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Lyons v Millards Noosa Motors Pty Ltd (In liq)[2015] QCAT 140

Lyons v Millards Noosa Motors Pty Ltd (In liq)[2015] QCAT 140

CITATION:

Lyons & Anor v Millards Noosa Motors Pty Ltd & Ors [2015] QCAT 140

PARTIES:

Richard Lyons

Loraine Stacey Lyons

(Applicants)

 

v

 

Millards Noosa Motors Pty Ltd (In Liquidation)

Brian Lennox Millard

Lee Millard

(Respondents)

APPLICATION NUMBER:

OCL077-14

MATTER TYPE:

Other civil dispute matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Paratz

DELIVERED ON:

30 April 2015

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The claim is allowed in the sum of $35,650.00 pursuant to s 105 and s 106 of the Agents Financial Administration Act 2014.
  2. The Chief Executive must pay to Richard Lyons and Loraine Stacey Lyons the sum of $35,650.00 from the Claim Fund, pursuant to s 112 of the Agents Financial Administration Act 2014, and if there is an appeal, payment must not be made until after the appeal is finally decided.
  3. Millards Noosa Motors Pty Ltd, Brian Lennox Millard and Lee Millard are named as the persons liable for the financial loss of Richard Lyons and Loraine Stacey Lyons, pursuant to s 105(3)(c) of the Agents Financial Administration Act 2014.
  4. Upon payment from the Claim Fund, Millards Noosa Motors Pty Ltd, Brian Lennox Millard and Lee Millard are jointly and severally liable to reimburse the Claim Fund by paying the sum of $35,650.00 to the Chief Executive, Department of Justice and Attorney-General, pursuant to s 116 and s 106 of the Agents Financial Administration Act 2014.

CATCHWORDS:

PAMDA – AFAA - CLAIM AGAINST THE FUND – where the owners put two cars on consignment for sale with a car dealer – where the dealer sold the cars but did not pay the proceeds to the owners - where the financial loss was accepted as the proceeds of sale that were not disbursed – whether the legal costs of obtaining a judgment against the dealer should be allowed on a claim – whether interest should be allowed on a claim

Property Agents and Motor Dealers Act 2000 (Qld), s 470, s 469, s 492

Agents Financial Administration Act 2014 (Qld) s 80, s 105, s 106, s 112, s 116

Gettens v XFar Homes Pty Ltd & Anor [2012] QCAT 150

Money 3 Corporation Ltd v Schwenke and Anor [2011] QCAT 512

APPEARANCES:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

  1. [1]
    Richard Lyons and Loraine Stacey Lyons (Lyons) placed two cars on consignment to sell with Millards Noosa Motors Pty Ltd t/a Millards Noosa Motors (‘Millards’):
    1. a Mercedes CLK 200 on 14 May 2013;
    2. a Landrover Range Rover wagon on 11 June 2013.
  2. [2]
    Under the terms of the consignments, Lyons agreed to pay Millards in respect of the Mercedes a commission of $2,200.00 and an unspecified amount for advertising costs; and in respect of the Range Rover a commission of $2,200.00, an unspecified amount for detailing, advertising costs to be calculated at the rate of “$40.00 per hit”, and the costs of procuring a Roadworthy Certificate if required.
  3. [3]
    Millards sold the Range Rover on 3 August 2013 for $38,000.00, and sold the Mercedes on 19 August 2013 for $28,000.00.
  4. [4]
    Millards did not disburse the sale proceeds to Lyons upon the sales. It made partial payments to Lyons in respect of the sales as follows:
  • 7 September 2013 -  $14,750.00
  • 14 October 2013 -  $11,000.00
  1. [5]
    Millards Noosa Motors Pty Ltd held a Motor Dealer Corporation Licence at all material times. Brian Lennox Millard held a Motor Dealer Principal Licence at all material times.
  2. [6]
    The Directors of Millards Noosa Motors Pty Ltd at all material times were Brian Lennox Millard and Lee Millard.
  3. [7]
    Millards Noosa Pty Ltd was placed into liquidation on 24 September 2014.
  4. [8]
    Lyons engaged Solicitors, and obtained Judgment against Millards for outstanding monies of $34,757.84 (including $1,701.11 for costs) on 27 February 2014.
  5. [9]
    Lyons lodged a Claim dated 5 June 2014 against the Claim Fund established under the Property Agents and Motor Dealers Act 2000 (Qld) (PAMDA – referred to as ‘the Act’ in these reasons, and section references in these reasons are to PAMDA unless otherwise stated). The Claim Fund is now administered under the Agents Financial Administration Act 2014 (Qld) (AFFA). The claim was for $39,640.10 calculated as follows:

Judgment debt

$34,757.84

Claimants costs to date

$ 6,311.01

Interest from 27.02.14 to 11.04.14

$ 2,449.52

Less standard costs included in

the judgment debt

$ 1,701.11

  1. [10]
    The Chief Executive referred the claim on 24 October 2014 for determination by the Tribunal under the provisions of Chapter 14 of the Act. I gave Directions on 27 October 2014 for the filing of material, and for the determination of the application on the papers after 27 January 2015 if no application for oral hearing was made, or was made and refused.
  2. [11]
    No application for an oral hearing has been made. This is the determination of the proceedings on the papers.

Is there a valid claim against the fund?

  1. [12]
    A claim will arise under s 470(1)(a) of the Act if a person suffers financial loss because of a breach of s 573 of the Act. Section 573(1) provides that ‘if a licensee, in the performance of the activities of a licensee, receives an amount belonging to someone else’ and who ‘dishonestly converts the amount to the licensee’s own or someone else’s use’ commits a crime.
  2. [13]
    A claim will also arise under s 470(1)(e) of the Act if a person suffers financial loss because of:

a stealing, misappropriation or misapplication by a relevant person of property entrusted to the person as an agent for someone else in the person’s capacity as a relevant person.

  1. [14]
    Millards did not properly deal with the funds and disburse them to the owners, and do not contest the claim. In an email sent to the Registry by Brian Millard and dated 22 December 2014, on behalf of ‘Millards Noosa Motors, Brian Millard, Lee Millard’ he said:

We are in receipt of your letter dated the 27 of October regarding the above claim.

We agree to the content of the claim and offer no defence to this claim.

Millards Noosa Motors was placed into receivership on the 24 September this year and have no funds to meet this claim.

Lee Millard has been declared bankrupt and Brian Millard is trying to re-establish himself to try and meet this claim.

Please contact us if you require any further information to support the Lyons claim.

  1. [15]
    The amounts were converted to the licensees use without authority, and were misappropriated or misapplied. An event within the meaning of s 470(1)(a) and s 470(1)(e) has therefore occurred, and a valid claim against the fund is established.

Has financial loss been suffered?

  1. [16]
    Lyons claim that their loss is now $41,353.32 calculated as follows:[1]

Judgment debt

$34,757.84

Legal costs as at 8 April 2014

$ 6,311.01

Interest on the judgment

from 27.02.14 to 11.04.14

$  272.35

Further legal costs since 8 April 2014

$ 1,065.00

Further judgment interest since 11 April 2014

$ 648.22

Less standard costs included in

the judgment debt

$ 1,701.11

  1. [17]
    The Chief Executive submits that the balance of the net sale proceeds that have not been remitted to Lyons is $35,650.00 calculated as follows:

Sale price: Range Rover

$38,000.00

Sale price: Mercedes

$28,000.00

Less: Agreed commissions

$ 4,400.00

Less: agreed dollar amount of detailing

$  200.00

Less: sale proceeds remitted

$14,750.00

Less: sale proceeds remitted

$11,000.00

Total amount outstanding

$35,650.00

Interest

  1. [18]
    Lyons has claimed interest on a judgment.
  2. [19]
    Section 492(5) of the Act provides that ‘Interest is not payable from the fund in relation to a claim allowed against the fund’.
  3. [20]
    Section 469 of the Act defines ‘financial loss’ as follows:

financial loss, suffered by a person, if evidenced by a judgment of a court, does not include interest awarded on the judgment

  1. [21]
    Interest can be recovered on a claim where it is in the nature of a loss of opportunity to interest on the monies withheld,[2] but not where it is interest on the claim itself, or interest on a judgment.
  2. [22]
    There is no material indicating that the interest claimed by Lyons arises because of an element for loss of opportunity to earn interest on the money in their hands. The interest that is claimed is specifically precluded by the Act and is not claimable on the fund
  3. [23]
    I therefore do not allow any of the interest claimed.

Legal Costs

  1. [24]
    Lyons has claimed a total of $7,376.01 as legal costs, less $1,701.11 which it was awarded as costs as part of the judgment against Millards.
  2. [25]
    As the Chief Executive has noted, the Tribunal has previously held that the Fund should not pay an applicant’s legal costs to obtain judgment before making a claim against the Fund; and the Fund should not bear the costs of an applicant’s decision to pursue a course of action that it was not required to pursue before making a claim.[3]
  3. [26]
    A claimant may recover legal costs that were reasonably incurred in pursuing recovery of a financial loss.[4] This is distinct from the costs of litigation engaged in before the making of a claim. A claimant who obtains a judgment, which includes an order for costs, would still be able to seek to recover those costs from the judgment debtor under the judgment – that is a distinct matter to recovery of financial loss from the Claim Fund.
  4. [27]
    Lyons does not provide any break-up of the legal costs. It is not possible to assess how much of the legal costs, if any, can be attributed to the pursuit of the financial loss that was not attributable to the litigation.
  5. [28]
    I note that Mr Lyons comments that their Solicitor never informed them of the process to claim on the fund[5] – it is therefore most likely that the Solicitor’s efforts were not directed to pursuing the financial loss, but were focussed on demand, issue of proceedings and recovery through civil litigation.
  6. [29]
    I cannot therefore be satisfied that the legal costs claimed fall within the treatment of financial loss under the Act, or are a proper impost on the Fund, and will not order that the legal costs be paid from the Fund

Matters to be considered on a claim

  1. [30]
    Section 488(3) of the Act requires the Tribunal to take into account any neglect or default by the claimant, and any compensation ordered under certain sections of the Act.
  2. [31]
    There is no suggestion of any neglect or default by Lyons, or any relevant compensation paid to them.

Order

  1. [32]
    I accept the submissions of the Chief Executive which identify the Event in this matter as being the failure to disburse the proceeds of sale, and accept its calculations in that regard.
  2. [33]
    I do not allow any amounts for interest or legal costs.
  3. [34]
    I will make an order in terms of the relevant sections of the Agents Financial Administration Act 2014 (Qld) which now administers the Fund.
  4. [35]
    I order that:
  1. The claim is allowed in the sum of $35,650.00 pursuant to s 105 and s 106 of the Agents Financial Administration Act 2014.
  1. The Chief Executive must pay to Richard Lyons and Loraine Stacey Lyons the sum of $35,650.00 from the Claim Fund, pursuant to s 112 of the Agents Financial Administration Act 2014, and if there is an appeal, payment must not be made until after the appeal is finally decided.
  1. Millards Noosa Motors Pty Ltd, Brian Lennox Millard and Lee Millard are named as the persons liable for the financial loss of Richard Lyons and Loraine Stacey Lyons, pursuant to s 105(3)(c) of the Agents Financial Administration Act 2014.
  1. Upon payment from the Claim Fund, Millards Noosa Motors Pty Ltd, Brian Lennox Millard and Lee Millard are jointly and severally liable to reimburse the Claim Fund by paying the sum of $35,650.00 to the Chief Executive, Department of Justice and Attorney-General, pursuant to s 116 and s 106 of the Agents Financial Administration Act 2014.

Footnotes

[1] Submissions Chief Executive filed 24 October 2014, p 5

[2] Gettens v XFar Homes Pty Ltd & Anor [2012] QCAT 150 at [38] and [40].

[3] Money 3 Corporation Ltd v Schwenke and Anor [2011] QCAT 512 at [13].

[4] Gettens v XFar Homes Pty Ltd & Anor [2012] QCAT 150 at [28].

[5] Letter Mr Lyons to OFT 5 June 2014.

Close

Editorial Notes

  • Published Case Name:

    Richard Lyons and Loraine Stacey Lyons v Millards Noosa Motors Pty Ltd (In liq), Brian Lennox Millard and Lee Millard

  • Shortened Case Name:

    Lyons v Millards Noosa Motors Pty Ltd (In liq)

  • MNC:

    [2015] QCAT 140

  • Court:

    QCAT

  • Judge(s):

    Member Paratz

  • Date:

    30 Apr 2015

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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