Hall v Freeman[2018] QCATA 159

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   Mr Hall says that he sold a car to Mr Freeman on the basis that Mr Freeman was to obtain a Roadworthy Certificate, and that Mr Freeman left a $400 deposit on the car.^[1]
2. [2]
   Mr Hall says that Mr Freeman decided to not purchase the car because of ‘cost concerns’, and asked for his money back.^[2]
3. [3]
   Mr Hall refused to refund the initial payment of $400 to Mr Freeman.
4. [4]
   Mr Freeman filed an Application in the Tribunal for Minor Civil Dispute which was heard by an Adjudicator on 20 December 2017. An order was made as follows:

The respondent refund the amount of $400.00 to the Applicant within 21 days of today.

5. [5]
   Mr Hall filed an Application for leave to appeal or appeal on 2 July 2018, which was outside the 28 day appeal period. He then filed an application to extend the time limit to file the application for leave to appeal or appeal on 18 September 2018.
6. [6]
   The Appeal Tribunal directed on 7 September 2018 that the application to extend time would be determined on the papers not before 5 October 2018. This is the decision on that application.
7. [7]
   Mr Hall also filed an application for a stay of the decision of 20 December 2017 on 24 August 2018. This decision also deals with that application.

Applications to extend time

8. [8]
   The principles upon which an extension of time will be granted are well established.
9. [9]
   The Court of Appeal has said that^[3] the important public policy which underlies time limits for filing appeals is the bringing of finality to litigation and, consequently, time limits are not to be lightly ignored, and identified the criteria to which the Court will have regard when determining whether or not to extend time are not limited, but should include:

   1. (a)
      the length of time that has elapsed since the notice of appeal should have been filed;
   2. (b)
      a satisfactory explanation for the delay;
   3. (c)
      any prejudice suffered by the respondent; and
   4. (d)
      the merits of the substantive appeal.
10. [10]
    The principles in relation to an application for extension of time under the QCAT Act have been similarly expressed. They were considered in Braunberger v Assistant Commissioner Les Hopkins^[4] where the Member noted:

[8]The Tribunal has the power under s 61 of the Queensland Civil and Administrative Tribunal Act 2009 to extend the time in which to file the application. The Tribunal must consider whether “the interests of justice are served by granting or refusing the extension sought”. (Benson v Ware [2012] QCATA at [9])

[9]There are earlier decisions of the Tribunal and the Appeal Tribunal that have identified some of the relevant factors to be considered in exercising the discretionary power to extend time. Relevant factors, although not exclusive, include the length of the delay and whether a satisfactory explanation has been provided for the delay; the merits of the application; and the degree of prejudice, if any, to the other party if the application to extend time is granted.

11. [11]
    The assessment of the merits of the case on an application for extension of time has been variously expressed:

    1. (a)
       In Gardener and Ors v Chief Executive, Office of Liquor & Gaming Regulation and Anor^[5] the Member described the merit threshold as ‘quite low’ and considered whether the applicants had ‘demonstrated that there is an arguable case or at least that the grounds for review are not hopeless’.^[6]
    2. (b)
       In Eastern Leader Co Pty Ltd v Department of Agriculture, Fisheries and Forestry^[7] the Senior Member considered the prospects of the applicant overturning the decision on the basis that it was not the correct or preferable decision ‘to be slim’.^[8]
12. [12]
    The test for the merits in an extension of time application has therefore been variously expressed as requiring the applicant to show an ‘arguable case’, or that ‘the grounds for review are not hopeless’, or that the prospects of overturning the decision are not ‘slim’.

Delay

13. [13]
    Mr Hall attributes the delay in filing his application to appeal upon delays in seeking Reasons for the adjudicator’s decision, and in time spent in correspondence with the Tribunal, and that he did not want to spend the filing fee of $326.50 (which is almost as much as the claim) if he could avoid doing so.
14. [14]
    Mr Freeman has not made any submissions as to prejudice caused to him by the delay.
15. [15]
    I would probably be satisfied that a sufficient explanation has been given for the delay, and that no prejudice has been shown to be caused by the delay.

Merits

16. [16]
    Mr Hall says in his application to appeal that:

Should this decision be correct, then it would follow that all deposits are not binding and are refundable on demand.

17. [17]
    Mr Hall does not refer to any authority in support of this broad proposition. That proposition is simplistic, and does not reflect relevant law.
18. [18]
    This is a matter of contract law, and will be determined upon the actual agreement made between Mr Hall and Mr Freeman. That contract may contain terms as to payment of a deposit, and terms as to when it may be refunded or forfeited, but that will be a matter of consideration of the actual contract.
19. [19]
    The author of Breach of Contract makes this comment as to deposits generally:^[9]

[1251] Uncertain Area

Contracts often provide for the payment of a sum of money described as a ‘deposit’. The fact that terms requiring such payments are so common makes it surprising that the authorities on accrued rights conflict to such an extent that they provide no authoritative guidance.

20. [20]
    The author goes on to say that the precise function of a payment described as a ‘deposit’ must depend on the terms of the contract.^[10]
21. [21]
    It is therefore not manifestly obvious that Mr Hall is entitled to forfeit of the deposit, as he asserts. That is a question of law to be determined on the facts.
22. [22]
    Mr Hall may seek to raise an implication that the payment of $400 was a forfeitable deposit. The basis in law for such an implication is long-standing and is discussed in Howe v Smith:^[11]

Money paid as a deposit must, I conceive, be paid on some terms implied or expressed. In this case no terms are expressed, and we must therefore inquire what terms are to be implied. The terms most naturally to be implied appear to me in the case of money paid on the signing of a contract to be that in the event of the contract being performed it shall be brought into account, but if the contract is not performed by the payer it shall remain the property of the payee. It is not merely a part payment, but is then also an earnest to bind the bargain so entered into, and creates by the fear of its forfeiture a motive in the payer to perform the rest of the contract.

23. [23]
    However, it is notable that the payment of $400 in this matter is expressed in the receipt dated 29 September 2017 to be ‘Part p-ment on Peugeot 307’. The payment is not clearly expressed to be a deposit, but to be a part payment, which would be subject to the terms of the contract.
24. [24]
    This Contract may well be seen as conditional upon Mr Freeman being able to obtain a Roadworthy Certificate (which is now known as a Safety Certificate) without any, or any significant expense. If that was the situation, then the failure to be able to obtain a Safety Certificate as anticipated would be seen as failure of a fundamental term, and the deposit could not be retained.
25. [25]
    Significantly, in any event, an issue arises as to the enforceability of the Contract itself.
26. [26]
    Regulation 23 of the Transport Operations (Road Use Management – Vehicle Standards and Safety) Regulation 2010 (Qld) provides:

23SC vehicles for sale – safety certificate requirement

3. (1)
   The owner of a registered SC vehicle must not offer the vehicle for sale unless –

1. (a)
   there is a current safety certificate for the vehicle; and

2. (b)
   the owner complies with subsection (1A).

Maximum penalty – 60 penalty units

27. [27]
    Regulation 24 of the Transport Operations (Road Use Management – Vehicle Standards and Safety) Regulation 2010 (Qld) provides:

24Disposal of registered vehicles – inspection certificate requirement

1. (1)
   The owner of a registered vehicle must not dispose of the vehicle to another person unless the owner –

   1. Possesses a current inspection certificate for the vehicle.

Maximum penalty – 60 penalty units

28. [28]
    The expression ‘disposal’ is defined in Schedule 4 of the Transport Operations (Road Use Management – Vehicle Standards and Safety) Regulation 2010 to be:

Disposal of a vehicle, includes delivery of possession of the vehicle under barter, gift, hire-purchase agreement, lease; or sale…

29. [29]
    Mr Hall placed an advertisement on Gumtree advertising the vehicle for a sale without having a Safety Certificate, in breach of Regulation 23. The advertisement actually reads:

It is registered to Jan 18, but needs a RWC

30. [30]
    Mr Hall then ‘disposed’ of the vehicle by giving possession of it to Mr Freeman so that he could take it away to get a Safety Certificate, under the contract of sale, without possessing a current safety certificate, in breach of Regulation 24.
31. [31]
    The effect of illegality is discussed by the authors of Cheshire and Fifoot’s Law of Contract^[12] as follows:

In the absence of statutory prescription, where a contract is illegal, whether because it is prohibited by statute or against public policy, the word most commonly used by courts to describe the legal status of the contract is ‘void’. It suggests that such a contract has no legal effect whatsoever. The maxim ex turpi causa non oritur action (an action cannot arise from a tainted cause) is often invoked in this connection.

The normal rule is, therefore, that a contract, or term of a contract, that is void because it is illegal will not be enforced by the court. This means that there is no liability for breach of contract.

32. [32]
    The status of a Contract for sale of a motor vehicle without the equivalent of a safety certificate was determined by the Full Court of the Supreme Court of Queensland in 1985 in Buckland v Massey^[13] in relation to similar predecessor legislation.
33. [33]
    The Full Court held that that the Motor Vehicles Safety Act 1980 (Qld) impliedly intended to prohibit a contract of sale between parties who contemplate that its performance will involve a breach of that Act in a situation where the Act prohibits the delivery of possession by one party to another of a second-hand motor vehicle without compliance with the requirements of subsections (2) and (3) of section 32 of that Act (which related to having a certificate of roadworthiness).
34. [34]
    The Full Court went on to hold that the performance of the contract was impliedly prohibited by the Act and was unenforceable.
35. [35]
    This Contract would therefore be unenforceable for illegality, which would negate any ability to enforce it and retain the deposit, even if it was non-refundable under the contract.
36. [36]
    I am not satisfied that Mr Hall has shown that he has any reasonable prospects of success in the appeal, as he has not shown that the contract provided for the part-payment to be a non-refundable deposit; and the contract itself would be unenforceable for illegality.
37. [37]
    There being no reasonable prospects of success, the test for an extension of time is not satisfied, and I therefore refuse the application to extend time.

The Stay Application

38. [38]
    Direction 2 given on 21 September 2018 provides that directions will be made as to the stay application if the application to extend time is successful.
39. [39]
    As the application to extend time has been unsuccessful, there is no need to consider the stay application further, and I dismiss the application for a stay.

Orders

40. [40]
    The application for an extension of time to file the application for leave to appeal or appeal is refused.
41. [41]
    The application for a stay is dismissed. 
42. [42]
    The appeal cannot therefore proceed, and I dismiss the application for leave to appeal or appeal.