Bilborough v Hunter & Anor [2006] QDC 274

DISTRICT COURT OF QUEENSLAND CITATION: Bilborough v Hunter & Anor [2006] QDC 274 PARTIES: CHRISTOPHER RUSSELL BILBOROUGH Plaintiff v ROBERT HUNTER and CATHERINE HUNTER Defendants FILE NO: Southport No 137/06 PROCEEDING: Application for summary judgment DELIVERED ON: 2 August 2006 DELIVERED AT: Brisbane HEARING DATE: 13 June 2006 JUDGE: Judge Brabazon QC ORDER: Claim dismissed CATCHWORDS: PROPERTY AGENTS AND MOTOR DEALERS ACT 2000 – CLAIM FUND – RECOVERY OF BENEFITS – ss 492, 493, 494, 495 Auctioneers and Agents Act 1971 Property Agents and Motor Dealers Act 2000, ss 408, 409, 472, 472A, 474, 475, 489, 490, 492, 493, 494, 495 Hunter, Robert and Catherine v National Asset Planning Corporation Pty Ltd and Atkinson James and Others [2002] QPAMDT 31 Chief executive, Department of Tourism, fair trading and wine industry development v Bilborough [2005] QSC 401 COUNSEL: Solicitors for the plaintiff Mr R Bain QC, with him Mr D Skennar, for the defendants SOLICITORS: Peter Morgan, Corporate Solicitor, for the plaintiff Carter Capner Lawyers for the defendants -- 1 of 9 -- 2 The Issue [1] This is an application by Mr and Mrs Hunter for summary judgment against Mr Bilborough. They submit that his claim against them is so obviously untenable that it should be dismissed in a summary way, without a trial. [2] The application is made under Rule 293 of the Uniform Civil Procedure Rules: “(1) A defendant may at any time after filing a notice of intention to defend, apply to the court under this part for judgment against a plaintiff. (2) If the court is satisfied – (a) The plaintiff has no real prospect of succeeding on all or a part of the plaintiff’s claims, and (b) There is no need for a trial of the claim, or the part of the claim; the court may give judgment for the defendant against the plaintiff …” Earlier Proceedings [3] In 1998 Mr Bilborough was the director of a company called National Asset Planning Corporation Pty Ltd. That company was marketing investment properties on the Gold Coast. In February 1998 it sold a property to Mr and Mrs Hunter. That sale settled on 31 March 1998. [4] In November 1999 Mr and Mrs Hunter lodged a claim against National Asset Planning Corporation. They alleged that there had been a contravention of the Auctioneers and Agents Act 1971, as it had made misrepresentations about the value of the property. Mr Bilborough became a party to that litigation. [5] On 26 June 2002 the Property Agents and Motor Dealers Tribunal ordered that Mr and Mrs Hunter recover $113,166.64 from the claim fund set up under the -- 2 of 9 -- 3 Auctioneers and Agents Act and then continued by the Property Agents and Motor Dealers Act 2000 (PAMDA). The Tribunal went on to order that National Asset Planning Corporation and Mr Bilborough were liable to reimburse that amount to the fund. [6] The reasons for the Tribunal’s decision were not referred to by counsel. In this case, it seems appropriate to refer to them, at Hunter, Robert and Catherine v National Asset Planning Corporation Pty Ltd and Atkinson James and Others [2002] QPAMDT 31 (26 June 2002). They can be found at www.austlii.edu.au/au/cases/qld/QPAMDT/2002/31.html [7] The reasons show that Mr and Mrs Hunter’s contract of sale, dated 6 February 1998, provided for a purchase price of $159,900. The Tribunal found that several false and misleading statements had been made, about the value of the property and its likely performance as an investment. [8] The valuer’s opinion about the value of the property, $116,000, was made as at the date of the contract. As Mr and Mrs Hunter paid $159,900, according to the contract, the capital loss was $43,900. Overall, the Tribunal found that their financial loss was $99,984 plus costs of $13,182.64, making a total of $113,166.64. Included in the financial loss was an award of $40,847 with respect to losses relating to income. Those losses were calculated from the date of purchase to 31 January 2002. They took into account the rental income received up to that time. It appears from the reasons that the value of the claim was calculated up to the time the decision was given, and did not include anything for future losses. An amount was claimed for future disposal costs which could be anticipated, but that aspect of the claim was refused. -- 3 of 9 -- 4 [9] Mr Bilborough did not agree with that judgment. He appealed to the District Court on the ground that he was not personally responsible for his company’s obligation to pay the compensation. [10] He was successful in that appeal. On 17 October 2002, Judge Britton overturned the order that he reimburse the claim fund. His appeal was successful on the ground that, as a director, he was not personally liable to pay the compensation. [11] That decision led to legislation, which had the aim of making directors such as Mr Bilborough personally liable to pay compensation to purchasers like Mr and Mrs Hunter. The amendment to PAMDA took effect on 13 December 2002. [12] Mr Bilborough did not agree that the legislation applied to him. The Chief Executive of the Department of Tourism, Fair Trading and Wine Industry Development then applied to the Supreme Court, seeking an order that he was personally liable to pay the Chief Executive a total of $857,501.41 in seven cases, which included Mr and Mrs Hunter. [13] The application was heard before Mr Justice Helman in November 2005. He gave judgment on 23 December 2005 – see the judgment at [2005] QSC 401. He traced the legislative changes to the Auctioneers and Agents Act and PAMDA, on the issues of compensation. With regard to Mr and Mrs Hunter’s claim and one other claim, he found that the amending legislation applied retrospectively to Mr Bilborough. He was liable to reimburse the $113,166.64 to the claim fund. [14] Earlier this year, Mr Bilborough paid that amount to the Chief Executive. -- 4 of 9 -- 5 These Proceedings [15] Then, on 16 March, Mr Bilborough filed this claim against Mr and Mrs Hunter. In summary, he asserts these things: (a) The declaration made against him, that he was liable to pay $113,166.64 to the Chief Executive; (b) The Tribunal had fixed that amount of compenation by reference to a valuation of the property $116,000; (c) Mr and Mrs Hunter later sold the townhouse, on about 23 August 2005, for $215,000. That was $99,000 in excess of the valuation; (d) So, Mr and Mrs Hunter have both the payment from the claim fund and the gross proceeds, at a profit, from the sale of the townhouse. Their total profit is $168,266; (e) They continue to earn rental income from the property, estimated to be $18,500; (f) They have received payment from the claim fund in excess of their entitlements; (g) It was their obligation to tell the chief executive of a benefit received by them, afte the claim was paid. They should reimburse the claim fund the amount of the overpayment made to them; (h) They should have repaid $186,766 to the claim fund. [16] On the basis of the above facts, Mr Bilborough says that he is entitled to recover the $168,266, together with additional rental estimated at $18,500. [17] Mr and Mrs Hunter filed a defence on 13 April. They admit the sale in August 2005 at $215,000. They admit that they have received $113,166.64 from the claim fund. They admit that they have earned rent from 2002 to 23 August 2005. Finally, they assert that Mr Bilborough has no standing to pursue his claim against them, and that it is likely to be struck out. -- 5 of 9 -- 6 The Claim Fund [18] It is necessary to understand the role of the claim fund, and the provisions of PAMDA about payments into and out of the fund. [19] The fund includes amounts payable to the fund under the Act. The fund must be used to pay the amount of all claims allowed against the fund (ss 408 and 409). [20] A person may make a claim against the fund, if the person suffers financial loss because of the happening of various events. Those events include this case. [21] There are time limits to make claims against the fund. See ss 472 and 472A. [22] If a claim is made against the fund, then the Chief Executive must give notice of it to the respondent “whose actions are alleged to have given rise to the claim”. If that respondent is a corporation, then it in turn must give written notice to everyone who was a director at the time. That director is then taken to be a respondent to the claim. See ss 474 and 475. If the director is liable for the claimant’s financial loss, then he or she must reimburse the fund. See s 490. [23] If a claim of this size has not settled within 28 days after the claim notice is given to the respondent, the claimant may apply to the chief executive, in the approved form, to refer the claim to the Tribunal for decision. If a claim is allowed, the chief executive authorises payment from the fund. That payment, which may be deferred until any appeal is finally decided, is taken to be in full settlement of the claim against the fund. See s 489. [24] There are then some provisions of the Act which are crucial in this case. Those provisions should be set out in full: “492 Limits on recovery from fund -- 6 of 9 -- 7 (1) A claimant cannot 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 losses; and (b) … Examples of paragraph (a) – (1) Compensation received from the licensee for the loss; (2) A payment from a receiver for the loss; … 493 Notice of other recovery A claimant must give the chief executive written notice of an amount or benefit, other than an amount from the fund, received by the claimant in relation to the claimant’s financial loss, whether before or after the claim is paid. Maximum penalty – 200 penalty units or three years imprisonment. 494 Recovery of Payments – general The chief executive must pay the fund any amount recovered by the chief executive in satisfaction of an amount paid from the fund. 495 Recovery of overpayments (1) This section applies if a claimant who has received a payment from the fund recovers – (a) an amount more than the claimant is entitled to recover under s 492 (‘overpayment’) or (b) … (2) The claimant must (a) reimburse the overpayment to the fund; and … (3) The chief executive may recover the overpayment or the amount of the payment from the fund the person received in relation to the thing as a debt owing to the Chief Executive by the person. (4) …” Conclusions [25] The claim in the statement of claim is founded on ss 492-495 of the Act. The prayer for relief asks for: “1. The sum of $168,266.64, being the difference between the original purchase price of the townhouse and the aggregate of the amount paid by the claim fund to the defendants -- 7 of 9 -- 8 ($113,166.64) and the gross sale proceeds of the contract for the sale of the townhouse ($215,000). 2. The sum of $18,500, being the minimum additional rental income obtained by the defendants, subsequent to 1 February 2002, and ending when the defendants sold the townhouse on 23 August 2005. …” [26] The first claim makes a comparison between the purchase price of $159,900, the aggregate of the payments from the fund, $113,166.64 and the gross sale proceeds on 22 September 2005 - $215,000. [27] Their financial loss was found by the Tribunal, and adopted by Justice Helman in the Supreme Court. Calculated up to 26 June 2002, it is not an amount that can now be contradicted. It establishes their financial loss for the purposes of their recovery from the claim fund, according to s 492. [28] Section 493 compels them to give a written notice of “an amount or benefit, other than an amount from the fund, received by them in relation to their financial loss, whether before or after the claim is paid”. The reference to financial loss there is the same as the reference to financial loss in s 492. That is to say, their financial loss is that fixed by the Tribunal. It cannot refer to other financial losses or benefits incurred after the Tribunal’s decision. By definition, “all benefits received or recovered by the claimant … in reduction of the loss” are so restricted. Any rent received after the date of that decision is not in relation to their financial loss. Neither is the difference between the original purchase price or valuation, and a sale price achieved six and a-half years later. The proceeds of that sale do not amount to recovery of “an amount more than the claimant is entitled to recover under s 492 (‘overpayment’).” -- 8 of 9 -- 9 [29] The examples of benefits given in s 492(1)(b) reinforce that conclusion. Compensation received from a real estate agent for the loss, and a payment from a receiver for the loss, are given as examples. This case is nothing like those categories. [30] Section 494 is consistent with the same conclusion. The chief executive only pays to the fund, amounts recovered “in satisfaction of an amount paid from the fund”. [31] As the written submission for the plaintiff put it, “… it is a central part of the plaintiff’s case that the defendants have resold their property for a substantial profit, and thereby made a ‘benefit’, as that expression is refered to in s 493 of PAMDA”. That being so, the claim is untenable. There is no benefit, and no reason for the defendants to repay any money to the claim fund. [32] There is no prospect of success for this claim. The claim must be dismissed. In the absence of any further submissions, that will be the order, together with an order that the plaintiff pay the defendants’ costs of the proceedings to be assessed on the standard basis. -- 9 of 9 --