Darroch v O'Neill Holdings Group Pty Ltd [2010] QCAT 307

CITATION: Darroch v O’Neill Holdings Group Pty Ltd [2010] QCAT 307 PARTIES: Ms Linda Darroch v O’Neill Holdings Group Pty Ltd Mr Robert John O’Neill APPLICATION NUMBER: PC034-09 MATTER TYPE: Occupational regulation matters HEARING DATE: 15 June 2010 HEARD AT: Brisbane DECISION OF: J Allen DELIVERED ON: 11 June 2010 DELIVERED AT: Brisbane ORDERS MADE: 1. The Chief Executive Department of Employment, Economic Development and Innovation pay the Applicant Linda Suzanne Darroch the sum of $13,000 from the claim fund 2. The second respondent Robert John O’Neill is liable for the whole of the Applicant’s financial loss. CATCHWORDS : Claim against the fund – financial loss because of a stealing, misappropriation or misapplication by a relevant person, person liable for financial loss – Property Agents and Motor Dealers Act 2000, sections 408, 470, 488 and 490. APPEARANCES and REPRESENTATION (if any): The hearing was held on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009 -- 1 of 10 -- PC034-09 / Page 2 of 10 REASONS FOR DECISION Background 1. Mrs Linda Darroch arranged for the sale of her late husband, Phillip Darroch’s 2004 Proton Gen 2 registration number 462IIH, through Mr Robert O’Neill trading as O’Neill Family Motors on 8 December 2007. At the time Mrs Darroch signed a consignment note in respect of the vehicle and Mr Robert O’Neill signed a letter agreeing to purchase the vehicle for $13,000 payable by bank cheque on 8 January 2008. If the vehicle sold before that date payment was to be seven (7) days from the date of sale. The vehicle was sold to another motor dealer, Neil Budini Motor Wholesale on or about 12 December 2007 for the amount of $9,000 including GST. 2. Following a series of emails between Mrs Darroch and the O’Neill Family Motors, a cheque in the amount of $12,800 was deposited into Mrs Darroch’s bank account. The drawer of that cheque was O’Neill Holdings Group Ltd. The cheque was dated 17 January 2008 and Mrs Darroch was advised by her bank on 21 January 2008 that the cheque which had been deposited on 18 January 2008 had been returned unpaid with the answer, refer to drawer. 3. Mrs Darroch engaged the firm of Laurence Wilson & Associates, Solicitors in an attempt to recover the funds due and a repayment plan was agreed upon. There were no payments received under the repayment plan. Mrs Darroch then made a claim against the Claim Fund on 13 October 2008. 4. The Chief Executive directed an Inspector of the Office of Fair Trading to investigate the claim. The Inspector’s report dated 8 October 2009 was forwarded to the Applicant on 22 October 2009 and the Respondent on 23 October 2009. The parties were notified that the matter had been forwarded to the former Commercial and Consumer Tribunal for determination. 5. The Respondents were served with the application by the Applicant but all correspondence to the Respondents including Tribunal orders has been returned to sender. -- 2 of 10 -- PC034-09 / Page 3 of 10 6. The Applicant requested that the matter be determined on the papers and the Tribunal made an order on 9 February 2010 requiring the Respondent to file and serve any material on which they intended to rely by 10 March 2010 with the matter to then be determined on the papers. The Tribunal has not received any material from the Respondents. The Law 7. This application was made to the former Commercial and Consumer Tribunal and is therefore subject to the transitional provisions under section 271 of the Queensland Civil and Administrative Tribunal Act 2009. The Tribunal has, and only has, the functions of the former Tribunal had in relation to the matter under the former Act; and the Tribunal can, and can only, make a decision the former Tribunal could have made in relation to the matter under the former Act. 8. The jurisdictional provisions of the Property Agents and Motor Dealers Act 2000 (“PAMD Act”) are contained in section 450 and those provisions are its same in respect of both the former Tribunal and the Tribunal. The provisions in regard to the functions of the Tribunal are contained in section 488 of the PAMD Act and again those provisions are the same for both the Tribunal and the former Tribunal. The Claim Fund is established under section 408 of the PAMD Act and in accordance with section 409 of the PAMD Act the fund must be used to pay the amount of all claims allowed against the fund. 9. A person may make a claim against the fund if a person suffers financial loss because of the happening of any events set out in section 470 of the PAMD Act. Relevantly under section 470(1)(e) stealing, misappropriate or misapplication by a relevant person of property entrusted to the person as agent for someone else in the person’s capacity as a relevant person is a specified event. 10. The term ‘relevant person’ is defined in section 469 of the PAMD Act to mean a licensee or a licensee’s employee or agent or a person carrying on business with the licensee or a person having charge or control or apparent charge or control of the licensee’s registered office or business. A licensee is defined under section 469 of the PAMD Act to include a former licensee and a person who is not licensed but who acts as a licensee. Licensee is defined in the dictionary of the PAMD Act as -- 3 of 10 -- PC034-09 / Page 4 of 10 generally meaning the holder of a Property Agents and Motor Dealers license that is in force. 11. The procedure for dealing with claims against the fund differs if the claim is defined as a minor claim that is a claim of not more than $10,000 which is determined by the Chief Executive and a claim greater than $10,000 which is determined by the Tribunal in accordance with section 488 of the PAMD Act. The procedure under section 488 of the Act is as follows: 488 Deciding claims other than minor claims (1) The tribunal may allow the claim, wholly or partly, or reject the claim. (2) However, the tribunal may allow the claim only if satisfied, on the balance of probabilities, that— (a) an event mentioned in section 470(1) happened; and (b) the claimant suffered financial loss because of the happening of the event. (3) If the tribunal allows the claim, wholly or partly, the tribunal must— (a) take into account— (i) any amount the claimant might reasonably have received or recovered if not for the claimant’s neglect or default; and (ii) any amount ordered to be paid to the claimant as compensation under section 530A, 572D or 592A; and (b) decide the amount of the claimant’s financial loss; and (c) name the person who is liable for the claimant’s financial loss. 12. There are limits on the recovery which is allowable under the fund which are set out in section 492 of the PAMD Act as follows: 492 Limits on recovery from fund (1) A claimant can not recover from the fund an amount more than the balance of the claimant’s financial loss after deducting from the claimant’s loss— (a) the amount, including the value of all benefits, received or recovered by the claimant from a source other than the fund in reduction of the loss; and -- 4 of 10 -- PC034-09 / Page 5 of 10 (b) the amount, including the value of all benefits, the chief executive or the tribunal considers the claimant might reasonably have received or recovered if not for the claimant’s neglect or default. Examples of paragraph (a)— 1 compensation received from the licensee for the loss 2 a payment from a receiver for the loss (2) A claimant may not recover from the fund for a single claim an amount more than the amount prescribed under a regulation. (3) Also, the claimant may not recover more than $35000 from the fund for a single claim for financial loss if the claim relates to a non-investment residential property purchased by the claimant because of, or arising out of, a marketeering contravention. (4) A regulation may prescribe the total amount that may be paid from the fund because of, or arising out of, a contravention, failure to ensure clear title to a vehicle, stealing, misappropriation or misapplication by a single person. (5) Interest is not payable from the fund in relation to a claim allowed against the fund. 13. It is noted that in accordance with section 488 of the PAMD Act the Tribunal is required to name the person who is liable for the claimant’s financial loss. The effect of this is set out in section 490 of the PAMD Act and the person who is named in the Tribunal’s order as being liable for the claimant’s financial loss is liable to reimburse the fund to the extent of the amount paid to the claimant in respect of their claim. 14. Section 530 of the PAMD Act sets out the orders that the Tribunal may make in regard to an application for a claim against the fund: 530 Orders tribunal may make on claim hearing The tribunal may make the following orders in relation to a claim against the fund— (a) an order allowing the claim, wholly or partly, or rejecting the claim; (b) an order stating that a named person is liable for a claimant’s financial loss and the amount of the loss; (c) an order about recovery of an amount payable in relation to a claim; -- 5 of 10 -- PC034-09 / Page 6 of 10 (d) an order that no amount is recoverable in relation to a claim. Evidence 15. As the hearing of this matter was on the papers the Tribunal has relied on the material filed by the Office Of Fair Trading in respect of the matter and a copy of the will of the late Paul Frederick Darroch filed by the Applicant. 16. A 2004 Proton Gen 2 Hatchback with registration number 462IIH was registered in the name of Paul Frederick Darroch according to a registration certificate with receipt date 7 May 2007. Mr Darroch in accordance with death certificate registration number 2007/11533 died on 25 September 2007. Mrs Linda Suzanne Darroch is in accordance with a copy of the will of Paul Frederick Darroch dated 20 December 1989 the Executor and sole beneficiary of the late Mr Darroch’s estate. 17. Mrs Darroch alleges that on 8 December 2007 she took her late husband’s car, the 2004 Proton Gen 2 registration number 462IIH to Robert O’Neill at Gold Coast Cars, Ferry Road Southport. Mrs Darroch alleges that she had wanted $13,900 for the car and that Mr O’Neill would advertise it for $15,900 on the internet. She stated that it was agreed that if the car was not sold Mr O’Neill would pay her $13,000 on 8 January 2008 or pay her within seven (7) days of the car being sold. In accordance with a letter on letterhead headed “O’Neill Family Motors” and dated 8 December 2007 Robert O’Neill agreed to purchase one 2004 Proton Gen 2 for $13,000 payable by bank cheque on 8 January 2008 to Linda Suzanne Darroch and that if the vehicle was sold before the payment will be seven (7) days from sale date. The Tribunal notes that there are two (2) business names used in respect of this matter but the individual licensee is nevertheless Mr Robert John O’Neil. 18. A licensing register extracts report for license number 3100655 which is the dealer number listed on the above mentioned letter from O’Neill Family Motors states that the license was for a motor dealer and it had been issued on 28 September 2005 and had expired on 28 September 2008. The licensee is listed as Robert John O’Neill with the business name of O’Neill Family Motors. -- 6 of 10 -- PC034-09 / Page 7 of 10 19. A registration history summary for motor vehicle license 426IIH indicated that on 12 December 2007 the motor vehicle had been transferred from O’Neill Family Motors to Neil Budini Motor Wholesale and that it had subsequently been further transferred to a Mr Noriyuki Sato. 20. A Department of Fair Trading inspector obtained a copy of a stock card from Neil Budini dated 12 December 2007 confirming the abovementioned transaction and noting that the vehicle had been purchased from O’Neill Family Cars for an amount of $9,000 including GST and subsequently sold to Mr Noriyuki Sato for an amount of $11,000. 21. The Tribunal was provided with a series of emails between Mrs Linda Darroch and Gold Coast Cars beginning on 28 December 2007 in regard to her following up on the sale of the car including advising the business of her bank account details. These emails confirm her knowledge that at least as of 9 January 2008 she knew that the car had been sold. Significantly there is a copy of an email from Gold Coast Cars to Linda Darroch dated 18 January 2008 which confirms that money was paid from a company account and stating that “I have the receipt number and copy of deposit slip.” There is a reply from Linda Darroch noting that she thought the transfer of funds would be directly into her bank account querying whether the meaning of the email from Gold Coast Cars was that they had deposited a cheque into her account. A further email from Linda Darroch to Gold Coast Cars of 23 January 2008 notes that the money is not showing in her account and requesting that they fax the bank deposit slip receipt. That email also stated that Mrs Darroch was having a police officer check whether the registration had been changed. There is also the correspondence from Westpac dated 21 January 2008 confirming that a cheque for $12,800 was deposited to her account number. This matches the account details provided by Linda Darroch by email to Gold Coast Cars on 3 January 2008. The bank advised that the cheque had been returned unpaid with the answer ‘refer to drawer’. A copy of a Bank of Queensland cheque drawn by O’Neill Holdings Group Pty Ltd to Linda Darroch in the amount of $12,800 and dated 17 January 2008 is also contained on the file. 22. A letter of demand was sent to Gold Coast Cars by Laurence Wilson & Associates on 31 January 2008, it is noted that Gold Coast Cars’ address was 44 Frank Street, -- 7 of 10 -- PC034-09 / Page 8 of 10 Labrador Qld which is a former address used by O’Neill Family Motors in accordance with details from the Business names register. The letter of demand noted the history of the matter and demanded payment of $13,107.21 including interest from 8 January 2008 and the bank dishonour fee. A facsimile transmission from Laurence Wilson & Associates to R O’Neill Group dated 27 March 2008 referred to a facsimile of 19 March 2008 and that Mrs Darroch would accept payment by instalments with the total outstanding to be $14,295.10. In her statement of claim Mrs Darroch set out this amount as being $13,900 for the car with solicitors costs as agreed of $395.10. 23. Mrs Darroch made a statement to Queensland Police dated 1 June 2008 confirming that she had not received payment from Robert O’Neill or Gold Coast Cars and that she has not seen her late husband’s vehicle since 8 December 2007. 24. Mr O’Neill did not respond to any of the requests for information from the Office Of Fair Trading nor has he responded to any of the material or orders from the former Commercial and Consumer Tribunal or the Tribunal. Similarly there has been no response from O’Neill Holdings Group Pty Ltd. Conclusion 25. I am satisfied that Mrs Darroch placed her car with Robert John O’Neill trading as O’Neill Family Motors on or about 8 December 2007 and that in accordance with the letter of 8 December 2007 on the O’Neill Family Motors letterhead Mr O’Neill had agreed to purchase the 2004 Proton Gen2 for $13,000 payable on 8 January 2008 if the vehicle was not sold before. The Vehicle was subsequently sold by O’Neill Family Motors for an amount of $9,000 including GST to Neil Budini Motor Wholesale. Mr O’Neill has not accounted to Mrs Darroch for the proceeds of sale. Having regard to the fact that he had agreed to purchase the vehicle for $13,000 the Tribunal is satisfied that in accordance with his agreement with Mrs Darroch he was required to account to her in the amount of $13,000 as by implication Mrs Darroch had not agreed to the sale of the vehicle for an amount less than $13,000.00. The Tribunal is satisfied that at the relevant time Mr O’Neill was a relevant person for the purposes of section 469 of the PAMD Act. The Tribunal is further satisfied that Mr O’Neill’s dealings with the vehicle by selling the vehicle and not accounting to Mrs Darroch in the amount he had agreed to pay constitute the happening of an event -- 8 of 10 -- PC034-09 / Page 9 of 10 under section 471(e) of the PAMD Act. That is a stealing misappropriation or misapplication by a relevant person of property entrusted to the person as agent for someone else in the person’s capacity as a relevant person. 26. While Mrs Darroch was not the registered owner of the vehicle the Tribunal is satisfied that she has suffered financial loss in her capacity as the sole beneficiary of her late husband’s will dated 20 November 1989 in that she has not received the agreed amount for the sale of the vehicle. 27. The Tribunal is satisfied that the amount of financial loss equals the amount Mr O’Neill agreed to pay in respect of the motor vehicle which is $13,000. The Tribunal had regard to the deposit of a cheque in the amount of $12,800 into Mrs Darroch’s bank account and is satisfied that Mrs Darroch had not accepted that amount in settlement of her claim as it was paid by deposit by a third party, O’Neill Group Holdings Pty Ltd and this amount was never agreed to by Mrs Darroch. While the claim relates to the higher amount which had been negotiated between Mr O’Neill and Mrs Darroch’s solicitor Laurence Wilson & Associates this amount was based on a repayment plan which Mr O’Neill had agreed to enter but which he did not adhere to. The Tribunal is satisfied the actual loss is the amount that Mr O’Neill had originally agreed to pay in respect to the motor vehicle as mentioned above. The Tribunal notes that Mrs Darroch has incurred some legal costs in respect of the claim the Tribunal though does not consider legal costs equate to financial loss. 28. The Tribunal is required to name the person who is liable for the claimant’s financial loss in accordance with subsection 488(3)(c) of the PAMD Act. The Tribunal notes that Mr Robert O’Neill entered the arrangement with Linda Darroch while trading as O’Neill Family Motors. At the time specified Robert John O’Neill held license number 3100655 in accordance with a certificate under section 587 of the PAMD Act by an Inspector appointed under the Act. The Tribunal also notes that in accordance with the same certificate O’Neill Holdings Pty Ltd has never held any kind of motor dealing license. The Tribunal is satisfied that the dealing Mrs Darroch had was with Robert John O’Neill trading as O’Neill Family Motors and that Robert John O’Neill is liable for Mrs Darroch’s financial loss. -- 9 of 10 -- PC034-09 / Page 10 of 10 29. While a cheque drawn by O’Neill Holdings Group Pty Ltd in the amount of $12,800 was deposited to Mrs Darroch’s bank account on or about 18 January 2008 the Tribunal is satisfied that the payment of that cheque by the company was at the instigation of Mr O’Neill and it was not proof of any arrangement between the company and Mrs Darroch. The Tribunal is therefore satisfied that O’Neill Holdings Group Pty Ltd is not liable for the claimant’s financial loss. Order 30. The Tribunal orders that the Chief Executive, Department of Employment, Economic Development and Innovation pay the sum of $13,000 to Mrs Darroch from the Claim Fund. The Tribunal further orders that Robert John O’Neill is liable in accordance with subsection 488(3)(c) of the PAMD Act for Mrs Darroch’s financial loss. -- 10 of 10 --