Charter and Anor v Fast Access Finance (Beaudesert) Pty Ltd and Anor [2011] QCAT 724

CITATION: Charter and Anor v Fast Access Finance (Beaudesert) Pty Ltd and Anor [2011] QCAT 724 PARTIES: Rachael Charter Michael Sinclair (Applicant/Appellant) v Fast Access Finance (Beaudesert) Pty Ltd ABN 51 091 483 457 (First Respondent) Diamond Clearing House Pty Ltd ABN 85 130 515 409 (Second Respondent) APPLICATION NUMBER: MCDO2512-10 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 15 July 2011 HEARD AT: Brisbane DECISION OF: John Bertelsen, Adjudicator DELIVERED ON: 15 July 2011 DELIVERED AT: Brisbane ORDERS MADE: [1] The Tribunal in its minor civil dispute jurisdiction is competent to hear the application. [2] The application be set down for hearing urgently. CATCHWORDS: Jurisdiction – whether a transaction could be a credit contract covered by the Consumer Credit Code (Qld) – whether Tribunal has jurisdiction to determine question Consumer Credit (Qld) Act 1994 Consumer Credit Code, s 7, 70, 71 Queensland Civil and Administrative Tribunal Act 2009, s 13(2)(a) APPEARANCES and REPRESENTATION (if any): -- 1 of 5 -- 2 This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). REASONS FOR DECISION Application [1] The applicants firstly seek the Tribunal’s finding that a transaction entered into between the applicants and the respondents was one which was covered by the Consumer Credit Code (Qld) (the Code) and secondly that such being the case the transaction be reopened and orders made for the first respondent to refund to the applicants the difference between the sum borrowed by the applicants and the amount repaid to the first respondent. The initial question to be considered is whether or not the Tribunal has jurisdiction to entertain the application. [2] The application was initially lodged at the Tribunal’s Beenleigh Registry on 30 June 2010. On 18 October 2010 the Tribunal granted leave for the parties to be legally represented. On 1 November 2010 the Tribunal made consent orders to the effect that the respondents file submissions as to “why the matter should be struck out” with the applicants to file a response to such submissions. Timeframes were put in place with the mediation conducted that day adjourned. The submissions on the part of the first and second respondents were filed on 18 November 2010 with the applicants’ submissions in response being filed on 29 November 2010. [3] On 7 December 2010 the respondents filed an application to dismiss/strike out the applicants’ initial application. It was accompanied by the respondents’ reply to the applicants’ submissions. Such a reply by the respondents was not required in terms of the consent order of 1 November 2010 but in any event was followed by applicants’ further submissions apparently filed with the Tribunal on 11 March 2011 but not placed on file until 14 April 2011. All these submissions centre around the applicability of the Consumer Credit Code to the subject transaction and hence the Tribunal’s jurisdiction to deal with and make findings in respect of the transaction. The legal representatives for both the applicants and the respondents have consented to the issue of jurisdiction being heard on the papers. [4] On 5 November 2009 the applicants attended the Beaudesert office of Fast Access Finance, an entity with which one of the applicants had dealt previously, to obtain a loan of $1,000 to pay arrears of rent. The transaction was fully completed that day with $1,000 being paid directly into the applicants’ bank account. [5] The transaction consisted of a number of steps as follows: ▪ The applicants completed a loan request form reciting an amount requested of $1,000. ▪ A sales agreement whereby the first respondent sold to the applicants 8 x loose modern brilliant cut diamonds, 0.1 cts, colour -- 2 of 5 -- 3 “H”, clarity P1 for the sum of $2,000. That agreement provided for the purchase price to be paid by 31 weekly payments of $64.00 each and one payment of the balance owing up to the $2,000. That agreement further provided that if the seller (Fast Access Finance) was still in physical possession of the goods (the diamonds) the seller was to act as the buyer’s agent in respect to dealing with the delivery of the goods (diamonds) only. ▪ The applicants were furnished with a tax invoice for the sale of the diamonds by Fast Access Finance to them. ▪ A collateral security agreement whereby the applicants placed their Holden Commodore motor vehicle as security for payment of the said $2,000 by instalments. ▪ A direct debit request authorising payments directly from the applicants’ bank account. ▪ Privacy Act consent form. ▪ A purchase agreement whereby the applicants sold to the second respondent Diamond Clearing House Pty Ltd the diamonds for the sum of $1,000. ▪ The same day Diamond Clearing House Pty Ltd paid $1,000 into the applicants’ bank account. [6] Section 6 of the Consumer Credit Code (Qld) provides as follows: Provision of credit to which this code applies. (1) This code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of pre contractual obligations) is proposed to be entered into – (a) The debtor is a natural person ordinarily resident in this jurisdiction or a strata corporation formed in this jurisdiction; and (b) The credit is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes; and (c) A charge is or may be made for providing the credit; and (d) The credit provider provides the credit in the course of a business of providing credit or as part of or incidentally to any other business of the credit provider. [7] It is clear and undisputed the applicants are natural persons ordinarily resident in this jurisdiction and that the credit was provided for domestic or household purposes (the payment of rent). [8] The respondents concede that while it is arguable that the pay by instalments procedure could be characterised as provision of credit they assert that there was no “charge … made for providing the credit”. [9] The applicants borrowed $1,000 and paid back $2,100 as provided for in the sales agreement. Whether the additional $1,100 paid amounts to a charge (interest) or was simply a component of the instalment procedure would be a question to be determined by the Tribunal at hearing. [10] In determining jurisdiction the first question to be asked is “are the applicants relevant persons (in this instance consumers) in terms of section -- 3 of 5 -- 4 12 of the QCAT Act.” It is not contentious that the transaction giving rise to the claim is between consumer and trader. [11] Then the question is whether the Tribunal is empowered to grant the relief sought. The respondents argue that it is not possible for the Tribunal to make any of the final orders as defined in section 13(2)(a) of the QCAT Act; that if there is any doubt as to whether the Tribunal can order payment or non payment of a stated amount then in any event such payment or non payment only applies to a contract between trader and consumer that is still “on foot”. The respondents concede that the Tribunal is empowered to make declarations pursuant to section 60 of the QCAT Act. [12] Section 9 of the QCAT Act provides that “the Tribunal has jurisdiction to deal with matters it is empowered to deal with under this Act or an enabling Act”. [13] Section 16 of the QCAT Act provides that “in exercising its original jurisdiction conferred by an enabling Act, the Tribunal may perform the functions conferred on the Tribunal by this Act or the enabling Act.” [14] The Consumer Credit Code (Qld) Act 1994 as it then stood was an enabling Act for the purpose of section 16 of the QCAT Act. The respondents acknowledge that the Consumer Credit Code (Qld) as it then stood is the law applicable to the orders sought by the applicants. [15] Section 70 of the Code provides that “the Court may1, if satisfied, on the application of a debtor, mortgagor or guarantor that, in the circumstances relating to the relevant credit contract, mortgage or guarantee at the time it was entered into or changed (whether or not by agreement), the contract, mortgage or guarantee or change was unjust, reopen the transaction2 that gave rise to the contract, mortgage or guarantee or change.” That section is not qualified such as to preclude an application for reopening simply because the credit contract is not “on foot”. Quite the contrary the very tenor of the section wording in granting power to reopen contemplates prior closure ie a credit contract since concluded and no longer “on foot”. [16] Section 71 of the Code goes on to list the orders that may be made on the reopening of a transaction and they are: (a) reopen an account already taken between the parties; (b) relieve the debtor and any guarantor from payment of any amount in excess of such amount as the Court, having regard to the risk involved and other circumstances, considers to be reasonably payable; (c) set aside either wholly or in part or revise or alter an agreement made or mortgage given in connection with the transaction; 1 Emphasis added. 2 Emphasis added. -- 4 of 5 -- 5 (d) order that the mortgagee takes such steps as are necessary to discharge the mortgage; (e) give judgement for or make an order in favour of a party of such amount as, having regard to the relief (if any) which the Court thinks fit to grant, is justly due to that party under the contract, mortgage or guarantee; (f) give judgement or make an order against a person for delivery of goods to which the contract, mortgage or guarantee relates and which are in the possession of that person; (g) make ancillary or consequential orders. Conclusions [17] The applicants are consumers and the respondents, either one or both, are traders. [18] The Consumer Credit (Qld) Act 1994 is an enabling Act for the purposes of this application. Section 7 of the Consumer Credit Code establishes the Tribunal’s minor civil dispute jurisdiction to hear the application. [19] The Tribunal pursuant to section 70 of the Consumer Credit Code is empowered to reopen the transaction the subject of the application. [20] Section 71 of the Consumer Credit Code empowers the Tribunal to make the sorts of orders applied for by the applicants. Additionally section 13(2)(a) of the QCAT Act also empowers the Tribunal to make those orders. [21] Whether the transaction of 5 November 2009 constitutes a credit contract satisfying the required elements of section 6 of the Code is a matter to be determined on evidence at hearing; that the transaction could be found to satisfy those elements is enough to establish jurisdiction of the Tribunal in its minor civil disputes jurisdiction to hear and determine the application even if that determination is to the effect that the transaction is not captured by the Code. [22] Given that the outcome of any hearing may well impact on numerous other transactions of like nature it is in the interests of economy and fairness to all concerned that this application be set down for hearing at the earliest possible date. Orders [1] The Tribunal in its minor civil dispute jurisdiction is competent to hear the application. [2] The application be set down for hearing urgently. -- 5 of 5 --