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Meldon v Office of Fair Trading QCAT 40
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Meldon v Office of Fair Trading & Ors  QCAT 40
shane anthony meldon
Chief Executive, Department of Justice and Attorney-general, office of fair trading
robert mckean trading as cheap cars noosa
General administrative review matters
31 January 2024
18 October 2023
The decision under review is confirmed.
PROFESSIONS AND TRADES – LICENSING AND REGULATION OF OTHER PROFESSIONS OR TRADES – DEALERS – OTHER DEALERS – where applicant purchased second-hand vehicle from a licensed motor dealer – where the vehicle broke down after travelling less than 25 kilometres – where applicant agreed to purchase vehicle and paid the purchase price in advance of signing written contract – where dealer made representations regarding the vehicle while applicant signing contract and other documents – whether applicant suffered loss as a result of the representations or other implied representations said to have been made
Agents Financial Administration Act 2014 (Qld), s 82
Motor Dealers and Chattel Auctioneers Act 2014 (Qld), s 118, s 216
APPEARANCES & REPRESENTATION:
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
What is this case about?
- This case concerns whether the applicant, Mr Meldon, is entitled to claim against the claim fund established under the Agents Financial Administration Act 2014 (Qld) (‘AFA Act’) in respect of losses suffered in relation to his purchase of a faulty Holden Statesman vehicle from Robert McKean trading as Cheap Cars Noosa.
- The Office of Fair Trading (‘OFT’) decided Mr Meldon is entitled to receive an amount of $624-25. Mr Meldon paid that amount to Mr McKean for six months registration on the vehicle, but Mr McKean, who is now a bankrupt, did not transfer the registration of the vehicle to Mr Meldon.
- However, the OFT otherwise rejected Mr Meldon’s claim, which included a claim for payment of the amount Mr Meldon paid for the vehicle. Mr Meldon seeks a review of that decision.
- Mr Meldon has suffered a financial loss as a consequence of the actions of Mr McKean. He finds himself out of pocket for the amount of $8,806-26 he paid for the vehicle less the amount of $624.25 paid by the OFT. Additionally, he no longer has possession of the vehicle which Mr McKean sent to a repairer who removed the engine but himself became embroiled in a dispute with Mr McKean. In other words, Mr Meldon was left with neither the faulty vehicle nor the money he paid for it.
- It is clear Mr Meldon has suffered financially and no doubt has endured considerable stress arising out of this matter. However, the AFA Act is not a general fund for the recovery of any loss suffered in connection with a vehicle acquired through a motor dealer. Payments from the claim fund can only be made in the circumstances specified in the AFA Act.
- I have concluded that no further payment to Mr Meldon from the fund is authorised by the AFA Act. My reasons follow.
- The essential facts set out below are mainly drawn from Mr Meldon’s statement dated 23 June 2022 and subsequent submissions:
- Mr Meldon became aware of the Statesman through an advertisement placed by Mr McKean and viewed and test drove the vehicle on 20 November 2021. The test drive was brief as there was little fuel in the vehicle.
- Following the test drive, Mr Meldon agreed with Mr McKean to purchase the vehicle for $7,750; they “shook on the deal”; and Mr McKean also agreed to arrange a further six months registration. Mr Meldon paid a $250 deposit in cash and Mr McKean issued a receipt.
- On 22 November 2021, through an exchange of text messages, Mr McKean advised that six months registration would cost $624.65, which Mr Meldon agreed to pay, taking the total price for the registered vehicle to $8,403.20.
- Mr Meldon paid the amount of $8,403.20 for the vehicle on 24 November 2021.
- On 27 November 2021, Mr Meldon returned to Mr McKean’s premises to collect the vehicle and at this time signed a contract and cooling off document. During this time, Mr McKean “just kept going on and on about how good the engine was in the car”.
- Before he collected the vehicle, Mr Meldon arranged insurance cover.
- After collecting the vehicle, it had travelled less than 25 kilometres when it broke down.
- Mr Meldon called Mr McKean who arranged a tow truck to pick up the vehicle which Mr McKean arranged to be taken to a mechanic nominated by Mr McKean. Subsequently, Mr McKean advised the mechanic had removed the engine which was being taken to a repairer for a rebuild.
- Mr Meldon continued to follow up Mr McKean who eventually, on 17 February 2022, advised Mr Meldon that he was looking at the prospect of bankruptcy. Mr Meldon asked for his money back which Mr McKean said would not happen.
- The mechanic subsequently told Mr Meldon the engine was in parts and the vehicle could not be driven. He also said Mr McKean owed him money and he would not be carrying out any further work on the vehicle.
- In April 2022, the OFT advised Mr Meldon that Mr McKean had advised that, although he was originally prepared to honour the statutory warranty, the repairer had advised the issues were caused by “misuse or negligence”. There is no evidence to support this assertion apparently made for the first time some months after the vehicle broke down.
- Mr McKean became bankrupt on 8 March 2022;
- In May 2022, Mr Meldon discovered that the registration had not been transferred into his name as Mr McKean had indicated had occurred before Mr Meldon picked up the vehicle.
- Section 82 of the AFA Act sets out the circumstances in which a person may make a claim against the claim fund.
- Section 82(1)(d) relevantly provides:
A person may claim against the fund if the person suffers financial loss because of the happening of any of the following events–
. . .
- (d)the contravention by a relevant person of the following provisions of the Motor Dealers and Chattel Auctioneers Act 2014-
. . .
- section 216;
- A “relevant person” is defined for this purpose in s 80 as:
- (a)an agent;
- (b)an agent’s employee or agent, or a person carrying on business with the agent;
- (c)a person having charge or control, or apparent charge or control, of an agent’s registered office or business.
- Section 216 of the Motor Dealers and Chattel Auctioneers Act 2014 (Qld) (‘MDCA Act’) in turn relevantly provides:
- (1)A licensee or motor salesperson must not represent in any way to someone else anything that is false or misleading about the sale or auction of goods.
. . .
- (2)Without limiting subsection (1), a representation is taken, for the subsection, to be false or misleading if it would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist, whether or not the representation indicates that state of affairs does exist.
- (3)Also, if a person makes a representation about a matter and the person does not have reasonable grounds for making the representation, the representation is taken to be misleading.
- (4)The onus of establishing that the person had reasonable grounds for making the representation is on the person.
. . .
- (7)In this section—
false or misleading, in relation to a representation, includes the wilful concealment of a material fact in the representation.
. . .
- The term “misleading” includes “deceptive”: Schedule 3, Dictionary.
- In summary, a person may claim against the fund if:
- (a)the person suffers financial loss;
- (b)because a motor dealer represents in any way to someone else anything that is false or misleading about the sale or auction of goods,
taking into account the ways the meaning of “false or misleading” is extended as indicated above.
- Another claimable event upon which Mr Meldon relies is found in s 82(1)(e), which covers:
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 the Motor Dealers and Chattel Auctioneers Act 2014, section 96.
- Notably, selling a vehicle that is not of an acceptable quality and failing to honour a statutory warranty are not claimable events.
Application of the law to this matter
Did a false or misleading representation in relation to the vehicle cause Mr Meldon to suffer a loss?
- Mr McKean made representations to Mr Meldon regarding the quality of the vehicle’s engine on 27 November 2021 when Mr Meldon attended his premises, signed the contract and collected the vehicle. The vehicle broke down that same evening after travelling a short distance.
- However, even if those representations were false, Mr Meldon had already agreed to purchase the vehicle, paid the purchase price and insured the vehicle when the representations were made. In those circumstances, it could not be said that the representations induced Mr Meldon to purchase the vehicle and thus caused the loss.
- In the course of submissions, Mr Meldon put forward various other arguments which I address below.
Absence of a safety certificate
- Mr McKean initially wanted to sell Mr Meldon the vehicle unregistered but with a safety certificate. However, Mr Meldon wanted to purchase the vehicle registered and Mr McKean agreed to arrange six months registration at Mr Meldon’s cost.
- Mr Meldon submitted the possession of a safety certificate would reasonably tend to lead to a belief that “the vehicle was in working order to be driven”. I take this submission to mean it was implicit in Mr McKean’s preferred approach that he already had a safety certificate. On this basis, Mr Meldon says he has suffered because of a false or misleading representation in relation to the vehicle.
- I accept the vehicle was mechanically unsound as evidenced by it breaking down after having been driven about 24 kilometres. However, a safety certificate does not guarantee mechanical soundness or that a vehicle will not break down.
- Accordingly, I cannot accept that, without more, the reference to a safety certificate amounted to an express or implied representation that the vehicle was mechanically sound. In any case, it appears from Mr Meldon’s statement that he agreed to purchase the vehicle-“shook on the deal”-before the discussion about registration. That discussion seems to have been directed to whether Mr McKean or Mr Meldon would arrange the registration.
An inference that Mr McKean knew the vehicle was unsound?
- Mr Meldon also points to the vehicle having passed through several dealers before being sold to Mr Meldon and to there being so little fuel in the vehicle that the test drive was cut short.
- In referring to these matters, Mr Meldon seems to suggest Mr McKean knew the vehicle was faulty and deliberately sought to hide the state of the vehicle from Mr Meldon. However, no attempt was made to require Mr McKean to give evidence in which such propositions could be put to him.
- In my view, none of the factors put forward by Mr Meldon, alone or together, could, without more, support an inference that Mr McKean must have known the vehicle was unsound. In any case, there is no evidence of any express representation having been made until after Mr Meldon agreed to purchase the vehicle and paid the agreed price. For the reasons indicated earlier, the mere reference to provision of a safety certificate does not support an inference that the vehicle would not break down.
Failure to provide clear title
- As already noted, Mr McKean did not cause the registration of the vehicle to be transferred to Mr Meldon as he had promised. Mr Meldon submitted this means a claimable event arises under s 82(1)(e) of the AFA Act.
- The difficulty with this submission is that registration is not necessary to obtain title. Mr Meldon entered into a contract to purchase the vehicle, paid the purchase price and took delivery. There is no suggestion that he had notice of any security or other interest in the vehicle. In those circumstances, there is no basis on which it could be said that Mr Meldon did not become the owner of and obtain legal title to the vehicle.
Entry into and completion of the contract
- Mr Meldon now also relies on s 118 of the MDCA Act which requires a motor dealer to ensure a contract for the sale of a motor vehicle is in writing and contains prescribed particulars. Because the written contract was not signed until around the same time the representations regarding the engine were made, Mr Meldon says he is entitled to claim against the fund.
- There are at least two difficulties with this submission.
- One is that s 118(2) provides that a contract for the sale of a motor vehicle by a dealer that is not in writing “is not enforceable against the buyer of the vehicle”. That does not mean there can be no contract unless parties agree in writing. Indeed, the operation of s 18(2) is premised upon there being a contract in existence; it is just that the contract cannot be enforced against the buyer.
- The other difficulty is that the evidence does not support a conclusion that Mr Meldon relied on the representation in deciding to purchase the vehicle. It is clear that he had decided to do so when he “shook on the deal” and paid the deposit. Mr Meldon insuring the vehicle, and in particular, paying the purchase price, before the written contract was signed reinforces that conclusion.
- The same observations apply in relation to other compliance irregularities identified by Mr Meldon: they do not prevent a contract having been formed nor detract from the fact that Mr Meldon had already determined to purchase the vehicle before the representations were made.
- In a similar vein, Mr Meldon argues the contract and delivery were not “completed” because the vehicle was returned and, it appears, because of what he considered to be other failures to comply with regulatory requirements.
- The evidence does not support a conclusion that delivery was not completed: Mr Meldon paid for the vehicle and took possession of it.
- In respect of completion of the contract, it is clear that Mr McKean did not transfer the registration as promised. That is a breach of a condition of the contract. However, Mr Meldon did not point to any provision under which it could be said such a breach is a claimable event. Even if the contract was not completed, that does not assist Mr Meldon’s claim against the fund.
Repairer’s lien and removal of engine
- Mr Meldon raises whether the repairer may have a lien for unpaid charges. To the extent that Mr Meldon suggests any such lien would prevent him obtaining title, I have already explained why there is no reason to conclude Mr Meldon did not obtain title at least by the time he took delivery of the vehicle. It is difficult to see how the repairer could obtain a lien for unpaid charges payable by Mr McKean over a vehicle owned by Mr Meldon.
- In relation to the removal of the engine, Mr Meldon relies on s 82(1)(b) of the AFA Act which includes as a claimable event:
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.
- This provision is only engaged if the stealing, misappropriation or misapplication of property is perpetrated by a relevant person – that is, Mr McKean. There is no suggestion that the repairer, in retaining the engine, was acting as agent for Mr McKean. So far as the evidence indicates, the repairer was engaged by Mr McKean to carry out the work. There is no reason to conclude that occurred other than with the repairer acting as principal in the usual course of motor vehicle repairs.
- Accordingly, there is no stealing, misappropriation or misapplication of the vehicle by Mr McKean. For this reason, s 82(1)(b) does not assist Mr Meldon.
- I have examined each of the submissions made by Mr Meldon. For the reasons explained, none of these provides a basis on which Mr Meldon may recover his loss from the fund.
- It follows that I must affirm the decision under review.
 Under s 96, it is an offence not to comply with the obligation to provide clear title.
- Published Case Name:
Meldon v Office of Fair Trading & Ors
- Shortened Case Name:
Meldon v Office of Fair Trading
 QCAT 40
31 Jan 2024