Chief Executive of Department of Employment, Economic Development and Innovation v National Australia Bank Limited, Mr Leslie McGill, Trustee of Mr McGill's Bankrupt Estate
[2011] QCATA 295
•24 October 2011
| CITATION: | Department of Employment, Economic Development and Innovation v National Australia Bank Ltd and Ors [2011] QCATA 295 |
| PARTIES: | Chief Executive of Department of Employment, Economic Development and Innovation (Applicant/Appellant) |
| v | |
| National Australia Bank Limited (First Respondent) Mr Leslie McGill (Second Respondent) Trustee of Mr McGill’s Bankrupt Estate (Third Respondent) |
| APPLICATION NUMBER: | APL277-10 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Judge Fleur Kingham, Deputy President |
| DELIVERED ON: | 24 October 2011 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The appeal is dismissed. |
| CATCHWORDS: | APPEAL – PAMDA – CLAIM AGAINST THE FUND – MOTOR DEALERS – FALSE OR MISLEADING REPRESENTATION – where the Bank lent money for purchase of motor vehicles in reliance on false or misleading invoices issued by motor dealer – where invoices presented to the Bank by an associate of the motor dealer – whether the representation was made to the Bank – whether Member erred in concluding the person to whom the representation was made need not be the same person who made the claim Property Agents and Motor Dealers Act 2000, ss 408, 470 Advance Finance Pty Ltd v Tuff Toys Qld Pty Ltd & Ors [2010] QCAT 525 cited |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act2009 (QCAT Act).
REASONS FOR DECISION
This is an appeal by the Chief Executive of the Department of Employment, Economic Development and Innovation (DEEDI) against a decision by a Member of the Tribunal that the National Australia Bank should be paid the sum of $150,040 from the claim fund established under the Property Agents and Motor Dealers Act 2000.[1]
[1] Property Agents and Motor Dealers Act 2000, s 408.
The claim against the fund related to conduct by Mr McGill, a licensee under PAMDA, then the principal of Les McGill Auto Wholesale, a motor dealer’s business. The NAB made a loan to W Lanham Marketing Pty Ltd, purportedly in order for Lanham to purchase a prime mover and a trailer. The NAB made the loan on production of invoices for the vehicles issued under McGill’s business name. Mr McGill prepared the invoices. In fact, the vehicles did not exist. The NAB has not recovered the loan from Lanham. It made a claim against the fund for the value of the loan.
A person can make a claim against the fund if they suffer financial loss because of the happening of specified events.[2] The relevant event in this case is a breach of s 574 of PAMDA. Relevantly, that section provides that a licensee must not represent in any way to someone else anything that is false or misleading in relation to the sale of property.
[2] Property Agents and Motor Dealers Act 2000, s 470.
On appeal there was no dispute that:
a)Mr McGill is a person whose actions are subject to PAMDA;
b)Mr McGill made false or misleading representations when he issued the invoices;
c)Those representations were that the vehicles existed and that he had received a deposit from the purchaser;
d)There was no evidence that Mr McGill made any attempt to verify the existence of the vehicles;
e)Mr McGill had not received a deposit for the vehicles; and
f)The NAB relied on the representations when it lent the purchase monies to Lanham.
DEEDI has appealed on one ground only: that the learned Member erred in determining that the someone else to whom the representation is made in breach of s 574, need not be the same person who suffers the loss because of the representation.
Appeals to the Appeal Tribunal may proceed without leave on a question of law.[3] The distinction between questions of law and fact is not always clear.[4] I respectfully adopt the following observation by the Supreme Court of Canada as providing useful guidance:[5]
Briefly stated, questions of law are questions about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests.[6]
[3] Queensland Civil and Administrative Tribunal Act 2009, s 142.
[4] See Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389, 394.
[5] Canada (Director of Investigation and Research) v Southam Inc [1997] 1 SCR 748.
[6]Canada (Director of Investigation and Research) v Southam Inc [1997] 1 SCR 748 at [35] per Iacobucci J.
DEEDI asserts its appeal raises a question of law only and that does not appear to be in dispute.
The point of contention arises because Mr McGill did not provide the invoices directly to the NAB. He gave them to another person, Mr Sinclair, who gave them to the NAB.
DEEDI’s case is that the person who suffers the loss and makes the claim against the fund must be the same person to whom the representations were made. It argued that the representations were made to Mr Sinclair, not to the NAB and, therefore, the NAB cannot claim against the fund.
[10] The NAB contended the point does not arise because the representations were made to the NAB. Alternatively, it argued, the person to whom the representations are made need not be the person who makes the claim against the fund, as long as the loss was suffered because of the breach of s 574.
Were the representations made to the NAB?
[11] In his defence, Mr McGill admitted that he was aware the purchases of the vehicles were to be financed. The evidence[7] before the learned Member at first instance also supports the further findings that:
a)The invoices were prepared on information supplied to Mr McGill by another person;
b)Mr McGill provided the invoices to Mr Sinclair; and
c)When he provided them, Mr McGill knew and intended Mr Sinclair would use the invoices to obtain finance for the purchase.
[7]Mr McGill’s statement given to the Qld Police Service (undated) and the transcript of his interview by Investigator Linnane (which took place on 9 September 2005); and the file note of Investigator Linnane’s conversation with Mr Sinclair (which took place on 7 November 2005).
[12] The parties have framed their submissions to address the question whether the representations were made to the NAB. Yet, in fact, their arguments address a different and more pertinent question: whether it was Mr McGill who made the representations. There is no dispute that representations were made to the NAB when Mr Sinclair presented it with the invoices. The issue is whether they were Mr McGill’s representations.
[13] The fact that Mr McGill did not personally provide the invoices to the NAB is of no consequence. He provided them to Mr Sinclair knowing and intending Mr Sinclair would use them to secure finance on a transaction for which Mr McGill would receive a brokerage fee. It does not matter that Mr McGill did not specifically identify or instruct Mr Sinclair to provide them to the NAB for that purpose. Mr Sinclair was authorised to provide the invoices to any potential financier.
[14] Mr Sinclair acted within the express terms of his authority from Mr McGill. Whilst Mr Sinclair physically provided the invoices to the NAB, he did so as Mr McGill’s agent in completing a transaction on which Mr McGill would receive a brokerage fee. Mr Sinclair’s interposition, then, between Mr McGill and the NAB does not mean that Mr McGill did not make the representation to the NAB.[8]
[8]Australasian Brokerage Ltd v Australian & New Zealand Banking Corp Ltd (1934) 52 CLR 430.
[15] If that finding is correct, the question of law raised by this appeal does not arise for consideration. Nevertheless, these reasons will address the question in case that finding is wrong.
Does the ‘someone else’ to whom the representation is made have to be the same person who has suffered the loss and makes the claim?
[16] If it is accepted that the representations were not made to the NAB, or, properly stated, that Mr McGill made the representations to Mr Sinclair, not to the NAB, does this preclude the NAB from making a claim on the fund?
[17] The learned Member decided DEEDI’s argument was bound to fail because of former decisions of the Commercial and Consumer Tribunal[9]. It can be inferred that she did not consider herself bound as a matter of precedent, as she observed that the point had not been expressly decided in either case. Rather, it seems, she was persuaded that the assumption, apparently made by all parties and the Tribunal Members in those cases, was a correct one, although she did not explain why.
[9]Suncorp Metway v McGill [2007] QCCTPAMD 29; BMW Australian Finance Ltd, The Chief Executive, Office of Fair Trading v VRUS Holdings Pty Ltd [2009] QCCTPAMD 31.
[18] The submissions by the NAB also rely on this line of authority that, it argued, established an accepted principle. It is hard to see how cases that do not address a point can establish a principle that determines the point.
[19] The NAB also relied on Advance Finance Pty Ltd v Tuff Toys Qld Pty Ltd & Ors[10], a case decided after the decision under appeal. In that case, the same Member who decided the decision under appeal, found a dealer breached s 574 when an intermediary provided an invoice to a financier, which was false or misleading.
[10]Advance Finance Pty Ltd v Tuff Toys Qld Pty Ltd & Ors [2010] QCAT 525.
[20] She did not directly address whether this meant the dealer, rather than the intermediary, made the representation to the financier. Evidently this is because, correctly in my view, she identified the questions she had to determine were:
a)Whether the dealer had made a false or misleading representation to someone else; and
b)Whether the financier suffered loss because of that representation.
[21] In that case, the claim failed at the hurdle of causation. That is, the learned Member was not satisfied the financier suffered loss because of the representation.
[22] Respectfully, that is the correct approach to determining entitlement to claim against the fund. As a matter of construction, the Tribunal must make two distinct findings in order for a person to be entitled to recover a claim against the fund under s 470: firstly, that a relevant event occurred; and secondly, that the claimant suffered loss because that event happened.
[23] A focus on identity (of the claimant and the representee) distracts from the critical question, which is one of causation.
[24] Although the learned Member did not sufficiently expose her reasoning, her conclusion that the NAB was entitled to claim against the fund is correct.
[25] DEEDI did not argue on appeal that the NAB did not suffer loss because of the representation and, therefore, causation is not in issue.
[26] Accordingly, the appeal must fail on either view of the case. On the evidence before the learned Member, the representations were made to the NAB. Further, because there was a breach of s 574, the question was not the identity of the claimant, but whether the NAB suffered loss because of the breach. On appeal, causation is not in issue.
[27] Before concluding, there was another argument raised by DEEDI in its submissions that warrants consideration. DEEDI argued the Appeal Tribunal should construe s 574 in such a way that a financier may not claim against the fund for loss arising from a false or misleading representation.
[28] That is a different question to the one raised by the ground of appeal. While it is accepted that consumer protection is an objective of PAMDA there is nothing in the language of sections 470 or 574 that would support the restrictive interpretation urged by DEEDI.[11] If it was Parliament’s intention that a financier that suffered loss because of a relevant event could not recover against the fund, that could have been provided. In the absence of a clear intention to exclude financiers from claiming against the fund, the Appeal Tribunal sees no reason to depart from applying the ordinary meaning of the words.
[11] Jomal v Commercial and Consumer Tribunal [2009] QCA 326, [56].
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