Dunn v Chief Executive, Department of Justice and Attorney General [2012] QCAT 476

CITATION: Dunn v Chief Executive, Department of Justice and Attorney General [2012] QCAT 476 PARTIES: Robert Alan Dunn v Chief Executive, Department of Justice and Attorney General APPLICATION NUMBER: GAR125-12 MATTER TYPE: General administrative review matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Peta Stilgoe, Senior Member DELIVERED ON: 2 October 2012 DELIVERED AT: Brisbane ORDERS MADE: 1. The Chief Executive’s decision on 12 March 2012, naming Mr Dunn as a responsible person, should be set aside. CATCHWORDS: MOTOR DEALER – where car sold on consignment – where odometer reading wrong – whether dealer had reasonable grounds for believing that odometer reading correct – whether reliance on dealer’s representations Property Agents and Motor Dealers Act 2000, ss 470, 574 He Kaw Teh v The Queen (1985) 157 CLR 523 London and Anor v Reynolds [2006] QDC 380 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. -- 1 of 4 -- 2 REASONS FOR DECISION [1] On 11 July 2009, Dunnmorr Pty Ltd, trading as Auto Sales R Us sold a 2000 Land Rover Discovery II. Mr Dunn was the director of the company and a licensee. The company was deregistered in July 2011. [2] The Discovery was sold with an odometer reading of 74,825 km. It subsequently transpired that the odometer reading was false and the true reading was 174,825. The purchasers made a claim on the statutory fund for $9,482.50. The Chief Executive accepted the claim and named Mr Dunn as a responsible person who is liable to reimburse the fund. Mr Dunn has challenged the Chief Executive’s decision. [3] A person can make a claim against the fund1 if a licensee has represented anything that is false or misleading in relation to the sale of property2. A representation is taken to be misleading if the person does not have reasonable grounds for making it3. The onus of establishing that a person did have reasonable grounds for making a representation is on the person who made it4. [4] To determine whether Mr Dunn has breached s 574 of PAMDA, I have to consider whether he has a defence under s 24 of the Criminal Code; that is, did he have an honest and reasonable, but mistaken, belief in the existence of any state of things.5 [5] Mr Dunn was selling the Discovery on consignment. He argues that he was entitled to rely on the odometer reading at the time and the paperwork provided to him by the seller and that he was doing no more than passing information on. The District Court has already considered a similar argument6. I adopt the reasoning of McGill J that Mr Dunn was not simply adopting and passing on information given to him by the seller. Instead, he advertised the car for sale with a particular odometer reading, completed sales documentation that recorded the particular reading and sold an extended warranty on the basis of the lower, but false, odometer reading. [6] In statements made in August 2012, three years after they took possession of the car, the purchasers say that they noticed the presence of a right- angled symbol in front of the first digit of the odometer but they thought it was normal. They say it looked like the bottom right hand vertical segment and the central horizontal segment of the 7 possible segments of the digit were illuminated. [7] The Chief Executive argues that the presence of this symbol should have alerted Mr Dunn to a problem which he should have investigated. His failure to do so means that Mr Dunn did not have a reasonable belief that the odometer reading was genuine. 1 Section 470 Property Agents and Motor Dealers Act 2000. 2 Section 574(1) PAMDA. 3 Section 574(4) PAMDA. 4 Section 574(5) PAMDA. 5 London and Anor v Reynolds [2006] QDC 380 at [18]. 6 London supra at [35]-[38]. -- 2 of 4 -- 3 [8] Mr Dunn says he did not notice the symbol at any time when the car was in his control. The safety certificate issued on 22 July 2009 does not refer to the symbol. An RACQ inspection report dated 13 July 2009 does not refer to the symbol. A report from the purchasers’ mechanic of choice dated 9 February 2010 refers to “fault codes retrieved from the computer” but does not refer to the symbol. [9] A previous owner of the car, Mr Muller, told the Chief Executive that the symbol was not present when he bought the car and the odometer showed 50,000 km. Mr Muller records that the symbol appeared when the odometer “clicked over” to 100,000 km. [10] The parties now know, thanks to a report from Mr Brown an assistant service manager at Austral Land Rover, that the presence of this symbol means that there is “a data mismatch between the instrument pack and the body control unit”. In other words, either the car has been in an accident and a component replaced or the odometer was wound back. [11] English literature is littered with pithy sayings about the benefits of hindsight. The reality is that whether a person had a reasonable but mistaken belief must be considered in light of the evidence available to the party at the time7. [12] Even though Mr Dunn took no positive action to satisfy himself that the odometer reading was correct, I am satisfied that he did have, and was entitled to have, an honest and reasonable belief that the odometer was correct. I am persuaded to that view by a number of factors. Firstly, none of the mechanics raised it as a possibility in their reports. In fact, none of them referred to the symbol at all. Secondly, the clear inference from the RACQ condition report is that the condition of the car was consistent with the odometer reading. Thirdly, the purchasers did not suspect anything was wrong until 6 months after they purchased the car. The computer faults referred to in the purchasers’ mechanic’s report were consistent with the mechanical issues identified in the RACQ report and not immediately referable to an odometer fault. Finally, I find it unlikely that Mr Dunn would sell an extended warranty conditional upon the car having travelled less than 150,000 km if there was an objective basis for suspecting that the car had, in fact, exceeded that limit. [13] I also have concerns the purchasers’ reliance on Mr Dunn’s representations caused their loss. They say that they told Mr Dunn they wanted a car that was in sound mechanical condition, with low kilometres, that was capable of towing horses. The RACQ report, commissioned by the purchasers, does not reflect a vehicle in sound mechanical condition. The overall mechanical condition was recorded as “fair” and the inspector recorded defects in the gearbox, differential, drive shaft, universal, C.V. joints, oil seals, cooling system and fuel system, all of which required attention. Even the seats and seatbelts required attention. The report has a notation: “You are welcome to discuss this report with our inspector:” but the purchasers do not say whether they took up this offer. In all the 7 He Kaw Teh v The Queen (1985) 157 CLR 523 at 582. -- 3 of 4 -- 4 circumstances, I am persuaded that the nexus between Mr Dunn’s representation and the purchasers’ loss was severed by the RACQ report. [14] The Chief Executive’s decision on 12 March 2012, naming Mr Dunn as a responsible person, should be set aside. -- 4 of 4 --