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Khadka v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading[2023] QCAT 450

Khadka v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading[2023] QCAT 450

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Khadka & Anor v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading & Ors [2023] QCAT 450

PARTIES:

HARI SARAN KHADKA

RAJANI KHADKA

(applicants)

v

CHIEF EXECUTIVE, DEPARTMENT OF JUSTICE AND ATTORNEY-GENERAL, OFFICE OF FAIR TRADING

WILLIAM JEFFREY MITCHELL

BILLY MITCHELL PTY LTD

(respondents)

APPLICATION NO/S:

GAR188-21

MATTER TYPE:

General administrative review matters

DELIVERED ON:

23 November 2023

HEARING DATE:

On the papers

DECISION OF:

Member Lumb

ORDERS:

  1. The decision of the Chief Executive, Department of Justice and Attorney-General – Office of Fair Trading made on 12 February 2021 is confirmed.
  2. The Application to review a decision filed on 10 March 2021 is dismissed.

CATCHWORDS:

ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – claim against claim fund established under Agents Financial Administration Act 2014 (Qld) – where Applicants claimed loss suffered by reason of underpayment of rent by tenant – where Applicants claimed underpayment due to failure of real estate agents to apply rent review provisions in accordance with lease – where Chief Executive decided claim was invalid – where Applicants sought review of decision – whether claimed loss was suffered because of the happening of an ‘event’ as specified in s 82(1)(b) of the Act – meaning of ‘misapplication’ – whether misapplication of property entrusted to real estate agents

Agents Financial Administration Act 2014 (Qld), s 77, s 78, s 79, s 82, s 90

Queensland Civil an Administrative Tribunal Act 2009 (Qld), s 9, s 20

CTA v Queensland Police Service [2018] QCAT 440

Factory Direct Pools Pty Ltd v Queensland Building Services Authority [2013] QCAT 34

Holgar v Chief Executive, Department of Justice and Attorney-General & Ors [2021] QCATA 113

Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58

Murphy, H. v Hancock, D. and Taylor, J. M. t/as Montville, Mapleton & Maleny Real Estate [2004] QCCTPAMD 10

Norman v Hyman and Hymans (Qld) Pty Limited [2005] [2005] QCCTPAMD 43

Peter & Anor v Tyson [2015] QCATA 9

REPRESENTATION:

 

Applicant:

Self-represented

Respondent:

Self-represented

APPEARANCES:

 

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

REASONS FOR DECISION

Introduction

  1. [1]
    The Applicants filed an Application to review a decision on 10 March 2021 (the Application).
  2. [2]
    By the Application, the Applicants seek a review of a decision of the Chief Executive, Department of Justice and Attorney-General – Office of Fair Trading (the Chief Executive) made on 12 February 2021 (the Decision).
  3. [3]
    By the Decision, the Chief Executive, by a delegate of the Chief Executive, decided that a claim lodged by the Applicants on 19 November 2020 (the Claim) was invalid, pursuant to s 90 of the Agents Financial Administration Act 2014 (Qld) (the AFAA). The Decision was given by way of an Information Notice.
  4. [4]
    By the Claim, the Applicant made a claim against the claim fund under the AFAA for the amount of $3,366.09 plus interest.

Jurisdiction

  1. [5]
    The Tribunal has jurisdiction to review a decision of the Chief Executive for which an information notice is given under, relevantly, s 90 of the AFAA.[1]

Nature of the review

  1. [6]
    The purpose of the review of a reviewable decision is to produce the correct and preferable decision.[2] The Tribunal must hear and decide a review of a reviewable decision by way of a fresh hearing on the merits.[3] The Tribunal must have access to any information that could have been or was considered by the original decision‑maker, plus any other material that becomes available and may be lawfully considered.[4]
  2. [7]
    The Tribunal is not required to identify an error in either the process or the reasoning that led to the decision being made and there is no presumption that the original decision is correct.[5]

The Claim

  1. [8]
    The stated basis of the Applicants’ claim was as follows:

Statement of Claims:

  1. We bought the property at 83 Middle Creek Road, Federal on 11/12/2014.
  1. Elders Real Estate, Gympie managed our property since 11/12/2014 until they sold their business to Century 21 Platinum agents some times in August 2017.
  1. We were not informed by Elders regarding this business sale.
  1. The previous owner from whom we bought this property had lease agreement with the tenant until 30/06/2035. We agreed to continue with this lease agreement in our purchase contract. The lease agreement is included in Appendix A, our purchase agreement is included in Appendix B and the appointment of real estate agent (Form 6) is included in Appendix C.
  1. The rent review dates (CPI review and market review) are specified in page 3 of this lease agreement.
  1. The details of the rent review are specified in section 4.2, 4.3 and 4.4 of this lease agreement.
  1. The annual rent for this property for the period 1/7/2013 to 30/6/2014 was $4,550 as per Elders letter dated 12/6/2014. This letter is included in Appendix D.
  1. The CPI rental review for the period 1/7/2014 to 30/6/2015 was $4,692.75 which was advised by Elders letter dated 12/6/2014. This letter is included in Appendix D. We agree with this CPI rental review.
  1. According to 2014-15 EOFY (End of year statement) the tenants have paid $2,770.37 rent amount from 11/12/2014 to 30/06/2015. We agree with this rent payment. This EOFY statement is included in Appendix E
  1. We did not received [sic] the CPI rental review for the period 1/7/2015 to 30/6/2016 from the Elders. According to 2015-16 EOFY the tenants have paid $4,850.76 rent amount. This EOFY statement is included in Appendix E. As per section 4.2, 4.3 and 4.4 of this lease agreement and the ABS published CPI index, we calculated the CPI rental review for the period 1/7/2015 to 30/6/2016 to be $4,817.37. Thus Elders invoiced $33.39 extra rent to the tenants.
  1. The market rent review for the period 1/7/2016 to 30/6/2017 was $5,850. This was advised to us by Elders letter dated 10/05/2015. This letter is included in Appendix D. We agree with this market rental review. According to 2016-17 EOFY, the tenants have paid $ $4,666.50 rent amount. Thus Elders invoiced $1,183.50 less rent amount to the tenants.
  1. We did not received [sic] the CPI rental review for the period 1/7/2017 to 30/6/2018 from the Elders. According to 2017-18 EOFY, the tenants have paid $4,493.92 ($3,477 to Elders and $1,189.50 to Century 21) rent amount. This EOFY statement is included in Appendix E. As per section 4.2, 4.3 and 4.4 of this lease agreement and the ABS published CPI index, we calculated the CPI rental review for the period 1/7/2017 to 30/6/2018 to be $5,993.68. Thus Elders invoiced $1,499.76 less rent amount to the tenants.
  1. We did not received [sic] the CPI rental review for the period 1/7/2018 to 30/6/2019 from Century 21. According to 2018-19 EOFY, the tenants have paid $ $4,268.65 rent amount until the property was sold on 20/04/2019. This EOFY statement is included in Appendix E. As per section 4.2, 4.3 and 4.4 of this lease agreement and the ABS published CPI index, we calculated the CPI rental review for the period 1/7/2018 to 20/04/2019 to be $4,984.86. Thus Elders invoiced $716.21 less rent amount to the tenants.
  1. We became aware of these underpaid rent amounts in February 2019. We emailed to Century 21 advising of this issue initially on 6/02/2019. Kim Edwards from Century 21 on her email dated 14/02/2019 has accepted that Elders had missed some increases. She also had confirmed that they will obtain the maximum market review increase for 2019-20. The 2019-20 market rental review by Century 21 was $100 /week (included in Appendix D) which is $650 per annum less than the 2016-17 market review. This is not accordance with clause 4.2(b) of the lease agreement.
  1. We tried to resolve this matter by corresponding through many emails but without success. All these emails are included in Appendix F.
  1. We made a claim of $5,993.39 with Century 21 on 3/11/2020. This claim has neither been acknowledged nor been responded as to date.
  1. Our revised claim is for the amount $3,366.09 and interest. The details of this revised claim is included in the next page.

The relevant AFAA provisions

  1. [9]
    The claim fund is established under the AFAA (s 78(1)).
  2. [10]
    The fund must be used to pay the amount of all claims allowed against the claim fund (s 79(1)).
  3. [11]
    Pursuant to s 82(1) of the AFAA, a person may claim against the claim fund if the person suffers financial loss because of the happening of any of the events listed in that provision. The relevant event is that set out in s 82(1)(b):

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

The Applicants’ contentions

  1. [12]
    The Applicants contend that the facts relied upon constitute a ‘misapplication’ within the meaning of s 82(1)(b). They point out that there is no definition of that term in the AFAA. The Applicants rely upon the following dictionary definitions:
    1. the Merriam Webster dictionary: ‘the act or instance of applying something incorrectly or improperly’;
    2. the Cambridge dictionary: ‘the act or process of using something badly, wrongly, or in a way that was not intended’.

The Chief Executive’s contentions

  1. [13]
    In summary, the Chief Executive contends that:
    1. the conduct complained of by the Applicants ‘rises no higher than the Respondents failing to do their job properly, breach of duty and/or negligence’;[6]
    2. such conduct does not ‘constitute a breach of section 82(1)(b) of AFAA or amount to any other “claimable event” listed in section 82(1) of AFAA’.[7]

Analysis

  1. [14]
    In my view, three matters arise for consideration, namely:
    1. the proper construction of the term ‘misapplication’ in s 82(1)(b) of AFAA;
    2. the nature of the Applicants’ claim;
    3. whether the conduct complained of falls within s 82(1)(b) of AFAA.[8]

‘Misapplication’

  1. [15]
    Two preliminary observations can be made. First, in construing the word ‘misapplication’, I consider that it should be construed in the context of the whole phrase ‘stealing, misappropriation or misapplication’. Second, each of those terms applies to property entrusted to a ‘relevant person’. In the case of misapplication, it must be a misapplication of property.
  2. [16]
    In Norman v Hyman and Hymans (Qld) Pty Limited,[9] the Commercial and Consumer Tribunal found that the term ‘misapplication’ meant ‘wrongfully bring into operation or use’.[10] I would adopt a slightly different construction, namely ‘a wrongful application or use of’, having regard to both the Macquarie dictionary definition of ‘misapplication’, namely, ‘to make a wrong application or use of’, and the context in which ‘misapplication’ is used in s 82(1)(b). Consequently, in the present case, the relevant event would need to be one in which there has been a wrongful application or use of property entrusted to a relevant person.

The nature of the Applicants’ claim

  1. [17]
    The loss which the Applicants allege they have suffered is an underpayment of rent resulting from an alleged failure by two separate real estate agents (the second named and third named Respondents) (the real estate agents) to correctly calculate the rent payable by the tenant occupying the Applicants’ property having regard to the rent review provisions of the governing lease.
  2. [18]
    Assuming the facts as stated by the Applicants are correct, the conduct complained of would, in my view, arguably constitute a failure to exercise reasonable care on the part of each real estate agent and give rise to a claim for breach of contract or, possibly, in negligence. I consider that any such loss has arisen in the course of a contractual relationship between the Applicant and the real estate agents.

Was there a misapplication pursuant to s 82(1)(b)?

  1. [19]
    The Appeal Tribunal has held that:
    1. in relation to the predecessor legislation, the Property Agents and Motor Dealers Act 2000 (Qld), the legislation does not respond to claims on the claim fund for negligence or breach of contract;[11]
    2. in relation to s 82(1) of the ATAA, a breach of fiduciary duty or a failure to act in good faith is not conduct that is a prescribed event addressed by the claim fund.[12]
  2. [20]
    In my view, the conduct the subject of the Applicants’ claim does not constitute a ‘misapplication’ of property entrusted to the real estate agents.[13] There has not been a wrongful application or use of property entrusted to those persons. The factual basis for the claim merely raises an alleged failure by the real estate agents to take reasonable care in the discharge of their contractual obligations vis-à-vis the Applicants. Subsection 82(1)(b) is not engaged in the circumstances of this case. Consequently, I find that the Applicants are not entitled to make a claim on the claim fund.

Orders

  1. [21]
    For the reasons set out above:
    1. I find that the correct and preferable decision is that the decision of the Chief Executive, Department of Justice and Attorney-General – Office of Fair Trading made on 12 February 2021 is confirmed;
    2. the Application to review a decision filed on 10 March 2021 is dismissed.

Footnotes

[1]  See s 77(b)(ii) of the AFAA; s 9 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).

[2]  Subsection 20(1) of the QCAT Act.

[3]  Subsection 20(2) of the QCAT Act. See also Factory Direct Pools Pty Ltd v Queensland Building Services Authority [2013] QCAT 34, [7].

[4] CTA v Queensland Police Service [2018] QCAT 440, [11].

[5] Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58, [9].

[6]  Chief Executive’s Submissions filed on 8 September 2023, [41].

[7]  Chief Executive’s Submissions filed on 8 September 2023, [43].

[8]  The Applicants have not contended, and I cannot identify a basis for finding that, the conduct complained of brings into play any of the other 'events' listed in s 82(1) of AFAA.

[9]  [2005] QCCTPAMD 43.

[10]  At [21].

[11] Peter & Anor v Tyson [2015] QCATA 9, [13], cited with approval in Holgar v Chief Executive, Department of Justice and Attorney-General & Ors [2021] QCATA 113, [70], [74]. A similar approach was adopted in the Commercial and Consumer Tribunal in Murphy, H. v Hancock, D. and Taylor, J. M. t/as Montville, Mapleton & Maleny Real Estate [2004] QCCTPAMD 10, [19].

[12] Holgar v Chief Executive, Department of Justice and Attorney-General & Ors [2021] QCATA 113, [70], [74].

[13]  And the conduct does not otherwise constitute an event falling within the scope of s 82(1) of the ATAA.

Close

Editorial Notes

  • Published Case Name:

    Khadka & Anor v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading & Ors

  • Shortened Case Name:

    Khadka v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading

  • MNC:

    [2023] QCAT 450

  • Court:

    QCAT

  • Judge(s):

    Member Lumb

  • Date:

    23 Nov 2023

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
CTA v Queensland Police Service [2018] QCAT 440
2 citations
Jump To
Cite 1 - [2018] QCAT 440
Cite 2 - [2018] QCAT 440
Factory Direct Pools Pty Ltd v Queensland Building Services Authority [2013] QCAT 34
2 citations
Jump To
Cite 1 - [2013] QCAT 34
Cite 2 - [2013] QCAT 34
H v Hancock [2004] QCCT PAMD 10
2 citations
Jump To
Cite 1 - [2004] QCCT PAMD 10
Cite 2 - [2004] QCCT PAMD 10
Holgar v Chief Executive, Department of Justice and Attorney-General [2021] QCATA 113
3 citations
Jump To
Cite 1 - [2021] QCATA 113
Cite 2 - [2021] QCATA 113
Cite 3 - [2021] QCATA 113
Kehl v Board of Professional Engineers of Queensland [2010] QCATA 58
2 citations
Jump To
Cite 1 - [2010] QCATA 58
Cite 2 - [2010] QCATA 58
Peter & Anor v Tyson [2015] QCATA 9
2 citations
Jump To
Cite 1 - [2015] QCATA 9
Cite 2 - [2015] QCATA 9

Cases Citing

Case NameFull CitationFrequency
Lin v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading [2024] QCAT 3713 citations
1

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