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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Lee v Mulvaney  QCATA 168
Warren david lee
MCDO 47/19 (Southport)
17 December 2020
On the papers
APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – WHEN NO APPEAL LIES – leave to appeal – where appellant sought leave to appeal against the tribunal’s decision that the appellant was in breach of contract by failing to provide use of a boat to a syndicate member – whether any reasonably arguable grounds of appeal
REASONS FOR DECISION
- This appeal is from a decision of an Adjudicator concerning a boat syndicate. James Mulvaney paid Warren David Lee $15,000 in the expectation, together with three other people, of use of a boat. But soon after the arrangement was completed, the boat suffered a motor failure and could not be used without major repair.
- Mr Mulvaney successfully applied to the tribunal seeking his money back from Mr Lee. Mr Lee now appeals, saying that the decision was incorrect.
- The hearing was before a tribunal Adjudicator on 13 June 2019. The Appeal Tribunal has obtained a transcript of the hearing on that day. The Adjudicator heard the evidence of Mr Mulvaney and Mr Lee, read the documents and then gave a fully reasoned decision. The Adjudicator decided that there was a contract between the two men and its terms could be found in an email of 10 October 2018. In that email Mr Mulvaney agreed to join the syndicate and make the payment.
- The Adjudicator found that the contract between Mr Lee and Mr Mulvaney required Mr Lee to provide Mr Mulvaney with use of the boat. It was not a contract for the sale of the boat; instead, the intention was that ownership of the boat was to be transferred to a company of which each member of the syndicate was a shareholder, including Mr Mulvaney.
- The Adjudicator found that Mr Lee was not provided with use of the boat. This was because of a defect in the motor which rendered the boat unusable. The Adjudicator found that the defect in the motor was a latent defect present at the time the contract was entered into, probably caused by lack of maintenance as found by the insurer’s loss assessor. The defect meant that the boat was not fit for the purpose for which it was supplied and not in good working condition as it had been described by Mr Lee.
- On that basis the Adjudicator decided that Mr Mulvaney had not received any consideration for his payment and he was entitled to its return.
- A number of points are made in this appeal by Mr Lee. Attached to his original notice of appeal, was a long list of errors alleged to have been made by the Adjudicator. The grounds are explained in later submissions, and merge into these:
- (a)He should not have been respondent to the claim because he did not own the boat, he was only a broker working on commission. He says that all purchasers knew that the boat was sitting on the owner’s jetty when they viewed it. So, he says, he should not be liable to repay the purchase price. In any case he has no access to the purchase price, having passed it on to the true seller.
- (b)There was no warranty given, purchasers were supposed to ‘do their own due diligence on the condition of the boat before purchasing the share’, and there was nothing wrong with the boat on purchase, the motor having recently been overhauled.
- (c)A syndicate member either did or may have caused the damage to the motor, and the effect of this [as provided for by section 54(6) of the Australian Consumer Law] was overlooked by the Adjudicator.
- (d)That the evidence was not considered properly and inadequate reasons were given.
- Another point is made by Mr Lee in subsequent submissions. He says that all four members of the syndicate brought claims against him in the tribunal and the tribunal decided to hear them separately to ensure that the tribunal had jurisdiction to hear the claims, and this demonstrates bias against him.
- There was a hearing of the appeal before me. At the appeal hearing, Mr Lee argued the points on appeal and added that the way the syndicate would work was that once the syndicate was set up, each member would pay a monthly fee which would cover maintenance and management, and that if a major repair were required this would be the shared responsibility of the syndicate members. He said that he did not have a ‘fair go’ at the hearing and the Adjudicator seemed ‘very hostile’ and biased.
- I turn therefore to the grounds of appeal.
- As for ground (a) about Mr Lee being the wrong party to the claim, his submissions are that the Adjudicator should have found that the contract was for sale of the boat, and that since he was not the owner of the boat, as Mr Mulvaney was aware at the time the contract was made, he was not liable under the contract. Mr Mulvaney denies that he knew at the time of the contract that Mr Lee did not own the boat. He says that he thought Mr Lee was the owner.
- The Adjudicator was clearly correct in identifying Mr Lee as the party who had promised under the contract to provide Mr Mulvaney with use of the boat. Mr Lee’s plan was to provide the boat by arranging for a company to purchase it from its current owner, with a view to the company providing Mr Mulvaney with use of the boat. Arrangements for maintenance and management of the boat were also to be put in place. It seems that the company did become the owner of the boat but then because of the motor failure, Mr Mulvaney was never in fact able to use it. This was therefore Mr Lee’s breach of contract – a failure to fulfil the promise under the contract to provide Mr Mulvaney with use of the boat.
- Mr Lee probably had other obligations under the contract, such as to complete the purchase of the boat by the company and to provide a framework for ongoing maintenance and management of the boat, but these obligations were not the subject of Mr Mulvaney’s claim.
- It is true that some subtle legal arguments could be made about whether the transaction was for a supply of goods, or whether it was for supply of services, or a mixture of the two, which would be under the Australian Consumer Law, or whether the transaction was outside the Australian Consumer Law altogether. It can be seen from the transcript that the Adjudicator was aware of the available arguments but chose to deal with the claim as mentioned above, by identifying Mr Lee’s direct contractual obligations and then determining whether he had fulfilled them. This was clearly the correct approach and the Adjudicator’s findings about this cannot be impugned.
- As for grounds (b) and (c) in the appeal about the condition of the boat on sale, the Adjudicator found as a fact that the boat had a latent defect at the time of sale. It is said that this was an untenable finding. The Adjudicator heard from Mr Lee at some length about what might have caused the problem with the motor, and there was a suggestion that it might have sucked up a bag, but the best evidence before the Adjudicator was a report obtained on behalf of the loss assessor after stripping the motor which found that it had a leaking high riser possibly due to rust.
- With respect to ground (c), both at the hearing before the Adjudicator and in the appeal hearing, Mr Lee frankly said that the possibility of the problems with the motor being caused by it having sucked up a bag was mere speculation. On the available evidence therefore, it was clearly open to the Adjudicator to make the finding that there was a latent defect in the motor when the arrangement was entered into.
- With respect to ground (b) it seems to me that the Adjudicator was right to find that Mr Lee had a contractual obligation to provide a boat which was capable of use. Inevitably this would mean, as the Adjudicator found, that it would need to be fit for the purpose and that it should have corresponded with Mr Lee’s description of it as being in good working condition.
- As for ground (d), which suggests that the Adjudicator did not consider the evidence properly and gave inadequate reasons for the decision, this is patently incorrect as is clear from the consideration of grounds of appeal (a) to (c).
- It is incorrect to say that the four claims were heard separately so as to give the tribunal jurisdiction which otherwise it would not have. Each member of the syndicate brought a separate claim. They were able to do this because they each had separate contracts with Mr Lee. The fact that the tribunal decided to hear Mr Mulvaney’s claim separately from other claims had no effect on the tribunal’s jurisdiction. So this is not a good point, and in any case does not demonstrate any bias against Mr Lee.
- As for the Adjudicator not giving Mr Lee a ‘fair go’ at the hearing and seeming to be ‘very hostile’ and biased, there is nothing in the transcript which even begins to demonstrate this. Since Mr Lee had a number of hearings before the same Adjudicator, it seems possible he may be referring to another hearing, but his suggestion is very vague and there is nothing to support it at all in this appeal.
Conclusion in the appeal
- In an appeal of this sort there has to be an arguable ground of appeal before leave to appeal can be given. Here the grounds of appeal are not arguable. I refuse leave to appeal. This means that the appeal fails.
- Mr Lee has applied to stay the decision made by the Adjudicator but that also fails.
Transcript 1-45 line 10.
Transcript 1-44 line 27, 1-45 line 7.
Transcript 1-45 line 3, 1-45 line 29.
Transcript 1-45 line 39.
Transcript 1-44 line 42, 1-45 line 29, 1-45 line 34.
Strictly, his application for leave to appeal or appeal.
Filed on 13 December 2019.
Filed on 10 March 2020.
Transcript 1-14 line 26 to 1-20 line 20.
Assessment quote dated 29 November 2018, discussed at transcript 1-32 line 34 to 1-33 line 13, 1-34 line 37.
- Published Case Name:
Lee v Mulvaney
- Shortened Case Name:
Lee v Mulvaney
 QCATA 168
17 Dec 2020