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Fraser v Millards Noosa Motors Pty Ltd[2015] QCAT 185

Fraser v Millards Noosa Motors Pty Ltd[2015] QCAT 185

CITATION:

Fraser v Millards Noosa Motors Pty Ltd & Ors [2015] QCAT 185

PARTIES:

Paul Fraser

(Applicant)

v

Millards Noosa Motors Pty Ltd

Brian Lennox Millard

Lee Millard

(Respondents)

APPLICATION NUMBER:

OCL070-14

MATTER TYPE:

Other civil dispute matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Paratz

DELIVERED ON:

21 May 2015

DELIVERED AT:

Brisbane

ORDERS MADE:

1. The claim is allowed in the sum of $18,500.00 pursuant to s 105 and s 106 of the Agents Financial Administration Act 2014.

2. The Chief Executive must pay to Paul Fraser the sum of $18,500.00 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 Paul Fraser, 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 $18,500.00 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 – CLAIM AGAINST THE FUND – where a motor dealer did not give clear title when selling a car – where the dealer agreed to repurchase the car, but did not pay out the finance owing or pay the agreed price – whether the claimant lessee has suffered financial loss as a result of an event giving rise to a claim against the fund – where the financial loss was accepted as being the market value of the car at the time it was taken back by the motor dealer

Property Agents and Motor Dealers Act 2000 (Qld), s 470, s 488, s 530

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

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. [1]
    Mr Fraser bought a 2003 Toyota Landcruiser Prado GXL Wagon for $22,950.00 on 8 April 2013 from Millards Noosa Motors Pty Ltd (Millards).
  2. [2]
    Millards gave a signed document entitled “Dealer’s Statement to Purchaser – Guarantee of Title” on 10 April 2013, which guaranteed that the vehicle had clear title.
  3. [3]
    The vehicle was subject to a security interest to Australia and New Zealand Banking Group Limited (ANZ) which was registered on 20 December 2011.
  4. [4]
    Millards sold the vehicle to Mr Fraser without clear title. Mr Fraser paid the full purchase price and took possession of the vehicle without knowledge that the vehicle remained encumbered.
  5. [5]
    In August 2013, Mr Fraser advertised the vehicle for sale, as he was relocating overseas on short notice. A potential buyer informed him at some time between 17 September 2013 and 1 October 2013 that the vehicle was encumbered.
  6. [6]
    Mr Fraser attempted to sell the car privately, but because his departure date was looming, he went back to Millards to discuss disposing of the vehicle. Millards offered to sell the vehicle on consignment, but Mr Fraser refused to do so.
  7. [7]
    Mr Fraser then agreed to sell the vehicle to Millards for $15,500.00 plus a further sum of $2,000.00 to compensate him for the Security Interest. On 5 October 2013 Mr Fraser delivered the vehicle to Millards. In or around October 2013 Mr Fraser left Australia and relocated overseas.
  8. [8]
    Millards have not paid Mr Fraser the amount of $17,500.00. It is unclear what has happened to the vehicle, or what the situation is in relation to ANZ. The Security Interest was still registered against the vehicle’s title as at 24 July 2014.
  9. [9]
    Mr Fraser lodged a claim against the Claim Fund on 2 December 2013. The claim was for $23,215.81 comprised of the purchase price of $22,950.00 plus insurance costs of $165.81. The date of the event alleged to give rise to the claim was 10 April 2013 – that is the date when the initial purchase was completed.
  10. [10]
    He advised of a revised claim on 12 March 2014, noting that the purchase price of the vehicle was actually $23,950.00. His claim was therefore for $24,356.89.
  11. [11]
    I gave Directions on 21 October 2014 as to submission of further material by Mr Fraser, Millards, Mr Millard and Ms Millard. Mr Fraser did not submit any further material.
  12. [12]
    Mr Millard provided a submission to the Tribunal by an email dated 15 December as follows:

We are in receipt of your letter dated the 21 October regarding the above claim.

We agree to the contents of the claim and we unfortunately have no defence to the claim.

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

Lee Millard has been declared bankrupt and Brian Millard is trying to regather himself to meet the claim funds eventual claim on him.

Please contact us if you require any further information to support Mr Fraser’s claim.

  1. [13]
    The Directions provided for the application to be determined on the papers after 23 January 2015. This is the decision on the papers.

Is there a valid claim against the fund?

  1. [14]
    The Chief Executive made submissions dated 23 September 2014. It noted that:[1]

In order to establish a valid claim against the Fund, the Applicant must demonstrate that he suffered financial loss due to the happening of an event mentioned in section 470(1) of PAMDA by a relevant person. Section 470(1) relevantly provides that:-

  1. (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 –
  1. (c)
    a failure of a motor dealer to ensure a person who has bought a motor vehicle sold by or for the dealer gains clear title to the vehicle at the time property in the vehicle passes to the buyer, whether or not the motor dealer contravenes section 233 or 295.
  1. [15]
    The Chief Executive submitted that it is open to the Tribunal to find that an event within the meaning of s 470(1)(c) occurred, and referred to the vehicle remaining encumbered by the security interest.[2]
  2. [16]
    However, the Chief Executive went on to submit that if an applicant sells a motor vehicle to a motor dealer, and the motor dealer then fails to pay the sale price, it is not an event within the meaning of s 470, and referred to McNabb v OFT Claims and Recoveries, Department of Justice and Attorney-General[3] where the Tribunal stated:

The relevant transaction between Mr McNabb and Mr Ivanov was a sale of the car. Mr McNabb gave possession of the car to Mr Ivanov; property in the car passed to Mr Ivanov when the agreement was made; and from then on, Mr Ivanov was free to do what he liked with the car. If Mr Ivanov did not pay the purchase price, Mr McNabb’s remedy lies in contract, not as a claim on the fund.

  1. [17]
    The Chief Executive then submitted that Millards failure to pay Mr Fraser the agreed sale price of $17,500.00 does not constitute an event within the meaning of s 470, and submitted as to Orders:[4]

Pursuant to sections 488 and 530 PAMDA, the Tribunal may only consider and make orders in relation to financial loss that the Applicant suffered because of the Event. As the Applicant’s remedy lies in contract and not against the fund, it is submitted that the appropriate order is to reject the claim.

  1. [18]
    I accept the Chief Executive’s submissions that the failure of Millards to pay Mr Fraser the agreed amount of $17,500.00 on the re-purchase and delivery of the vehicle on 15 October 2013, does not of itself give rise to a claim against the fund.
  2. [19]
    However, Mr Fraser’s claim against the fund lodged on 2 December 2013 is a claim in relation to the original sale by Millards to Mr Fraser, as the form refers to the date of the event as being that date of sale of 10 April 2013. The basis of that claim (even if the explanation by Mr Fraser on the form does not explicitly say so with legal clarity) is the failure of Millards to give clear title on the initial sale.
  3. [20]
    The Chief Executive has submitted (as discussed) that a failure to give clear title can give rise to an event under s 470(1). I accept that Millards failed to give clear title to Mr Fraser on the initial sale, and that accordingly he has a valid claim against the fund in these proceedings.

What financial loss has Mr Fraser suffered?

  1. [21]
    Having found that Mr Fraser has an allowable claim, I am required to decide the amount of Mr Fraser’s financial loss pursuant to s 488(3)(d).
  2. [22]
    Mr Fraser has claimed the full purchase price of the vehicle of $23,950.00. However, he had use of the vehicle for about six months, and its value on a resale would be reduced accordingly. Mr Fraser has also had the benefit of use of the vehicle for those six months.
  3. [23]
    What would a genuine buyer pay for a vehicle with an encumbrance on it? A sophisticated buyer, such as a motor dealer, would still buy the vehicle, but only on the basis that the encumbrance was paid out. The usual mechanism would be to pay an amount directly to the financier representing the payout figure of the finance on that day, thereby obtaining clear title, and paying any balance to the owner. This is the usual process on trade-in of any vehicle still subject to finance. The effect on the owner is that they would be freed of their outstanding obligation to the financier, and would recover their equity in the vehicle.
  4. [24]
    However, where the obligation to the financier is the obligation of some other person, the owner gains no benefit from the finance being paid out, and they lose the amount of the finance payout.
  5. [25]
    Mr Fraser says in his “Statement of Claim Narrative” that he offered the vehicle for sale on a Classified Adverts website on 24 August 2013 for $19,950.00 to expedite a sale. He received a firm offer from a buyer who was travelling up from Sydney on 1 October 2013 to purchase the vehicle, but the buyer acquired a PPRS search which brought to light that the vehicle was encumbered, and the buyer withdrew his offer (the amount of that offer is not stated). On 3 October 2013 Mr Fraser received an offer of $18,500.00, but that sale also fell through because of the encumbrance.
  6. [26]
    Mr Fraser delivered the vehicle back to Millards. That was in the context of a sale, but only arose as Mr Fraser had genuinely tried to sell the vehicle for market value previously, but was unable to do so because of the encumbrance. It is clear that Millards agreed to buy the vehicle back to resolve the “clear title” issue which was preventing Mr Fraser from selling the vehicle. Mr Fraser expected to receive back the amount of $15,500.00 plus an additional $2,000.00 as an adjustment to offset his loss on the vehicle, making a total of $17,500.00.
  7. [27]
    Mr Fraser had been offered $18,500.00 by a genuine third party buyer two days beforehand, and then was effectively offered $17,500.00 by Millards.
  8. [28]
    I am not satisfied that the Millards offer represented the proper market value. At that stage, Mr Fraser was anxious and saw no other avenue to sell the vehicle before he went overseas. He accepted the best offer he could get from Millards. It is clear however, that if the vehicle had not been encumbered, that he would have sold it for $18,500.00 two days before that.
  9. [29]
    I am satisfied that delivery of the vehicle to Millards by Mr Fraser was a direct consequence of the failure to give clear title. I am also satisfied that the financial loss suffered by Mr Fraser by not being paid for the vehicle, which he could not otherwise sell, does represent his financial loss as a result of the failure to give clear title.
  10. [30]
    I am satisfied that the amount of that financial loss is the market value of the vehicle as at 5 October 2013, which is evidenced by the genuine offer from an independent third-party of $18,500.00.
  11. [31]
    I therefore assess the amount of Mr Fraser’s financial loss as being $18,500.00.

Matters to be considered on a claim

  1. [32]
    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. [33]
    There is no suggestion of any neglect or default by Mr Fraser, or any relevant compensation paid to him.

Liable persons

  1. [34]
    The Tribunal is required to name the persons who are liable for Mr Fraser’s financial loss, pursuant to s 530(b) and s 488(3)(c) of the Act.
  2. [35]
    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.
  3. [36]
    Mr Millard and Ms Millard were Directors of the corporation at the relevant time. I am satisfied that Millards, Mr Millard and Ms Millard should be named as liable persons.

Conclusion and Order

  1. [37]
    I am satisfied that Mr Fraser has suffered financial loss in the amount of $18,500.00 arising from the event.
  2. [38]
    I will make an order in terms of the relevant sections of the Agents Financial Administration Act 2014 (Qld) which now administers the Fund.
  3. [39]
    I order that:
  1. The claim is allowed in the sum of $18,500.00 pursuant to s 105 and s 106 of the Agents Financial Administration Act 2014.
  1. The Chief Executive must pay to Paul Fraser the sum of $18,500.00 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 Paul Fraser, 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 $18,500.00 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 23 September 2014 at [16].

[2]Submissions Chief Executive 23 September 2014 at [18].

[3][2011] QCAT 505 at [7].

[4]Submissions Chief Executive 23 September 2014 at [22].

Close

Editorial Notes

  • Published Case Name:

    Paul Fraser v Millards Noosa Motors Pty Ltd, Brian Lennox Millard and Lee Millard

  • Shortened Case Name:

    Fraser v Millards Noosa Motors Pty Ltd

  • MNC:

    [2015] QCAT 185

  • Court:

    QCAT

  • Judge(s):

    Member Paratz

  • Date:

    21 May 2015

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
McNabb v OFT Claims and Recoveries, Department of Justice and Attorney General [2011] QCAT 505
1 citation
Jump To
Cite 1 - [2011] QCAT 505

Cases Citing

No judgments on Queensland Judgments cite this judgment.

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