Ermolova v Profcoll Pty Ltd t/as Professional Collection Services [2015] QCATA 126

CITATION: Ermolova v Profcoll Pty Ltd t/as Professional Collection Services [2015] QCATA 126 PARTIES: Olga Ermolova (Applicant/Appellant) v Profcoll Pty Ltd t/as Professional Collection Services (Respondent) APPLICATION NUMBER: APL187 -15 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM DELIVERED ON: 24 August 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. Leave to appeal granted. 2. Appeal allowed. 3. The decision of 16 February 2015 is set aside. 4. The application filed 22 August 2014 is dismissed. 5. If Olga Ermolova has paid Profcoll Pty Ltd t/as Professional Collection Services any money pursuant to the decision of 16 February 2015, Profcoll Pty Ltd t/as Professional Collection Services shall repay that amount to Olga Ermolova by 15 September 2015. CATCHWORDS: APPEAL – LEAVE TO APPEAL - MINOR CIVIL DISPUTE – MINOR DEBT – where agreement to provide debt collecting services – where debtor agreed to lodge claim on insurance – where creditor did not agree to proposal – where debt not collected – where collection agency claim commission – where tribunal found for debt collection agency - whether grounds for leave to appeal -- 1 of 6 -- 2 Australian Consumer Law ss 23, 24, 29, 276 Dearman v Dearman (1908) 7 CLR 549 Fox v Percy (2003) 214 CLR 118 Pickering v McArthur [2005] QCA 294 Chambers v Jobling (1986) 7 NSWLR 1 APPEARANCES and REPRESENTATION (if any): 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 [1] Olga Ermolova had a decision in her favour from the tribunal arising out of a traffic accident. She couldn’t collect the money from the respondent, now debtor. She engaged Profcoll Pty Ltd t/as Professional Collection Services to collect it for her. [2] Profcoll told Ms Ermolova that she could collect the money through the debtor’s insurance. Profcoll contacted the debtor and discussed her insurance. She didn’t want to make a claim so Profcoll suggested a settlement offer. The debtor made a settlement offer, but Ms Ermolova declined it. The debtor offered Ms Ermolova another car in lieu of money. Ms Ermolova declined that offer too. Profcoll talked through the possibility of enforcement proceedings. Ms Ermolova advised Profcoll that, if the debtor entered into a repayment agreement, it could take its fee from the last payment. Eventually, Profcoll persuaded the debtor to claim on her insurance. Profcoll gave Ms Ermolova the claim number so that she could pursue the insurer. [3] Profcoll rendered its fee for service. Ms Ermolova did not pay so Profcoll filed a minor debt claim in the tribunal. The tribunal ordered Ms Ermolova pay Profcoll. [4] Ms Ermolova wants to appeal that decision. She says the tribunal wrongly relied on s 276 of the Australian Consumer Law, that the contract was unfair within the meaning of the Australian Consumer Law, and that Profcoll was in breach of ss 29, 60 and 61 of the Australian Consumer Law. She says that the tribunal did not take account of the fact that she cancelled the contract within the cooling off period. She says the tribunal did not establish that she had a contract with Profcoll. She says the tribunal did not properly apply the doctrine of consideration or privity of contract. She says there was no evidence that Profcoll supplied services to her. She says the tribunal committed procedural errors in not giving her copies of documents Profcoll handed up, not excluding oral statement made by Profcoll’s representative, and failing to assess the credibility of oral evidence. -- 2 of 6 -- 3 [5] Because this is an appeal from a decision of the tribunal in its minor civil disputes jurisdiction, leave is necessary.1 Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.2 Did the tribunal err in its application of the Australian Consumer Law? [6] Section 276 of the Australian Consumer Law states that a term of a contract is void to the extent that it purports to exclude the operation of the Act. Ms Ermolova points to clause 3(b)(iii) of the Terms and Conditions of contract as the term which is in breach of s 276. [7] The effect of clause 3(b)(iii) is that the debt is taken to be collected if Ms Ermolova gave Profcoll instructions to accept goods and services in full or partial settlement of the debt. It does not purport, nor does it in fact, exclude the operation of the Australian Consumer Law. [8] Ms Ermolova submits that the contract was an unfair contract because Profcoll demanded payment from her without providing a benefit. [9] The Australian Consumer Law does not state that contracts can be unfair. It does state that that a term of a standard form contract can be void if it is unfair3. The contract between Profcoll and Ms Ermolova was a standard form contract. [10] The Australian Consumer Law sets out the meaning of an unfair term4. A term will be unfair if it would cause significant imbalance in the parties’ rights and obligations. A term will be unfair if it is not reasonably necessary to protect the legitimate interests of the party who would receive an advantage by the term. A term will be unfair if it would cause detriment to a party if it was applied or relied upon. [11] None of the terms is unfair in the sense set out in the Australian Consumer Law. Clause 3 sets out the circumstances in which commission is payable. In all cases, commission is dependent upon recovery, or compromise, of the debt. [12] Section 29 of the Australian Consumer Law states that a person must not, in trade or commerce, make a false or misleading representation that services are of a particular standard, quality, value or grade. A representation is taken to be misleading unless there is evidence to the contrary5. That means that Profcoll must show that a statement was not misleading. 1 QCAT Act s 142(3)(a)(i). 2 Pickering v McArthur [2005] QCA 294 at [3]. 3 Australian Consumer Law s 23. 4 Section 24. 5 Australian Consumer Law s 29(2). -- 3 of 6 -- 4 [13] But first, Ms Ermolova must establish that the representation was made. Ms Ermolova states that Profcoll promised “no resolution, no commission” but there is no evidence to that effect. She did not tell the tribunal that someone from Profcoll made that representation, who it was, when it occurred or what was said. In the absence of that evidence, I am unable to find that s 29 applies. [14] The terms and conditions set out when the commission is payable, but that is a separate issue to which I will shortly refer. Was there a contract between Profcoll and Ms Ermolova? [15] Ms Ermolova submits that there was no offer and acceptance between her and Profcoll. That submission is incorrect. Through its website, Profcoll offered debt collection services. By clicking through the website forms, Ms Ermolova accepted the offer. A contract was formed. [16] Ms Ermolova then submits that there was no consideration for the contract. That submission is also incorrect. The consideration from Profcoll was the collection of the debt. The consideration from Ms Ermolova was payment of the commission. If Profcoll failed to collect the debt, and claimed commission, then that may be a breach of a contract that was properly formed. [17] The doctrine of privity of contract means that a contract cannot impose obligations on people who are not parties to that contract. Ms Ermolova makes the point that, because she is not a party to the contract between the debtor and the insurer, she has no right to claim on the insurance. She submits that, because she has no right to claim on the insurance, Profcoll has no right to claim commission. Again, the real question is not whether the tribunal erred in failing to find privity of contract; the real question is whether Profcoll was entitled to claim commission. Was there a contract between Profcoll and Ms Ermolova? [18] Ms Ermolova disputes the terms of the contract. She says that she either terminated the contract within the cooling off period or varied the terms of the contract. [19] The appeal tribunal will not usually disturb findings of fact on appeal if the evidence is capable of supporting the conclusions.6 An appellate tribunal may interfere if the conclusion is ‘contrary to compelling inferences’ in the case.7 [20] Ms Blake, for Profcoll, explained that Ms Ermolova completed an online application. An application cannot be processed unless the creditor accepts the terms and conditions, the price schedule and an authority to deduct commission from money collected. The tribunal accepted Ms Blake’s 6 Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125- 126. 7 Chambers v Jobling (1986) 7 NSWLR 1 at 10. -- 4 of 6 -- 5 evidence. She supported her evidence with a copy of the website form and the authorisation from Ms Ermolova dated 27 June 2014. [21] Ms Ermolova told the tribunal that she sent an amended copy of the terms and conditions to Profcoll. The amendments altered clause 3(b)(iii). The only evidence that Ms Ermolova sent the amended conditions to Profcoll was a transmission verification report dated “12/07/2008”. Ms Ermolova told the tribunal that the date on her facsimile machine was wrong (and the tribunal accepted that the year was wrong) but she could not provide any evidence that she sent it on any other date. The tribunal rejected Ms Ermolova’s evidence and I can find no compelling reason to come to a different view. Did Profcoll collect the debt within the terms of its contract? [22] The tribunal’s findings on this issue are limited. It found, correctly, that there was a contract. It then stated8 that: … we aren’t satisfied on the physical evidence provided here today that [Ms Ermolova] has sufficiently defended their (sic) claim [23] It was for Profcoll to prove its claim. The tribunal found that it did provide sufficient evidence to do so9. For the reasons that follow, I am not so satisfied. [24] Under clause 3, Profcoll is entitled to its commission if the debt, or part of it, was collected by Profcoll or any person appointed by Profcoll. That did not happen. [25] Profcoll is also entitled to commission if Ms Ermolova settled or compromised the debt. That did not happen. [26] Finally, Profcoll is entitled to commission if Ms Ermolova accepted goods or services in full or partial settlement of the debt. That did not happen. Ms Ermolova’s email of 9 July 2014 makes it clear she did not accept another car in lieu of the debt. [27] What did happen, according to Profcoll, is that it persuaded the debtor to claim on her insurance, the debtor did claim and, therefore, Ms Ermolova was entitled to payment from the insurer. The difficulty with Profcoll’s submission is that there was simply no evidence to support it. There was no letter from the debtor confirming she would put the claim through her insurer. There was no acknowledgement from the insurer that the policy covered the accident or that it would pay Ms Ermolova’s claim. [28] Profcoll’s email chain on 9 July 2014 seems to suggest that, because it had reached a satisfactory compromise with the debtor, she was liable for commission. That approach completely ignores the fact that this arrangement required Ms Ermolova’s consent, and she did not give that 8 Transcript page 1-25, lines 34 – 35. 9 Transcript page 1-25, lines 41 – 42. -- 5 of 6 -- 6 consent. The agreement between Ms Ermolova and Profcoll does not contain any term making Ms Ermolova liable for commission if she unreasonably withheld her agreement to a debt collection proposal. In the absence of such a clause, Profcoll could not unilaterally settle the debt. [29] Ms Ermolova did not settle or compromise the debt and, on her evidence, it is still unpaid. Therefore, Profcoll was not entitled to charge commission and its claim for commission is without substance. [30] Leave to appeal should be granted and the appeal allowed. The decision of 16 February 2015 is set aside. The application filed 22 August 2014 is dismissed. If Ms Ermolova has paid any money pursuant to the decision dated 16 February 2015, Profcoll shall repay that amount to Ms Ermolova by [14 days]. -- 6 of 6 --