Gallagher Bassett Services Pty Ltd v Insurserv Australia Pty Ltd - [2013] QCAT 140

CITATION:

Gallagher Bassett Services Pty Ltd v Insurserv Australia Pty Ltd [2013] QCAT 140

PARTIES:	Gallagher Bassett Services Pty Ltd (Applicant)
v
Insurserv Australia Pty Ltd Scott Hallewell (Respondents)

APPLICATION NUMBER:

GAR028-12

MATTER TYPE:

General administrative review matters

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Mr David Paratz, Member

DELIVERED ON:

27 March 2013

DELIVERED AT:

Brisbane

ORDERS MADE:

1. Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is partially allowed in the sum of $34,046.71.

2. Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period the Chief Executive must pay to the Applicant the sum of $34,046.71 from the Claim Fund, and if there is an appeal, payment must not be made until the appeal is finally decided.

3. Pursuant to section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the respondents Insurserv Australia Pty Ltd and Scott Andrew Hallewell are named as the persons liable for the financial loss of the Applicant.

4. Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, the respondents Insurserv Australia Pty Ltd and Scott Andrew Hallewell are jointly and severally liable to reimburse the Claim Fund by paying the sum of $34,046.71 to the Chief Executive, Department of Justice and Attorney-General.

CATCHWORDS:

Commercial agent – trust funds stolen, misappropriated or misapplied – client suffered financial loss – director liable

Property Agents and Motor Dealers Act 2000 ss 488, 489, 490, 530

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).

REASONS FOR DECISION

Insurserv Australia Pty Ltd (Insurserv) was a commercial recovery agent. It held a licence under the Property Agents and Motor Dealers Act 2000 (the Act). The sole Director and Secretary was Scott Hallewell. It was retained by Gallagher Bassett Services Pty Ltd (Gallagher).
Gallagher had claims management contracts with various petroleum companies to recover monies from negligent third parties on motor and property claims.
Gallagher says that the retainer of Insurserv involved administering debt recoveries, banking the recovered funds to its trust account, deducting its commission fees, remitting the balance of recovered fees to the Claimant, and operating a website access facility which allowed progress to be monitored.
It alleges that on or about 9 December 2008 it experienced a noticeable change in Insurserv’s responsiveness to enquiries by both email and telephone. In about mid December 2008 it was assured that payment of all outstanding funds would be made within 7 days, but this did not occur.
It has since been unable to contact Insurserv, and their office has been vacated.
Gallagher made a claim on the Claim Fund in Form 50 under the Act on 16 March 2009 for the amount of $76,034.72 in respect of approximately 187 active claims. It alleged that Insurserv and Mr Gallagher had stolen, misappropriated or misapplied the funds, causing resultant financial loss to Gallagher.
The Chief Executive of the Department of Justice and Attorney-General (the Chief Executive) appointed Insolvency & Turnaround Solutions as Receiver over the trust property of Insurserv on 3 April 2009 pursuant to s 420 of the Act.
An amended Claim Form was lodged on 17 April 2009, amending certain of the alleged dates.
A Claim Notice was sent to Insurserv and Mr Hallewell on 20 April 2009 notifying them of the claim. No response was received from either party. Gallagher gave notice that it wished to proceed with the claim on 21 May 2009.
A revised summary and spreadsheet was provided to the Receiver by Gallagher on 3 June 2011 for a claim total of $68,976.32
The Receiver produced a report in relation to Adjudication of the claim application on 20 December 2011. It reviewed the financial material. It verified the amount owing to Gallagher as $34,046.71, and proposed that the claim be referred to the Tribunal for hearing and decision.
The matter was referred to the Tribunal on 17 January 2012. Directions were made on 29 February 2012 as to the filing of material by the parties.
Gallagher filed an application on 16 March 2012 for leave to be represented. It subsequently sought leave to withdraw that application. On 24 April 2012 an Order was made that the application in whole was withdrawn. An application was then filed on 22 May 2012 to re-open the proceeding, and that was granted on 14 September 2012.
Directions were given on 12 December 2012 noting that Gallagher had filed all of its material that it wished to rely upon; directing Insurserv and Mr Hallewell to file any statements of evidence in response by 4pm on 25 January 2013; and directing that the application would be determined by a member of the Tribunal on the material already filed and without an oral hearing not before 25 January 2013.
Mr Hallewell is aware of these proceedings. On 9 November 2012 he sent an email to the Tribunal in response to letters he had received from the Tribunal dated 6 and 8 November 2012. In that email he raised queries as to documents which were said to have been provided to him, which he disputed. He made the following comments:-
The process appears to be very much one sided, and biased.
Any material that I receive, even thought they have failed to deliver to same to me personally, by either due date, will certainly be responded too.
My reply will require the material to be sent to the ACCC (Australian Consumer Competition Commission) and it is unlikely that a reply will be received until the February 2013.
I will not allow my opportunity to be heard to be stifled by a biased or abusive procedure.
Mr Hallewell telephoned the Tribunal Registry on 7 December 2012 and said that he would be attending the Directions Hearing on 12 December 2012 in person and would be faxing something through that afternoon.
Nothing was received by fax. It appears that Mr Hallewell did not appear in person at the Directions Hearing on 12 December 2012, but that he was telephoned, and it is noted in the file that Mr Hallewell appeared ‘momentarily’.
No material has been received from Insurserv or Mr Hallewell in accordance with the directions made on 12 December 2012.
Gallagher has submitted that there is sufficient evidence available in the Receiver’s report and supporting documentation to support the adjudication, and it requests that the Tribunal accept the adjudication of the matter by the receiver.
The Tribunal may allow a claim only if it is satisfied on the balance of probabilities that an event happened and that the claimant suffered financial loss - s 488(2).
The Tribunal must, if it allows the claim, decide the amount of the financial loss and name the person who is liable for the claimant’s financial loss - s 488(3).
The Act provides that an executive officer of a corporation is jointly and severally liable to reimburse a payment from the fund - s 490(2).
The Chief Executive has prepared draft orders.
I am satisfied on the balance of probabilities that:-
(a)Gallagher has suffered financial loss as a result of actions of Insurserv and/or Mr Hallewell.
(b)Gallagher is entitled to be paid from the Claim Fund.
(c)The adjudication decision is based upon a proper consideration of the matter, and should be accepted.
(d)Insurserv and Mr Hallewell are the liable parties under the legislation.
(e)Orders should be made directing the payment to Gallagher from the Claim Fund in the adjudicated amount.
Accordingly, I order in terms of the draft order prepared by the Chief Executive as follows:-
1.Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is partially allowed in the sum of $34,046.71.
2.Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period the Chief Executive must pay to the Applicant the sum of $34,046.71 from the Claim Fund, and if there is an appeal, payment must not be made until the appeal is finally decided.
3.Pursuant to section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the respondents Insurserv Australia Pty Ltd and Scott Andrew Hallewell are named as the persons liable for the financial loss of the Applicant.
4.Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, the Respondents Insurserv Australia Pty Ltd and Scott Andrew Hallewell are jointly and severally liable to reimburse the Claim Fund by paying the sum of $34,046.71 to the Chief Executive, Department of Justice and Attorney-General.