A local couple has failed in their bid to have the Property Agents Fidelity Fund reimburse them over the loss of money paid to a local agent intended to be used to snap up distressed US real estate at the height of the Global Financial Crisis.
Ian and Pamela Mann gave the funds to Alistair McCreath who held financial planning and real estate licences and traded as FBC Realty in Maroochydore.
Documents were presented to them for signing in September 2010, setting out particulars of the properties and the purchase price payable in US dollars for each.
They provided that the sale would be “closed within 10 days after all necessary documents are ready and the transaction has been fully funded”.
The contract documents were accompanied by a photograph of the property and an estimated market value supported by comparative valuation of similar homes.
According to the Queensland Civil and Administrative Tribunal – in determining the Manns’ application for payment from the Fidelity Fund – the only conclusion open as to the identity of the seller in each case was that it was in fact FBC Realty itself.
This was confirmed by Ian Mann who told the tribunal that he assumed McCreath had purchased the properties, refurbished them and then sold to investors.
Upon the Manns obtaining finance for the acquisitions, the funds were requested to be paid into McCreath’s business account rather than in his trust account.
McCreath later explained that resulted from a clerical error.
The acquisitions did not go ahead and despite demands for their repayment, the funds were never repaid.
Concluding that McCreath was acting in the capacity of seller rather than as agent, senior QCAT member Jeremy Gordon reasoned that the loss did not occur as a result of any “stealing, misappropriation or misapplication” by any real estate agent.
Ruling that the Fidelity Fund has no application where real estate licensees conduct their own business dealings, he rejected the claim against the fund.
FBC and McCreath faced prosecution over their conduct in 2013. Aroiund the same time McCreath was banned from giving financial advice for nine months.
The Manns also pursued bankruptcy proceedings against him.