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Real estate agency loses appeal over failure to return deposit

The Court of Appeal has rejected a Brisbane real estate agency’s challenge to its conviction and $5000 fine for not refunding a deposit to a buyer as a result of a failed sales contract.

In a decision published on Monday, the court dismissed an appeal by Prestige and Rich Pty Ltd against convictions and penalty imposed by a magistrate in 2018 and affirmed by a District Court judge in August last year.

The agency was initially issued with an infringement notice by Queensland’s Office of Fair Trading (OFT) for an alleged breach of the Agents Financial Act 2014 at Sunnybank Hills on 14 April 2016.

The OFT alleged Stephanie To Realty was appointed the selling agent for the sale of a Sunnybank Hills property and that a buyer entered into a contract to purchase the property, but the contract was later terminated because the buyer could not obtain suitable finance.

The buyer requested Stephanie To Realty to return the $24,500 deposit they had paid, as allowed for under the contract. The property seller also agreed that the deposit should be returned to the buyer.

However, in contravention of the Agents Financial Administration Act 2014 (AFAA), Stephanie To Realty did not release the funds from its trust account to the buyer and instead released the deposit to the seller minus a $20,000 sales commission payment to the agency.

The OFT issued an infringement notice to the agency, however Ms To elected to have the matter heard in court.

Stephanie To Realty was found guilty in the Holland Park Magistrates Court on 18 December 2018, of one count of failing to pay a disputed amount from a trust account and a conviction was recorded.

Magistrate Robert Turra found the defendant ignored advice and direction to benefit the agency and stubbornly insisted on the defendant’s own definition of the law.

On the same day, the Queensland Civil and Administrative Tribunal (QCAT) upheld the OFT’s decision to award a $24,500 payment from the AFAA claim fund to the buyer, dismissing a review lodged by Stephanie To Realty.

QCAT confirmed that the OFT’s decision to award the claim fund payment as compensation for the misappropriated deposit was appropriate.

In August 2019, the agency mounted a failed appeal to the magistrate’s decision in the District Court. The court dismissed the appeal against both conviction and sentence with costs.

Court of Appeal Justice David Boddice, in his two-page written decision, dismissed the agency’s second attempt to appeal the matter.

“(Prestige and Rich) seeks leave to appeal against its conviction and sentence in relation to an offence of an agent’s failure to pay an amount in dispute,” Justice Boddice said.

“Nothing in (Prestige and Rich’s) outline or indeed in the oral submissions made on behalf of the (real estate agency) have identified an error by way of the reason of the District Court Judge in relation to the dismissal of the appeal against conviction or in relation to the dismissal of the appeal against sentence.

“As (Prestige and Rich’s) appeal does not have any prospects of success and there are no other reasons for grant of leave, I would refuse leave to appeal.”

Court of Appeal President Walter Sofronoff and Justice Anthe Philippides agreed with Justice Boddice’s reasons.

Read the Court of Appeal decision.

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