Cullen v Lynton Clearance Centre Pty Ltd (deregistered) and Ors [2011] QCAT 485

CITATION: Cullen v Lynton Clearance Centre Pty Ltd (deregistered) and Ors [2011] QCAT 485 PARTIES: Sara Cullen v Lynton Clearance Centre Pty Ltd (deregistered) Mitchell Craig Lynton Rodney Michail APPLICATION NUMBER: OCR112-11 MATTER TYPE: Other civil dispute matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Peta Stilgoe, Member DELIVERED ON: 10 October 2011 DELIVERED AT: Brisbane ORDERS MADE: The application for payment from the fund is refused. CATCHWORDS: PAMDA – MOTOR DEALER – where car sold to motor dealer – where funds not remitted to mortgagee – whether relevant event – whether loss – whether claimant might reasonably recovered if not for neglect or default Property Agents and Motor Dealers Act 2000, ss 470(1)(e), 488(3)(a)(i) APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION [1] Lynton Clearance Centre Pty Ltd was a licensed motor dealer. Messrs Lynton and Michail were directors of the company. [2] Ms Cullen owned a BMW318i. In August 2008, she delivered the car to Lynton Clearance so that it could arrange for its sale. In March 2009, a -- 1 of 4 -- 2 person from Lynton Clearance told Ms Cullen that there was someone who wanted to buy the car for $17,000. Ms Cullen instructed Lynton Clearance to sell the car for that price and send the proceeds to Esanda, the mortgagee of the car. [3] In November 2009, Lynton Clearance was placed in liquidation. On 20 July 2010, Ms Cullen received notice from Esanda of an exercise of power of sale because she had defaulted under the mortgage. [4] In October 2010, Ms Cullen lodged a claim against the fund for $17,220.17 plus daily interest of $4.13. Notice of that claim was given to the respondent on or about 4 February 2011. Twenty-eight days having elapsed from that notice and with no settlement being received from any person, on 13 July 2011 the Department referred the claim to the tribunal for determination. [5] Section 488 of the Property Agents and Motor Dealers Act 2000 sets out the process for deciding the claim. The Tribunal must be satisfied that: a) An event as mentioned in s 470(1) happened; and b) The claimant suffered financial loss because of the event. [6] The Tribunal must also take into account any amount the claimant might reasonably have received or recovered if not for the claimant’s neglect or default1. [7] Finally, if allowing a claim, the Tribunal must decide the amount of the claimant’s financial loss and name the person who is liable for the loss2. Was there an event? [8] Ms Cullen has not provided a copy of any document that evidences the initial agreement that she delivered the car to Lynton Clearance so that it could be sold. [9] There is a copy of an agreement dated 26 March 2009 which records that Ms Cullen sold the car to Lynton Clearance for $17,000. Mr Michail argues that this document shows that Ms Cullen delivered the car for sale, not bailment. He argues, therefore, that Ms Cullen is simply an unsecured creditor of Lynton Clearance who failed to make a claim to the liquidator. [10] That argument ignores Ms Cullen’s uncontested evidence that she delivered the car to Lynton Clearance in August 2008. In any event, I am of the view that the distinction is irrelevant. [11] Once Ms Cullen signed the contract of sale on 26 March 2009, she was entitled to receive $17,000 from Lynton Clearance. It is not contested that: she directed the company to pay that money to Esanda; and Lynton Clearance did not pay Esanda. The effect of that transaction was that Lynton Clearance dishonestly converted $17,000 to its own use. Another way of characterising the transaction is that Lynton Clearance stole either the car, because it had no intention of paying Ms Cullen for it, or stole 1 Section 488(3)(a). 2 Sections 488(3)(b) and (c). -- 2 of 4 -- 3 $17,000, from Ms Cullen. The theft is a relevant event3 which occurred on 26 March 2009. Ms Cullen’s Loss [12] Strangely, Ms Cullen does not swear an affidavit about her loss and the affidavit of her lawyer is deficient in many respects. [13] There is a copy of Esanda’s ledger-cum-file note in the material. That document indicates: a) Ms Cullen rang for a payout figure on 25 March 2009. b) She rang back on 26 March 2009 trying to stop a direct debit being taken from her account. Ms Cullen was given a new payout figure and she then advised the operator that the account would be cleared in two payments. The file records, importantly, that the operator told Ms Cullen to: “…call back in a couple of days to ensure loan is in process of being finalised”. c) Ms Cullen paid Esanda $4,471.38 on 26 March 2009. d) On 3 April 2009, the file records that Ms Cullen was told that the payout figure was $17,000. [14] Nothing happened on the Esanda ledger for almost 12 months. That is understandable, as Ms Cullen’s payment was the equivalent of 10 months’ instalments in advance. [15] In March 2010, the account fell into arrears. Esanda tried to contact Ms Cullen but was advised that the contact phone number for Ms Cullen was “wrong”. [16] In April 2010, Esanda received an email advising that the account was supposed to have been paid out as the car was sold “long ago”. On 14 April 2010, Ms Cullen contacted Esanda. She was advised that, if the account was not settled by 30 April 2010, there may be adverse consequences. [17] On 23 April 2010, Ms Cullen contacted Esanda to say that: “That dealer made an oversight and ctr will be paid out w/in a wk.” That advice could not have been correct, as Lynton Clearance had already been placed into liquidation by that time. [18] There is no evidence that Ms Cullen followed up on Lynton Clearance after the conversation with Esanda on 3 April 2009. There is no evidence that she followed up with the liquidator after the conversation with Esanda on 23 April 2010. If Ms Cullen had diligently pursued Lynton Clearance in March/April 2009, it is reasonable to expect that she might have received the $17,000, or at least, been able to retain ownership of the car. What seems more likely is that Ms Cullen had been unable to sell the car for some time; she was going overseas and wanted a quick solution; and she simply failed to take any steps to protect her interests. 3 Section 470(1)(e). -- 3 of 4 -- 4 [19] The Esanda file shows that Ms Cullen never received a letter confirming that the finance contract was at an end. She worked for a firm of lawyers so she had access to advice and it is reasonable to expect that she should have taken better precautions to ensure that Lynton Clearance paid Esanda out in accordance with her instructions. In the circumstances, I find that Ms Cullen might reasonably have recovered the amount of the claim from Lynton Clearance had she been more diligent in her dealings with both Esanda and Lynton Clearance. Her neglect in this regard means that she has forfeited her entitlement to be paid from the fund. Orders [20] Ms Cullen’s claim for payment from the fund is refused. -- 4 of 4 --