.00pm on 15 August 2023, gives notice requesting an oral hearing, the future conduct of the claims be decided on the papers after 15 August 2023.