Nowill v Millards Noosa Motors Pty Ltd
[2015] QCAT 178
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- Unreported Judgment
- Nowill v Millards Noosa Motors Pty Ltd[2015] QCAT 178
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Nowill v Millards Noosa Motors Pty Ltd[2015] QCAT 178
Nowill v Millards Noosa Motors Pty Ltd[2015] QCAT 178
CITATION: | Nowill v Millards Noosa Motors Pty Ltd & Anor [2015] QCAT 178 |
PARTIES: | Robert Nowill (Applicant) |
v | |
Millards Noosa Motors Pty Ltd Brian Lennox Millard (Respondents) |
APPLICATION NUMBER: | OCL075-14 |
MATTER TYPE: | Occupational regulation matters |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Paratz |
DELIVERED ON: | 20 May 2015 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
|
CATCHWORDS: | PAMDA – CLAIM AGAINST THE FUND – where the lessor put a car on consignment for sale with a car dealer – where the dealer sold the car but did not pay out the finance owing – whether the claimant lessee has suffered financial loss –where the financial loss was accepted as the proceeds of sale that were not disbursed, plus the extra amount paid to the dealer to pay out the finance company – whether commission improperly retained can be claimed against the fund Property Agents and Motor Dealers Act 2000 (Qld), s 470, s 488 Agents Financial Administration Act 2014 (Qld) s 80, s 105, s 106, s 112, s 116 Dowson v Mata & Sons Pty Ltd and Anor [2013] QCAT 67 Money 3 Corporation Ltd v Schwenke and Anor [2011] QCAT 512 Powell v Sunshine CCC Pty Ltd t/a Sunshine Coast Cars and Caravans & Ors [2014] QCAT 004 Cornish v Vacchini [2013] QCAT 002 Warrehe Pty Ltd t/a Activfreight v Millards Noosa Motors Pty Ltd & Ors (No 2) [2015] QCAT 151 |
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
The facts of the matter
- [1]Robert Nowill purchased a 2011 BMW 520d sedan on 18 August 2012, by obtaining finance from BMW Australia Finance Limited (BMW). The interest was registered on the Personal Property Securities Register. The loan provided for monthly repayments of $1,268.30.
- [2]Mr Nowill placed the car on consignment to sell with Millards Noosa Motors Pty Ltd t/a Millards Noosa Motors (‘Millards’). A PAMD Form 34 “Appointment of motor dealer to sell a motor vehicle on consignment” was signed by Mr Robert Nowill and Ms Nicole Nowill on 2 February 2014.
- [3]The Appointment form provided for a listing price of $59,750.00 and agreed commission of $3,000.00.
- [4]Millards Noosa Motors Pty Ltd held a Motor Dealer Corporation Licence numbered 2200041, at all material times. Mr Brian Millard was a Director of Millards Noosa Motors Pty Ltd and held a Motor Dealer Principal Licence numbered 1601896 at all material times.
- [5]Mr Millard sent an email to Mr Nowill on 10 April 2014 at 10:47 saying that he had an offer of $55,000.00 for the car and setting out the net proceeds as follows:
Sale price $55,000
Stamp Duty @ 3.5% $ 1,925
Transfer fee $ 25
RWC (say) $ 50
Total $ 2,000
My commission $ 3,000
Registration and plates $ 500
My all up costs $ 5,500
Nett to you $49,500
Payout to BMW finance $56,942
Minus ($ 7,442)
- [6]In the email, Mr Millard said that in ‘my $3,000’ he was covering detailing, advertising and selling costs, so Mr Nowill could assume that was another $500.00 he was paying out of the commission. He asked for the additional amount of $7,442.00 to be paid to him by Mr Nowill so that he would be able to give clear title.
- [7]Mr Nowill sent an email in reply that same day at 14:10 saying that he had transferred $7,442.00 into Millards’ account.
- [8]Millards sent a cheque to BMW Finance Services dated 15 April 2014 in the amount of $56,914.97. Mr Millard sent an email that day to Ms Nowill saying that he had sent the cheque to BMW.
- [9]It appears that the proceeds of the cheque were not debited to Mr Nowill’s account with BMW. It is unclear whether the cheque was dishonoured, or the moneys were applied to another account in the name of “Ben Gebbett” on the direction of Mr Millard. Whatever occurred, Mr Millard acknowledged that the finance was not paid out in an email from him to Mr Nowill dated 30 June 2014 where he said:
You will no doubt be aware of the fact that I have not paid out your car as the payment would have come out of your account.
Yes Robert, I am in a bit of strife and I wish they had of banked the cheque when I gave it to them and the money was there.
- [10]BMW wrote to Mr Norwill on 30 June 2014 and advised him that the amount required to pay out the finance was $55,636.15. BMW debited the usual payment of $1,268.30 from Mr Norwill’s account on 1 July 2014, and has continued to deduct loan repayments from Mr Norwill’s bank account.
- [11]On 10 July 2014 Mr Nowill lodged a Claim against the Fund pursuant to the Property Agents and Motor Dealers Act 2000 (Qld) (the Act). The claim was for $59,922.45 calculated as follows:
Money still owed to BMW Finance $55,636.19
Money debited from the Claimant’s account arising from the Respondent’s failure to pay the vehicle finance $ 1,286.30
Commission paid without lawful entitlement $ 3,000.00
- [12]The claim was referred to the Tribunal by the Chief Executive for determination under the Act on 22 October 2014. Directions were made on 5 November 2014 for the filing of material by the parties.
- [13]Mr Millard provided a submission by an email dated 22 January 2015 to the Tribunal as follows:
We are in receipt of your correspondence dated 5th Nov 2014.
Unfortunately it was read incorrectly and the response date was read as the 22nd Jan which after viewing it again it is read as the 9th Jan, my apologies.
We agree to the statement and unfortunately have no defence to this claim.
Millards Noosa Motors was placed into receivership on the 24th Sept 2014 and have no funds to meet this claim.
Brian Millard is starting to regather himself and is working to recover himself with the hope to be able to repay some of this debt.
The basis of a claim against the Fund
- [14]The Chief Executive made submissions dated 21 October 2014. It noted that:[1]
To establish to establish a valid claim against the Fund, the Applicant must demonstrate that an event mentioned in section 470(1) occurred which caused him to suffer financial loss. Section 470(1) relevantly provides that:-
- (1)A person may make a claim against the fund if the person suffers financial loss because of the happening of any of the following events –
- (a)The contravention of any of the following provisions by a relevant person –
- Section 573
…
- (e)a stealing, misappropriation or misapplication by a relevant person of property entrusted to the person as agent for someone else in the person’s capacity as a relevant person.
- [15]The Chief Executive submitted that Millards sold the vehicle on consignment for Mr Nowill but failed to apply the net proceeds of the sale as directed by him, and that an event within the meaning of s 470(1)(e) of the Act had occurred.[2]
- [16]The Chief Executive further submitted that directing the funds by email to be applied contrary to Mr Nowill’s interests, constituted dishonesty as required by s 573, and that an event within the meaning of that section had occurred.
- [17]The basis of a claim by Mr Nowill is not disputed by the respondents, and is supported by the submissions of the Chief Executive. I accept that a claim against the claim fund by Mr Nowill is made out, if financial loss can be established.
Financial Loss
- [18]In a previous matter[3] involving Millards, I canvassed the difficulties presented in relation to establishment of financial loss where a claimant has not paid out the loan, and an issue arises as to whether a financial loss has crystallised which can be paid out from the fund.
- [19]The Chief Executive submitted in that matter, that there is an alternative way for the Tribunal to determine financial loss that does not require the Applicant’s indebtedness to crystallise by payment out of the loan. It submitted that because Millards stole, misappropriated or misapplied the net sale proceeds after the vehicle was sold, that the claimant had not received the net proceeds.[4]
- [20]It submitted that a loss crystallised when the claimant was entitled to be paid the net proceeds and they were not paid, and that any obligation that the claimant may have had to the finance provider after the sale is a matter between the claimant and the finance provider.
- [21]It also submitted in that matter that the Tribunal could additionally view the claimant’s financial loss as the net proceeds from the sale because:
- (a)The Tribunal has previously held that what an applicant may or may not owe on its vehicle finance should not be considered when assessing financial loss and the Tribunal should instead focus on the Event,[5] and
- (b)Section 82(1) AFAA confines the financial loss that the Fund can compensate to what has been suffered because of the Event only
- [22]I found that the Chief Executive had made a cogent and simple submission in its submissions as to a basis of calculation of loss as being the amount not disbursed on the sale, which was a precise amount.
- [23]As I noted in that case, a possible difficulty with that approach is that there is no assurance that the claimant will actually use the funds to pay out the finance owing, and the vehicle may remain encumbered, which could still lead to a claim by the third party purchaser against the fund. It is to avoid such a scenario that financial loss is usually ascertained after demand has been made by the financier or payment made to it. I will similarly leave it to the Chief Executive to work out a mechanism with the claimant by which it can be satisfied that a further claim will not arise.
- [24]The Chief Executive submits that the commission cannot be claimed from the fund, even if it was improperly retained in breach of s 288 PAMDA, because a breach of s 288 is not an event that gives rise to a claim against the fund under s 470(1).
- [25]Mr Nowill had not anticipated receiving the commission of $3,000.00 from the sale, so he is not placed in a less favourable position by not recovering that amount from the fund. I accept that the submissions of the Chief Executive that improper retaining of the agreed commission is not an event that gives rise to a claim against the fund. I therefore will not allow that amount.
- [26]I accept that financial loss can be established in this matter as being the failure to disburse the proceeds of sale. The agreed amount that was to be disbursed after the commission and costs of sale was $49,500.00, and I will allow that amount.
- [27]In addition, Mr Nowill has suffered financial loss by the misappropriation of the additional funds of $7,442.00 which he sent to Millards to pay out the finance. That amount is also recoverable.
Matters to be considered on a claim
- [28]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.
- [29]There is no suggestion of any neglect or default by Mr Nowill, or any relevant compensation paid to him.
Liable persons
- [30]The Tribunal is required to name the persons who are liable for Mr Norwill’s financial loss, pursuant to s 530(b) and s 488(3)(c) of the Act.
- [31]Section 490(2) of the Act provides that each person who was an executive officer of the corporation when the relevant event happened is liable if the responsible person is a corporation.
- [32]Mr Millard was a Director of the corporation at the relevant time. I am satisfied that Millards and Mr Millard should be named as liable persons.
Conclusion and Order
- [33]I am satisfied that Mr Nowill has suffered financial loss in the amount of $56,942.00 arising from the event as follows:
Proceeds of sale not disbursed $49,500.00
Funds paid for finance $ 7,442.00
- [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.
- [35]I order that:
- The claim is allowed in the sum of $56,942.00 pursuant to s 105 and s 106 of the Agents Financial Administration Act 2014.
- The Chief Executive must pay to Mr Robert Nowill the sum of $56,942.00 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.
- Millards Noosa Motors Pty Ltd and Brian Lennox Millard are named as the persons liable for the financial loss of Mr Nowill, pursuant to s 105(3)(c) of the Agents Financial Administration Act 2014.
- Upon payment from the Claim Fund, Millards Noosa Motors Pty Ltd and Brian Lennox Millard are jointly and severally liable to reimburse the Claim Fund by paying the sum of $56,942.00 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 14 October 2014 at [14].
[2] Powell v Sunshine CCC Pty Ltd t/a Sunshine Coast Cars and Caravans & Ors [2014] QCAT 004; Cornish v Vacchini [2013] QCAT 002.
[3] Warrehe Pty Ltd t/a Activfreight v Millards Noosa Motors Pty Ltd & Ors [2015] QCAT 038; Warrehe Pty Ltd t/a Activfreight v Millards Noosa Motors Pty Ltd & Ors (No 2) [2015] QCAT 151.
[4] Submissions Chief Executive in Warrehe filed 6 March 2015, at [6] – [12].
[5] Dowson v Mata & Sons Pty Ltd and Anor [2013] QCAT 67 at [10].