King Developments Pty Ltd v Mayne
[2015] QCAT 173
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- Unreported Judgment
- King Developments Pty Ltd v Mayne[2015] QCAT 173
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King Developments Pty Ltd v Mayne[2015] QCAT 173
King Developments Pty Ltd v Mayne[2015] QCAT 173
CITATION: | King Developments Pty Ltd v Mayne [2015] QCAT 173 |
PARTIES: | King Developments Pty Ltd (Applicant) |
v | |
Alan John Colburn Mayne (Respondent) |
APPLICATION NUMBER: | OCL093-13 |
MATTER TYPE: | Other civil dispute matters |
HEARING DATE: | 11 May 2015 |
HEARD AT: | Brisbane |
DECISION OF: | Dr Cullen, Member |
DELIVERED ON: | 11 May 2015 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
|
CATCHWORDS: | APPEAL – PAMDA – CLAIM AGAINST THE FUND – MOTOR DEALERS – FALSE OR MISLEADING REPRESENTATION – where applicants purchased repairable write off – where vehicle was not able to be registered – where applicants lost money – whether car dealer knew car was not registrable – whether claim was false or misleading – whether Tribunal erred in finding no false or misleading representation – whether claim can be made against the fund Property Agents and Motor Dealers Act 2000 (Qld), s 294B, s 408, s 470, s 488, s 574 Myers v DPP [1965] AC 1001 |
APPEARANCES:
APPLICANT: | Greg King and Garry King |
RESPONDENT: | Alan Mayne |
REASONS FOR DECISION
The Ute that could never be registered
- [1]The respondent, Alan John Colburn Mayne, was once in the business of selling repairable write-off vehicles. Brothers Gary and Greg King responded to an advertisement placed in the Trading Post for a 2005 Ford Falcon Utility Vehicle. The Kings intended to use the Ute in their business, King Developments Pty Ltd.
- [2]Mr Mayne and the Kings agree that King Developments purchased the Ute following a period of negotiations lasting several weeks in October and November 2011. The Ute was represented by Mr Mayne to be a ‘repairable write-off’ that would be capable of registration. The parties also agree that the price of the vehicle was $9,000.00, and that there was no written acknowledgment signed by either of the Kings on behalf of King Developments identifying that the Ute was a repairable write-off, as is required by s 294B of the Property Agents Motor Dealers Act 2000 (Qld) (‘PAMD Act’).
- [3]Ultimately, the Kings were never able to get the Ute registered. Having invested significant funds into a vehicle that has only ever been capable of serving as ornamental lawn décor, they are understandably upset. It is the Kings’ position that Mr Mayne was aware, prior to selling the vehicle to them, that it was never capable of being registered.
- [4]Mr Mayne left the business of selling repairable write-off vehicles. He did offer to refund the purchase price of $9,000.00, but this was not satisfactory to the Kings as they had, at that point, invested a further $2,669.49 in an optimistic effort to get the Ute registered.
- [5]The Kings then made a claim on the fund established under s 408 of the PAMD Act. In short, this fund allows persons duped by car sales people to have their loss refunded to them from the fund. It then becomes the Chief Executive’s[1] problem to recover the public funds distributed from the car sales agent, which likely proves challenging at times. Naturally, there are numerous constraints on making claims on the fund, as taxpayers would no doubt otherwise come to resent having to fund the overly ambitious purchases made by non-car savvy consumers. In other words, sometimes you get what you pay for and this should not be the Chief Executive’s problem.
- [6]The Chief Executive refused the claim, finding that there was no evidence that Mr Mayne was aware that his representations to the Kings were false.
- [7]This matter was then referred to the Tribunal for a determination in accordance with s 488 of the PAMD Act. The Tribunal had a hearing, wherein the learned Member endeavoured to unravel the inner tanglings of the complex world of repairable write-off sales, leading to the same conclusion as the Chief Executive.
- [8]The Kings then successfully appealed to the QCAT Appeals Tribunal, and this hearing de novo was ordered. Meanwhile, the Ute remained stationary and unregistered in the Kings’ mother’s yard gathering a patina of rust that would ultimately compromise its residual value.
Non-compliance by Mr Mayne with the PAMD Act
- [9]It is not in dispute that Mr Mayne did not comply with all respects of the PAMD Act, including s 294B, which provides:
294B Notice to be given about used motor vehicle—written-off vehicle
- (1)This section applies if a used motor vehicle that is an unregistered written-off vehicle is to be sold by a motor dealer, other than by auction, to a prospective buyer (buyer).
- (2)Before the motor dealer sells the vehicle to the buyer, the motor dealer must tell the buyer that the vehicle is a written-off vehicle and state—
- (a)if the vehicle is a repairable write-off—that the vehicle is a repairable write-off and must pass a written-off vehicle inspection under a regulation under the Transport Operations (Road Use Management) Act 1995 before it can be registered; or
- (b)if the vehicle is a statutory write-off—that the vehicle can not be registered.
Maximum penalty—200 penalty units.
- (3)The motor dealer must also ask the buyer to sign an acknowledgement, printed in type no smaller than 12 point, that—
- (a)identifies the used motor vehicle as a written-off vehicle; and
- (b)states whether the vehicle is a repairable write-off or a statutory write-off.
Maximum penalty—200 penalty units.
- [10]Despite this, as has been correctly identified in the Chief Executive’s submissions, noncompliance with s 294B does not give rise to a claim against the Claim Fund.
- [11]The Department also correctly identifies that s 574 of the PAMD Act, which relates to false representations about property, prohibits a licensee (which Mr Mayne was at the relevant time) from representing ‘in any way to someone else anything that is false or misleading in relation to the letting, exchange or sale of property’. (Emphasis by the Tribunal.)
- [12]The terms false or misleading are defined to mean, in relation to a representation, ‘the wilful concealment of a material fact in the representation’.
Was the conduct false or misleading?
- [13]King Developments asserts that Mr Mayne was aware that the Ute he was selling had encountered previous inspection problems, and could not pass inspection.
- [14]The Chief Executive concedes that if the Tribunal is satisfied that Mr Mayne made such a representation in circumstances where he had knowledge that the representation was false or misleading, he would have wilfully concealed a material fact in the course of selling the vehicle to King Developments. This would lead to recovery from the Claim Fund by King Developments.
- [15]Mr Mayne’s version of events is that he was unaware at the time he sold the Ute to King Developments that the vehicle would ultimately be incapable of registration. He says that the fault lies squarely the feet of his repairer, a man named Barry Garner.
- [16]It was Mr Garner who sold the Ute to Mr Mayne, which he was then selling on to King Developments. It is also the case the Mr Garner was the exclusive supplier of the ‘repairable write-off’ vehicles to Mr Mayne for his business.
- [17]Apparently, Mr Garner told Mr Mayne that he had already repaired the Ute, and all that was needed for registration were the receipts from his repair. Mr Garner is nowhere to be found in relation to this dispute, but is apparently the subject of a complaint by Mr Mayne to the New South Wales police ‘fraud squad’.
- [18]It would be convenient for Mr Mayne if, as the seller of the Ute, he was able to escape liability under PAMD Act simply by asserting that Mr Garner, who cannot be located, incorrectly represented to him that the Ute had been repaired and could be registered. This is particularly so in circumstances where the burden of proof falls upon party asserting the conduct was false or misleading to prove it.
- [19]There is nothing in the PAMD Act that would, in these circumstances involving sale of a repairable write-off, protect a consumer from the negligence of the licensed car sales person. In other words, there is an arguably convenient loophole for licensed car sales people to escape responsibility under PAMD Act simply by making a blanket assertion that they were unaware that the facts represented to them by their own repairers were, in fact, false.
- [20]Mr King asserts that there is sufficient information before the Tribunal to demonstrate that Mr Mayne did, in fact, know at the time of sale to King Developments, that the Ute would not be capable of being registered. The Tribunal agrees, having carefully examined the paperwork supplied by the Department, in conjunction with the timeline contained in the submissions of King Developments.
The paperwork demonstrates that Mr Mayne knew the Ute could not be registered prior to sale
- [21]The Tribunal accepts the evidence of Mr Greg King that on 18 November 2011 he did a ‘V Check’ and discovered that the Ute he had been negotiating to purchase was a repairable write-off. At this stage, Mr Mayne acknowledged that this was the case and Mr King responded by telling him that the deal was off.
- [22]Mr Mayne then assured Mr King that there was no major damage, that all repairs were done, and the Ute had passed the required inspection. Mr Mayne told Mr Greg King to contact Mr Garner to confirm this information. Mr King did contact Mr Garner, who told him that the Ute had been passed, and was okay to sell a few weeks prior.
- [23]With this assurance, Greg King then rang the previous owner to investigate the extent of the damage prior to the Ute being rendered a repairable write-off. The information Greg King obtained was satisfactory to him, and he proceeded to purchase the vehicle, and take delivery of it on 24 November 2011.
- [24]Having encountered difficulties with registration post-sale, the Kings contacted Mr Mayne. Though he was the seller, Mr Mayne palmed the Kings off to Mr Garner. Mr Garner then told the Kings that he had to sign off on parts used for the repairs to the Ute prior to the vehicle inspector,[2] Queensland Inspection Services, issuing the registration certificate.
- [25]The evidence obtained through the Office of Fair Trading’s investigation establishes that as early as 28 June 2011, Mr Mayne telephoned a Keith Schmidt from Queensland Inspection Services, to enquire as to whether four cars, of which Mr Mayne acknowledged in his oral evidence the relevant Ute was one, had been taken off the repairable write-off list. It appears, from the printout of the telephone message provided to Mr Schmidt, that as at 28 June 2011, Mr Mayne was aware that the Ute had not been taken off the repairable write-off list, which would prohibit it from being registered.
- [26]A further message of the same day indicates that Barry Garner called Keith Schmidt later that same afternoon, and had also been told that the Ute had not passed. Strictly speaking, this information is not relevant as the false or misleading information must have come from Mr Mayne, and not Mr Garner. It does however assist in painting the picture of how the business arrangements between Mr Mayne and Mr Garner unfolded.
- [27]There is further documentation indicating that on 2 August 2011, a fail inspection was recorded for the Ute by Queensland Inspection Services. There is then a further message from Keith Schmidt on 21 November 2011, indicating that Mr Mayne called to see whether Mr Garner had provided Queensland Inspection Services with the receipts for the Ute that would lead to it being taken off the repairable write-off list.
- [28]The telephone message from 21 November 2011 indisputably indicates that Mr Mayne was clearly aware that there was a difficulty with the information that Mr Garner had provided to Queensland Inspection Services, and that it was possible that the Ute would not be removed from the repairable write-off list, such that it could be registered. This is three days prior to the purchase of the vehicle by King Developments on 24 November 2011.
- [29]The Tribunal considers that this provides evidence that Mr Mayne knew that the Ute would not pass inspection at least three days prior to the final sale. In turn, the lack of disclosure by Mr Mayne of the information he had obtained from Keith Schmidt.
- [30]The Tribunal considers that Mr Mayne’s lack of disclosure to King Developments in relation to the information exchanged with Keith Schmidt on 21 November 2011 falls within the definition of false or misleading. It amounts to a wilful concealment of a material fact in relation to whether the Ute could ultimately be registered.
Quantum of King Developments’ loss
- [31]Having made the determination that an event as defined in s 470(1) of the PAMD Act has transpired, and that King Developments is entitled to claim on the fund, the Tribunal must consider what the financial loss to King Developments is.
- [32]Mr Mayne and Mr King agree that the cost of purchasing the vehicle was $9,000.00. There is evidence that the Tribunal accepts in relation to the cost of fruitless repairs made by King Developments made to the Ute in the amount of $2,669.49.
- [33]King Developments has provided the Tribunal with quotations from Salvage Tender indicating that that it would purchase the Ute for scrap in the amount of $1,500.00, and also from Sandgate Auto Wreckers which offered $1,600.00. The Tribunal accepts that the sum of $1,600.00 is reflective of the value of the vehicle, at least prior to the torrential rain that hit Southern Queensland on 1 May 2015.
- [34]During the hearing, Mr King gave evidence that following the rain, the Ute became inundated with water. King Developments submits that this means that the value of the vehicle is $Nil. Whilst King Developments has an obligation to mitigate its loss and ensure that the vehicle is safely stored prior to disposal, the Tribunal does not consider there was much that could be done to preserve the Ute in such circumstances.
- [35]The Tribunal orders that King Developments endeavour to sell the vehicle to either Sandgate Auto Wreckers or Salvage Tender, and submit evidence of the price obtained to the Tribunal no later than 29 May 2015.
- [36]The decision in relation to the quantum of the claim to be paid from the fund will then be made on the papers and without an oral hearing.
Orders
- The Tribunal orders that King Developments endeavour to sell the vehicle to either Sandgate Auto Wreckers or Salvage Tender, and submit evidence of the price obtained to the Tribunal, copied to the Applicant, no later than 29 May 2015.
- The decision in relation to the quantum of the claim to be paid from the fund will then be made on the papers and without an oral hearing.
- The Chief Executive, Department of Justice and Attorney General is Ordered to pay King Developments Pty Ltd the sum ordered by the Tribunal, following the decision on the papers in relation to quantum.
- The respondent, Alan John Colburn Mayne, is liable for the whole of King Developments Pty Ltd’s financial loss.