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Soel Products Australia Pty. Ltd. T/As Caravan RV CQ v Love[2019] QCATA 101

Soel Products Australia Pty. Ltd. T/As Caravan RV CQ v Love[2019] QCATA 101

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Soel Products Australia Pty Ltd t/as Caravan RV CQ v Love [2019] QCATA 101

PARTIES:

SOEL PRODUCTS AUSTRALIA PTY LTD T/AS CARAVAN RV CQ

(applicant/appellant)

 

v

 

JOHN ANDREW LOVE

(respondent)

APPLICATION NO/S:

APL253-18

ORIGINATING APPLICATION NO/S:

MCDO 026/2018

MATTER TYPE:

Appeals

DELIVERED ON:

19 June 2019

HEARING DATE:

22 March 2019

HEARD AT:

Brisbane

DECISION OF:

Justice Carmody

ORDERS:

  1. Leave for the parties to be represented granted.
  2. Leave to appeal refused.
  3. Application dismissed.

CATCHWORDS:

APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where consumer dispute over deposit on purchase order – whether transaction was a binding contract of sale or mere option to buy – whether the consumer defaulted entitling the seller to forfeit – whether tribunal order fair and equitable.

APPEARANCES & REPRESENTATION:

 

Applicant:

Mr G Kelly, Kelly  Lawyers Pty Ltd

Respondent:

Mrs M Love

REASONS FOR DECISION

  1. [1]
    The tribunal decided that cancellation of an order to buy a caravan just before the delivery date did not put the respondent (buyer) in default and, therefore, the applicant (seller) was not free to forfeit the $10,000 security deposit.

The context

  1. [2]
    At the 2017 Lifestyle Expo in Rockhampton the respondent signed a purchase order (#1040N) for a customized “show special” caravan to be manufactured and delivered sometime after Christmas. The order form described the caravan by model (Titan Blackhawk Rear Ensuite 1960), year of manufacture (2018) and price ($69,900) but not the colour selection or other identifying specification.
  2. [3]
    Under the terms of the contract the respondent was free to cancel without defaulting under cl. 1 if the dealer’s finance required to complete the purchase was refused but under cl. 6  default by the buyer in observing any of the conditions of sale relevantly entitled the dealer (without prejudice to any other rights and remedies) to resell the caravan with no liability to the buyer and retain any monies paid by the buyer on account of the purchase price up to ten per cent (10%) of its value or $6,900.
  3. [4]
    Sometime later, the respondent informed the applicant that he was “unable to place an order for our caravan due to an industrial dispute …”. The applicant agreed to an extension “as a matter of courtesy” for six (6) months from 5 September 2017 on the same terms.
  4. [5]
    On 3 February 2018 the respondent requested return of the deposit. The applicant refused to let the respondent out of the deal but then within 48 hours claims to have re-sold the caravan to someone else for an undisclosed sum.
  5. [6]
    The respondent applied for a tribunal order requiring the applicant to refund the disputed deposit.

The rival cases

  1. [7]
    The triable issues were whether (a) the transaction was an unconditional sale or option to buy and (b) the applicant’s forfeiture rights were triggered by the cancellation.
  2. [8]
    On the respondent’s case, all he had was an obligation free option to buy the caravan in issue at special rate secured by a holding deposit and it was contemplated from the outset that he could walk away at any time without defaulting if either dealer finance to complete was not available or, alternatively, ongoing strike action at the Oakey North mine was not resolved.
  3. [9]
    According to the applicant there was a binding unconditional sale contract under which 10% of the purchase price was liable to be withheld if the balance was not paid when due. The company concedes the disputed deposit exceeds the permissible maximum limit of the stated amount at risk of retention by more than $3,000 but has not refunded the excess yet because claims “the respondent refused the offer”.
  4. [10]
    The business manager representing the applicant at the hearing explained the standard process if a client required finance at T1-4:40 but admitted that he could “… only go on what … I have on the paperwork” because the salesman involved was not called as a witness. The manager did not remember personally participating in the negotiations as the respondent and his wife alleged and was unable to confirm or deny telephoning a finance broker to come over to fill out a credit application without success because of the broker’s family commitments.
  5. [11]
    The order form was tendered but did not assist the tribunal to resolve the finance issue because neither of the alternative finance option fields on the order form had been ticked by the customer and the special conditions section was blank.
  6. [12]
    The manager explained that in those circumstances the dealer deemed the sale not to be subject to finance or contingent on any other event.[1]

The tribunal decision

  1. [13]
    Deposits guarantee the buyer’s promise to perform the bargain.
  2. [14]
    As the asserting party the applicant had the onus of demonstrating default on the respondent’s part by not observing a condition of sale.
  3. [15]
    In other words, it had to negative the respondent’s contention that there was no binding obligation to purchase because the purported contract was too uncertain, not concluded or conditional on dealer’s finance. Alternatively, the election to terminate by reselling the caravan before expiry of the extended contract period had to be validated as a permissible response to an anticipatory breach or repudiation of the respondent’s obligation to pay on delivery. Otherwise, it will be in breach of its own duty to be ready, willing and able to tender delivery of a caravan matching the documented description on the due date.
  4. [16]
    The applicant’s forfeiture case was highly speculative based on what might or should have been rather than direct evidence of what was said and done in negotiations. Its documentation was incomplete and equivocal. The respondent’s contrary narrative by contrast was affirmed, first hand and tested.
  5. [17]
    As to the finance issue the tribunal concluded at T1:17-1-18:

… one of the most important features of this contract document, is that it is silent as to whether, or not, it is subject to finance. It seems to me there is clear evidence that I am prepared to accept, that this contract would clearly have been subject to finance;  the man had not worked for months, and he and his wife have both provided information to the tribunal, which I’m prepared to accept – that there was a need for finance, and in my view, the issue about whether, or not, this sale was to be subject to finance – especially having regard to the important consideration, that if the contract is unconditional the money provided by (the respondent), which he says was a holding deposit, but which the seller was a contract deposit …

The contract is silent as to when and how it is going to be completed, whether it is going to be subject to finance, and when the contract is to be completed. And, in those circumstances …

… I am not prepared to uphold the contract as being a binding contract upon the purchaser …

  1. [18]
    An appeal against this finding will only succeed if it was not reasonably open to the tribunal on the available evidence or contrary to the only rational interpretation of the primary facts. There is no appellable error in preferring one credible version of events over the other.
  2. [19]
    Even if there was proven default the tribunal has a residual discretion to disallow forfeiture if the deposit is punitive rather than a pre-estimate of likely loss.
  3. [20]
    The deposit was almost 15% of the contract price and 5% more than the permitted retention amount. Also, as the dealers right of forfeiture was default not loss based it was exercisable even if the goods were resold at a higher price.
  4. [21]
    In addition, there was arguable unfairness in how the sale was negotiated and terminated.
  5. [22]
    To my eyes, whether it was based on (a) credit based findings that there was no concluded agreement or (b) if there was it was subject to an unmet dealer finance condition or (c) the discretion to relieve against forfeiture the tribunal order is fair and equitable in the circumstances and, therefore, unimpeachable on appeal.
  6. [23]
    Leave to appeal is, therefore, refused. Application dismissed.

Footnotes

[1]  T1-6:1-40. T1-9:40-1:10:5.

Close

Editorial Notes

  • Published Case Name:

    Soel Products Australia Pty. Ltd. T/As Caravan RV CQ v Love

  • Shortened Case Name:

    Soel Products Australia Pty. Ltd. T/As Caravan RV CQ v Love

  • MNC:

    [2019] QCATA 101

  • Court:

    QCATA

  • Judge(s):

    Carmody J

  • Date:

    19 Jun 2019

Appeal Status

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

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