Capital Options (Aust) Pty Ltd v Batchelor [2013] QCAT 493

CITATION: Capital Options (Aust) Pty Ltd v Batchelor [2013] QCAT 493 PARTIES: Capital Options (Aust) Pty Ltd (Applicant) v Karla May Batchelor (Respondent) APPLICATION NUMBER: MCDO50191-13 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 21 August 2013 HEARD AT: Southport DECISION OF: Jeremy Gordon, Adjudicator DELIVERED ON: 18 September 2013 DELIVERED AT: Southport ORDERS MADE: 1. Under section 88(5)(c) of the National Credit Code, the Applicant is authorised to bring these proceedings despite not having first served a default notice. 2. The Respondent is ordered to pay to the Applicant the sum of $3,060.85 made up as follows:- Debt: $2,905 Filing fee: $98 Bailiff’s service fee $44.10 Citec transaction fee $13.75 CATCHWORDS: Claim for repayment of loan used to purchase car – whether Consumer Credit Code applied and National Credit Code now applies - no default notice - whether QCAT has jurisdiction as a ―court‖ under the National Credit Code – whether QCAT’s jurisdiction is limited - whether lack of default notice fatal to enforcement – whether claim is statute barred Consumer Credit (Queensland) Act 1994 and Consumer Credit Code (Queensland) Credit (Commonwealth Powers) Act 2010 (Qld) National Consumer Credit Protection Act 2009 -- 1 of 17 -- 2 and National Credit Code National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 Small Claims Tribunal Act 1973 Queensland Civil and Administrative Tribunal Act 2009 s164(1) Avery v Saree Holdings Ltd; Lava Ltd v Avery [2012] NSWSC 463 Owen v Menzies & Ors; Bruce v Owen; Menzies v Owen [2012] QCA 170 Watts v Rake (1960) 108 CLR 158 Cavalliotis v Rizio & Anor [2013] QCATA 201 Gerhardt v AD Hanlon and PJ Hanlon [2011] QCATA 356 Monas v Perpetual Trustees Victoria Ltd [2011] NSWCA 417 Westpac Banking Group v Tesoro [2012] VSC 182 APPEARANCES and REPRESENTATION (if any): Applicant: Martin Orr on behalf of Applicant company Respondent: In person REASONS FOR DECISION [1] On 19 July 2006 Ms Batchelor purchased a car from a licensed motor dealer for a total cost of $10,475. She paid that sum by trading in her existing vehicle for $1,500 and by taking a loan of $8,975. [2] The loan was organised by the dealer. The loan money was provided by Admin Holdings 3 Pty Ltd trading as Able Auto Finance. Under the loan agreement Ms Batchelor was given an interest free loan and she agreed to pay this off by making payments of $180 per fortnight, the first payment being 3 August 2006. [3] Ms Batchelor returned the car to the dealer before the loan was paid off, and after that she did not make any more payments. The car was sold by the dealer and her loan account was credited with the proceeds. After that was done, the amount remaining on the loan was $3,265. [4] Admin Holdings 3 Pty Ltd brought the claim in QCAT without having first served a default notice. After bringing the claim, Admin Holdings validly assigned the debt to Capital Options (Aust) Pty Ltd and Capital was substituted as the applicant to this claim. -- 2 of 17 -- 3 [5] There are several issues arising in this case. The first is whether the loan came within the Consumer Credit Code (applicable before 1 July 2010), and if so whether it now comes within the National Credit Code (the NCC). If it does come within the NCC, there is an issue whether the failure to serve a default notice is fatal to the claim. This depends on whether QCAT is a ―court‖ for the purposes of section 88(5)(c) of the NCC and therefore can authorise the proceedings despite the lack of a default notice. A further issue is whether the claim is statute barred because it was brought more than six years after the cause of action arose. The transaction [6] It is not in dispute that Admin Holdings trading as Able Auto Finance lent Ms Batchelor the sum of $8,975 to purchase the car. Usually in such arrangements there is a written loan agreement. At the hearing Ms Batchelor could not remember there being a written loan agreement. The Applicant did not present a written loan agreement either. [7] The contract to purchase the car was on a standard form complying with the Property Agents and Motor Dealers Act 2000. It cannot itself stand as a loan agreement. This is because although it recited that $8,975 of the purchase price would be paid from interest free finance arranged by the dealer and to be provided by Admin Holdings, it was not signed by or on behalf of that company. And there was nothing in the agreement which suggested that the motor dealer was signing the document as agent for Admin Holdings although it was said at the hearing that he was a director of that company. In any case, the contract did not oblige Ms Batchelor to repay the loan. [8] If there is no written loan agreement it is sufficient under the Consumer Credit Code for there to be a written offer signed by the credit provider, and accepted by the borrower by drawing down the loan1. [9] One document which would stand as a sufficient written loan offer signed by the credit provider was a ―Tax Invoice/Statement‖ which was given to Ms Batchelor when she purchased the car. It recited the amount of the loan and the terms of repayment and it was signed by the dealer apparently on behalf of Admin Holdings. [10] It would appear that the motor dealer registered the car on the Register of Encumbered Vehicles at the Office of Fair Trading2. This appears from the ―Buyer’s declaration and acknowledgement‖ box on the contract where Ms Batchelor acknowledged receipt of a ―security interest certificate REVS‖ with a number and a date. The dealer must have entered the details of the car on the online system on the day of the sale in order to obtain the REVS number. That this was done is also supported by a 1 Consumer Credit Code s 12(1)(b). 2 Under the Motor Vehicle and Boats Securities Act 1986 (Qld). -- 3 of 17 -- 4 charge of $245 added to the purchase price of the car with the annotation ―Qld Bill of Sale Loan Administration‖. [11] There is no document supplied to the Tribunal in which Ms Batchelor did actually charge the car as security for the loan repayments. It is possible she did charge the car but the evidence about this is not strong enough to infer that she did. Whether the Consumer Credit Code applied at the time of the transaction [12] On 19 July 2006 when the contract between the parties was made, consumer credit contracts were governed by the Consumer Credit Code implemented in Queensland by the Consumer Credit (Queensland) Act 1994. [13] Since 1 July 2010 such contracts have been governed by the National Credit Code in the National Consumer Credit Protection Act 2009. [14] In deciding which provisions should apply to the contract, when they should apply and how they should apply, it is firstly necessary to decide whether the contract on 19 July 2006 was a credit contract within the meaning of the Consumer Credit Code. [15] Ms Batchelor does not contend one way or the other whether it was. This means that there is no presumption that the Code applied to the loan under section 11(1) of the Consumer Credit Code. This is because the presumption is triggered only if a party contends that the Code applied. [16] There was clearly a loan made in the course of a business to a consumer. However the Code only applies where ―a charge is or may be made for providing the credit‖.3 Usually there would be interest to be paid on such a loan and where there is interest clearly there would be a charge made for providing the credit. [17] However, where there is no interest on the loan, it is still possible that there is a charge made for providing the credit. Here there was the charge of $245 referred to earlier, purportedly for the ―Qld Bill of Sale Loan Administration‖. If there had been no credit, this fee would not have been added. I note that at the time of this agreement the fee payable to the Office of Fair Trading for registering a bill of sale was no more than $15.404 so the remainder would have been to cover the credit provider’s administration costs. [18] It has been held that legal fees and charges associated with a transaction come within section 6(1)(c). And it has been held that the definition in Schedule 1 of the Code which defines ―credit fees and charges‖ does not 3 Section 6(1)(c) of the Code 4 Schedule to the Motor Vehicle and Boats Securities Regulation 2005 Reprint 1A. -- 4 of 17 -- 5 help to construe ―a charge is or may be made for providing the credit‖ in section 6(1)(c).5 [19] It is clear therefore that the charge of $245 was a charge made for providing the credit, and therefore the Consumer Credit Code applied to the loan agreement at the time when it was made. No default notice [20] The claim was brought on 20 February 2013. By that time the Consumer Credit Code had been repealed and replaced by the National Credit Code. The NCC requires that before agreements can be enforced a default notice has to be served on the debtor.6 This was also required by the former Code.7 [21] There was no default notice in this case. [22] The question arises is whether it may be right to allow the claim to proceed despite the absence of a default notice. A court can permit this under section 88(5)(c) of the NCC.8 [23] Bearing in mind that the Consumer Credit Code has now been repealed and replaced by the National Credit Code, such orders cannot now be made under the old Code. And they can only be made under the NCC if it applies to this credit contract. And there is some uncertainty whether QCAT has jurisdiction under the NCC because only ―courts‖ have such jurisdiction. [24] So before considering whether such an order is appropriate, it is necessary to decide (a) whether the NCC now applies to the credit contract and (b) if so, whether and how far QCAT has jurisdiction to make appropriate orders under the NCC. Does the National Credit Code now apply to the credit contract? [25] As from 1 July 2010 the Consumer Credit Code was repealed by the Credit (Commonwealth Powers) Act 2010 (Qld) and by that Act, Consumer Credit matters were referred to the Commonwealth. By this means, the National Consumer Credit Protection Act 2009 and the National Credit Code within it, applied in Queensland from that date. [26] The transitional provisions determine whether the NCC applies to the credit contract in this case. These were in the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009. 5 Avery v Saree Holdings Ltd; Lava Ltd v Avery [2012] NSWSC 463. 6 Section 88 of the NCC. 7 Section 80. 8 Under the Consumer Credit Code there was a similar provision in section 80(4)(c). -- 5 of 17 -- 6 [27] The object of the transitional provisions was to put a person to the greatest extent possible in the same position immediately after the new Code came into effect as they were before.9 This was possible because many provisions of the NCC corresponded to the provisions of old Code. [28] This object was achieved by identifying which instruments were ―carried over instruments‖. Effectively carried over instruments were to be governed by provisions in the NCC which corresponded to those in the old Code. Where there were differences between the old Code and the NCC, the transitional Act made adjustments as far as possible to ensure that the rights of the parties were not affected by the changes. [29] A question therefore arises whether the credit contract with which I am concerned was a carried over instrument. [30] A carried over instrument is defined by section 4 of the transitional Act (dictionary):- carried over instrument means a contract or other instrument that: (a) was made before commencement; and (b) was in force immediately before commencement; and (c) the old Credit Code of a referring State or a Territory applied to immediately before commencement. [31] It might be thought that the words ―in force immediately before commencement‖ in paragraph (b) ought to be taken literally. If so, it might involve an examination whether or not there are any remaining obligations of either side under the credit contract. In this case the only obligation is that Ms Batchelor owes $3,265 under the credit contract. It could be argued that this has crystallised into a debt so that the credit contract itself was no longer ―in force‖ after her last payment was due on 19 June 2008. [32] However it’s clear that the words ―in force‖ must be given a wider meaning. This is because the transitional provisions do not envisage the possibility of non carried over instruments where there were no proceedings already underway.10 This would mean that if such a category existed at all, then on 1 July 2010 credit contracts within that category would be free of any statutory control. This would clearly be contrary to the stated aim of the transitional provisions. To apply that aim purposively means that a carried over instrument must be one where the rights and obligations of the parties would still be governed by the old Code if it were not for its repeal. 9 Schedule 1 item 2. 10 This is clear from (a) Schedule 1 item 3 which provides that the NCC does not apply to agreements made before its commencement unless they are ―carried over instruments‖, and (b) Schedule 1 items 4 and 6 the NCC which makes savings in respect of proceedings already underway in courts and tribunals - such proceedings continue with nil effect on the parties; see also section 22 of the Credit (Commonwealth Powers) Act 2010 (Qld). -- 6 of 17 -- 7 [33] It follows that the agreement in this case is a carried over instrument and the NCC applies to it. Does QCAT have jurisdiction as a court under the National Credit Code? [34] The starting point is to see if ―court‖ is defined in the National Consumer Credit Protection Act 2009 itself, or in any subordinate legislation, or in the Credit (Commonwealth Powers) Act 2010 (Qld) which adopted the New Credit Code. [35] There is no such definition. The closest is section 187 of the 2009 Act, which confers jurisdiction to various courts in relation to civil matters arising under the Act and limits certain courts’ jurisdiction. Under this section, jurisdiction is conferred upon ―a superior court, or lower court, of a State or Territory‖ and such courts’ jurisdiction is limited to ―the court’s general jurisdictional limits, including limits as to locality and subject matter‖. [36] In the dictionary in section 5:- lower court means: (a) the Federal Circuit Court; or (b) a court of a State or Territory that is not a superior court. [37] The question therefore resolves to whether QCAT is a lower court of the State of Queensland within this definition. The following things which I shall deal with more fully one by one, suggest that it is:- (a) QCAT is not said not to be a court for the purposes of the National Credit Code, and section 164(1) of the Queensland Civil and Administrative Tribunal Act 2009 provides that QCAT is a ―court of record‖. (b) In Owen v Menzies & Ors; Bruce v Owen; Menzies v Owen [2012] QCA 170 it was found that QCAT is a ―court of the State‖ within the Constitution. (c) Section 187 of the National Consumer Credit Protection Act 2009 limits the jurisdiction of a court of a State or Territory under the Act to matters which are within its usual scope, tending to show the intention of the legislature that QCAT is a court under the Act. (d) If QCAT is unable to exercise jurisdiction as a court within the National Credit Code then there could be inconsistent results between QCAT decisions and those in the mainstream courts, and this is unlikely to have been the intention of the legislature. A - QCAT not said not to be a court for the National Credit Code [38] When QCAT was established on 1 December 2009, it was specifically given jurisdiction over the Consumer Credit Code. This was by amendment to section 7 of the Consumer Credit (Queensland) Act 1994 as follows:- -- 7 of 17 -- 8 7 Conferral of judicial functions (1) The jurisdiction that is expressed to be exercisable by the Court under the Consumer Credit (Queensland) Code and the Consumer Credit (Queensland) Regulations in relation to a contract or other matter is exercisable by— (a) if proceedings in relation to the contract or other matter have been instituted in, or are before, a court—that court; or (b) in any other case—the court whose monetary jurisdiction is not exceeded by the total amount in dispute. (2) In this section— court includes QCAT. [39] Before QCAT was formed, section 7(2) read:- (2) In this section— court includes a Small Claims Tribunal. [40] At that time, under the Small Claims Tribunal Act 1973, there was a Small Claims Tribunal in Queensland which was operated from within the Magistrates Courts system. The Small Claims Tribunal had jurisdiction over claims of up to $7,500 between consumers and traders, and between traders. It also had jurisdiction in residential tenancy matters and over dividing fences. There was nothing in the 1973 Act establishing the Small Claims Tribunal to suggest that it was a court. [41] Claims to recover against a debt or liquidated demand in money where the amount involved no more than $7,50011 could be dealt with by the Magistrates Court under the simplified procedure for minor debt claims provided by the Uniform Civil Procedure Rules 1999. Under this procedure the decision reached was a decision of the Magistrates Court. [42] So the position as far as the Consumer Credit Code was concerned before 1 December 2009 was that both the Small Claims Tribunal [by section 7(2) of the Consumer Credit (Queensland) Act 1994] and the Magistrates Court when dealing with minor debt claims (because it was a court) had jurisdiction under the Consumer Credit Code. [43] When QCAT was formed as from 1 December 2009, it took over both the jurisdiction of the Small Claims Tribunal and in the minor debt claims jurisdiction of the Magistrates Court. It was only logical therefore, to give QCAT jurisdiction over the Consumer Credit Code in the same way as had its predecessors. [44] When seven months later, the Consumer Credit Code was replaced by the National Credit Code, then if the Queensland legislature had intended QCAT to lose the jurisdiction it had previously been given, it could easily have provided for this in the Credit (Commonwealth Powers) Act 2010 (Qld). [45] Bearing in mind that section 164(1) of the Queensland Civil and Administrative Tribunal Act 2009 states that QCAT is a ―court of record‖ it 11 As defined by schedule 2 to the Supreme Court of Queensland Act 1991. -- 8 of 17 -- 9 would appear that it would have been necessary to provide that QCAT was not a court for the purposes of the National Credit Code if such were intended, but this was not done. [46] The situation in Queensland can be compared to that in other States and in the Territories and from this it emerges that there is no standard pattern applying to all. [47] In New South Wales, Victoria, and Western Australia, prior to 1 July 2010 tribunals as well as the mainstream courts had specific jurisdiction to make orders under the Consumer Credit Code12. Since the introduction of the National Credit Code it has been recognised that these tribunals have lost their consumer credit jurisdiction. Their jurisdiction was not saved in the change, and they are not courts.13 [48] In Northern Territory, Tasmania and South Australia there was no tribunal with such consumer credit jurisdiction, and it was exercised only by the mainstream courts. In each, upon the adoption of the National Credit Code no attempt was made to define which courts would have jurisdiction in the future. The jurisdiction would have continued with the mainstream courts as before. [49] ACT was different and probably in a similar position to QCAT. From 2 February 2009 the ACT Civil and Administrative Tribunal (ACAT) was created to deal with civil claims of $10,000 or less, which had formerly gone to the Small Claims Court of the Magistrates Court. ACAT was given jurisdiction to apply the Consumer Credit (Australian Capital Territory) Code under the Consumer Credit Act 1995 (ACT). Section 22 of the ACT Civil and Administrative Tribunal Act 2008 (which established the Tribunal) states that ACAT has the same jurisdiction as the Magistrates Court in relation to civil dispute applications within its jurisdiction. Thus it would appear that it can act as a court under the National Credit Code when dealing with matters within its jurisdiction. B - Owen v Menzies [50] In Owen v Menzies & Ors; Bruce v Owen; Menzies v Owen [2012] QCA 170 it was held that the effect of s164(1) of the Queensland Civil and Administrative Tribunal Act 2009 which states that QCAT is a ―court of record‖, together with the fact that QCAT is an independent tribunal resolving disputes between parties, that it makes enforceable decisions binding on the parties, that it sits in public and must give reasons for its decisions, and there is an appeal process from the decisions, show that QCAT was a ―court‖, albeit an ―inferior court of summary jurisdiction‖ (paragraphs [20], [49] and [101]). Indeed, QCAT was a ―court of the State‖ within the meaning of section 77(iii) of the Constitution and was 12 NSW – Consumer Trade and Tenancy Tribunal; VIC – the Victorian Civil and Administrative Tribunal (VCAT); WA – the State Administrative Tribunal. 13 Indeed VCAT was expressly prohibited from hearing proceedings relating to rights under the NCC - section 15(2) of the Credit (Commonwealth Powers) Act 2010 (VIC). -- 9 of 17 -- 10 therefore able to exercise federal jurisdiction under section 76(i) of the Constitution by determining whether State law is constitutional – see [55]. C - Section 187 [51] If QCAT is to be regarded as a lower court of the State of Queensland within the definition in the National Consumer Credit Protection Act 2009, then section 187 of that Act would apply to it in this manner:-. Jurisdiction is conferred on a court … in relation to civil matters arising under this Act subject to .. the court’s general jurisdictional limits, including limits as to locality and subject matter. [52] The limitation as to jurisdiction limits and to subject matter is important because QCAT’s jurisdiction is purely statutory. It can be seen from sections 6 and 9 of the Queensland Civil and Administrative Tribunal Act 2009 that QCAT’s jurisdiction is limited to the jurisdiction conferred by the QCAT Act itself, or by an enabling Act, that is to say another Act or subordinate legislation ―that confers original, review or appeal jurisdiction on the tribunal‖14. [53] Neither the QCAT Act nor any enabling Act confers on QCAT any jurisdiction to deal with applications made under the National Consumer Credit Protection Act 2009 or the National Credit Code. And because QCAT’s jurisdiction is limited to that conferred by the QCAT Act itself or by an enabling Act, the National Consumer Credit Protection Act 2009 could not confer any additional jurisdiction upon QCAT either. [54] And it cannot be said that the National Consumer Credit Protection Act 2009 is itself an enabling Act. It is very clear when QCAT is given jurisdiction by an enabling Act. QCAT is named in the Act and its jurisdiction is defined, and as stated in section 6(3) of the QCAT Act, an enabling Act conferring original jurisdiction on QCAT will generally state the tribunal’s functions in the jurisdiction. [55] QCAT’s original jurisdiction is set out in sections 10 to 13 and Schedule 3 to the QCAT Act. QCAT has jurisdiction up to the prescribed amount of $25,000 in the case of claims to recover a debt or a liquidated demand of money and in contracts between a consumer and a trader or between two traders. A credit provider in the business of supplying loan services would be within the definition of ―trader‖. In these claims, QCAT has jurisdiction to order a payment of money, to give relief from a payment of money, or to order that goods are returned, or it may make a combination of such orders.15 [56] In some such claims inevitably from time to time there will be an element concerning the National Credit Code. This might arise for example where 14 Section 6(2). 15 Section 13(2)(a). -- 10 of 17 -- 11 a credit provider is bringing a claim where the debtor might have a right of set-off or compensation under the Code. Or it might arise where a debtor seeks to be relieved of an obligation to pay under a credit contract by reason of a provision in the Code. Or it might arise where a credit provider or a debtor seeks the return of goods under a credit contract governed by the Code. Or as in this case, it might arise where a credit provider has failed to serve a default notice and it might be right to authorise the proceedings. [57] It cannot be said that if there is an element of that sort in any particular claim, QCAT cannot handle the claim itself. This is because section 23 of the National Consumer Credit Protection Act 2009 makes it clear QCAT’s jurisdiction is not to be curtailed in any way. It states:- 23 Concurrent operation intended (1) This Act and the Transitional Act (the Commonwealth credit legislation) are not intended to exclude or limit the concurrent operation of any law of a State or Territory. [58] Because QCAT’s jurisdiction must be limited to its original jurisdiction, then QCAT would have no jurisdiction in the case of applications under the 2009 Act or under the National Credit Code which are not also within its ordinary jurisdiction. This would be the case even without the provisions of section 187, but it is underlined by those provisions. [59] There are many examples of claims under the 2009 Act or under the NCC itself which would not be within QCAT’s ordinary jurisdiction. For example applications by ASIC under Part 4.1 for the payment of a pecuniary penalty because of a contravention of a civil penalty provision of the Act, or for an adverse publicity order under section 182. Or under Part 4.2 of the Act (on application by ASIC or a person who has suffered loss) for an injunction, a compensation order or other orders against those who engage in credit activities unlawfully. [60] Within the NCC itself, an example would be an application for a statement of account under section 37, or an application by a credit provider for a court order giving permission to enter residential premises in order to take possession of mortgaged goods under section 100. [61] But QCAT would have jurisdiction to deal with a number of different types of claims within its ordinary jurisdiction where an order under the NCC would be required to deal properly with the claim. [62] Examples are given in the following tables. The references to section 13 are to the QCAT Act. Other references are to the NCC unless otherwise stated. [63] This table has examples within QCAT’s jurisdiction to order the return of goods:- -- 11 of 17 -- 12 QCAT’s jurisdiction: section 13(2)(a)(iv) for return of goods s101 Credit provider’s application for return of goods s108 Mortgagor’s application for return of goods wrongly repossessed [64] An applicant would expect QCAT to be able to deal with these matters under the NCC and if necessary to make the consequential orders which are available for example under s 110(2) (to restore the parties to their previous financial position) or under s 110(3) (compensation for damage). Such orders would not be available from QCAT within its original jurisdiction16. [65] This table has examples of possible claims within QCAT’s jurisdiction to relieve a person from a debt or part of a debt, or when dealing with setoffs relied on as defences to claims:- QCAT’s jurisdiction: section 13(2)(a)(ii) of Schedule 3 for relief from debt (alternatively as set off against a claim brought by the credit provider) s38(7) Either side applying to have a disputed amount in an account determined s86 and 106 Debtor seeking credit on the account on grounds that credit provider did not sell repossessed goods at the best price reasonably obtainable s74 Debtor applying to change terms on grounds of hardship on credit provider’s refusal to do so s76 Reopening of unjust transactions s78 Review of unconscionable interest or other charges s107 Relief from unreasonable enforcement expenses s118 Compensation to debtor for contravention of a key requirement s124 Compensation to debtor on other contraventions s134 to 136 Financial adjustments after termination s180 of the 2009 Act Adjustments if the credit provider is unlicensed [66] Some provisions of the NCC declare the position between the parties and this position would seem to apply even if the claim is being heard by a tribunal without any jurisdiction under the NCC. This table contains such examples:- NCC declaring the parties’ position (no order by ―court‖ provided for) s143 to 149 Debtor’s entitlement to return of insurance premium or commission in certain circumstances 16 Because the types of orders which can be made are limited by section 13 of the QCAT Act. -- 12 of 17 -- 13 s150 Entitlement to compensation for loss arising from credit advertisements s154 Entitlement to compensation for loss arising from false or misleading representations s179 Fixes amount payable by a lessee who terminates a consumer lease [67] These provisions would appear to pose jurisdictional problems for tribunals which are not courts under the NCC because on the face of it they are declaratory of the parties’ legal rights. [68] The argument about section 187 is that if QCAT is a court, section 187 limits QCAT’s jurisdiction under the 2009 Act to what is practically required properly to resolve disputes within QCAT’s ordinary jurisdiction where there is a consumer credit element in the claim covered by the National Credit Code. This tends to show that it was the intention of the legislature that QCAT is a court under the Act. D – Avoiding inconsistencies between QCAT and the mainstream courts [69] As a matter of practicality, when a tribunal deals with claims which include a consumer credit element covered by the National Credit Code, that tribunal should have the power to deal with the claim in the manner provided for in the Code. [70] If the tribunal is unable to do this, then this might result in inconsistencies in the final order made in such cases. [71] The most obvious situation is where a debtor is facing a claim by a credit provider to enforce a credit contract, where the credit provider is not properly licensed under section 29 of the National Consumer Credit Protection Act 2009. The civil result of this between the parties is that provided by section 180. Under this provision the credit provider can be stripped of its profit, or the debtor can be compensated for losses arising from the fact that the credit provider was unlicensed. In addition there is a power to declare he contract void or to vary it. An order under section 180 can only be made by a court. This means that where in a particular jurisdiction there is a tribunal able to hear a claim but that tribunal is not a court for the purposes of section 180, unlicensed moneylenders would be advised to bring their claims in that tribunal in an attempt to improve their position. [72] Another example arises from sections 86 and 106 of the NCC. These sections provide that a court may apply a credit on the account if the credit provider has taken back goods purchased with credit, but has not sold them at the best price reasonably obtainable. Such an issue might arise in a claim by a credit provider for the remaining balance on a loan account. It is true that if a tribunal were not a court for this purpose, it could make the same type of order on the basis that the credit provider -- 13 of 17 -- 14 had not mitigated its loss. However dealt with that way the debtor would lose the protection of sections 86(3) or 106(3) which reverse the usual burden of proof in such cases. At common law the burden would be on the debtor to show the price was not the best reasonably obtainable17 whereas if the tribunal were a court and the claim were made under section 86 or 106, then by 86(3) or 106(3) it is for the credit provider to show this. [73] A similar disadvantage would apply if the debtor wished to challenge enforcement expenses levied by the credit provider in a claim by the credit provider properly brought in a tribunal. If the tribunal were also a court under section 107 it could reduce such expenses if they were unreasonable; if not, and fixed expenses were provided in the agreement, it could only do so if the expenses amounted to a penalty. [74] Such inconsistencies would be contrary to one of the objects of the QCAT Act to enhance the quality and consistency of decisions made by decision- makers.18 [75] It might be said that QCAT does not need to be a court to avoid such inconsistencies because:- (a) under section 13(1) of the QCAT Act, when dealing with minor civil disputes, QCAT must make orders that it considers fair and equitable and therefore QCAT is able to achieve the same result as if it were able to apply the National Credit Code directly, and (b) if QCAT cannot do that, then it can transfer the claim to another court which can apply the National Credit Code directly. [76] As for (a), in the way section 13 has been interpreted on appeal it appears doubtful that the argument would work. Section 13 does not mean (at least in larger claims) QCAT can fairly depart from general legal and equitable principles (Dr J Forbes in Cavalliotis v Rizio & Anor [2013] QCATA 201 at [16]). In Gerhardt v AD Hanlon and PJ Hanlon [2011] QCATA 356 at [7] Justice Alan Wilson President said that inescapable conclusion from reading the (QCAT) Act as a whole is that the (decision maker), in reaching his decision, had to apply the relevant law. He said that the Tribunal has limited equitable jurisdiction, but s 13 should not be interpreted as conferring any equitable jurisdiction on the MCD jurisdiction which would empower the (decision maker) to adjust parties’ legal rights in accordance with some undefined principle of fairness. [77] This was also the view of the Chief Justice de Jersey in Owen v Menzies [2012] QCA 170 where in [13] he stated when referring to section 13 that it [D]id not however exclude the Tribunal’s implied obligation to make its determinations in accordance with the parties’ legal rights and obligations. In certain situations, the legislature has specified the legislation which 17 The burden of proof is on the person claiming the breach of duty: Watts v Rake (1960) 108 CLR 158 at 159. 18 Section 3(d). -- 14 of 17 -- 15 prescribes the orders which may be made [s 13(2)(b)-(d)], itself inconsistent with a view that the Tribunal is unconstrained by the law. [78] A transfer required by (b) would be contrary to QCAT’s aims to deal with matters in a way which is accessible, fair, just economical, informal and quick. It could be some way through a hearing of such a matter that the need for a specific order under the NCC would appear. At that stage it would be most unsatisfactory and also puzzling to litigants that they were being offered a transfer to another court. Conclusion whether QCAT can apply the National Credit Code as a court [79] Since QCAT is stated to be a court in the QCAT Act and has been held by the Court of Appeal of the Supreme Court to be a court for the purposes of the constitution, my conclusion is that this must also apply to the National Credit Code because the inconsistencies and practical difficulties which might otherwise arise could not have been intended by the legislature. Because of the provisions of section 187 of the 2009 Act however, QCAT’s jurisdiction is limited to cases which it can hear within its ordinary jurisdiction. Is failure to serve a default notice fatal? [80] In an appropriate case QCAT can make an order under section 88(5)(c) authorising the proceedings despite there being no default notice. [81] A default notice informs the debtor of the amount owing and gives at least 30 days to remedy the default. The notice enables the debtor to organise the necessary repayments, or possibly to ask the credit provider for a relaxation of the strict requirements of the agreement on the grounds of hardship, or to ask for a postponement of enforcement of obligations under the agreement. If this is refused, the debtor can apply to a court for this.19 [82] There was no default notice served on Ms Batchelor. In this case, bearing in mind that it was nearly six years since the last payment she made, a default notice prior to the proceedings would have served little purpose. It is clearly right if it is possible to do so, to make an order authorising the proceedings despite the lack of default notice. [83] In Monas v Perpetual Trustees Victoria Limited [2011] NSWCA 417 the New South Wales Court of Appeal decided that (under similar wording in the Consumer Credit Code) such authorisation could be given by the court even though the proceedings were already underway. In Westpac Banking Group v Tesoro [2012] VSC 182 at [36] Lansdowne AsJ held that the same reasoning applied to the NCC. 19 Section 74 (hardship); section 96 (postponement). -- 15 of 17 -- 16 Effect of the limitation period [84] Ms Batchelor relies on the six year limitation period in section 10 of the Limitation of Actions Act 1974. The six year period starts when the cause of action arose. [85] Since the claim was brought on 20 February 2013, a cause of action arising on or after 20 February 2007 would be in time. [86] When Ms Batchelor returned the car to the dealer on 30 January 2007 she was up to date with her payments, but she told him that she would no longer be able to make them. She had made 13 payments and had another 36 fortnightly payments of $180 to make, followed by one last payment of $155 which she would have to make on 19 June 2008. [87] The dealer sold the car and applied the proceeds of $3,500 to the account. This appears to have been done on 31 March 2007. It would appear he then crossed out the statement of account in his own paperwork. This demonstrated that he was not expecting any further payments. He calculated that at that time the amount owing was $3,265. [88] Did the instalment agreement come to an end and $3,265 become owing when Ms Batchelor brought back the car on 30 January 2007? If so, the claim would be out of time and statute barred. [89] In the absence of any contractual agreement as to what would happen upon the return of the car and its acceptance by the dealer with a view to its sale, the only ways the $3,265 could become due on 30 January 2007 would be by waiver, by variation, or by discharge of the loan agreement and replacement by an immediate obligation to pay. [90] Waiver might apply because the right to make the payments as they became due over a period of time under the interest free arrangement was to Ms Batchelor’s advantage. But when she returned the car to the dealer she did not change that arrangement. She did not promise to pay the outstanding amount immediately. So there was no waiver of this right. [91] When considering variation it is important to note that the contract of sale and the loan agreement were two separate contracts. Nothing the dealer did unilaterally could vary the loan contract. And there was no agreement between the two parties to end the obligation to make the payments in the loan contract as they became due, and replace it with an obligation to make all the remaining payments immediately. So there was no variation of the loan contract. [92] And I do not think Ms Batchelor’s return of the car with a statement that she could not afford the payments was a repudiation or renunciation of the loan agreement. She was not refusing to pay the remainder of the instalments; instead she was saying she could not afford to do so. -- 16 of 17 -- 17 Returning the car was an attempt to reduce the amount owing. If the car was security for the loan it was an acceptance of that fact. [93] Since the loan agreement remained intact after 30 January 2007 separate causes of action arose in respect of each payment as they became due after that date. The proceeds of the sale of the car would be applied first to the older sums due. [94] Therefore the Applicant is out of time only in respect of the payments due on 1 February 2007 and 15 February 2007. Conclusion [95] The Applicant is entitled to judgment in the sum of $2,905. This is the amount claimed less the proceeds of sale of the car and less two payments of $180 each which are out of time. No interest is claimed. To the total must be added the filing fee of $98, the bailiff’s service fee of $44.10 and Citec transaction fee of $13.75. The total comes to $3,060.85. -- 17 of 17 --