Noonsite has contacted the yacht brokers mentioned in the following report and is awaiting their reply and comments.

For anyone hoping to buy or sell a boat in Australia: WARNING!!!! Buyer Beware and Seller Beware! There is very little, if any, regulation of boat brokers and there are no teeth in Australia’s consumer protection laws. To sell a boat in Australia, the owner of a boat can list with as many brokers as he chooses, he can even advertise and sell his boat without the broker if he makes the first contact with the buyer. Also, there is NO requirement for a broker to have a trust account. An unscrupulous broker can tap into a deposit and use it in any way he or she sees fit.

In the state of Queensland, there is an association for boat brokers called the BIAQ, Boat Industry Association of Queensland. Their listing agreement called an “Authority To Sell” states that the Vendor (the seller) shall pay the Broker Commission on the completion of the sale. The “Agreement For Sale Of Vessel” states the Broker can deduct the brokerage commission from ANY Security Deposit. In other words, once the contract has been signed the broker can take the position that he has earned his commission. Closing and funding of a contract is executed through the broker, they have control of all funds. Doesn’t that sound like a Conflict of Interest?

The brokers at the Reilly & Associates office in the Bundaberg Port Marina office, had signs on the windows and throughout the office saying BIAQ Member, they used BIAQ contracts stating BIAQ Membership. Reilly & Associates, owner Stewart Pascoe, also in Gladstone and Yeppoon is not a member of the BIAQ. The two brokers in the Reilly & Associates Bundaberg office, Jill Fleming and Paul Cocks are not members of the BIAQ. According to a BIAQ board member, this is Misrepresentation!!!!

Here is a very brief description of our nightmare. The contract presented to us for the sale of our Hylas 46, Leprechaun, was written in Australian dollars with a two and a half month delayed closing. Our question to the broker was “how can we protect our bottom line in the event the Australian dollar declines against the US dollar prior to closing?” Our boat is a US flagged vessel, we are Americans, we have a one year Australia multiple entry visas and our boat was advertised in US dollars. Paul Cocks with Reilly & Assoc. went to great lengths explaining how we could buy a Foreign Exchange Contract, about his experiences in dealing with Foreign Exchange Contracts, and that it would be easy. We knew nothing about a Forward Exchange Contract and told him so. He guided and directed us on what to do. However, the information he gave us was flawed and the process was extremely difficult. As soon as possible after we set up the foreign exchange account we approached Paul Cocks about the discrepancies. His various responses were: “you are wrong,” “ it’s your money,” “you signed the contract,” “you misunderstood me,” “there’s nothing I can do about it.” At one time Jill Fleming accused us of doing something illegal. The brokers were protecting the buyer! We were paying the commission and sincerely believed they should have been working for our benefit. Did we miss something?

Immediately after signing the contract and before we were aware of the flawed information given to us by Paul Cocks, we told him that the bank’s International Foreign Currency department required a 10% deposit assigned to the bank. Paul Cocks was the expert and we needed guidance. He said “OK” and deposited the buyer’s deposit into our bank account. He then went back to the buyers, without our knowledge, telling them Reilly & Assoc. needed another deposit to cover the commission. We fully expected to be required to sign a release for the funds but there was no such requirement. The buyers did not sign a release. We never requested or acknowledged the money Paul Cocks deposited into our account. The buyer was given a receipt for his additional deposit which we never saw, it was never written into the contract.

Within three weeks of signing the contract, the Australian dollar began receding against the US dollar, in another four weeks, the rate dropped two and a half cents. That may not sound like much until you figure we would lose thousands of dollars for each one cent drop. Three times we called Stewart Pascoe the owner of Reilly & Assoc. for assistance thinking he was an honorable business person. Three times he said he would investigate our complaint, that his company did not deal in foreign currency and that he would get back with us. We never heard from him. With the brokers office in the marina office, we had almost daily contact with them and the tension was almost unbearable.

We tried filing a complaint with the BIAQ. That didn’t work because they weren’t members. As you can imagine, we went to a solicitor. The solicitor said if we didn’t close we could be sued for specific performance. Our options weren’t good. If we closed at a lower exchange rate we would lose thousands of dollars, if we didn’t close we could be sued. We were in a bind. Another WARNING to consider. In Australia there are unwritten laws of “Intent” that can supersede a contract, whatever “Intent” means.

Every day we called the bank for an update on the rates. During the two weeks prior to the scheduled closing, the US dollar declined sufficiently and unexpectedly against the Australian dollar. We called the buyer and worked a deal with him.

02/28, Wednesday – Closing with our solicitor, the Buyer, Buyers solicitor, and ourselves. Everything was amicable, the money and papers exchanged hands. At the closing table, the Buyer agreed we could stay on Leprechaun a reasonable amount of time to pack and move. We had already packed as much as possible but with the possibility of not closing hanging over our heads, we still had lots to do. We told the buyer we would like at least a day to clean, we wanted to turn over Leprechaun in the best condition possible.

We all left the solicitor’s office arm in arm, we walked together to Customs, we paid the GST and signed the import forms. We walked together to the bank, the buyer knew we needed to deposit our checks, I thought we were all very happy. But wait, the worst of the nightmare was yet to come. I endorsed the checks and prepared to leave the bank for the Post Office to send off for Visas for Thailand. The buyer approached saying he wanted to go look at the boat, where could he find the key? At the solicitor’s office, we agreed we would meet him at the boat prior to 3:00 P.M. We needed to buy boxes before returning to the marina. I didn’t think there was any reason not to tell the buyer where he could find the key. As soon as he knew where to find the key he immediately said we had to move off the boat by 4:00 P.M. I tried to reason with him saying we had an agreement. He pointed to his head saying he didn’t understand what was being said. His cell phone rang, he handed it to me. It was Jill Fleming with Reilly & Assoc saying we had to hand over the key and be off the boat by 4:00 P.M. Hadn’t she been paid at closing? Wasn’t she supposed to be representing us? The next 48 hours were a blur. The buyer walked as far as the Post Office with me telling me over and over we had to get off the boat by 4:00. I ran back to the bank and together we ran to our solicitor. No, we couldn’t give back the money, it was a done deal. The solicitor said he would work out something with the buyer’s solicitor. He said we couldn’t be forced off the boat without a court order because it was a Civil matter. We rushed back to the marina, on our way we received a call from the buyer, we had until 5:00 P.M. on Friday to move off the boat. When we arrived at the marina the key was gone, we were locked out of the boat. We found the buyer eating lunch on Paul Cocks boat, together they nonchalantly walked down the dock, climbed aboard, the buyer unlocked the boat. We went in, called movers, travel agent, started making lists, organizing. The buyer said he would be sleeping on the boat that night and we would be his guests. The situation was deteriorating, I was becoming frightened. Terry was livid. The buyer, Paul Cocks, and Jill Fleming sat on the deck laughing and smoking. We called our solicitor asking what we should do, we were being harassed. Around 8:30, the buyer tried to come into the cabin without knocking, when he realized it was locked he began banging on the companionway. A few minutes later there were flashlights shining into the boat with more banging on the companionway, we tried calling the police but it was the police. We were ordered off the boat. We called our solicitor who talked with the police, no luck, we had to leave the boat, NOW! We put together a few belongings. The buyer told the police we could come back at 9:00 the next day to get our personal belongings but would have to be finished by 4:00. We were humiliated, having to be evicted by the police. We couldn’t sleep.

03/01, Thursday – Arrived back to Leprechaun at 9:00. The Buyer said you must be off the boat by 1:00, no exceptions. We couldn’t think, what should we take, what should we leave? We were throwing things into boxes, it was exhausting work. At 11:30 I began crying in heaves and shaking. I was becoming physically ill. There was no way we could be finished by 1:00. The buyer relented saying he could see that 1:00 was impossible, that he would give us more time but the pressure was still on. We took things we should have left, we left the things we needed to take. Some of Terry’s tools were missing, there is no telling what else was missing, there was no time to check anything. The buyer and his son did help move our 35 boxes onto the dock. With the help of the marina personnel, our boxes were stored in an empty space. We had always taken pride in Leprechaun during the five years we owned her, keeping her as clean and shining as possible. There was no time to clean after we left she looked as if she had been pitchpoled.

03/02, Friday – We had an opportunity to check our email. We had a message from our solicitor with an attached letter from Jill Flemings Solicitor stating she was rescinding the agreement made between the buyer and ourselves concerning when we were to move off the boat, she was giving us until 1:00 P.M. on Thursday to vacate. What gave Jill Fleming the right to rescind our agreement with the buyer? Also, her solicitor was the same solicitor at closing. He wasn’t the buyer’s solicitor, he was Jill Flemings solicitor! He did not reveal to us who he was representing! Why was Jill Fleming of Reilly & Assoc. interfering, telling us we when we had to vacate the boat? Didn’t we pay Reilly & Assoc. their commission? We went back to the marina, taped our boxes, filled out paperwork for the movers, finalized our bill.

At this point let me say that other boat brokers knew of our difficulties with Stewart Pascoe, owner of Reilly & Assoc, Paul Cocks, and Jill Fleming. They wanted to help us because they do not want Australian boat brokers to have a bad reputation with foreign cruisers. They tried to give advice on how we might resolve the issues. They are David Flynn of Yacht Domain and especially Nick Cox of Sunshine Coast Yacht Sales. Nick is a member of the BIAQ board and even offered to mediate a settlement.

What is written here is only part of the story. From the beginning of this nightmare, we kept a diary, documenting dates, what was said, by whom, etc. We have letters and email. We even recorded the conversation when we were accused by Jill Fleming of trying to do something illegal. For more specific information please contact us at joema02@earthlink.net It is our hope that we can prevent other boat owners and cruisers from experiencing the grief and nightmare we had to endure in selling our boat in Australia.

Terry McMahon, Iris McMahon