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Sutton v Tomkins[2017] QCATA 44

CITATION:

Sutton & Ors v Tomkins [2017] QCATA 44

PARTIES:

Sandra Joanne Sutton and David John Sutton

(First Applicants)

Damien Edward Cahill

(Second Applicant)

v

Cecil Thomas John Tomkins

(Respondent)

APPLICATION NUMBER:

APL469-15; APL473-15

MATTER TYPE:

Appeals

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Senior Member O'Callaghan

Member Lumb

DELIVERED ON:

7 April 2017

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The applications for leave to adduce further evidence are refused.
  2. The appeal is allowed in relation to the claims insofar as they are based on the alleged misrepresentations of the Respondent.
  3. Otherwise, leave to appeal is refused.
  4. The Tribunal’s decisions of 7 October 2015 in OCR170-14 and OCR176-14 rejecting the Applicants’ claims are set aside.
  5. The matters are returned to the Tribunal for reconsideration according to law in respect of the claims insofar as they are based on the alleged misrepresentations of the Respondent.
  6. It is directed that the matters be heard by way of an oral hearing.
  7. The parties shall file (and serve on the other party), within 14 days of the date of these orders, written submissions (no longer than 4 pages) in respect of the question of costs of the applications and appeal.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – ADMISSION OF FURTHER EVIDENCE – where applicants seek to adduce new evidence on appeal – whether an applicant for leave to appeal may seek to adduce further evidence before leave to appeal is granted – whether new evidence was reasonably available at the time of the decision

APPEAL AND NEW TRIAL – Leave to Appeal – where Tribunal rejected a claim against the Fund maintained under the Property Agents and Motor Dealers Act 2000 and the Agents Financial Administration Act 2014 – where Tribunal concluded a Deposit Bond was not mishandled – whether the Tribunal erred in not finding that the Deposit Bond was dealt with in a manner which engages liability for the Fund – whether leave to appeal should be granted

APPEAL AND NEW TRIAL – Leave to Appeal – where Tribunal rejected a claim against the Fund maintained under the Property Agents and Motor Dealers Act 2000 and the Agents Financial Administration Act 2014 – where Tribunal concluded the applicants had not established reliance on misrepresentations which a reasonable person would have relied upon and which were an inducement to contract – whether Tribunal erred in law in failing to provide adequate reasons

Property Agents and Motor Dealers Act 2000 (Qld), s 469, s 469A, s 470, s 471, s 471A, s 472, s 473, s 488, s 573, s 574

Agents Financial Administration Act 2014 (Qld), s 78, s 81, s 82, s 84, s 105, s 106, s 116, s 155

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28, s 32, s 100, s 139, s 142, s 143, s 146, s 147

Property Occupations Act 2014 (Qld), s 212

Land Sales Act 1984 (Qld), s 23, s 24

Duties Act 2001(Qld), Chapter 2, Part 9

Attorney-General v Kehoe [2001] 2 Qd R 350

Bannink v Solar Energy Group Pty Ltd [2012] QCATA 148

Downey and Anor v Carlson Hotels Asia Pacific P/L [2005] QCA 199

Ericson v Queensland Building Services Authority [2013] QCA 391

Gould v Vaggelas (1984) 157 CLR 215

Kerr v Paku and Anor [2011] QCATA 157

Laing & Anor v Kokkinos & Anor (No 2) [2013] QCATA 247

Mannix v Chris Neale Constructions Pty Ltd [2011] QCATA 222

Res 1 v Medical Board of Queensland [2008] QCA 152

Robertson v Airstrike Industrial Pty Ltd [2016] QCA 104

Underwood v Queensland Department of Communities (State of Queensland) [2013] 1 Qd R 252

Vidal v NRMA Insurance Ltd [2005] NSWCA 390

APPEARANCES:

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

REASONS FOR DECISION

Introduction

  1. [1]
    This is a decision on two applications for leave to appeal, and appeal (“the Appeal Applications”) against decisions of the Tribunal dated 7 October 2015 (“the Decisions”) in two matters, OCR170-14 and OCR176-14.
  2. [2]
    By the Decisions, the Tribunal Member (“the Member”) rejected two essentially identical claims made on 19 March 2012 by the Applicants against the claim fund then maintained under the Property Agents and Motor Dealers Act 2000 (Qld) (“PAMDA”) and subsequently maintained under the Agents Financial Administration Act 2014 (Qld) (“the AFAA”). The second applicant is the son of the first applicants, and his claim arose out of the same facts and circumstances. The Member’s reasons for the Decisions (“the Reasons”) are identical but for the named applicants, and the Appeal Tribunal has thus heard and now determined the Appeal Applications in one decision.
  3. [3]
    The respondents to both claims were Prime Real Estate Australia Pty Ltd (subsequently deregistered) and Cecil Thomas John Tomkins (“the Agent”).  The Agent is the only named respondent to the Appeal Applications. The Agent did not participate in the proceedings at first instance nor did he participate in these proceedings.
  4. [4]
    The Chief Executive, Department of Justice and Attorney-General (“the Chief Executive”) made submissions below and has also made written submissions on these Appeal Applications.
  5. [5]
    The Applicants seek leave to appeal the Decisions and to adduce further evidence on the Appeal Applications.

The Decisions and their background

  1. [6]
    The Applicants’ claims were lodged on 19 March 2012.
  2. [7]
    On 21 March 2014, the Member granted an extension of time to file the claims against the Fund.
  3. [8]
    On 4 August 2014, the claims were referred to the Tribunal for determination under Chapter 14 of PAMDA.
  4. [9]
    The Decisions were made on the papers without an oral hearing.
  5. [10]
    The Member approached the claims on the basis of three broad categories which he described as “The Deposit Bond Event”, “The Misrepresentation Event” and the “The Marketeering Event”. 
  6. [11]
    It is convenient to address the Applicants’ case having regard to those categories.
  7. [12]
    There does not appear to be any dispute as to the facts giving rise to the claims which are set out in the Reasons at paragraphs [12] to [22].

The Appeal Applications

  1. [13]
    The Appeal Applications set out eight grounds of appeal and the Applicants contend that such grounds involve errors of mixed fact and law.  Those grounds are as follows:
    1. absent any evidence from the Agent, findings of fact ought to have been made in favour of the Applicants (Ground 1);
    2. the “Deposit Event” was misconstrued and ought to have been found in favour of the Applicants (Ground 2);
    3. the Applicants did not receive accounting advice, nor are they business savvy so as to disentitle the claim (Ground 3);
    4. the Accounting letter relied upon was arranged by the Agent to secure the deposit bond (Ground 4);
    5. the misrepresentations were about the acquisition of the property and give rise to a claim against the Fund (Ground 5);
    6. the nature of the representations was such that a reasonable person would be and was mislead by them (Ground 6);
    7. the claim was not a “Marketeering Claim”, the likes of which are not supported from the Fund (Ground 7);
    8. there was not a “bad deal”, but deceitful and wrongful actions of the Agent enabling a claim against the Fund (Ground 8).
  2. [14]
    The grounds of the Appeal Applications have not, with respect, been framed with precision.  It appears tolerably clear that Ground 2 concerns “The Deposit Bond Event”; Grounds 3, 4, 5 and 6 concern “The Misrepresentation Event”; and Grounds 7 and 8 concern “The Marketeering Event”.  It is unclear whether Ground 1 is directed to one or more of the respective events.  Having regard to the Applicants’ submissions, it is not apparent that Ground 1 gives rise to any discrete basis for contending that there was an identifiable error in the Reasons over and above those contained in Grounds 2 to 8.

Jurisdiction

  1. [15]
    In our view, prior to 1 December 2014, the jurisdiction of the Tribunal to determine the claims was governed by PAMDA.
  2. [16]
    The AFAA commenced on 1 December 2014. By virtue of s 155:
    1. the rights and liabilities of the claim fund under PAMDA are taken to be the rights and liabilities of the claim fund under the AFAA (see subsection (1));
    2. a claim that has been made against the former fund, and not finished before the commencement date, continues as if it were a claim against the current fund (see subsection (2)). The current fund is established pursuant to s 78 of the AFAA.
  3. [17]
    The claims were made before the commencement date of the AFAA and continue as if they were claims against the current fund.
  4. [18]
    Nevertheless, in our view, the question of whether the conduct of the Agent gave rise to a contravention of the relevant legislation is to be determined having regard to the then operative legislation, namely PAMDA (now repealed).

Leave to appeal

  1. [19]
    Subsection 142(1) of QCAT Act provides that a party to a proceeding may appeal to the Appeal Tribunal against a decision of the Tribunal in the proceeding if a judicial member did not constitute the Tribunal in the proceeding.  The Member was not a judicial member.
  2. [20]
    While an appeal on a question of law is as of right, an appeal on a question of fact, or of mixed fact and law, may only be made with the leave of the Appeal Tribunal.[1]
  3. [21]
    In considering leave to appeal on a question of mixed law and fact, the following questions arise:
    1. (a)
      Is there a reasonably arguable case of error in the primary decision?
    2. (b)
      Is there a reasonable prospect that the applicant will obtain substantive relief?
    3. (c)
      Is leave necessary to correct a substantial injustice to the applicant caused by some error?
    4. (d)
      Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?[2]

The Applications for leave to adduce further evidence

  1. [22]
    The Applicants indicated that they wished to adduce further evidence on the hearing of the Appeal Applications.  The evidence was sought to be led from Mrs Sutton (one of the first applicants), Damien Cahill (the second applicant), a Scott Jamieson and the Agent.  However, the Applicants did not put any proposed statements or statutory declarations or even a précis of evidence before the Appeal Tribunal.  We consider this to be an unconventional approach to an application to adduce further evidence.
  2. [23]
    A threshold issue arises as to whether it is open to the Appeal Tribunal to give an applicant for leave to appeal leave to adduce further evidence or whether the Appeal Tribunal’s discretion arises only in the event that leave to appeal is given.
  3. [24]
    Subsection 147(2) of the QCAT Act provides that the appeal must be decided by way of rehearing, with or without the hearing of additional evidence as decided by the Appeal Tribunal. A party may appeal against a decision of the tribunal (if a judicial member did not constitute the Tribunal) only if the party has obtained the Appeal Tribunal’s leave to appeal on a question of fact or a question of mixed law and fact.[3]  Subsection 147(2) makes express reference to an “appeal”.
  4. [25]
    In Underwood v Queensland Department of Communities (State of Queensland)[4] it was said by Muir JA (Dalton J agreeing):

[38]  The Appeal Tribunal, in deciding whether to receive the applicant’s further evidence, applied part of the definition of ‘reopening ground’ in s 137 of the QCAT Act. Under that section and s 138 a party is given a right to apply to QCAT for a proceeding to be reopened if a ‘reopening ground exists’. A reopening ground relevantly exists where:

‘… the party would suffer a substantial injustice if the proceeding was not reopened because significant new evidence has arisen and that evidence was not reasonably available when the proceeding was first heard and decided’.

[39]   Under s 139, where a reopening ground exists and where that ground could be ‘effectively or conveniently dealt with by reopening the proceeding’ the Tribunal may grant the application to reopen. Sections 136 to 141 inclusive, however, do not apply to appeals. Section 143 of the QCAT Act which provides for applications for leave to appeal is silent as to the Appeal Tribunal’s ability to receive additional evidence. Section 147, which relates to appeals to the Appeal Tribunal on a question of fact or on a question of mixed fact and law, provides that ‘The appeal must be decided by way of rehearing, with or without the hearing of additional evidence as decided by the appeal tribunal’. The test contained in the definition ‘reopening ground’ in s 137, as a general proposition, is a useful enough guide for the Appeal Tribunal to apply on application for leave, but it would not be correct in law for the Tribunal to fetter its discretion by rigidly applying a test which expressly applies to proceedings at first instance but not to appeals.[5] [underlining added, footnotes omitted]

  1. [26]
    As noted by Muir J, s 143 is silent as to the Appeal Tribunal’s ability to receive additional evidence. In our view, it is unclear whether the words “application for leave” in the underlined passage are a reference to an application for leave to appeal or an application for leave to adduce additional evidence (on an appeal against a decision on a question of fact or a question of mixed law and fact).
  2. [27]
    It may be that the answer is found in s 28(3)(c) of the QCAT Act which provides that, in conducting a proceeding, the Tribunal may inform itself in any way it considers appropriate. “Proceeding” is defined, generally, to mean a proceeding before the Tribunal, including an appeal before the Appeal Tribunal and a proceeding relating to an application for leave to appeal to the Appeal Tribunal.
  3. [28]
    We will proceed on the basis that an applicant for leave to appeal may seek the exercise of the Appeal Tribunal’s discretion to give leave to adduce further or additional evidence on the Appeal Application.
  4. [29]
    Consistently with the decision in Underwood, we consider that the test in relation to the adducing of new evidence pursuant to s 139 is apposite in the present situation.  That test includes the question of whether significant new evidence has arisen and whether that evidence was not reasonably available when the proceeding was first heard and decided. The Tribunal’s power to allow fresh evidence (on appeal) is not a mechanism by which parties can repair the holes in their original case.[6] 
  5. [30]
    In our view, it is not evident that the proposed evidence would not be significant or have “an important influence on the outcome of the case”[7] insofar as the Deposit Bond Event and the Marketeering Event are concerned, given the Appeal Tribunal has not been provided with the detail of the proposed evidence.
  6. [31]
    Having regard to the Applicants’ submissions, it may be that the proposed evidence may be significant in so far as the Misrepresentation Event is concerned.  However, no concluded view can be reached in the absence of the specific evidence sought to be relied upon.
  7. [32]
    Further, we find that the Applicants have not demonstrated that the evidence was not reasonably available when the proceeding was first heard and decided.
  8. [33]
    With respect to evidence to be adduced from Mrs Sutton and Mr Cahill, it seems clear that such evidence could have been led below. 
  9. [34]
    With respect to any proposed evidence from the Agent, what evidence could be led and the materiality of same is speculative.  Further, it was open to the Applicants to apply to the Tribunal at first instance for the issue of a written notice requiring the Agent to attend (or to produce a document) pursuant to s 97 of the QCAT Act.
  10. [35]
    With respect to the proposed evidence of Mr Jamieson, we are not persuaded that such evidence was not readily available at the time of the hearing.  The seemingly undisputed contentions of the Chief Executive were that Mr Jamieson was known to the Applicants and had either provided evidence or had been interviewed by the Applicants for the earlier legal proceedings in New South Wales.[8]
  11. [36]
    Further, for the reasons set out later in these reasons, we have found that the Decisions were infected by an error of law. In that event, further evidence cannot be adduced on an appeal involving a question of law only (which involves s 146 of the QCAT Act).[9]  Otherwise, we would not have given leave to adduce further evidence from the Applicants because such evidence was reasonably available at the time of the Decisions.
  12. [37]
    Leave to adduce further evidence is refused.

The Deposit Bond Event

  1. [38]
    The Member’s reasons in relation to this issue are set out in the Reasons at [34] to [49].
  2. [39]
    The Applicants were required to pay a deposit of $46,900.00 in relation to the purchase of the proposed property. The Agent arranged for that obligation to be met by the Applicants by way of the provision of a deposit bond (which has been described as the “Deposit Bond”).
  3. [40]
    The material indicates that the following occurred:
    1. Mrs Sutton and Mr Cahill signed separate forms labelled “Deposit Bond Application Form - Individual” issued by Deposit Access Pty Ltd (which appears to be the agent of QBE Insurance (Australia) Ltd (“QBE”)) and Mr Sutton signed a form labelled “Deposit Bond Application Form - Guarantor”;
    2. by such application forms, the Suttons and Mr Cahill agreed to guarantee the amounts of the “Deposit Bonds” to be issued by QBE;
    3. tax invoices issued by Deposit Access to Mrs Sutton and Mr Cahill indicate that an amount of $4,845.00 (in the Suttons’ case) and $9,960 (being two amounts of $4,845.00 in Mr Cahill’s case) were paid. The amount of $4,845.00 comprised a “Bond Premium” of $4,596.00 (being the “premium” for the issue of a 10% “deposit bond”) and $249 as a “Handling Fee”. It appears common ground that the amounts  were paid to the Agent;[10]
    4. QBE issued three “Deposit Bonds” pursuant to which it undertook to the Vendor (under the contracts of sale) to pay to  the Vendor’s lawyers,[11] on demand, any sum or sums which may be demanded by the Vendor or the solicitors to a maximum aggregate sum of $46,900 (in the Suttons’ case) and $46,900 and $46,800 (in each of Mr Cahill’s bonds).
  4. [41]
    The factual findings made by the Member included the following:
    1. the Agent dealt with the “Initial Deposits” (the three sums of $4,845.00) in the manner anticipated; they were forwarded to QBE and three Deposit Bonds were issued by QBE (Reasons [44]);
    2. QBE in turn provided the Deposit Bonds and then paid them to the Vendor when called upon (and that those events were not controlled by the Agent) (Reasons [45]);
    3. the Applicants consented to a judgment being entered against them in favour of QBE (which indicated that they conceded a liability by them to QBE) (Reasons [45]);
    4. the Agent had been paid a commission by the Vendor in relation to the sales (although no details are provided as to the process by which such payment was made) (Reasons [46] - [48]).
  5. [42]
    The Member concluded:
    1. there was no mishandling of the “Initial Deposit” moneys in terms of the Land Sales Act 1984 (“the LSA”) or the AFAA (Reasons [44]);
    2. the sequence of events did not show any mishandling of the Deposit Bond by the Agent (Reasons [45]);
    3. the mere payment of commission to the Agent has not been shown to be a breach of any of the relevant Acts and did not of itself give rise to a claim against the Fund (Reasons [48]).
  6. [43]
    Ground 2 of the grounds of appeal states that “The ‘Deposit Event” was misconstrued and ought to have been found in favour of the Applicants.  The grounds do not identify the basis upon which it is asserted that the relevant event was “misconstrued”.
  7. [44]
    The written submissions provide little elucidation on that ground. The Applicants submit that the “Deposit Event’’ was misconstrued because “the Deposit Bond is no different from a cash deposit paid (and the bond ought to have been dealt with accordingly) but the explanation and treatment of it, was used by [the Agent] to perpetrate a fraud to the significant detriment of” the Applicants.[12]
  8. [45]
    The Applicants also raise a specific contention in relation to the Member’s reliance upon the consent judgment being entered against the Applicants.  They submit that the judgment is not an admission against interest; it is explained as a without prejudice strategy to limit the adverse consequences of the action, in circumstances where there was no recourse to the true perpetrator of the financial loss.[13]
  9. [46]
    We accept that the entry of the consent judgment, of itself, is not necessarily an admission that the Applicants accepted that they were in fact liable to QBE. This issue was not canvassed below, as the matter was determined on the papers. However, accepting that to be the case, the question remains as to whether, on the facts, there was any error in the conclusions reached by the Member.
  10. [47]
    The Applicants’ submissions do not articulate the bases upon which it is said that the relevant facts fall within the ambit of the respective provisions identified by the Member at Reasons [34] to [37].
  11. [48]
    As we apprehend the facts, the following is apparent:
    1. the “Initial Deposit” of $4,845.00 formed no part of the deposit payable by the Applicants under the contract to purchase; rather, it constituted the consideration paid for the issue of the Deposit Bond by QBE (such that the Applicants were not required to pay the deposit out of their own funds at that time);
    2. there appears to be no dispute that the Applicants agreed to the payment of the “Initial Deposit” to QBE;
    3. the Deposit Bond provided for the payment of the amount to Ramsden Faes Lawyers.  There is no evidence that the proceeds of the Deposit Bond (or part thereof) were paid by QBE to the Agent.  Rather, the material indicates that on 14 December 2010 QBE provided a cheque for the deposit price to the Vendor’s lawyers (then named Ramsden Bow Lawyers).[14]  If the moneys were paid out by the Lawyers to the Vendors (or others), a question might arise as to whether there was any breach of the relevant legislative provisions by the Lawyers rather than the Agent.
  12. [49]
    In light of these facts, it is not apparent that the relevant provisions have been engaged.  In our view, the Applicants have not demonstrated that the Member should have concluded, for example:
    1. that there was “stealing, misappropriation or misapplication” by the Agent of property (the relevant moneys);[15]
    2. that a “licensee” dishonestly converted an amount belonging to someone else to the licensee’s own or someone else’s use;[16] or
    3. that the Agent received money as trustee being moneys the payment of which the Applicants were bound to make in terms of an “instrument” that was intended to bind a person to purchase a proposed lot.[17]
  13. [50]
    We are unpersuaded that there is a reasonably arguable case of error in the Decisions or a reasonable prospect that the Applicants will obtain substantive relief if granted leave to appeal.  Leave to appeal in relation to this issue is refused.

The Misrepresentation Event

  1. [51]
    This “Event” is addressed at Reasons paragraphs [50] to [71].
  2. [52]
    Before turning to the basis upon which the Member reached such conclusions, we will address the issue of whether s 212 of the Property Occupations Act 2014 (“the POA”) (referred to by the Member at Reasons [53]) was the relevant provision for consideration.  In our view, it was not. As noted above, we consider that the operative provisions were those governed by PAMDA.  Pursuant to s 470(1) of PAMDA, a person may make a claim against the fund if the person suffers financial loss because of the happening of specified events, the relevant one in this case being a contravention of s 574.
  3. [53]
    Pursuant to s 574(1) a licensee (or registered employee) must not represent in any way to someone else anything that is false or misleading in relation to the letting, exchange or sale of property. Subsection (3) provides that, without limiting subsection (1) or (2), a representation is taken, for the subsection, to be false and 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 that state of affairs does exist.
  4. [54]
    However, the language of s 212 of the POA is analogous to the language contained in s 574 of PAMDA.  In our view, there is no basis for concluding that a different outcome could be reached in relation to s 574 as would be reached in relation to s 212.
  5. [55]
    The Member identified the following misrepresentation (as alleged by the Applicants):[18]
    1. the property for sale was unique (the first alleged representation);
    2. the acquisition of the property could be achieved with a payment of only 1% of the purchase price (the second alleged representation);
    3. the Agent would look after the Applicants’ interests as paramount in relation to the purchase (the third alleged representation);
    4. the Applicants would not be obliged to do or contribute anything further towards the completion of the purchase of the property (because the Agent would take care of everything for them) (the fourth alleged representation); and
    5. the liability of the Applicants in any event was limited to the Applicants’ upfront payment of 1% of the purchase price (the fifth alleged representation).
  6. [56]
    The Member found that the Applicants had not made out a case under s 212 of the POA because they had not established that:
    1. the statements of the Agent as to the “basics” of the sale were misrepresentation (we assume, although it is not entirely clear, that the reference to the “basics of the sale” is a reference to the matters contained in Reasons [55]);[19]
    2. the Applicants relied on the statements of the Agent;[20]
    3. a reasonable person would have been led into error by the statements of the Agent;[21]
    4. the representations that were an inducement to enter into the contract were “misrepresentations that were false and on which they reasonably relied”.[22]

Were the alleged representations actionable misrepresentations?

  1. [57]
    With respect to the first alleged representation, the Member appears to have concluded that the statement did not qualify as a representation; rather it was sales talk or “puff” and that no reasonable person would believe that the property was unique (Reasons [63], [64]).
  2. [58]
    With respect to the second alleged representation, the Member appears to have concluded that the statement that the property could be acquired with a payment of 1% of the purchase price was, in fact, true (Reasons [56]).
  3. [59]
    With respect to the third alleged representation, the Member appears to have concluded that the statement was sales talk or “puff” and that no reasonable person would accept as truthful, a statement that the Agent would look after the Applicants’ interests as “paramount” (Reasons [63], [65]).
  4. [60]
    With respect to the fourth and fifth alleged representations, the Appeal Tribunal directed the filing of submissions by the parties in relation to whether the Member’s Reasons address the alleged misrepresentations referred to in subparagraphs 50(d) and (e) at all and, if so, whether the Member has given adequate reasons addressing the alleged misrepresentations referred to in those subparagraphs.
  5. [61]
    The Applicants submit that the Member has not addressed those representations at all and that they ought to have been addressed separately in the Member’s reasons as to whether each was a misrepresentation of a kind supporting the claim against the Fund and whether, in failing to do so, the Member erred in law.
  6. [62]
    The Chief Executive submits that those subparagraphs received treatment at Reasons [66] to [70] and refers to the Member’s conclusion at Reasons [69(b)] and (c) and [70].  The Chief Executive further submits:
  1. The Member concluded at paragraph [69] of his Reasons that the Applicants had not established that:
  1. The Suttons relied on the statements of the agent
  2. A reasonable person would not have been led into error by the statements of the Agent.
  1. At Reasons [70] he concluded:

The Suttons have not established that the representations … were misrepresentations … on which they reasonably relied.

  1. This was adequate to address the legal issue. The Member addressed the critical questions. This occurred in the context that the focus of the argument had been whether the representations had induced the Applicants to purchase the properties and whether they had suffered any loss as a consequence (see, for example, Reasons [31]).
  2. The findings the Member made on these points and the inferences he drew were open. That evidence included the contemporaneous documentary evidence from Glenis J Mapp addressed to Deposition Access Underwriting. The Member made reference to this at Reasons [68] in finding that the Applicants had sought advice from their accountant about the property purchase and were able to assess for themselves the reasonableness of the representations.[23]
  1. [63]
    The Chief Executive correctly characterises the matters set out in Reasons [69] and [70] as conclusions.  We are unable to identify, in the Reasons, the reasoning of the Member in reaching those conclusions in relation to the fourth and fifth representations.  The Reasons do not indicate that the Member gave consideration to whether the statements comprising the fourth and fifth representations were either not misrepresentations or, if so, were true (or, to put it another way, not false or misleading).  The Reasons do not articulate, adequately or at all, a basis for reaching any such conclusions.
  2. [64]
    With respect to the fifth representation, if the statement comprising it is characterised as a representation, we consider that it is clear that the liability of the Applicants was not limited to the upfront payment of 1% of the purchase price.  That is, if it were characterised as a representation, there appears to be no proper basis for concluding that the representation was true. 
  3. [65]
    As to the question of whether such a statement can be characterised as a representation, we consider that, without expressing a concluded view, it is plainly at least arguable that the statement was an actionable representation, as distinct from mere puffery.  In the context of advertisements, it has been said that whether a representation is actionable or merely in the nature of puffery depends on the particular facts, considered “in the light of the ordinary incidents and character of commercial behaviour”.[24]  In Downey, a representation made by the appellant that a property development would be a "guaranteed success" was found not to be a puff and was actionable.[25]  A statement to the effect that the Applicants’ liability was limited to 1% of the purchase price is not an obvious example of puffery.
  4. [66]
    Courts and Tribunals have a duty to give reasons; a judicial decision should enable the parties to see the extent to which their arguments have been understood and accepted, as well as the basis for the decision.[26]  The provisions of the QCAT Act relied upon by the Chief Executive at paragraph 8 of its submissions dated 15 March 2017 do not detract from the obligation of the Tribunal to provide adequate reasons for its decisions.
  5. [67]
    In Attorney-General v Kehoe[27] the Queensland Court of Appeal said:

A failure to give reasons does not ipso facto amount to an error of law, and the occasions when a Court of Appeal will identify such a failure as an error of law will vary according to the nature of the case. Generally speaking, an error of law is discerned when the Court draws the inference that the relevant tribunal has failed in some respect to exercise its powers according to law. A lack of transparency, or obfuscation of the true basis of a decision may make it easier for a court to identify such an error.[28] [footnotes omitted]

  1. [68]
    In our view, the Reasons do not enable the parties to understand the basis upon which the Member has, seemingly, rejected the contention that the fourth and fifth representations were actionable misrepresentations (or, to put it in the language of s 574 of PAMDA, were representations that were false or misleading in relation to the sale of property).[29]  In our view, the letter referenced at Reasons [67] and [68] (and relied upon by the Chief Executive at paragraph 7 of its submissions) is immaterial to this issue.[30]  In any event, even if it could be material, the Member’s reasons do not identify how this is so.
  2. [69]
    There is a relevant lack of transparency or obfuscation of the true basis for the Member’s conclusions insofar as the fourth and fifth representations are concerned.  In our view, the absence of any adequate reasons in this regard amounts to an error of law.

Reliance/inducement

  1. [70]
    At Reasons 69(b), the Member found that the Applicants had not established that they relied on the statements of the Agent.  In our view, this finding is at odds with the Member’s findings at Reasons [58] and [70].
  2. [71]
    The Member stated at Reasons [58]:

The misrepresentations that the Suttons complain of are the representations that led them to agree to enter into the arrangements.[31]

  1. [72]
    And at Reasons [70]:

The Suttons have not established that the representations that induced them to enter into the Contract were misrepresentations that were false, and on which they reasonably relied. [underlining added]

  1. [73]
    On our reading of those paragraphs, the Member has found that the Applicants in fact relied upon the all of the alleged representations in deciding to enter into the contract.  We consider that those findings cannot be reconciled with the conclusion or finding reached at Reasons [69(b)]. 
  2. [74]
    In our view, the conclusion reached by the Member at Reasons [70] further complicates the issue.  The Member’s statement that the Applicants had failed to establish that the representations that induced them to enter into the contract were misrepresentations on which they “reasonably relied” appears to import a test, namely reasonable reliance which, in our view, is not a requirement for establishing inducement or reliance in a misrepresentation case such as one under s 574 of PAMDA.
  3. [75]
    We also note that the Member referred to a letter from the Applicants’ accountant which the Member said suggested that “the [Applicants] did seek advice from their accountant before the Deposit Bond was issued, and that they did not rely solely on the representations of the agent” (emphasis added).[32]  On its face, this statement may be taken to suggest that the Applicants relied partly on the representations of the Agent and partly on the advice from the Applicants’ accountant.  If so, such a finding would be sufficient, in our view, to establish reliance; it being settled that the contravening conduct need only be a contributing cause, it need not be the sole inducement.[33]  The fact that the Applicants did not rely “solely” on the representations of the Agent would not preclude a finding of reliance.  
  4. [76]
    It is also unclear how the finding that the Applicants sought advice from their accountant sits with the subsequent finding (at Reasons [88]) that the Applicants committed themselves to a very large financial commitment “without seeking legal or financial advice” (emphasis added).  If the “advice” referred to in Reasons [68(a)] was not financial (or legal) advice, it is difficult to identify what type of advice the Member was referring to.
  5. [77]
    In our view, the contradictory (material) findings in Reasons [69(b)] and in Reasons [58] and [70] respectively demonstrate a further error of law, namely the making of inconsistent findings.[34]

Conclusion in relation to the Misrepresentation Event

  1. [78]
    In our view, in light of the errors of law identified above, the orders made by the Member should be set aside and the matters should be returned to the Tribunal for reconsideration according to law in relation to the claims insofar as they are based on the alleged misrepresentations of the Agent. Given that all of the alleged representations arose out of the same course of conduct of the Agent; that there is some potential interrelationship between at least the second alleged representation and the fourth and fifth alleged representations; and also the matters identified under the “Reliance/inducement” heading, we consider it appropriate to remit the matter for reconsideration in relation to all of the alleged misrepresentations.
  2. [79]
    Given the nature of the misrepresentation case, we consider that it is appropriate that the matter be heard by way of an oral hearing.  We consider that the Appeal Tribunal has power to make that direction pursuant to one or both of s 146(c)(ii) or s 146(d) of the QCAT Act.
  3. [80]
    On remittal, it will be open to the Member, should the Member so decide, to receive further evidence including the evidence which was sought to be adduced on the Appeal Applications.

The Marketeering Event

  1. [81]
    The Member’s reasons on this issue are found in the Reasons at [72] to [82].
  2. [82]
    The Member concluded that the purchase was made for investment purposes and, consequently, the claim could not be made by virtue of section 84(2) of the AFAA (Reasons [79] to [82]).
  3. [83]
    In our view, Grounds 7 and 8, as expressed, do not make clear the specific basis of attack on the Member’s findings. The Applicants’ written submissions do not clarify the matter. The Applicants submitted that:

This was not a “marketeering claim”, the likes of which are no longer supported by the Fund; or just a “bad deal”, but a genuine case of deceit and wrongful actions of [the Agent] to secure commission from a sale of real estate based on representations and trickery about the acquisition of the property.[35]

  1. [84]
    The Member recorded the provisions of sections 82(2), 81 and 84(2) respectively of the AFAA at Reasons [76], [77] and [79].  The terms of those provisions reflect the provisions contained in PAMDA (now repealed) at ss 471A, 469A and 471(2)(h) respectively.
  2. [85]
    The AFAA provisions provide that a claim against the fund for financial loss suffered because of, or arising out of, a marketeering contravention must be one relating to a “non-investment residential property”.
  3. [86]
    A person purchases a “non-investment residential property” only if the property is a residential property and, relevantly, a concession under the Duties Act 2001 (Chapter 2, Part 9 for transfer duty) has been assessed for the purchase.[36]
  4. [87]
    In our view, the Member has seemingly approached the issue by considering whether there was evidence of the Applicants’ intention to purchase a property for investment purposes or, perhaps, whether the Applicants would be entitled to a concession on the purchase of the property (Reasons [88]).
  5. [88]
    We consider that this is not the correct approach.  In our view, the legislation is directed to whether an assessment at the concessional rate under the relevant provisions of the Duties Act has, in fact, been made.
  6. [89]
    Notwithstanding this erroneous approach, we find that leave to appeal should not be granted.  This raises a mixed question of fact and law. The Applicants presented no evidence at first instance that a concessional assessment under the relevant part of the Duties Act was, in fact, issued in relation to the property in question.[37]  Absent such evidence, we consider there can be no basis for concluding that (even if there were a marketeering contravention) the contravention was one relating to “non-investment residential property”.
  7. [90]
    Although we have found error in the Member’s approach, we are unpersuaded that there are reasonable prospects that the Applicants will obtain substantive relief if granted leave to appeal.  Leave to appeal in relation to this issue is refused.

Ground 1

  1. [91]
    In the absence of any submissions directly addressing Ground 1, we are unpersuaded that there is a reasonably arguable case of error in the primary decisions or a reasonable prospect that the Applicants will obtain substantive relief if granted leave to appeal. As noted above, this ground does not appear to add anything to the other stated grounds.  Leave to appeal in relation to this issue is refused.

Orders made

  1. [92]
    The formal orders of the Appeal Tribunal are as follows:
  1. The applications for leave to adduce further evidence are refused.
  2. The appeal is allowed in relation to the claims insofar as they are based on the alleged misrepresentations of the Respondent.
  3. Otherwise, leave to appeal is refused.
  4. The Tribunal’s decisions of 7 October 2015 in OCR170-14 and OCR176-14 rejecting the Applicants’ claims are set aside.
  5. The matters are returned to the Tribunal for reconsideration according to law in respect of the claims insofar as they are based on the alleged misrepresentations of the Respondent.
  6. It is directed that the matters be heard by way of an oral hearing.
  7. The parties shall file (and serve on the other party), within 14 days of the date of these orders, written submissions (no longer than 4 pages) in respect of the question of costs of the applications and appeal.

Costs of the Appeal

The Appeal Tribunal will allow the parties 14 days to file written submissions in relation to the question of costs.

Footnotes

[1]QCAT Act, s 142(1), (3)(b).

[2]State of Queensland & Anor v Aigner [2013] QCATA 151 at [7] per Justice Alan Wilson, President, Ms Howard, Member and Ms Fitzpatrick, Member.

[3]QCAT Act, ss 142(1), 142(3)(b).

[4][2013] 1 Qd R 252.

[5] Underwood at [38]-[39].

[6] Kerr v Paku and Anor [2011] QCATA 157 at [7], cited with approval in Mannix v Chris Neale Constructions Pty Ltd [2011] QCATA 222 at [9].

[7] Underwood at [42].

[8]An affidavit of Scott Jamieson, dated 23 January 2012, appears to have been filed in the NSW Local Court matter and is included in the Applicants’ claims documents.

[9] Ericson v Queensland Building Services Authority [2013] QCA 391 at [11]-[13].

[10]Applicant’s Outline of Claim, filed 17 October 2014 in OCR170-14, [8]; Outline of submissions on behalf of the Chief Executive, filed 19 December 2014, [12]; Outline of submissions on behalf of the Chief Executive, filed 5 May 2016, [9] “There was no substantive dispute as to the factual allegations made by the Applicants below.”

[11]The Deposit Bond document refers to Ramsden Faes Lawyers (Deposit Holder). It appears from latter correspondence that the firm has changed its name to Ramsden Bow Lawyers.

[12]Applicants' submissions dated 7 April 2016, paragraph 8(a).  See also the Applicants' submissions in reply dated 31 May 2016, paragraph 8.

[13]Applicants' submissions in reply dated 31 May 2016 paragraph 9.

[14]Letter of 14 December 2010 from QBE Insurance to Azzura Holdings Pty Ltd, via Ramsden Bow Lawyers, included in the Applicant’s claim documents in OCR170-14.

[15]PAMDA, s 470(1)(e); AFAA s 82(1)(b); cf Reasons [34].

[16]PAMDA s 573; Property Occupations Act 2014 s 206; cf Reasons [35].

[17] Land Sales Act 1984, ss 23, 24; cf Reasons [36]-[37].

[18]Reasons [50].

[19]Reasons [69(a)].

[20]Reasons [69(b)].

[21]Reasons [69(c)].

[22]Reasons [70].

[23]Submissions as to the treatment by the Member of aspects of the misrepresentation event, filed by the Chief Executive on 21 March 2017, at [4] - [7].

[24] Downey and Anor v Carlson Hotels Asia Pacific P/L ("Downey") [2005] QCA 199 at [91], citing Australian Competition and Consumer Commission v Henry Kaye and National Investment Institute Pty Ltd [2004] FCA 1363, at [122] per Kenny J.

[25]Downey at [92] per Keane JA with whom Williams JA and Atkinson J agreed.

[26] Res 1 v Medical Board of Queensland [2008] QCA 152.

[27][2001] 2 Qd R 350.

[28]Ibid at [23]. Cf Res 1 v Medical Board of Queensland [2008] QCA 152 at [14] per Muir JA, McMurdo P agreeing.

[29]The relevant test to be applied is not yet settled: Robertson v Airstrike Industrial Pty Ltd [2016] QCA 104 at [63]-[67] per Jackson J (McMurdo P, Morrison JA agreeing).

[30]Although it may have relevance to the issue of reliance or inducement and this is addressed below.

[31]Also, at Reasons [85] the Member said that the Applicants “accepted what the agent told them” (in the context of the Applicants entering into the purchase with the intention of achieving a profit).

[32]Reasons [68(a)].

[33]See e.g. Gould v Vaggelas (1984) 157 CLR 215 at 236 (per Wilson J), 250-251 (per Brennan J as he then was).

[34] Vidal v NRMA Insurance Ltd [2005] NSWCA 390 at [8].

[35]Applicant’s Submissions dated 7 April 2016 at paragraph 8 (c).

[36]AFAA, s 81.

[37]The Contract of Sale dated 25 January 2008, included in the Applicant’s claim documents in OCR170-14, provided that “the Buyer is responsible for all duty and registration fees payable in relation to the transfer of the Lot.” In Mrs Sutton’s affidavit of 12 October 2011, prepared for the NSW Local Court matter and included in the Applicant’s claim documents in OCR170-14, she states at [13] that “[the first Respondent] told me that I would not have to pay stamp duty, because my contract would not proceed and property would go straight from the Developer to the end Buyer…” It seems apparent, from the material provided, that the sale transaction did not progress to the point where a concessional assessment was undertaken.

Close

Editorial Notes

  • Published Case Name:

    Sandra Joanne Sutton, David John Sutton and Damien Edward Cahill v Cecil Thomas John Tomkins

  • Shortened Case Name:

    Sutton v Tomkins

  • MNC:

    [2017] QCATA 44

  • Court:

    QCATA

  • Judge(s):

    Senior Member O'Callaghan, Member Lumb

  • Date:

    07 Apr 2017

Appeal Status

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