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  • Unreported Judgment

A.G.C. (Advances) Limited v Auctioneers and Agents Committee

 

[1986] FC 94

IN THE SUPREME COURT OF QUEENSLAND

Appeal No. 184 of 1986

FULL COURT

BEFORE:

The Chief Justice (Mr. Justice Andrews)

Mr. Justice Demack

Mr. Justice McPherson

BRISBANE, 30 OCTOBER 1986

(Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter, Court Reporting Bureau.)

-----

BETWEEN:

A.G.C. (ADVANCES) LIMITED

(Plaintiff) Appellant

-and-

AUCTIONEERS AND AGENTS COMMITTEE

(Defendant) Respondent

JUDGMENT

THE CHIEF JUSTICE: In my view the appeal should be dismissed with costs. I agree with the reasons about to be published by my brother McPherson. I am authorised by my brother Demack to say that he agrees with the orders proposed and the reasons about to be published.

MR. JUSTICE McPHERSON: In my view the appeal should be dismissed with costs. I publish my reasons.

THE CHIEF JUSTICE: Orders accordingly.

-----

IN THE SUPREME COURT OF QUEENSLAND

Appeal No. 184 of 1986

FULL COURT

BETWEEN:

A.G.C. (ADVANCES) LIMITED

(Plaintiff) Appellant

AND:

AUCTIONEERS AND AGENTS COMMITTEE

(Defendant) Respondent

_____________________

THE CHIEF JUSTICE

DEMACK J.

McPHERSON J.

_____________________

Reasons for judgment delivered by McPherson J. on 30th October, 1986. The Chief Justice and Demack J. concurring with those reasons.

_____________________

“Appeal dismissed with costs.”

_____________________

IN THE SUPREME COURT OF QUEENSLAND

Appeal No. 184 of 1986

Before the Full Court

The Chief Justice

Mr Justice Demack

Mr Justice McPherson

BETWEEN:

A.G.C. (ADVANCES) LIMITED

(Plaintiff) Appellant

AND:

AUCTIONEERS AND AGENTS COMMITTEE

(Defendant) Respondent

JUDGMENT: McPHERSON J.

Delivered the 30th day of October 1986.

CATCHWORDS:

Principal and agent - Statutory provisions relating to agents - Motor dealers - Fidelity fund - Claims against fund - Claim by bailor under floor plan - Whether a “purchaser or prospective purchaser” - Auctioneers and Agents Act 1971-1981, ss. 65(l), 98.

Counsel:

P. Keane for Appellant

 

J. Douglas for Respondent

Solicitors:

Henderson Lahey Trout Bernays for Appellant

 

R.P. Sammon, Crown Solicitor for Respondent

Hearing dates:

3rd October 1986

 

IN THE SUPREME COURT OF QUEENSLAND

Appeal No. 184 of 1986

FULL COURT

BETWEEN:

A.G.C. (ADVANCES) LIMITED

(Plaintiff) Appellant

AND:

AUCTIONEERS AND AGENTS COMMITTEE

(Defendant) Respondent

JUDGMENT - McPHERSON J.

Delivered the day of 1986.

In and after 1979, Patrick Harley, trading in the name Brighton Motors, carried on business as a used car dealer. Within the meaning of the Auctioneers and Agents Act 1971-1981, he was a “motor dealer” and licensed as such. By a written instrument dated August 23, 1979 (ex. 4) he entered into a contract entitled “A.G.C. Bailment Plan”, in which he is called the “Bailee”. The other parties were Australian Guarantee Corporation Limited (called “A.G.C.”); and A.G.C. (Advances) Limited (called the “Guarantor”), which is the plaintiff in the action.

In outline, the bailment plan provides that used vehicles, described as “goods” will be taken on bailment from A.G.C. by the bailee: cl. 1(c); and that A.G.C. may from time to time approve of the bailee “ordering goods on its behalf under this agreement”: cl. 2. By cl. 6 it is provided that all used goods “ordered in accordance with an approval granted by A.G.C. should be purchased by bailee from the owner thereof as agent for A.G.C”, and paid for in the first instance by the bailee as agent for A.G.C. Provision is made by various sub-cll. of cl. 6: (a) that A.G.C. indemnify and reimburse the bailee in respect of expenditure “incurred by him as its agent (hereinafter called the purchase money)”; (b) that the bailee will satisfy himself as to title and supply A.G.C. with details and documents concerning the goods and title; and (e) that the bailee will indemnify A.G.C. against any loss arising by reason of defects in the title to any used goods “purchased by him on its behalf”. In addition, cl. 15 contains a guarantee by the plaintiff as Guarantor in favour of A.G.C. of the performance by the bailee of his obligations under the contract.

During the period March 10, 1982 to August 16, 1982 a number of used vehicles were left in the possession of Harley by their owners. At the trial in the District Court it was admitted or agreed that the vehicles in question were placed in Harley's possession “on consignment for sale”, i.e. for sale by him, and that he had not purchased those vehicles under the contract with A.G.C. It follows that, in relation to those vehicles, Harley was not acting as agent for A.G.C. nor did Harley become entitled under the contract to the indemnity from A.G.C. conferred by cl. 6(a) in respect of the purchase money. Indeed, there would have been no purchase money to be paid by Harley if all he did was to take possession of the vehicles without agreeing to buy them whether on his own behalf as buyer or as agent for A.G.C.

Harley nevertheless falsely notified A.G.C. that he had bought the vehicles, had acquired titled to them, and had paid the sellers for them. A.G.C. was therefore led to believe that the vehicles had been purchased by Harley as its agent pursuant to the bailment plan contract. It paid him, and so lost, sums totalling $26,164.50 on account of its obligation to indemnify under cl. 6(a). The Guarantor under the contract later performed its obligation under cl. 15 by paying to A.G.C. the amount of that loss. As plaintiff in the action in the District Court the Guarantor then sought to recover the amount of the payment from the Auctioneers and Agents Committee.

The Committee, which is constituted and incorporated by s. 6 of the Act, has as its general function the supervision of the licensing and conduct of auctioneers, real estate agents motor dealers, and others who are subject, to the Act. Among its duties is administration of the Auctioneers and Agents Fidelity Guarantee Fund established by s. 93 of the Act. A purpose of the Fund is by s. 98 to reimburse persons “who may suffer pecuniary loss by reason of the contravention or failure to comply with any provision of sections ... 65 ...” The concept of a fund against which, to express if in general terms, clients or customers defrauded by persons licensed under the Act may claim, is, of course, not peculiar to this legislation. It is evidently framed on the analogy of the fidelity funds established by similar legislation for the benefit of clients of solicitors: cf. Chew v. Council of Institute of Auctioneers, etc. [1960] S.R. (N.S.R.) 430, and authorities cited there. For present purposes, it is sufficient to refer to s. 99(1) of the Act, which authorizes the Committee to receive and settle claims against the Fund. If the claim is disallowed, the claimant may commence an action in relation to the Fund. Here the Committee disallowed the claim for reimbursement made by the plaintiff, which thereupon instituted the action against the Committee.

The trial in the District Court was conducted on the footing of factual admissions by the parties and documents tendered by consent. Given D.C.J. dismissed the plaintiff's claim, and gave judgment for the defendant, against which the appeal is now brought.

In order to make good its claim the plaintiff was in this case bound to establish a contravention or failure to comply with the provisions of s. 65. So far as material, that section provides:

“(1) No ... motor dealer ... shall make to any purchaser or prospective purchaser ... any statement or representation that is false or misleading ... concerning any personal property which he, or as the case may be, has employer, has for sale ... as a motor dealer, as the case may be.”

It may be accepted that the vehicles which Harley had in his possession on consignment were, within the meaning of s. 65(1), personal property that he had on sale as motor dealer. It was admitted at trial that Harley had made to A.G.C. false or misleading statements concerning the vehicles. The substance of those statements is set out earlier in these reasons. The question is whether, when the statements were made, A.G.C. was either a “purchaser” or “prospective purchaser” within s. 65(1).

It is, in my view, not possible to regard A.G.C. as a “purchaser”. A.G.C. did not purport to buy the vehicles from Harley. The transaction by which A.G.C. supposed itself to be acquiring the vehicles was intended to take effect under the contract constituted by the A.G.C. bailment plan. In order to attract the provisions of that contract, it was necessary that Harley should have ordered goods “on behalf of” A.G.C. under the contract: see cl. 2; and that all used goods “ordered in accordance with an approval granted by A.G.C. should be purchased by” Harley from the owner thereof “as agent for A.G.C”. The express liability of Harley to indemnify A.G.C. against loss arising by reason of defects in title is confined to used goods “purchased by him on its behalf”: see cl. 6(e).

It is clear that the transactions by which Harley came into possession of the vehicles did not involve any contracts of sale between him and the owners thereof. They were, as the parties agreed, simply held by him “on consignment for sale”, by which I understand it to be meant that the vehicles were put in his possession for the purpose of finding persons who were prepared to buy them. Harley was not himself the buyer of the vehicles; or, if he ever was, he bought as principal and not as agent for A.G.C. At no stage was there a contract between the vehicle owners as sellers and A.G.C. as buyer entered into by its agent Harley for the purchase of those vehicles. Unless Harley was acting as agent, and in that capacity purchased the vehicles on behalf of A.G.C., the A.G.C. bailment plan could have no application. Any remaining doubt about the matter is removed by the plaintiff's own allegation in the plaint that “the dealer [Harley] had not purchased the motor vehicles pursuant to the agreement” with A.G.C.: see para. 5(a).

On appeal it was, however, submitted on behalf of the plaintiff that, if not a “purchaser”, A.G.C. was at least a “prospective purchaser” in terms of s. 65(1). In Drewery v. Ware-Lane [1960] 1 W.L.R. 1204, on which the plaintiff relied, Ormerod L.J. said at 1208 that a “prospective purchaser” means:

“a man who has the question of buying this property in prospect or in contemplation and is prepared to make an offer with regard to it.”

In a general sense it may be said that the contract, or bailment plan with A.G.C. envisaged that A.G.C would, or might, in time become a purchaser of vehicles for which Harley negotiated as its agent. But I do not consider that it was sufficient to constitute A.G.C. a “prospective purchaser” within the section. The definition adopted in Drewery v. Ware-Lane, supra, requires that a particular property (“this property”) be in prospect or contemplation. That cannot be said of the A.G.C. bailment plan, which at the time it was entered into had no particular vehicle in prospect. It was nevertheless submitted that, when particulars of the vehicles represented by Harley to have been purchased by him were notified to A.G.C., it became the “prospective purchaser” of those identified or identifiable vehicles. In my opinion, however, Mr. Douglas of counsel for the defendant is correct in saying that such a submission is unsustainable in view of the allegations in the plaint. What is alleged by the plaintiff is that between March and August, 1982 Harley represented to A.G.C. that he “had purchased under” the A.G.C. bailment plan contract, the particular vehicles' “on the purchaser's behalf”: see para. 3(a) of the plaint. That is quite inconsistent with a suggestion that A.G.C. was ever a “prospective purchaser” of those vehicles.

Whether the plaintiff's position in the action would have been improved by alleging that the dealing between Harley and A.G.C. was in truth one by which A.G.C. purchased from Harley as principal is a question that is not raised by the pleadings, and need not be considered here. It was not a form in which the plaintiff's claim was formulated at the trial. If it had been, the plaintiff would again have had to face the problem that the bailment plan contract is concerned with purchases made by A.G.C. through the agency of Harley. It is only because of the guarantee contained in cl. 15 of the bailment plan that the plaintiff claims it became liable to pay and paid A.G.C. Apart from cl. 15 the plaintiff sustained no loss in respect of which its claim against the defendant Committee might have been pursued.

In my view the learned trial judge was correct in his decision. The appeal should be dismissed with costs.

Close

Editorial Notes

  • Published Case Name:

    A.G.C. (Advances) Limited v Auctioneers and Agents Committee

  • Shortened Case Name:

    A.G.C. (Advances) Limited v Auctioneers and Agents Committee

  • MNC:

    [1986] FC 94

  • Court:

    QFC

  • Judge(s):

    Andrews CJ, Demack J, McPherson J

  • Date:

    30 Oct 1986

Litigation History

No Litigation History

Appeal Status

No Status