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Lin v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading[2024] QCAT 371

Lin v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading[2024] QCAT 371

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Lin v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading & Ors [2024] QCAT 371

PARTIES:

SUICHUN Lin

(applicant)

v

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

(respondent)

Ralan Property Services Qld Pty Ltd (externally administrated)

(respondent)

Catherine Madigan

(respondent)

William Peter O'Dwyer

(respondent)

Ralan Capital Investment Pty Ltd (externally administered)

(respondent)

Koon Tung Chu

(respondent)

APPLICATION NO/S:

GAR326-20

MATTER TYPE:

General administrative review matters

DELIVERED ON:

6 September 2024

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Lumb

ORDERS:

  1. The time within which the Applicant’s claim against the claim fund established under the Agents Financial Administration Act 2014 (Qld) may be made is extended to 29 June 2020.
  2. The decision made by the Respondent to reject the Applicant’s claim against the claim fund is set aside.
  3. The Applicant’s claim against the claim fund is allowed wholly.
  4. The amount of the Applicant’s financial loss is $179,300.00.
  5. The name of the person who is liable for the Applicant’s financial loss is Ralan Property Services QLD Pty Ltd (externally administrated).
  6. No amount is to be reimbursed to the claim fund by Ralan Property Services QLD Pty Ltd (externally administrated).

CATCHWORDS:

ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – where applicant entered into two contracts to buy an apartment off the plan  – where applicant paid 10% deposit under each contract to seller’s agent – where applicant signed document purporting to loan all bar $200.00 of the deposit monies to a related company of the seller – where applicant signed further document acknowledging to the seller that the agreed deposit monies would be transferred to the related company – where agent paid deposit monies into the agent’s trust account  – where the agent subsequently paid out the amount of the deposit monies bar $200.00 to the related company – where agent and related company subsequently placed into liquidation – where applicant made a claim against the claim fund established under Agents Financial Administration Act 2014 (Qld) in respect of the monies paid out by the agent – where Chief Executive decided claim was invalid – where Applicant sought review of decision – whether claimed loss was suffered because of the happening of an ‘event’ as specified in s 82(1)(a) or (b) of the Act

Acts Interpretation Act 1954 (Qld), s 36, Schedule 1

Agents Financial Administration Act 2014 (Qld), s 11, s 15, s 16, s 17, s 18, s 21, s 22, s 77, s 82, s 90, s 122, Schedule 1

Body Corporate and Community Management Act 1997 (Qld), s 4, s 211A, s 218A, s 218B, s 218C, s 218D, s 318

Property Occupations Act 2014 (Qld), s 16, s 26

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 9, s 20, s 21

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

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

Peter & Anor v Tyson [2015] QCATA 9

APPEARANCES & REPRESENTATION:

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]
    By an Application to review a decision filed on 2 September 2020 (‘the Review Application’), the Applicant seeks a review of a decision of the Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading (‘the Chief Executive’) made on 28 August 2020 (‘the Review Decision’).
  2. [2]
    By the Decision, the Chief Executive (on an internal review that had been sought by the Applicant on 19 August 2020) confirmed the Chief Executive’s earlier decision  dated 4 August 2020 (‘the Original Decision’) that a claim lodged by the Applicant against the claim fund on 29 June 2020 (‘the Claim’) was invalid, pursuant to s 90 of the Agents Financial Administration Act 2014 (Qld) (‘the AFAA’).
  3. [3]
    By the Claim, the Applicant claimed the amount of $179,300.00.[1]
  4. [4]
    The Tribunal has jurisdiction to review the Review Decision,[2] and to decide whether to extend the time within which to make a claim under s 122 of the AFAA.[3]

Nature of the review

  1. [5]
    The purpose of the review of a reviewable decision is to produce the correct and preferable decision.[4] The Tribunal must hear and decide a review of a reviewable decision by way of a fresh hearing on the merits.[5] 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.[6] The decision-maker for the reviewable decision must use his or her best endeavours to help the Tribunal so that it can make its decision on the review.[7]
  2. [6]
    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.[8]

The relevant background to the Claim

  1. [7]
    In early 2016, the Applicant was introduced to Koon Tung Chu (‘Mr Chu’).[9] Mr Chu is one of the Respondents to the proceeding. Mr Chu was a sales consultant. At all relevant times Mr Chu held a valid real estate agent licence.[10] The Chief Executive was satisfied, on the balance of probabilities, as am I, that Mr Chu was acting as an agent for Ralan Property Services QLD Pty Ltd (‘Ralan Services’). Ralan Services held a valid real estate agent licence.[11]
  2. [8]
    On or shortly prior to 18 March 2016, the Applicant decided to purchase two apartments ‘off the plan’ from ‘Ralan’ (the Ralan Group) and on 18 March 2016, the Applicant transferred $179,500.00 from her home mortgage bank account to her ANZ bank credit card account.[12]
  3. [9]
    On 19 March 2016, the Applicant signed the following contract documents as buyer:[13]
    1. a Contract of Sale to buy proposed Lot 4202 (‘Lot 4202’) at 3 Norfolk Avenue, Surfers Paradise (‘the Norfolk contract’);
    2. a Contract of Sale to buy proposed Lot 4706 (‘Lot 4706’) at 2 Birt Avenue, Surfers Paradise (‘the Birt contract’).
  4. [10]
    The Norfolk contract provided, relevantly:
    1. that the Seller was Ralan Paradise No. 2 Pty Ltd (‘the Norfolk seller’) (Reference Schedule, Item 2);
    2. that the Agent was Ralan Services (Reference Schedule, Item 1);
    3. that the Seller’s Solicitor was ‘David S Clark & Associates with J.H. Fisher & Sons’ (Reference Schedule, Item 3);
    4. that the Buyer was the Applicant, and that the Applicant was ‘Self-representing’ (Reference Schedule, Items 4 and 5);
    5. that the Purchase Price for Lot 4202 was $905,000.00 (Reference Schedule, Item 8);
    6. that the Deposit was $90,500.00 ‘being 10% of the Purchase Price …’ and that the full amount was payable ‘on the signing of this Contract’ (Reference Schedule, Item 9);
    7. the Deposit Holder was Ralan Services, and bank account details were provided, including the account name of Ralan Services and the identified National Australia Bank account BSB and account number (‘the Deposit bank account’) (Reference Schedule, Item 10).
  5. [11]
    The Terms and Conditions forming part of the contract documents provided, relevantly:
    1. by clause 2.3:
      1. ‘Act’ was defined to mean the ‘Body Corporate and Community Management Act 1997’;
      2. ‘Law’ was defined to mean ‘any statute, act, rule, order, regulation or common law of Australia which is enacted or decided by the Commonwealth of Australia, a State, Territory, local authority, Court or tribunal.’;
      3. ‘Obligation’ was defined to mean ‘any legal, equitable, contractual, statutory or other obligation, commitment, duty, undertaking or liability’;
      4. ‘Requirement’ was defined to mean ‘any requirement or authorisation of a Seller’s Financier, any Government Agency, Court or other authority necessary or desirable under applicable Law.’;
    2. by clause 8.1:

The Deposit is:

  1. part of the Purchase Price; and
  2. paid as an assurance for the Buyer’s performance of its Obligations under this Contract, subject to any Obligations of the Seller to return or refund the Deposit to the Buyer under this Contract or a Law.
  1. by clause 8.2: ‘The Buyer satisfies its Obligations to pay the Deposit to the Seller by paying (and the Buyer must pay) the Deposit to the Deposit Holder at the time specified in the Reference Schedule to be held by the Deposit Holder until either Party becomes entitled to it under this Contract.’;
  2. by clause 8.3: ‘The Deposit Holder will hold and apply the Deposit in accordance with its Obligations or such Obligations that apply under the Act to holding of money and this Contract. The provisions of the Act prevail in the event of any inconsistency with provision of this Contract.’;
  3. by clause 8.6:

The Deposit Holder is authorised to:

  1. invest the Deposit (when fully paid) with a bank selected by the Seller in the name of the Deposit Holder in trust in an interest bearing account for the Seller and the Buyer;
  2. provide the Parties’ tax file numbers under applicable income tax legislation when making the investment;
  3. comply with applicable Laws and Requirements in connection with investment of the Deposit; and
  4. in investing the Deposit in accordance with clause 8.6(a) from time to time during the term of this Contract, reinvest the Deposit with another bank to obtain a preferable interest rate on the investment.
  1. by clause 8.14:

The Seller and Buyer acknowledge that they are respectively entitled to, and must direct the Deposit Holder to pay, subject to the Act:

  1. the Deposit to, if this Contract:
    1. Settles, the Seller;
    2. it is terminated without default by the Buyer, the Buyer; or
    3. is terminated because of the Buyer’s default, the Seller;

…

  1. [12]
    The Birt contract provided, relevantly:
    1. that the Seller was Ralan Paradise No. 3 Pty Ltd (‘the Birt seller’) (Reference Schedule, Item 2);
    2. that the Agent was Ralan Services (Reference Schedule, Item 1);
    3. that the Seller’s Solicitor was ‘David S Clark & Associates’ (‘Clark & Associates’) (Reference Schedule, Item 3);
    4. that the Buyer was the Applicant, and that the Applicant was ‘Self-representing’ (Reference Schedule, Items 4 and 5);
    5. that the Purchase Price for Lot 4706 was $890,000.00 (Reference Schedule, Item 8);
    6. that the Deposit was $89,000.00 ‘being 10% of the Purchase Price …’ and that the full amount was payable ‘on the signing of this Contract’ (Reference Schedule, Item 9);
    7. the Deposit Holder was Ralan Services, and the Deposit bank account was identified (Reference Schedule, Item 10).
  2. [13]
    The Terms and Conditions forming part of the Birt contract documents included the same terms set out at paragraph [11] above.
  3. [14]
    On 20 March 2016, Mr Chu brought an EFTPOS machine to the Applicant’s place, and the Applicant used her credit card to transfer $179,500.00 (being the total of the two Deposits) into the Deposit bank account.[14]
  4. [15]
    Mr Chu and the Applicant had a conversation in relation to the Deposits. It appears that this took place on 20 March 2016 (or, alternatively, 21 March 2016).[15] The Applicant’s evidence is that:[16]
    1. Mr Chu said to her that she had three options on interest returned for the 10% deposit:
      1. the deposit monies would have zero interest if they were kept in the NAB trust bank account;
      2. the deposit monies could only earn 2 to 3% interest if they were invested as term deposits;
      3. if she could lend the ‘trust fund’ to Mr Chu’s ‘boss’ William O'Dwyer to manage, the Applicant would be able to get 15% interest guaranteed and that the interest earned would be enough to pay for her ‘stamp duties’ at settlement;
    2. for the third option, the Applicant asked Mr Chu if there were any risks involved, and he said to her that Mr O'Dwyer had been a very successful property developer; the property markets were booming; and that she would appreciate ‘him’ (presumably Mr Chu) for the arrangements;
    3. Mr Chu also said that if Mr O'Dwyer ever changed his mind and wanted to leave the business behind, Mr Chu and other sales managers would continue to deliver the project and keep the promise to the clients.
  5. [16]
    On 21 March 2016, Mr Chu brought two ‘agreement letters’ (as described by the Applicant) to the Applicant’s home. The Applicant was told that they were standard arrangements which did not necessitate legal representation and that she could get a lawyer at the time of settlement.[17]
  6. [17]
    The Applicant signed four documents, two relating to the Norfolk project and two relating to the Birt project. All of the documents were addressed to William O'Dwyer (‘Mr O'Dwyer’) who is one of the Respondents to this proceeding.
  7. [18]
    With respect to the Norfolk project, the first document had been prepared in the form of a letter from the Applicant to Mr O'Dwyer. Under Mr O'Dwyer’s name was a reference to ‘Ralan Capital Investment Pty Limited’ (‘Ralan Investment’). The document was signed by the Applicant and a handwritten date of 21 March 2016 was included both at the top of the letter and under the ‘GUARANTEE’ at the end of the letter. This document (‘the Norfolk loan document’) stated, amongst other matters:

This serves as confirmation that I/We, [the Applicant] loaned [Ralan Investment] the amount of $90,400.00 under the following terms and conditions:

  1. The capital amount is $90,400.00.
  2. The term is the completion of the [‘Ralan project’ at Norfolk Avenue].
  3. Interest, at the rate of 15% per annum, is to be calculated on the capital amount from the date the capital amount is received by [Ralan Investment]. Interest will accrue in arrears on each anniversary of the date of this agreement.
  4. The repayment of the capital and accrued Interest will be on completion of the [‘Ralan project’ at Norfolk Avenue].

…

  1. [19]
    By clause 6, there was an acknowledgement by the Applicant that ‘you’ (seemingly a reference to Mr O'Dwyer) had advised the Applicant of various matters including to obtain financial, taxation, legal and any other advice in connection with the loan and the terms and conditions, from the Applicant’s own independent advisors and that such advice had not been provided to the Applicant by Mr O'Dwyer in connection with the loan and any of the terms and conditions.
  2. [20]
    Underneath the Applicant’s signature was a heading ‘ACCEPTANCE’ under which was stated: ‘Ralan Capital Investment Pty Limited’ acknowledges and accepts the above terms and Conditions.’ The document did not purport to be signed on behalf of Ralan Investment. However, underneath that section appears the word ‘GUARANTEE’ and underneath that appears:

I, WILLIAM O'DWYER of Level 6, 282 Victoria Avenue, Chatswood guarantee the due and punctual payment of interest on the loaned funds, and if Item 5 above applies, the repayment of the loan.

  1. [21]
    It purported to have been signed by Mr O'Dwyer (and witnessed).
  2. [22]
    The second document concerning the Norfolk project (‘the Norfolk acknowledgement’) was addressed to Mr O'Dwyer of Ralan Services and was:
    1. signed by Mr O'Dwyer for (and as Managing Director of) Ralan Paradise No 2 (the Norfolk seller), next to which a handwritten date of 21 March 2016 appears;
    2. signed by the Applicant with a handwritten date of 21 March 2016.
  3. [23]
    The Norfolk acknowledgement provided that ‘This hereby serves as an acknowledgement’ by the Norfolk seller and the Applicant:

That the deposit held on Unit 4202/3 Norfolk Avenue, SURFERS PARADISE QLD 4217 is to be $100.00 and the balance of funds currently being held over and above the deposit being $90,400.00 is to be transferred to [Ralan Investment].

  1. [24]
    Two corresponding documents, also dated 21 March 2016, were signed by the Applicant in relation to the Birt project. The first document was in the same terms as the Norfolk loan document save that the amount identified was $88,900.00, and the stated ‘term’ was the completion of the Birt project. The acknowledgement was in the same terms as the Norfolk acknowledgement save that it referred to the proposed lot in the Birt project and also referred to, and was signed by Mr O'Dwyer on behalf of, the Birt seller. For convenience only, I will refer to the respective loan documents and acknowledgements collectively as ‘the side agreements’.
  2. [25]
    On 22 March 2016, the Applicant received two emails attaching copies of trust account receipts in relation to the Deposits.[18]
  3. [26]
    The first of the receipts is headed ‘Ralan Property Services Qld Pty Ltd’ and is dated 22 March 2016. It also refers to ‘Licensee: Ralan Property Services QLD Pty Ltd’ and is signed by Kate Madigan (who is one of the Respondents to this proceeding). The content of the receipt states, relevantly:
    1. ‘Agents Financial Administration Act 2014 Trust Account Receipt: 002436’
    2. ‘Received from’ with the name of the Applicant and her address included;
    3. ‘Description: Deposit 3NOR42022’;
    4. ‘Property: 4202/3 Norfolk Avenue SURFERS PARADISE’;
    5. ‘P/Ref: 3NOR4202’;
    6. ‘Vendor: RP242022’;
    7. “Received: Total $90,500.00 (Direct Deposit $90,500.00)’.
  4. [27]
    The second of the receipts was also signed by Ms Madigan and is in the same terms save for the following:
    1. the Receipt number is 002437;
    2. the Description is ‘Deposit 2BIR27062’;
    3. the Property is ‘27096/2 Birt Avenue SURFERS PARADISE’;
    4. the ‘P/Ref’ is ‘2BIR27062’;
    5. the Vendor is ‘RP327062’;
    6. in relation to the item ‘Received’, the amount of both the ‘Total’ and the ‘Direct Deposit” is $89,000.00.
  5. [28]
    I find that:
    1. on 22 March 2016, the respective deposit monies of $90,500.00 and $89,000.00 were paid into the trust account of Ralan Services;[19]
    2. subsequently on 22 March 2016, $90,400.00 of the deposit monies for Lot 4202, and $88,900.00 of the deposit monies for Lot 4706 were paid from the trust account of Ralan Services;[20]
    3. the respective deposit monies of $90,400.00 and $88,900.00 were paid by Ralan Services to Ralan Investment.[21]
  6. [29]
    The Applicant’s material includes correspondence dated 22 March 2016 (‘the 22 March letter’) from Ralan Services signed by Louise Johnson ‘Business Manager’ on behalf of Ralan Services. It states, relevantly:

Congratulations on your decision to purchase unit 2706/2 Birt Avenue, SURFERS PARADISE QLD 4217.

Naturally, we are pleased that we have been able to assist you with the addition of another property to your property portfolio and trust that we can continue to assist you with the accumulation of many more in the future.

…

  1. [30]
    On 23 March 2016, an ‘exchange’ of the Norfolk contract and the Birt contract took place.[22] Clarke and Associates provided correspondence dated 23 March 2016 to the Applicant in respect of each of the properties. The correspondence was in the same terms save for the reference to the respective properties. The correspondence stated, relevantly:

We confirm that we have attended to the exchange of Contracts with respect to your Client’s purchase of the above property. We now enclose the following documents to complete exchange:

  1. Contract documents acknowledgement;
  2. Notice under section 421 of the Environmental Protection Act;
  3. Form 8 under the Property Occupation [sic] Act 2014;
  1. Waiver of Cooling Off Period;
  1. Project Statement incorporating BC am a Disclosure Statements; and
  1. Contract of Sale.

The deposit holder has been directed to hold the deposit in accordance with the Contract.

…

  1. [31]
    The Applicant’s material also includes correspondence dated 29 March 2016 from Ralan Services signed by Louise Johnson ‘Business Manager’ on behalf of Ralan Services. It is in the same terms as the 22 March letter save that it refers to the purchase of Unit 4202/3 Norfolk Avenue.
  2. [32]
    During March 2016, Mr O'Dwyer was:
    1. the managing director of each of the sellers;[23]
    2. one of two directors of Ralan Services;[24]
    3. the ‘executive officer’[25] of Ralan Services;[26] and
    4. the sole director of Ralan Investment.[27]
  3. [33]
    On 30 July 2019, joint and several voluntary administrators (‘the Administrators’) were appointed voluntary administrators of certain companies with the Ralan Group of companies.
  4. [34]
    On 31 July 2019, the Applicant received an email from the Administrators, and the Applicant says that this was the first knowledge she had of her potential financial loss.[28]
  5. [35]
    Neither the Norfolk project nor the Birt project was constructed.
  6. [36]
    The Administrators prepared a Voluntary Administrators’ Report dated 28 November 2019. That report stated, amongst other matters:
    1. the Ralan Group commenced as a project marketing company in 1998 selling off the plan apartments for developers and in 2008 expanded into property development;[29]
    2. at the date of the Administrators’ appointment, the Group had completed over 30 developments, mostly in New South Wales;[30]
    3. in 2014, the builder primarily used by the Group to construct its developments entered administration which had a significant financial impact on the Group and its ability to continue as a result of increased costs and the overall losses it suffered on the five developments being built at the time;[31]
    4. as a result of an unsustainable business model that replicated a partial Ponzi scheme, accumulated losses and poor management of the group, the Group was placed into administration on 30 July 2019;[32]
    5. at the date of the Administrators’ appointment there were approximately $238 million owed to secured creditors, approximately $323 million owed to unsecured creditors, and approximately $3 million owed in priority claims (employees);[33]
    6. the Administrators’ preliminary investigations revealed that the Group had been trading whilst insolvent from at least 30 June 2014, if not earlier, when the Group’s builder entered voluntary administration which had a knock on financial impact to the group and that after this date the Group continued to make losses on all developments (with the exception of Ruby Tower 1 which was still to be determined).[34]
  7. [37]
    On 17 December 2019, Ralan Services was placed into liquidation.
  8. [38]
    On 1 March 2020, Ralan Investment was placed into liquidation.
  9. [39]
    On 29 June 2020, the Claim was lodged.
  10. [40]
    On 10 February 2021, the Chief Executive appointed joint and several receivers over the trust property of Ralan Services.
  11. [41]
    On 29 March 2021, the Applicant lodged a claim with the receivers for $200.00 in deposit monies held in the trust account.
  12. [42]
    On 20 July 2021, Mr O'Dwyer became an undischarged bankrupt.
  13. [43]
    On 16 February 2022, the Federal Court of Australia decided that the AFAA does not prevent a liquidator imposing an equitable lien over a company’s trust account to pay the reasonable remuneration and expenses in administering trust property in priority to creditors.
  14. [44]
    On 24 May 2022, the receivers paid the Applicant the whole $200.00 from the trust account in satisfaction of the Applicant’s claim on the trust property.
  15. [45]
    On 18 August 2022, the receivers delivered their Final Claims Report (‘the final claims report’).
  16. [46]
    The arrangement involving the side agreements was a widespread practice within the Ralan Group, apparently involving more than 1,000 buyers in total.[35]

The issues

  1. [47]
    Having regard to the parties’ respective submissions, I consider that in determining the correct and preferable decision, the primary questions that arise are:
    1. whether the Claim was lodged within the time required by the AFAA;
    2. if not, whether an extension of time should be granted to the Applicant;
    3. if so, whether one or more of the following events happened:
      1. a contravention of  s 21 or s 22 of the AFAA;
      2. a stealing, misappropriation or misapplication within the meaning of s 82(1)(b) of the AFAA;
    4. if so, whether the Applicant has suffered financial loss because of the happening of one or more such event (and, if so, how much loss).
  2. [48]
    I commence with the question of whether an extension of time is required and, if so, whether it should be granted to the Applicant.

Should an extension of time be granted?

  1. [49]
    Section 82 of the AFAA provided, relevantly:[36]
  1. A person may claim against the fund if the person suffers financial loss because of the happening of any of the following events—
  1. a contravention of section 21 or 22;
  1. 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;

…

  1. [50]
    Section 85 of the AFAA provided:
  1. 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.
  1. A person may make the claim against the fund for financial loss for the happening of an event only if the person makes the claim within the earlier of the following—
  1. 1 year after the person becomes aware that the person has suffered the loss;
  1. 3 years after the happening of the event.
  1. However, if the person starts a proceeding in a court to recover the person’s financial loss within the time permitted to make a claim under subsection (2), the person may make the claim within 3 months after the proceeding in the court ends.
  1. Subsection (3) does not limit the time allowed under subsection (2) to make a claim.
  1. In this section—

court includes QCAT.

  1. [51]
    The Chief Executive’s general contentions are that:
    1. the Claim was not lodged within the time required by the AFAA and that the Applicant requires an extension of time from the Tribunal to lodge the Claim;
    2. the extension of time should not be granted because the evidence firmly establishes that there is no basis upon which the Claim can satisfy the requisite legislative requirements of the AFAA.
  2. [52]
    I find that the Applicant became aware that she had suffered loss on 31 July 2019. The Claim was lodged within one year of that date. The time limit in s 85(2)(a) is satisfied.
  3. [53]
    However, the Chief Executive submits[37] that the relevant event occurred on 21 March 2016 when the Applicant agreed to lend him money to Ralan Investment, and the Claim was lodged more than four years later.
  4. [54]
    For the reasons set out below, I consider that the relevant events were the contravention of s 21 of the AFAA and the misapplication of the $179,300.00, each of which was constituted by the payment out of the deposit monies from Ralan Service’s trust account to Ralan Investment. This occurred on 22 March 2016, well in excess of three years prior to lodgement of the Claim. Subsection 85(2)(b) is not satisfied.
  5. [55]
    The Tribunal has power to extend time under s 122 of the AFAA. That section provides:
  1. QCAT may extend the time within which to make a claim or seek review of a decision of the chief executive if QCAT is satisfied—
  1. the application is made—
  1. for a claim—within the time mentioned in the notice given under section 88(5)(b); or
  1. for a review of a decision of the chief executive—within 42 days after the person is given notice of the decision to be reviewed; and
  1. it is appropriate to extend time having regard to—
  1. the reasons for not making the claim or seeking the review within the time allowed; and
  1. the application generally; and
  1. for a claim, the relative hardship that an extension of time or a refusal to extend time would place on the claimant or respondent; and
  1. the justice of the matter generally.
  1. No appeal lies against QCAT’s decision under this section.
  1. To remove any doubt, it is declared that the QCAT Act, section 61 does not apply for a proceeding to which this section applies.
  1. [56]
    I am satisfied that the Review Application was filed within the time specified in s 122(1)(a)(ii).
  2. [57]
    The Chief Executive opposes an extension of time on the ground that the Claim has ‘no discernible merit’ and it is not appropriate to extend time for an application that has no prospects of success.[38]
  3. [58]
    In my view, it is appropriate to extend time having regard to the following matters:
    1. the Applicant did not know that she had suffered the financial loss until 31 July 2019, and that is the reason why the Claim was not lodged earlier;
    2. the Applicant lodged the Claim within 12 months of the above date;
    3. the deposit monies were paid pursuant to an off the plan contract with a lengthy proposed development period, with a ‘Settlement Date’ of up to 5½ years;
    4. contrary to the Chief Executive’s submissions, the Applicant had good grounds for lodging the Claim (as addressed below);
    5. the Chief Executive does not suggest that there is any financial hardship, nor is there any apparent basis for such a finding, given that the claim fund is paid from funds provided by Treasury;[39]
    6. whilst the Applicant has not provided evidence of her own financial position, the amount of the Claim is substantial;
    7. the Applicant was the victim of a scheme, of which Ralan Services was an active participant, to use buyers’ deposit monies to prop up the business activities of the Ralan Group.
  4. [59]
    Pursuant to s 122(1) of the AFAA, the time within which the Applicant’s claim against the claim fund may be made is extended to 29 June 2020.

The merits of the Review Application

  1. [60]
    The Applicant’s challenge to the Review Decision is based on the fact that the Applicant was entitled to claim against the claim fund because she had suffered financial loss because of the happening of one or both of the events set out in s 82(1)(a) and (b) of the AFAA.
  2. [61]
    There is no dispute that, and I find that, Ralan Services:
    1. was an ‘agent’ for the purposes of Part 7 of the AFAA;[40] and
    2. consequently, was a ‘relevant person’ as defined in s 80 of the AFAA.
  3. [62]
    The initial question is whether there was a contravention of s 21 or s 22 of the AFAA by Ralan Services.

Contravention of s 21 or s 22?

  1. [63]
    Part 2 of the AFAA deals with, amongst other matters, the keeping of trust accounts, payments to trust accounts (Division 2), and payments from trust accounts (Division 3).
  2. [64]
    Section 21 of the AFAA provided (as it still does):
  1. An amount paid to a trust account must be kept in the account until it is paid out under this Act.

Maximum penalty—200 penalty units or 2 years imprisonment.

  1. An amount may be paid from a trust account only in a way permitted under this Act.

Maximum penalty—200 penalty units or 2 years imprisonment.

  1. [65]
    I find that the two trust account receipts (see paragraphs [26] and [27] above) evidence the fact that the deposit monies of $179,500.00, paid by the Applicant to Ralan Services, were paid by Ralan Services into its trust account (set up under the AFAA) on 22 March 2016.
  2. [66]
    The Chief Executive contends that the payment out of the $179,300.00 was permitted by s 18 of the AFAA.
  3. [67]
    In order to address the Chief Executive’s argument, it is necessary to understand the process for payment of money into a trust account.
  4. [68]
    Section 15 of the AFAA provided (as it still does):
  1. Sections 16 and 17 apply if an amount is received by an agent—
  1. for a transaction; or
  1. with a written direction for its use.

Example of paragraph (b)—

an amount received by a property agent with a written direction to use it for advertising or marketing by the property agent or another person

  1. In this section—

amount, received by an agent for a transaction—

  1. includes deposit and purchase monies for the transaction; but
  1. does not include an amount payable to the agent for the transaction in refund of an expense the agent was authorised to incur and did incur and for which the agent holds a receipt.
  1. [69]
    The AFAA does not define the term ‘transaction’. Some guidance is provided by s 15(2). It identifies that an amount received by an agent for a transaction includes ‘deposit and purchase monies for the transaction’. In my view, the adoption of the phrase ‘for a transaction’ is very broad; it requires identification of the transaction for which, relevantly, deposit monies are paid and received. I consider that it is unnecessary that there be, for example, a concluded contract at the time of receipt of the deposit monies. In many transactions (likely a large majority) for the sale of property, whether existing property or a proposed lot, a deposit or part deposit will be paid upon the signing of the contract document. For example, the current standard Contract for Houses and Residential Land in Queensland provides for an initial deposit payable on the day the buyer signs, unless another time is specified in the contract. In my view, in circumstances where, as here, a deposit is paid by a buyer pursuant to a signed contract document by way of offer to purchase, s 15 of the AFAA applies to the deposit monies received by the agent. Any contrary interpretation would be entirely at odds with the consumer protection intent of the legislation.
  2. [70]
    Pursuant to s 16 of the AFAA, an agent must, before the end of the first business day after receiving the ‘amount’, pay it to the agent’s general trust account or, if s 17(1) applies, invest it under s 17(2) of the AFAA. In the present case, Ralan Services paid the whole amount of the Applicant’s deposit monies into its trust account.
  3. [71]
    Section 17 provides that a property agent under the Property Occupations Act 2014 (Qld) may invest an amount in the circumstances specified in s 17(1). In such event, the agent must pay the amount as required to a special trust account with a branch of a financial institution within the State operated for the investment of the amount.[41] In my view, s 17 is not material to the present case.
  4. [72]
    I note turn to the Chief Executive’s argument in relation to s 18 of the ATAA. That section provided (as it still does):
  1. An agent must not pay to a trust account an amount other than an amount that must be paid to the account under section 16 or 17.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

  1. However, if the agent receives an amount consisting of trust money and other money (the non-trust money) that can not be divided, the agent must—
  1. pay the whole amount to the agent’s general trust account; and
  1. draw the non-trust money from the account within 14 days after the money becomes available for drawing.

Example of amount consisting of trust money and non-trust money—

A property agent receives a single cheque for rent and services provided by the property agent, including, for example, television rental.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

  1. [73]
    Schedule 1 contains a definition of ‘trust money’ which includes ‘an amount that was, or ought, under this Act, to have been, deposited in a trust account by an agent’.
  2. [74]
    For the reasons that follow, I reject the Chief Executive’s contention that Ralan Services was not in breach of s 21 because the payment out of the $179,300.00 was ‘non-trust money’ and, consequently, permitted by s 18(2) of the AFAA.
  3. [75]
    I find that:
    1. the deposit monies were paid by the Applicant to Ralan Services by a credit card transaction made on 20 March 2016;
    2. the deposit monies were paid pursuant to the terms of the contract documents signed by the Applicant, and the amount paid ($179,500.00) was the combined amount of deposits payable pursuant to the contract documents;
    3. the deposit monies were paid to Ralan Services which was both the ‘Agent’ and the ‘Deposit Holder’ under the contract documents;
    4. the deposit monies were paid for a ‘transaction’ within the meaning of s 15 of the AFAA, being either a transaction involving the purchase of Lot 4202 and Lot 4706 or, alternatively, a transaction involving the proposed purchase of those Lots;
    5. as evidenced by the trust account receipts, Ralan Services treated the whole of the monies received by it ($179,500.00):
      1. in the nature of a deposit; and
      2. as the deposits respectively payable under the Norfolk contract and the Birt contract;
    6. the content of the ‘acknowledgements’ is consistent with Ralan Services’ treatment of the deposit monies; the acknowledgements expressly recognise that the deposit monies as ‘the deposit held’ on Lot 4202 and Lot 4706 respectively;
    7. the deposit monies received by Ralan Services constituted an ‘amount’ within the meaning of s 15(2) of the AFAA;
    8. s 16 of the AFAA required Ralan Services to pay the deposit monies into its trust account or to invest the monies under s 17(2) (in the event s 17(1) applied);
    9. Ralan Services paid the whole of the deposit monies into its trust account (established pursuant to the AFAA) pursuant to s 16 of the AFAA.
  4. [76]
    In light of the findings in paragraph [75] above, I find that:
    1. the whole amount of $179,500.00 paid into the trust account was ‘trust money’ within the meaning of the AFAA;
    2. the deposit monies constituted a ‘transaction fund’ within the meaning of s 22(6) of the AFAA;[42]
    3. none of that money was ‘non-trust money’, and s 18 of the AFAA had no application;
    4. s 21 of the AFAA required Ralan Services to keep the whole $179,500.00 in the trust account and not pay it from the trust account save as permitted under that Act.
  5. [77]
    For the above reasons, it is my respectful view that the Chief Executive’s reliance on the side agreements is misplaced.
  6. [78]
    Additionally, I am of the view that regardless of the operation of the AFAA, Ralan Services, in its capacity as agent and deposit holder, was bound to hold (and apply) the deposit monies in accordance with the terms and conditions of the contract documents (being the terms of the relevant ‘transaction’), rather than the side agreements.
  7. [79]
    First, the deposit monies formed part of the purchase price and were paid as an assurance for the Applicant’s performance of her obligations under the contracts.
  8. [80]
    Second, the contract documents did not contemplate the making of any loan to a third party (or to the seller), much less contemplate the arrangement the subject of the side agreements.
  9. [81]
    Third, clause 8.3 of the terms and conditions stated that Ralan Services would hold and apply the ‘Deposit’ in accordance with its ‘Obligations’ (as defined) or such Obligations that apply under the Body Corporate and Community Management Act 1997 (Qld) (‘the BCCMA’) to ‘holding of money’ and the contract (with the BCCMA to prevail in the event of any inconsistency with a provision of the contract).[43]
  10. [82]
    Fourth, the side agreements did not purport to constitute an express variation to the contract documents. Upon acceptance of the respective offers made by the Applicant by the respective sellers, both parties would, and did, become bound strictly in accordance with the terms and conditions of the contract documents. The relevant ‘transaction’ (as identified above) was not the arrangement the subject of the side agreements. The Chief Executive’s submissions make no attempt to address the incompatibility of the side agreements with the terms and conditions of the respective ‘transactions’.
  11. [83]
    As I have found, s 21 of the AFAA required Ralan Services to keep the whole of the deposit monies in its trust account and not pay them from the trust account save in a way permitted under that Act.
  12. [84]
    Section 22 dealt with permitted drawings from trust accounts. That section provided (as it still does):
  1. An agent may draw an amount from the agent’s trust account to pay the agent’s transaction fee or transaction expenses for a transaction only if—
  1. the amount is drawn against the transaction fund for the transaction; and
  1. the agent is authorised to draw the amount under this section. Maximum penalty—200 penalty units or 2 years imprisonment.
  1. The agent is authorised to draw an amount from the transaction fund to pay a transaction expense when the expense becomes payable.
  1. After the transaction is finalised, the agent is authorised—
  1. to draw an amount from the transaction fund to pay the person entitled to the amount, or someone else in accordance with the person’s written direction, that is equal to the difference between—
  1. the balance of the transaction fund; and
  1. the total of the agent’s transaction fee and any outstanding transaction expense; and
  1. after the amount, if any, mentioned in paragraph (a) has been paid—to draw the agent’s transaction fee from the transaction fund. Example of when a transaction is finalised— the settlement of a contract for the sale of property or the termination of the contract.
  1. For subsection (3)(a) or (b), if a dispute about the transaction fund arises, the transaction is not taken to be finalised until the agent is authorised to pay out the transaction fund under division 5.
  1. The agent must pay an amount mentioned in subsection (3)(a) to the person entitled to it, or someone else in accordance with the person’s written direction—
  1. if the person asks, in writing, for the balance—within 14 days after receiving the request; or
  1. if the person has not asked, in writing, for the balance—within 42 days after the transaction is finalised.

Maximum penalty—200 penalty units or 2 years imprisonment.

  1. In this section—

transaction expense means an expense an agent is authorised to incur in connection with the performance of the agent’s activities for a transaction.

transaction fee means fees, charges and commission payable for the performance of an agent’s activities for a transaction.

transaction fund means an amount held in an agent’s trust account for a transaction.

  1. [85]
    I find that Ralan Services was not permitted under the AFAA to pay the $179,300.00 of the deposit monies to Ralan Investment on any of the grounds set out in s 22. In particular, Ralan Services was not permitted to draw an amount from the transaction fund until after the transaction was finalised (s 22(3)). That did not occur in the present case. The Applicant’s material includes written submissions seemingly made by the Chief Executive (appearing as amicus curia) to Federal Court. The submissions, which appear to have been made in or about February 2021, included the following:[44]

There is prima facie evidence which supports an allegation that the agent indeed reinvested the deposit monies but those funds were not transferred into any interest earning account, rather, the funds were transferred to an account controlled by the agent and used to keep the project afloat. The deposit funds were not ‘reinvested’ in accordance with the terms of the contract, nor were they paid out of the trust account into a ‘special trust account’ or in any other way in accordance with the provisions of the AFAA …

(footnotes omitted)

  1. [86]
    The next issue is whether the Applicant has suffered the claimed financial loss of $179,300.00 because of the happening of the event being the contravention of s 21.
  2. [87]
    The Chief Executive does not dispute that the amount of $179,300.00 paid to Ralan Investment cannot be recovered by the Applicant. In light of the Voluntary Administrators’ Report and the final claims report, I am satisfied that such amount is irrecoverable.
  3. [88]
    The Chief Executive contends that the release of the sum of $179,300.00 did not cause the Applicant to suffer financial loss; rather, the true cause of the loss was Ralan Investment’s failure to comply with the loan agreement it had with the Applicant (which is a contractual matter between those parties and ‘not a matter for the Fund to concern itself with’).[45]
  4. [89]
    I reject that argument. The loss was suffered because Ralan Services paid the amount of $179,300.00 from its trust account to Ralan Investment in contravention of s 21 of the AFAA. Had Ralan Services complied with its obligation under that provision, it would have retained that amount in its trust account.
  5. [90]
    The Chief Executive’s submissions do not otherwise address the question of financial loss. In light of the Voluntary Administrators’ preliminary investigations revealing that the Ralan Group had been trading whilst insolvent from at least 30 June 2014, it is my view that is more probable than not that the whole of the $179,300.00 was irrecoverable at the time the money was paid to Ralan Investment.
  6. [91]
    In light of this conclusion, I do not consider it necessary to undertake some analysis of the recoverability of the full amount of the deposit monies from time to time subsequent to 22 March 2016. However, if it were considered to be relevant, I am satisfied, on the balance of probabilities, that the whole of the monies would have been recoverable by the Applicant had they remained in the trust account. First, the Applicant was reimbursed the remaining $200.00 of the deposit monies remaining in the account at a rate of 100 cents in the dollar.[46] Second, the final claims report indicates that of the buyers whose claims for reimbursement in relation to trust monies were allowed,[47] those buyers were reimbursed at the rate of 100 cents in the dollar.[48]

Conclusion

  1. [92]
    I am satisfied, on the balance of probabilities, that:
    1. the Applicant may make the Claim under Division 2 of Part 7 of the AFAA;
    2. the Applicant suffered financial loss because of the happening of an event being a contravention of s 21 of the AFAA;
    3. there is no amount to be taken into account pursuant to s 105(3)(a) of the Agents Financial Administration Act 2014 (Qld);
    4. there is no evidence of any amount ordered to be paid to the Applicant as compensation under s 188, s 204 or s 228 of the Property Occupations Act 2014.
  2. [93]
    I am satisfied that the correct and preferable decision is that:
    1. the claim lodged against the claim fund on 29 June 2020 is allowed wholly;[49]
    2. the amount of the Applicant’s financial loss is $179,300.00;[50]
    3. the name of the person who is liable for the Applicant’s financial loss is Ralan Property Services QLD Pty Ltd (externally administrated);[51]
    4. no amount is to be reimbursed to the claim fund by Ralan Property Services QLD Pty Ltd (externally administrated).[52]
  3. [94]
    I now turn to s 82(1)(b) of the AFAA.

Stealing, misappropriation or misapplication?

  1. [95]
    By s 82(1)(b) of the AFAA, a person may claim against the claim fund if the person suffers financial loss because of the happening of an event of 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. [96]
    I accept that the legislation does not respond to claims on the claim fund for negligence or breach of contract.[53]
  3. [97]
    In my view, in the present case, there was a misapplication by a relevant person (Ralan Services) of property entrusted to Ralan Services (being $179,300.00 of the deposit monies) as agent for someone else (the Applicant) in Ralan Services’ capacity as a relevant person.
  4. [98]
    There is no dispute that, and I find that, Ralan Services is a ‘relevant person’ for the purposes of s 82.[54]
  5. [99]
    There is no definition of ‘property’ in the AFAA. However, by operation of s 36 of, and Schedule 1 to, the Acts Interpretation Act 1954 (Qld) the term ‘property’ is taken to mean:

any legal or equitable estate or interest (whether present or future, vested or contingent, or tangible or intangible) in real or personal property of any description (including money), and includes things in action.

  1. [100]
    In my view, the deposit monies paid by the Applicant constituted ‘property’ for the purposes of s 82 of the AFAA.
  2. [101]
    I find that in the circumstances identified in paragraph [75] above, the deposit monies were:
    1. entrusted to Ralan Services in its capacity as a relevant person; and
    2. as agent for, relevantly, the Applicant.
  3. [102]
    The critical question is whether there was a misapplication of the $179,300.00 by Ralan Services.
  4. [103]
    I addressed the meaning of ‘misapplication’ in s 82 in Khadka & Anor v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading & Ors.[55] In my view, the term refers to ‘a wrongful application or use of’ property entrusted to a relevant person.
  5. [104]
    For the following reasons, I consider that there was a misapplication of the Applicant’s deposit monies by Ralan Services.
  6. [105]
    First, I consider that a payment out of trust money (the $179,300.00) from the trust account operated by Ralan Services in contravention of s 21 of the AFAA (as found above) also constituted a misapplication of those monies for the purposes of s 82(1)(b) of the AFAA.
  7. [106]
    Second, I consider that the manner in which Ralan Services dealt with the deposit monies in its trust account was prohibited by the BCCMA and, consequently, constituted a misapplication of those monies.
  8. [107]
    As at 19 March 2016 (and, subsequently, to and including the date of lodgement of the Claim), the BCCMA provided:[56]
    1. by s 218A:

This subdivision applies to the following amounts—

  1. an amount paid towards the purchase of a proposed lot under a contract for the sale of the lot (other than an amount paid at settlement);
  1. an amount paid under another instrument (whether legally binding or not) relating to the sale of a proposed lot.

Examples of instruments for paragraph (b)—

• an option to purchase

• an instrument providing for an expression of interest

  1. by s 218B, relevantly:
  1. The person to whom the amount is paid must pay the amount directly to—
  1. if the contract or instrument states the amount is to be paid to either of the following recognised entities, the recognised entity—
  1. a law practice at its office in Queensland;
  1. a real estate agent carrying on the business of a real estate agent; or
  1. if paragraph (a) does not apply, the public trustee.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

  1. An amount paid to a recognised entity mentioned in subsection (1)(a) or (b) must be—
  1. held by the entity in a prescribed trust account; and
  1. dealt with by the entity in accordance with this subdivision and the law governing the operation of the entity’s prescribed trust account.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

…

  1. by s 218C:
  1. A recognised entity that is paid an amount under section 218B(1) must hold the amount in the entity’s prescribed trust account until a party to the contract or instrument becomes entitled, under this part or otherwise according to law, to a repayment or payment of the amount.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

  1. On a party becoming entitled to a repayment or payment of the amount, the recognised entity must dispose of the amount in accordance with the law governing the operation of the entity’s prescribed trust account.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

  1. Subsections (1) and (2) apply despite anything in the contract or instrument under which the amount was paid to the recognised entity.

(emphasis added)

  1. by s 218D:
  1. A recognised entity that holds an amount paid under section 218B(1) in a prescribed trust account may invest the amount if—
  1. either of the following applies—
  1. the contract or instrument authorises the investment;
  1. the parties to the contract or instrument give the entity their consent to the investment by signed written notice; and
  1. the investment is carried out in accordance with the law governing the operation of the prescribed trust account.
  1. An amount invested as mentioned in subsection (1) is taken to be an amount in the prescribed trust account.
  1. Any proceeds of an investment of an amount as mentioned in subsection (1) must be paid into the prescribed trust account, unless the proceeds are further invested as mentioned in subsection (1).

Maximum penalty for subsection (3)—200 penalty units or 1 year’s imprisonment.

  1. [108]
    I find that, based on the factual findings in relation to the contravention of s 21 of the AFAA:
    1. the deposit monies constituted an amount paid by the Applicant towards the purchase of a proposed lot under a contract for the sale of a lot (being Lot 4202 under the Norfolk contract and Lot 4706 under the Birt contract);
    2. Ralan Services was a ‘recognised entity’ being a real estate agent carrying on the business of a real estate agent;[57]
    3. the deposit monies were paid to Ralan Services;
    4. the deposit monies were held by Ralan Services in a ‘prescribed trust account’ being a trust account kept by Ralan Services under the AFAA;[58]
    5. subject to s 218D, Ralan Services was required to hold the amount of the deposit monies in its trust account until a party to the Norfolk contract and the Birt contract became entitled, under Part 2 of Chapter 5 of the BCCMA or otherwise according to law, to a repayment or payment of that amount;
    6. Ralan Services did not invest the deposit monies as permitted by s 218D;
    7. Ralan Services contravened s 218C of the BCCMA in paying the money from its trust account (to Ralan Investment);
    8. a contravention of s 218C carries with it a maximum penalty of 200 penalty units or 1 year’s imprisonment;
    9. the payment of the deposit monies to Ralan Investment constituted a wrongful application or use of the Applicant’s property, and a ‘misapplication’ of same pursuant to s 82(1)(b) of the AFAA.
  2. [109]
    In my view, the side agreements do not alter this analysis.
  3. [110]
    First, the purported loan agreements were between the Applicant and Ralan Investment, a third party to the respective contracts. The ‘acknowledgements’ were in terms that the balance of the ‘funds’ were to be ‘transferred’ to Ralan Investment. Section 218C required Ralan Services to hold the whole of the deposit monies in its trust account until a party to the contract became entitled (under this part or otherwise according to law) to a repayment or payment of the amount. The side agreements provided for payment to Ralan Investment. Ralan Investment was not a party to the contract. The side agreements did not purport to entitle the respective sellers to payment of the respective amounts of $90,400.00 and $88,900.00 (or any part of those amounts). On the proper construction of s 218C, no amount could lawfully be paid out to Ralan Investment pursuant to that provision.
  4. [111]
    Second, in my view, the respective sellers had not become entitled to payment or repayment of any part of the deposit monies held in the trust account, either under Part 2 of Chapter 5 of the BCCMA or otherwise ‘according to law’. To the contrary, I consider that and payment from the trust account was precluded by the BCCMA (and the AFAA).
  5. [112]
    Third, I rely on the matters set out at paragraphs [78]-[82] above.
  6. [113]
    Fourth, if the side agreements could be considered to override any of s 218A, s 218B or s 218C, it is my view that s 318 of the BCCMA would render the side agreements ineffective. Section 318 of the BCCMA provides that a person cannot waive, or limit the exercise of, rights under the BCCMA or contract out of the provisions of the BCCMA. In my view, the prohibition against contracting out of the provisions of the BCCMA applies whether or not a contrary position is provided for in the relevant contract for sale, or in a separate agreement. Section 318 is expressed in broad terms and refers to a ‘contracting out’ without any reference to the contract of sale between the parties. I consider that any contrary interpretation would be inconsistent with one of the secondary objects of the legislation, namely, to provide an appropriate level of consumer protection for, relevantly, intending buyers of lots included in community titles schemes.[59]
  7. [114]
    If, contrary to my conclusions above, it was considered that some additional conduct was required on the part of Ralan Services to take it outside the ambit of mere negligence, I find that Ralan Services was an active participant in the scheme involving the side agreements, based Mr O'Dwyer’s personal involvement in the side agreements, together with the position or positions he held in Ralan Services and the position held in each of the sellers and Ralan Investment (see paragraph [32] above).
  8. [115]
    Further to paragraphs [92] and [93] above, I am satisfied, on the balance of probabilities, that:
    1. there was a misapplication by a relevant person (Ralan Services) of property entrusted to Ralan Services (being $179,300.00 of the deposit monies) as agent for the Applicant in Ralan Services’ capacity as a relevant person;
    2. the amount of the Applicant’s financial loss because of that event is the same as the amount of financial loss because of the contravention of s 21, namely $179,300.00;
    3. the Claim should also be allowed wholly in relation to the matters referred to in subparagraphs (a) and (b) above.

Orders

  1. [116]
    For the above reasons, the correct and preferable decision is that:
    1. the time within which the Applicant’s claim against the claim fund established under the Agents Financial Administration Act 2014 (Qld) may be made is extended to 29 June 2020;
    2. the decision made by the Respondent to reject the Applicant’s claim against the claim fund is set aside;
    3. the Applicant’s claim against the claim fund is allowed wholly;
    4. the amount of the Applicant’s financial loss is $179,300.00;
    5. the name of the person who is liable for the Applicant’s financial loss is Ralan Property Services QLD Pty Ltd (externally administrated);
    6. no amount is to be reimbursed to the claim fund by Ralan Property Services QLD Pty Ltd (externally administrated).

Footnotes

[1]The amount claimed is less than the maximum amount recoverable under the AFAA: AFAA, s 113(2); Agents Financial Administration Regulation 2014 (Qld), s 25.

[2]AFAA, s 77(b)(ii); Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘the QCAT Act’), s 9.

[3]AFAA, s 77(c); QCAT Act, s 9.

[4]QCAT Act, s 20(1).

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

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

[7]QCAT Act, s 21(1).

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

[9]Applicant’s statement filed on 20 May 2021, [12].

[10]See the Chief Executive’s reasons for the Original Decision, [28].

[11]Licensing Register Extracts Report forming part of the material attached to the Review Application; Chief Executive’s reasons for the Original Decision, [13].

[12]Applicant’s statement filed on 20 May 2021, [15].

[13]Applicant’s statement filed on 20 May 2021, [16] and Appendix 1 and 2.

[14]Applicant’s statement filed on 20 May 2021, [17].

[15]Applicant’s statement filed on 20 May 2021, [17], [19], [20].

[16]Applicant’s statement filed on 20 May 2021, [19], [20].

[17]Applicant’s statement filed on 20 May 2021, [20].

[18]Applicant’s statement filed on 20 May 2021, [18].

[19]See the respective trust account receipts and also the email from Grant Thornton to the Applicant sent on 13 August 2020 (forming part of the material attached to the Review Application).

[20]See the email from Grant Thornton to the Applicant sent on 13 August 2020 (forming part of the material attached to the Review Application).

[21]See the document entitled ‘Annexure A – Book value of debts per the Group’s records’ forming part of the material attached to the Review Application. See also Section 6.3 (page 8) of the final claims report (which was attached to the Chief Executive’s Submissions filed on 21 October 2022).

[22]Applicant’s statement filed on 20 May 2021, [23].

[23]This is how Mr O'Dwyer was described in the signature clause in each of the acknowledgements.

[24]Chief Executive’s document Bundle, pp 356-357.

[25]This term is defined in Schedule 1 to the AFAA, for a corporation, to mean a person, by whatever name called and whether or not the person is a director of the corporation, who is concerned, or takes part, in the management of the corporation.

[26]Licensing Register Extracts Report forming part of the material attached to the Review Application.

[27]Chief Executive’s document Bundle, pp 362-363.

[28]Applicant’s statement filed on 20 May 2021, [26].

[29]The Report, p 12.

[30]The Report, p 12.

[31]The Report, p 12.

[32]The Report, p 12.

[33]The Report, p 12.

[34]The Report, p 13.

[35]Affidavit of Mr Jahani, one of the liquidators appointed, affirmed on 4 November 2020 and filed in the Federal Court of Australia, [25]-[31].

[36]I consider the reprint of the AFAA applicable to the facts of the present case is the one current as at 1 December 2014.

[37]Chief Executive’s Submissions filed on 13 January 2021, [19]-[20].

[38]Chief Executive’s Submissions filed on 25 February 2021, [10]-[11].

[39]AFAA, s 78(2).

[40]See the definition of ‘agent’ in Schedule 1 to the AFAA, the terms of s 8, the definition of ‘agent’ in s 80, and the definition of ‘licensee’ in Schedule 1 to the AFAA.

[41]Section 11 of the AFAA sets out various requirements for opening a general trust account or special trust account.

[42]The term ‘transaction fund’ means an amount held in an agent’s trust account for a transaction.

[43]The relevant provisions of the BCCMA are addressed below.

[44]Applicant’s documents, pp 811-813 [10].

[45]See, in particular, the Chief Executives submissions filed on 21 October 2022, [40].

[46]Final claims report, Appendix D.

[47]The Receivers declared a dividend for 423 out of 1077 creditors. It appears that 18 creditors were removed due to invalid bank details and a further 19 dividend payments bounced back to the trust account. I have been unable to discern from the material the basis upon which claims by the balance of the creditors were not allowed.

[48]Final claims report, pp 7-8.

[49]AFAA, s 105(1), s 106(1)(a).

[50]AFAA, s 105(1)(b).

[51]AFAA, s 105(1)(c).

[52]Pursuant to AFAA, s 106(2).

[53]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]; Khadka & Anor v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading & Ors [2023] QCAT 450, [19].

[54]See the Chief Executive’s reasons for the Original Decision, [13]-[17].

[55][2023] QCAT 450, [15]-[16].

[56]The provisions are located in Subdivision 2 of Division 5 of Part 2 of Chapter 2 and were introduced by the Land Sales and Other Legislation Amendment Act 2014 (s 19).

[57]See Chief Executive’s reasons for the Original Decision, [7], [12]-[17]; the definition of ‘recognised entity’ in BCCMA, s 211A; the definition of ‘real estate agent’ in s 211A; and Property Occupations Act 2014 (Qld), ss 16, 26.

[58]See the definition of ‘prescribed trust account’ in BCCMA, s 211A.

[59]BCCMA, s 4(g).

Close

Editorial Notes

  • Published Case Name:

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

  • Shortened Case Name:

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

  • MNC:

    [2024] QCAT 371

  • Court:

    QCAT

  • Judge(s):

    Member Lumb

  • Date:

    06 Sep 2024

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
Holgar v Chief Executive, Department of Justice and Attorney-General [2021] QCATA 113
2 citations
Jump To
Cite 1 - [2021] QCATA 113
Cite 2 - [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
Khadka v Chief Executive, Department of Justice and Attorney-General, Office of Fair Trading [2023] QCAT 450
3 citations
Jump To
Cite 1 - [2023] QCAT 450
Cite 2 - [2023] QCAT 450
Cite 3 - [2023] QCAT 450
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
Belle v Office of Fair Trading [2025] QCATA 262 citations
1

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