Australian Guarantee Corporation Ltd, Re; Re AGC v Director-General, Dept of Queensland Emergency Services [1994] QCA 416

IN THE SUPREME COURT [1994] QCA 416 OF QUEENSLAND Appeal No. 116 of 1994 IN THE MATTER of the Credit Act 1987 - and - IN THE MATTER of an application by AUSTRALIAN GUARANTEE CORPORATION LIMITED pursuant to Sections 86, 87 and 87A of the Credit Act 1987 BETWEEN: AUSTRALIAN GUARANTEE CORPORATION LIMITED ACN 000 015 485 Appellant AND: THE DIRECTOR-GENERAL, DEPARTMENT OF QUEENSLAND EMERGENCY SERVICES Respondent The President Mr Justice Derrington Mr Justice Cullinane Judgment delivered 11/10/1994 REASONS FOR JUDGMENT - THE COURT Appeal upheld; order below set aside; liability of each of the debtors under their respective loan contracts be increased by a determination that each such debtor is liable to pay the whole of the credit charge otherwise payable under his respective loan contract. CATCHWORDS: Finance - Application for relief by credit supplier. Contraventions of Credit Act requirements. Whether borrowers should be served "minor errors" - The Credit Act 1987 s. 87A COUNSEL: Mr K.D. Dorney Q.C. for the Appellant Mr S.A. McLeod for the Respondent SOLICITORS: Messrs Clayton Utz for the Appellant Mr K.M. O'Shea, Crown Solicitor HEARING DATE: 04/10/1994 -- 1 of 5 -- IN THE SUPREME COURT OF QUEENSLAND Appeal No. 116 of 1994 IN THE MATTER of the Credit Act 1987 - and - IN THE MATTER of an application by AUSTRALIAN GUARANTEE CORPORATION LIMITED pursuant to Sections 86, 87 and 87A of the Credit Act 1987 BETWEEN: AUSTRALIAN GUARANTEE CORPORATION LIMITED ACN 000 015 485 Appellant AND: THE DIRECTOR-GENERAL, DEPARTMENT OF QUEENSLAND EMERGENCY SERVICES Respondent JUDGMENT OF THE COURT Delivered the 11th day of October, 1994 This is an appeal, by leave, from an order of a District Court Judge made pursuant to s.87A(2)(c) of The Credit Act 1987, directing that the appellant [a credit provider], serve each of the debtors under three loan contracts with an application brought to that Court by the appellant. The appellant concedes that the three loan contracts are not in accordance with section 38 of the Act and that, accordingly, subject to sections 86 and 87, each debtor "is not liable to pay ... the credit charge under the contract": subsection 44(1)(b). That is a substantial amount in each case. Under section 86, the Court, "after consideration of the relevant circumstances" may "determine that the debtor is liable to pay the whole ... of the credit charge under the contract", and that is the order which the appellant has applied for in respect of each debtor. -- 2 of 5 -- 2 A single application was brought in relation to all three debtors, seeking a determination authorised by subsection 87(1)(a), and the appellant sought to proceed in the absence of the debtors in reliance on section 87A. Section 87A reads as follows: "(1) In this section - "minor error" means a contravention or failure to comply with this Act which is unlikely to disadvantage the debtors concerned in any significant respect. (2) If a credit provider makes an application to a court under section 87 and requests the court to deal with the application under this section, the following provisions have effect - (a) notice of the application must be served on the registrar but (unless the court otherwise directs) is not required to be served on any other person; (b) if the court is satisfied that all the contraventions or failures to which the application relates are minor errors and ought reasonably to be excused - the court may make a determination under section 86 that debtors under all regulated contracts entered into during the period concerned which are affected by those minor errors are liable to pay the whole of the credit charges under those contracts; (c) if the court is not so satisfied - the court must direct that notice of the application be given to the debtors concerned, either personally or in accordance with section 87." The drafting is imperfect; subsection 87A(2)(b) expressly authorises only an order of the type referred to in subsection 87(1)(b), but the appeal was conducted on the footing that an order might also be made under section 87A in the more limited form provided for by subsections 87(1)(a) and (c). That makes sense, and the appellant's assumption is apparently acquiesced in by the registrar, who was represented before us by counsel. In the circumstances, we will proceed on that basis, while making it clear that we are acting on an implicit concession and in circumstances in which the appellant's non-compliance with the Act is entirely inconsequential. The non-compliance by the appellant in the respective cases was as follows - First Case There was an erroneous or incorrect addition or transcription of the sub-totals of certain particulars which should have equalled $44,859.40 rather than $44,849.40 as appears in the document. The amount shown in the document in -- 3 of 5 -- 3 this respect favours the borrower. In addition the instalments were shown as $747.73 each and when these are multiplied by the number of instalments amount to $44,863.80, that is an amount of $4.40 above the correct figure. The particulars of the instalments should have referred to fifty-nine instalments of $747.66 and a final instalment of $747.46. Second Case The only error lies in the addition of the credit charge to the amount financed. The total shown in the document is $53,728 whereas it should be $53,928. Consequently the figure shown again favours the borrower by $200. Third Case The only error here again lies in the addition of the same components and a figure is shown in the document of $4,200.80 instead of $4,300.80. Again the figure shown favours the borrower. Although the District Court Judge gave no reasons for his decision, which is regrettable, he appears to have considered that the appellant's non-compliance was not, in each case, a "minor error" because the consequence for each debtor from the order sought by the appellant would be substantial; that is, each debtor would be made liable to pay the appellant the credit charge under the contract from which he or she is otherwise excused by subsection 44(1). That is not the test of a "minor error", and, indeed, on that basis there could never be a "minor error" except in the unlikely event that the credit charge under a contract was insignificant. The question whether an "error" is "minor" falls to be decided by reference to the effect of the "error" on the debtor. It is unnecessary, and, in the absence of full argument in which all possibilities are discussed, undesirable, to say more than that the appellant's errors here were undoubtedly "minor" and would not have occasioned any disadvantage to the debtors. It is equally apparent that, in these circumstances, such minor errors ought reasonably be excused. The only conceivable argument to the contrary is that excusing such errors will disadvantage the debtors in that each will become liable for the credit charges under the contract (which they agreed to pay) but which, because of "minor errors", they are presently exempted from by the Act. In our opinion, the Act plainly, albeit implicitly, accepts that this does not mean that "minor errors" should not be excused; if it did, the material provision would lack any purpose. The appeal is therefore upheld. The order below is set aside and in lieu thereof IT IS -- 4 of 5 -- 4 ORDERED THAT the liability of each of the debtors John Andrew Fossey, Bradley Neil Jones and Albert Gordon Fitch under their respective loan contracts be increased by a determination that each such debtor is liable to pay the whole of the credit charge otherwise payable under his respective loan contract. -- 5 of 5 --