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Armstrong v Commissioner for Consumer Protection

Armstrong v Commissioner for Consumer Protection

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Case Copied 9 April 2014 56 min read

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: ARMSTRONG -v- COMMISSIONER FOR CONSUMER PROTECTION [2014] WASCA 71

CORAM: MARTIN CJ
NEWNES JA
MURPHY JA

HEARD: 9 SEPTEMBER 2013

DELIVERED : 9 APRIL 2014

FILE NO/S: CACV 147 of 2012

BETWEEN: TANYA ARMSTRONG
TILAI MORRISSEY
GRAHAM THOMSON AS TRUSTEE FOR TRAYNOR THOMSON FAMILY TRUST
CHOONG KIONG BOEY
BOON KEE NG
PAUL MORRISSEY
FASTPACE INVESTMENTS PTY LTD
RENNELK & SAMOHT PTY LTD AS TRUSTEE FOR RENNELK & SAMOHT FAMILY TRUST
DEE ELETRICAL SERVICES PTY LTD AS TRUSTEE FOR DEMPSEY FAMILY TRUST
MARTIN IHMS
NICOLE IHMS
PALMHEIGHTS PTY LTD AS TRUSTEE FOR G & D FAMILY TRUST
Applicants
AND
COMMISSIONER FOR CONSUMER PROTECTION
Respondent

ON APPEAL FROM:
Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Coram :JUSTICE J A CHANEY (PRESIDENT)

MR J MANSVELD (MEMBER)
MS C WINSOR (SESSIONAL MEMBER)

Citation :WILSON and COMMISSIONER FOR CONSUMER PROTECTION [2012] WASAT 200
File No :VR 130 of 2011

Catchwords:

Statutes - Settlement Agents Act 1981 (WA) - Claim against Fidelity Fund for loss sustained as a result of defalcation by settlement agent - Whether interest incurred in borrowing funds for investment recoverable - Reimbursement limited to the extent of the defalcation

Words and phrases - 'actual loss', 'defalcation', 'by reason of'

Legislation:

Land and Business Agents Act 1973 (SA)
Law Practitioners' Act 1982 (NZ), s 169
Legal Practitioners' Act 1981 (SA)
Legal Profession Act 2004 (Vic)
Legal Profession Practice Act 1958 (Vic)
Queensland Law Society Act 1952 (Qld)
Real Estate and Business Agents Act 1978 (WA)
Settlement Agents Act 1981 (WA), s 3, s 49, s 93(1), s 95, s 95(2), s 95(3)
State Administrative Tribunal Act 2004 (WA), s 105, s 105(7)
Strata Titles Act 1985 (WA), s 70, s 70A, s 70B, s 70(3), s 70(5)

Result:

Application for an extension of time to appeal dismissed
Leave to appeal refused
Appeal dismissed

Category: B

Representation:

Counsel:

Applicants: Mr I M O Matthews
Respondent: Mr M G S Crowley

Solicitors:

Applicants: Chew & Matthews
Respondent: Department of Commerce

Case(s) referred to in judgment(s):

Bontempo v Mirvac (WA) Pty Ltd [2012] WASC 104
Daly v Sydney Stock Exchange Ltd [1986] HCA 25; (1986) 160 CLR 371
Dobcol v Law Institute of Victoria [1979] VR 393
Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40; (2004) 221 CLR 309
Eumeralla Finance Co Pty Ltd v Law Institute of Victoria [1973] VR 98
Florence v New Zealand Law Society [1989] 1 NZLR 132
Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125
Legal Services Board v Gillespie-Jones [2013] HCA 35
March v E & M H Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506
Mirvac (WA) Pty Ltd v Yeo [2011] WASC 162
Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361
Public Trustee v The Attorney General for the State of South Australia & The Law Society [2000] SASC…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] WASCA 71
Decision Date: 9/04/14

CaseChat Overview and Summary

In Armstrong v Commissioner for Consumer Protection, the plaintiff sought compensation from the Fidelity Fund for losses incurred due to the defalcation of a settlement agent. The matter was heard in the Supreme Court of Western Australia. The plaintiff argued that the interest incurred on borrowing funds to invest should be recoverable as part of the actual loss sustained by reason of the defalcation. The defendant, the Commissioner for Consumer Protection, argued that the reimbursement should be limited to the extent of the defalcation itself.

The court was required to determine the scope of the term "actual loss" under the Settlement Agents Act 1981 (WA) and whether the interest incurred on borrowed funds was recoverable in the context of the defalcation by the settlement agent. The court considered the statutory language and the purpose of the Fidelity Fund, which is to compensate for losses due to defalcation, without extending beyond the actual loss caused by the defalcation.

The court held that the term "actual loss" in the statute should be interpreted narrowly and that the interest incurred on borrowed funds was not part of the actual loss caused by the defalcation. The reimbursement was thus limited to the amount of the defalcation itself. The court further held that the interest on the borrowed funds was a separate financial decision made by the plaintiff and not a direct consequence of the defalcation. As a result, the appeal was dismissed, and the application for an extension of time to appeal was also dismissed.

In conclusion, the court refused the plaintiff's request for leave to appeal and dismissed the appeal, upholding the decision that the reimbursement from the Fidelity Fund should be limited to the extent of the defalcation, excluding any interest incurred on borrowed funds.

Orders

Orders of the court

Application for an extension of time to appeal dismissed

Leave to appeal refused

Appeal dismissed

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MR J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: MR J

Full text does not contain this section.