Jenkins v Stato Pty Ltd
[2012] QCAT 99
•28 February 2012
| CITATION: | Jenkins v Stato Pty Ltd and Ors [2012] QCAT 99 |
| PARTIES: | Bruce Jenkins |
| v | |
| Stato Pty Ltd t/as Gold Coast Motor Auctions Kenneth Greaves Clint Andela Christopher Royston formerly t/as Global Prestige Motors |
| APPLICATION NUMBER: | OCL148-10 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | 6 October 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Sandra G Deane, Member |
| DELIVERED ON: | 28 February 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The claim against the fund is rejected. |
| CATCHWORDS: | PROPERTY AGENT AND MOTOR DEALER ACT – claim against fund – motor dealers – whether false and misleading representations – whether neglect or default of claimant reduces or extinguishes amount otherwise payable Property Agents and Motor Dealers Act 2000, ss 470, 476, 488, 492, 530, 574 Henville v Walker [2001] HCA 52 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Bruce Jenkins appeared in person |
| RESPONDENT: | Stato Pty Ltd t/as Gold Coast Motor Auctions No appearance on behalf of Clint Andela or Christopher Royston formerly t/as Global Prestige Motors |
REASONS FOR DECISION
Background
Mr Jenkins made a claim against the statutory fund under the Property Agents and Motor Dealers Act 2000 (the Act). All of the Respondents are parties whose actions are alleged to give rise to the claim. The claim was referred by the Office of Fair Trading (OFT) for determination[1].
[1]Section 476(1) of the Act requires that the Chief Executive refer to claim to the Tribunal if it exceeds $10,000.
I was satisfied that all parties had been given notice of the hearing and that it was appropriate to hear and determine the claim.
In February 2009 Mr Jenkins acquired a black BMW 735Li (the Vehicle) as a consequence of dealings with Mr Andela.
Stato Pty Ltd holds a Motor Dealer Corporation Licence issued on 28 July 1994 and which expires on 27 December 2012 and trades as Gold Coast Motor Auctions.
Mr Greaves is the director of Stato Pty Ltd and holds a Motor Dealer Principal Licence issued on 28 July 1994 and which expires on 27 December 2012.
According to OFT’s records Mr Andela has never held a motor dealer’s licence.
Mr Royston held a Motor Dealer Licence issued on 2 June 1988 which expired on 2 June 1996. He traded as Global Prestige Motors.
Mr Jenkins’ claim is based on representations made by Mr Andela and the other respondents in relation to the age of the vehicle, its mileage and its condition.
Mr Jenkins’ amended claim was set out in his submissions filed 31 August 2011. The amended claim was for an amount of $61,285.96 calculated as follows:
a) $485 – the cost of obtaining a valuation ($250); the cost of a safety certificate ($60) and the cost of obtaining an RACQ report ($175);[2]
b) $20,000 – difference in value;
c) $27,912.61 – cost of repair to make Vehicle roadworthy;
d) $12,888.35 – interest calculated to hearing date on the above;
e) $16.97 – interest per day after the hearing date until payment.
[2] Statement of Bruce Jenkins dated 5 March 2010, para [72].
Law
Claims against the fund must meet the legislated requirements. There are several elements that are prescribed which must be proved before the Tribunal is empowered to order amounts be paid out of the fund. The Act prescribes the types of losses in respect of which claims are and are not payable. Not all wrong doing by a licensee gives rise to a valid claim against the fund.
Section 492(5) of the Act provides that interest is not payable from the fund in relation to a claim allowed against the fund. No amount can therefore be payable for interest claimed by Mr Jenkins. The Tribunal has no discretion in relation to such a matter.
Section 488 of the Act provides that the Tribunal may allow a claim for compensation only if it is satisfied, on the balance of probabilities:
a) that an event mentioned in section 470(1) of the Act happened;
b) the claimant suffered financial loss because of the happening of the event.
The events are actions by a relevant person.
Section 469 of the Act provides that relevant person includes a licensee, an employee or agent of a licensee, former licensee, a person who is not a licensee but who acts as a licensee and a person who carries on business with a licensee.
Further pursuant to section 488 of the Act the Tribunal must also take into account any amount the claimant might reasonably have received or recovered if not for the claimant’s neglect or default and any amount ordered to be paid to the claimant as compensation to the claimant under sections 530A, 572D or 592A of the Act.
If the Tribunal allows the claim wholly or partly it must decide the amount of the loss and name the person liable.
Section 530 of the Act provides that the Tribunal may make the following orders in relation to a claim against the fund—
a) an order allowing the claim, wholly or partly, or rejecting the claim;
b) an order stating that a named person is liable for a claimant's financial loss and the amount of the loss;
c) an order about recovery of an amount payable in relation to a claim;
d) an order that no amount is recoverable in relation to a claim.
Section 574(1) of the Act 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.
Section 574(4) of the Act provides that if the person making the representation does not have reasonable grounds for making the representation it is taken to be misleading. The onus on establishing reasonable grounds is on the person who made the representation.[3]
[3] Section 574(5) of the Act.
Evidence and Submissions
Mr Jenkins gave evidence that:
a) He is a director of a corporate finance consultancy services company and has been a self employed business person for over 25 years.
b) In December 2008 Mr Jenkins was introduced to Mr Andela at the offices of Mr Andrew Papadopoulos. From time to time Mr Andela used secretarial services at these offices. These premises were not a car yard or a motor dealer’s premises.
c) On the occasion Mr Andela was introduced to him Mr Andela showed Mr Jenkins a black BMW 735Li (the Vehicle) and represented to Mr Jenkins that the Vehicle had travelled 96,000 km and was a 2003 model (initial occasion).
d) The Vehicle was outside Mr Papadopoulos’ offices in a car park.
e) He did not:
i)obtain a business card from Mr Andela.
ii)ask Mr Andela what he did for a living.
f) Mr Andela told him that he worked with a lot of car dealers.
g) Mr Andela did not tell him that Mr Andela was a car dealer.
h) Mr Andela offered Mr Jenkins a number of different vehicles as alternatives to the Vehicle.[4]
[4] Exhibit 5 paragraph 3 and 4.
i) The initial discussions took place over a period of approximately 20 minutes.
j) He relied upon Mr Andela’s statements because he believed Mr Andela was a car dealer.
k) The Vehicle’s external appearance was impressive.
l) He noted that the registration was about to expire and indicated to Mr Andela that he would be interested in doing a deal at ‘an all in price’ of $70,000 inclusive of stamp duty and six months registration.
m) During December 2008 Mr Jenkins made it known to Mr Andela that he would want finance if he was to acquire the Vehicle. Discussions occurred with Mr Andela over a period of some weeks during which Mr Andela offered to organise finance.
n) He saw the Vehicle again between mid January and early February 2009 at which time he sat in the Vehicle (subsequent occasion) (I note that there is no evidence as to where this occurred and therefore no evidence that it occurred at a car yard or motor dealer’s premises).
o) He did not, on either the initial occasion or the subsequent occasion:
i)check the odometer of the Vehicle to verify the number of kilometres;
ii)take the Vehicle for a test drive or ask to take the Vehicle for a test drive;
iii)ask for Mr Andela to start the Vehicle;
iv)take any steps to verify the age or mileage of the Vehicle.
p) Mr Andela referred to Mr Royston as the dealer.
q) Mr Andela told Mr Jenkins that the Vehicle was being sold by Gold Coast Motor Auctions.[5] (I note that Mr Jenkins did not give evidence of when this conversation occurred and did not give evidence of it until his statement of 1 September 2011 and it appears inconsistent with his other evidence. Under cross examination Mr Jenkins stated that he thought Mr Royston was the Principal of Gold Coast Motor Auctions. There is no evidence of any steps Mr Jenkins took prior to the transaction completing to contact Gold Coast Motor Auctions directly or of any enquiries Mr Jenkins made as to whether it was a licensed motor dealer).
[5] Exhibit 5 at paragraph 8.
r) During the period December 2008 to February 2009 Mr Jenkins did some research as to the price of comparable vehicles[6] which confirmed that $70,000 “drive away” was an acceptable price and sent Mr Andela documents such as his driver’s licence and bank statements to progress a finance application.
[6] Exhibit 2 at paragraphs 15, 16 and 17.
s) Finance was arranged through Esanda Finance. An Offer To Hire was prepared.[7]
[7] Exhibit 2 Exhibit BJ1 page 1 (first page only).
t) Stato Pty Ltd provided an invoice dated 6 February 2009 to Esanda. The invoice stated that the Vehicle was a 2003 model and had travelled 90,701 km. Mr Jenkins did not see a copy of this invoice prior to the transaction completing.
u) He believes he was given a finance application to sign. He recalls it was incomplete but does not recall that it was inaccurate. He does not have a copy of the application.
v) He signed documents relating to the transaction provided by Mr Andela on 6 February 2009 and returned them to Mr Andela by email that day.
w) He accepts that the Offer To Hire is inaccurate as the document refers to a deposit of $5,000. He did not pay a deposit.
x) On 6 February 2009 he asked Mr Andela when he could pick up the Vehicle.
y) Mr Andela informed him that settlement might be that day (Friday 6 February) or on Monday (9 February 2009) and that he would get the Vehicle to Mr Jenkins after settlement.
z) After he had signed and returned the finance documents Mr Andela informed him by telephone on 6 February 2009 that the Vehicle had travelled 240,000 km rather than 96,000 km.
aa) He did not seek to terminate the transaction due to the earlier misrepresentation as to mileage but rather he negotiated a $26,000 reduction in the price for the Vehicle.
bb) He did not seek to inspect the Vehicle to verify the odometer reading after being informed of the misrepresentation.
cc) He did not seek to inform Esanda of the misrepresentation or the negotiated price reduction.
dd) After taking delivery of the Vehicle on 10 February 2009 he looked at the odometer. It read 459,208 km, which was consistent with the service book. He discovered it was a 2002 model.
ee) He did not receive a contract, a safety certificate or any other documents when he took delivery of the Vehicle.
ff) On 11 February 2009 he received part only of the agreed price reduction being the sum of $22,000. His bank statement identifies it as having been paid by Mr Andela from Global Prestige.[8]
[8] Exhibit 11.
gg) He had effectively paid $48,000 for the Vehicle.
hh) He did not pay to Esanda the amount received in reduction of the price. (He did not give an explanation for failing to do so.)
ii) He obtained a valuation of the Vehicle from Queensland Motor Valuations at a cost of $250.[9] The Vehicle was valued at $28,000.[10]
jj) On 11 February 2009 he obtained a report from Lube Mobile noting that the Vehicle is not safe to drive.
kk) On 13 February 2009 the Vehicle was inspected by Mark Jackson Automotive and failed to pass a safety certification inspection. Mr Jenkins incurred a cost of $60 in seeking the certificate[11].
ll) On 17 February 2009 he obtained a report from RACQ. The RACQ report cost $175.[12]
mm) On 17 February 2009 he handed a defects list to Mr Andela, which attached copies of these inspection reports.[13]
nn) On 27 February 2009 he sent a defects list to Stato Pty Ltd by mailing a copy to and leaving a copy at Stato Pty Ltd’s address given on its website and in the Yellow Pages listing.[14]
oo) After many complaints to Mr Andela the Vehicle was eventually registered in his name but as it is unroadworthy it cannot be driven without extensive repairs being performed.
pp) He has not had the repairs undertaken and is awaiting the outcome of these proceedings.
qq) He has bought and sold many vehicles across a lengthy period of time and has financed vehicles before this transaction but has only ever bought vehicles from licensed dealers because the vehicle then comes with protections as to title, warranty and roadworthiness.
[9] Exhibit 2 paragraph 72.
[10] Exhibit 2 paragraph 68 and attachment BJ1 at pages 22-23 of 38.
[11] Exhibit 2 paragraph 72.
[12] Exhibit 2 paragraph 72.
[13] Exhibit 2 paragraph 56 and attachment BJ1 at page 3-8 of 38.
[14] Exhibit 2 paragraph 56 and attachment BJ1 at page 9-16 of 38.
Mr Love, an experienced BMW mechanic, gave evidence that:
a) He inspected the Vehicle shortly after Mr Jenkins acquired the Vehicle.
b) The Vehicle didn’t smoke much when it idled but smoked a lot when ‘revved’.
c) There were flashing lights/warning messages which were displayed on the screen in the centre of the dash which directed you to perform computerised diagnostic tests.
d) He provided quotes to Mr Jenkins to perform work required.
e) The first quote is dated 2 March 2009[15]. The most recent quote is dated 15 February 2011 and is in the amount of $27,912.61.[16]
f) The following items in the quote totalling $1,859.10 are not roadworthy items:
i)Labour to replace A/C Compressor $138.00
ii)Labour to repair boot release $350.00
iii)Labour to replace PDC Sensor $73.60
iv)Parts – Reco Compressor A/C $874.50
v)Parts – PDC Sensor $423.00
g) The other items are roadworthy items and total $26,053.51.
[15] Exhibit 6 attachment B-001.
[16] Exhibit 6 attachment B-002.
There was no other evidence tendered in relation to the cost of making the Vehicle roadworthy. I accept Mr Love’s evidence.
Ms Willis, the Office of Fair Trading Officer who investigated Mr Jenkins’ claim, gave evidence that:
a) The one page Offer to Hire document was provided to her by Mr Jenkins.
b) Her enquiries with Esanda revealed that Esanda had received an application on 23 December 2008 which represented that the Vehicle was a 2003 model with 51,000 km and it had been approved on 24 December 2008. (Mr Jenkins gave evidence that he was not aware of such an application).
Mr Jenkins tendered an unsigned statement by Mr Papadopoulos. There being no objection on behalf of Stato Pty Ltd or Mr Greaves I agreed to receive it into evidence if a signed written statement was provided to the Tribunal by no later than the following day. The signed statement is dated 7 October 2011 and was received that day.
Mr Papadopoulos gave evidence that he had dealings with Mr Andela in connection with purchasing vehicles, he had purchased two vehicles through Mr Andela and that Mr Andela had offered to him a number of vehicles including the Vehicle.
Mr Greaves gave evidence that:
a) He was not the dealer selling the Vehicle.
b) He had no dealings with Mr Jenkins in relation to selling the Vehicle.
c) Mr Royston asked him to provide an invoice in relation to a transaction to assist in gaining finance through Esanda.
d) He agreed to do Mr Royston a favour and his assistant prepared the invoice based upon the information provided by Mr Royston.
e) The invoice did not state who the owner of the Vehicle was and he regarded the invoice as having been issued as agent for Mr Royston.
f) He was not aware that Mr Royston was unlicensed at the time.
g) He did not take any steps to verify the information provided by Mr Royston which was set out in the invoice. (I note that from the face of the invoice he did not record the asserted agency in the invoice.)
h) On 9 February 2009 Stato Pty Ltd received into its bank account the sum of $70,000 from Esanda and paid the sum of $70,000 to Global Prestige on 10 February 2009 in relation to this transaction.[17]
i) He recalled that he got a letter months afterward relating to the Vehicle which he gave to Mr Royston to sort out.
[17] Exhibit 10 Attachment 1.
Discussion and Decision
The claim may be allowed, either partly or wholly, only if, on the balance of probabilities, an event described in section 470(1) of the Act happened, and the claimant suffered financial loss because of the happening of the event. Further, if the claim is allowed wholly or in part, the matters referred to in section 488(3) of the Act must be considered.
Was there an event?
Mr Jenkins submits that each of the Respondents was a “relevant person”.
On the basis of the evidence given by Mr Jenkins, Mr Papadopolous and Mr Greaves I find that Mr Andela:
a) acted as a licensee by offering multiple vehicles for sale to Mr Jenkins and Mr Papadopoulos including the Vehicle; or
b) was an employee or agent of Mr Royston or carried on business with Mr Royston.[18]
[18] Section 469 of the Act.
I also find that each of the other Respondents were relevant persons being licensees or former licensees.
Stato Pty Ltd and Mr Greaves admit that the invoice was inaccurate as to age and mileage but contend that in accordance with section 574(4) of the Act they have a defence because they had reasonable grounds for making the misleading representation as to age and mileage.
I am not satisfied that simply producing an invoice relying upon the information provided by Mr Royston without taking any steps to verify the information constitutes reasonable grounds.
I find that on the balance of probabilities each of the Respondents contravened the Act as each misrepresented the age and mileage of the Vehicle and as such I find that there was an event for the purposes of section 470 the Act.
The misrepresentations were made to Mr Jenkins by Mr Andela, to Stato Pty Ltd by Mr Royston and by Stato Pty Ltd and Mr Greaves to Esanda.
Mr Jenkins also claims that there were false and misleading representations about the roadworthy condition of the Vehicle arising from the fact that a motor dealer warrants that a vehicle it sells is roadworthy.
Mr Jenkins submits that Mr Andela impliedly warranted that the Vehicle was roadworthy because he believed he was a motor dealer and acted as if he were a licensee by offering multiple vehicles for sale.
The difficulty with this submission is that other people represented to Mr Jenkins that Mr Andela was a dealer but Mr Andela did not. Mr Jenkins’ evidence is that Mr Andela did not tell him that he was a dealer or give him a business card nor did Mr Jenkins meet with him at a car yard.
There is no evidence before the Tribunal that Mr Andela made any express representations as to roadworthiness prior to the transaction completing such as telling Mr Jenkins that the Vehicle had a safety certificate.
In the circumstances there is insufficient evidence to find that Mr Andela misrepresented the condition of the Vehicle to Mr Jenkins.
Mr Jenkins gave evidence that Mr Andela told him that the Vehicle was being sold by Gold Coast Motor Auctions. Mr Jenkins appears to submit that therefore Stato Pty Ltd, a licensed dealer impliedly represented to him that the Vehicle was roadworthy.
The difficulty with this submission is that there is no evidence before the Tribunal that Mr Andela was employed by Stato Pty Ltd or had any authority to act on its behalf or that Stato Pty Ltd held Mr Andela out as its agent or held itself out to Mr Jenkins that it was the dealer or in fact had any knowledge of this transaction prior to being asked to produce an invoice to Esanda. In fact Mr Greaves’ evidence is to the contrary. There is also no evidence that Mr Jenkins went to Stato Pty Ltd’s car yard or received any correspondence or contract documents from it.
In the circumstances there is insufficient evidence to find that Stato Pty Ltd misrepresented the condition of the Vehicle to Mr Jenkins.
Mr Jenkins submits that Stato Pty Ltd and Mr Greaves by issuing the invoice to Esanda represented that Stato Pty Ltd, a licensed motor dealer, was selling the Vehicle and that it therefore impliedly warranted to Esanda that the Vehicle was roadworthy.
Stato Pty Ltd and Mr Greaves submit that they were not the dealer and that they were merely acting as agent for Mr Royston.
The difficulty with this submission is that the invoice does not mention Mr Royston or any agency concept. On the face of the invoice Stato Pty Ltd is selling the Vehicle to Esanda and is asking for the balance of $70,000 to be deposited to its bank account.
I find on the balance of probabilities that Stato Pty Ltd impliedly represented to Esanda that the Vehicle was roadworthy and that Stato Pty Ltd contravened the Act as it misrepresented the condition of the Vehicle. I therefore find that there was an event for the purposes of section 470 of the Act.
Did the Event(s) Cause Financial Loss?
Mr Jenkins submits that but for the misrepresentations:
a) made to him by Mr Andela in relation to mileage and age of the Vehicle, he would not have proceeded with the transaction and would not have suffered loss.
b) made to Esanda by Stato Pty Ltd in the invoice dated 6 February 2009, Esanda would not have advanced the money and Mr Jenkins would not have suffered loss because the acquisition of the Vehicle would not have occurred.
On behalf of Stato Pty Ltd and Mr Greaves it was submitted that:
a) The misrepresentations in the invoice were made to Esanda and not to Mr Jenkins;
b) Mr Jenkins did not purchase the Vehicle, is not the owner of the Vehicle and has not suffered the loss claimed relating to diminution of value.
c) Loss may be claimable by Esanda.
d) The representation being made on 6 February 2009 it could not be said to have been relied upon by Esanda or Mr Jenkins to enter into the financing contract as the finance was approved in December 2008.
e) When Mr Andela informed Mr Jenkins on 6 February 2009 that the mileage was 240,000 km rather than the previously represented 96,000 km a new contract or a varied contract arose and Mr Jenkins ceased to rely upon representations made earlier.
f) The Tribunal should apportion any loss found (as between Respondents and as between the Respondents and Mr Jenkins) and cited authority for the proposition that it is open to apportion loss regardless of what the statute says[19].
g) Stato Pty Ltd and Mr Greaves ought only be responsible for loss arising out of the misrepresentation as to age and mileage and not in respect of any misrepresentation as to the Vehicle’s condition because they were not the dealer in this transaction.
h) There is insufficient evidence that Esanda would not have advanced the funds if the invoice had not been provided.
i) The evidence was that finance was approved on the basis of a misrepresentation of mileage of 51,000 km. This misrepresentation was made by someone other than Stato Pty Ltd or Mr Greaves.
j) Mr Jenkins had not established the causal connection between the misrepresentation to Esanda and his loss and that there had been supervening events which severed the connection.
[19]Henville v Walker [2001] HCA 52; I&L Securities Pty Ltd v HTW Valuers (Bne) Pty Ltd [2000] QCA 383.
The Tribunal and the Commercial and Consumer Tribunal have previously found that the claimant under the fund need not be the person to whom the misrepresentation was made.[20]
[20]National Australia Bank Limited v McGill [2010] QCAT 478; Suncorp Metway Ltd v McGill [2007] QCCTPAMD 29; BMW Australian Finance Ltd, The Chief Executive, Office of Fair Trading v VRUS Holdings Pty Ltd [2009] QCCTPAMD 31.
The Tribunal has previously accepted that the misleading conduct does not need to be the only factor in a decision to enter into a transaction.[21]
[21] Advance Business Finance Pty Ltd v Tuff Toys Qld Pty Ltd & Ors [2010] QCAT 525.
Mr Jenkins submitted that financiers will not finance transactions unless vehicles are purchased through licensed motor dealers. Unfortunately Mr Jenkins did not give any evidence as to this matter either from Esanda or otherwise. The matter was challenged on behalf of Stato Pty Ltd and Mr Greaves.
There is no evidence before the Tribunal as to whether Esanda would have refused to advance the funds if it was aware that the Vehicle was unroadworthy.
There is insufficient evidence to make a finding that the implied misrepresentation as to condition made to Esanda caused financial loss.
I find that no amount is payable from the claim fund in respect of the claimed repair costs to make the Vehicle roadworthy or in respect of the cost of the RACQ condition report or the cost of seeking a safety certificate.
Mr Jenkins submits Esanda would not have advanced the funds if it had not received the invoice which made express misrepresentations as to age and mileage.
There is no evidence before the Tribunal as to whether Esanda would have refused to advance the funds if it had not received the invoice setting out the description of the Vehicle. It is possible that Esanda required an invoice to support the transaction before it would advance the funds but there is no evidence about this matter.
There is insufficient evidence to find that the misrepresentations to Esanda as to age and mileage caused financial loss.
If I am wrong about this and there is sufficient evidence to find that Esanda would not have advanced the funds if it had not received an invoice misdescribing the Vehicle then Mr Jenkins has established the misrepresentation as to age and mileage to Esanda caused financial loss.
It would then be necessary to determine the amount to paid out of the fund.
Mr Jenkins also submits that but for the misrepresentations made to him by Mr Andela in relation to mileage and age of the Vehicle, he would not have proceeded with the transaction and would not have suffered loss. This submission must be viewed as relating primarily to the misrepresentation as to age and the misrepresentation as to mileage made on 6 February 2009 because Mr Jenkins did proceed with the transaction after being told of the earlier misrepresentation as to mileage on the basis of a reduction in the price.
I find that the misrepresentations made by Mr Andela to Mr Jenkins as to age and as to mileage made on 6 February 2009 were factors which lead Mr Jenkins to proceed with a transaction to acquire the Vehicle and therefore caused financial loss.
The Offer To Hire sets out that Esanda will hire the Vehicle to Mr Jenkins in return for Mr Jenkins paying 60 monthly rental payments. The rental payments are calculated by reference to the $70,000 to be paid by Esanda, various fees and Terms Charges (in the nature of interest on the amount advanced). Unhelpfully only page 1 of the 2 page Offer to Hire has been placed into evidence.
Mr Jenkins’ loss arises out of increased payments to Esanda based on the amount advanced being the price of the Vehicle. There is no evidence before the Tribunal as to how that loss should be calculated. I accept that some loss would more than likely have been suffered and the loss would be calculated by reference to the diminution in value after taking into account the amount refunded directly to Mr Jenkins.
I find that this net diminution in value of the Vehicle approximates the loss suffered by Mr Jenkins even though he is technically a hirer rather than an owner.
The only evidence before the Tribunal as to the value of the Vehicle is the Queensland Motor Valuations valuation dated 18 March 2009 in the amount of $28,000. I accept that as the valuation of the Vehicle.
Mr Jenkins gave evidence that the valuation cost $250.
I find that Mr Jenkins’ loss is $20,250.
The loss is calculated as follows:
a) Advance by Esanda $70,000
b) Less amount refunded direct $22,000
c) Less Valuation $28,000
d) Diminution of value $20,000
e) Plus cost of valuation $ 250
f) Loss $20,250
Section 488(3) Matters
There is no evidence that any amounts of compensation have been ordered to be paid under sections 530A, 572D or 592A of the Act.
Mr Jenkins is and was at the time of the transaction an experienced business person who has bought and sold many vehicles and to whom it was important to only buy vehicles from licensed dealers.
On the evidence before the Tribunal he chose:
(a) to acquire a car from Mr Andela who did not represent to Mr Jenkins that he was a licensed dealer (although other people known to Mr Jenkins made such representations), who did not have the trappings of being a licensee in that he did not provide him with a business card or deal with him at a dealer’s premises;
(b) to rely upon the fact that he believed Mr Andela was a licensed dealer;
(c) not to make any enquiries to verify the representations made by Mr Andela as to the mileage and age of the Vehicle by for example taking the simple step of checking the odometer or checking the service book despite having at least two opportunities to do so prior to 6 February 2009;
(d) not to take the Vehicle for a test drive or even ask for the Vehicle to be started despite having at least two opportunities to do so prior to 6 February 2009;
(e) not to make any enquiries to verify the representations made by Mr Andela as to the mileage even after Mr Andela had told him he had significantly misrepresented the mileage to him;
(f) not to seek to terminate the transaction upon being informed of the significant misrepresentation;
(g) not to inform Esanda of the significant misrepresentation;
(h) to seek a reduction in the price;
(i) not to seek to return the Vehicle to Mr Andela pursuant to section 302 of the Act after taking delivery of it and discovering the true odometer reading and condition of the Vehicle.
As identified earlier in these Reasons there was no evidence before the Tribunal that Mr Jenkins took any steps prior to the transaction completing to contact Gold Coast Motor Auctions directly or that he made any enquiries as to whether it or any of the parties he was dealing with were a licensed motor dealer. The lack of evidence about this matter is inconsistent with Mr Jenkins’ evidence that buying a car from a licensed motor dealer was important to him. If it was as important as he contends then I would have expected that he would have taken steps to assure himself that he was dealing with such a licensee.
Stato Pty Ltd and Mr Greaves submitted that Mr Jenkins’ behaviour was “bizarre” for such an experienced business person and for someone who had bought and sold many vehicles.
Mr Jenkins contends that he relied upon the fact that he believed Mr Andela was a licensed dealer although Mr Andela did not have the usual trappings of a licensee. I find that Mr Jenkins’ reliance on such a belief in the circumstances was not reasonable.
Mr Jenkins failed to take simple steps to verify:
(a) whether the parties he was dealing with were licensed;
(b) the age, mileage and condition of the Vehicle despite having opportunities to do so.
I find on the balance of probabilities that if Mr Jenkins had made these simple enquiries he would have avoided the circumstances leading to his loss.
The Tribunal is not satisfied that there has been no relevant neglect or default by Mr Jenkins.
The cases referred to the Tribunal in relation to apportionment of the loss relate to claims for misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) (TPA) where there was conduct by the claimant which also resulted in loss. The Court of Appeal in I&L Securities[22] upheld the decision of the court below to apportion the loss as between the party who made the contravention and the party making the claim which the court found had failed to make reasonable enquiries.
[22] [2000] QCA 383.
I am not persuaded that the language in the Act is sufficiently similar to the language of the TPA for these decisions to provide guidance on this matter.
The Act expressly contemplates that if there is an event which caused financial loss the amount payable from the fund must be adjusted to take into account the claimant’s neglect or default.
I find that but for the neglect or default of Mr Jenkins he would not have suffered any loss.
Section 490 Matters
Each of the Respondents contravened the Act.
I make no finding as to whether the Act permits apportionment as between Respondents but in any event I am not persuaded that any loss established ought to be apportioned as between the Respondents where all Respondents contravened the Act and the contravention caused the same loss.
If I am wrong about Mr Jenkins’ neglect or default Mr Andela who was either an employee or agent of Mr Royston or was carrying on business (at least in respect of this transaction) and Mr Royston are jointly and severally responsible for the financial loss in the sum of $20,250 and for reimbursing the fund.
If I am wrong about Mr Jenkins’ neglect or default and also wrong about there being insufficient evidence to find that Esanda would not have advanced the funds if it had not received an invoice misdescribing the Vehicle then Stato Pty Ltd and Mr Greaves are also jointly and severally responsible for the financial loss in the sum of $20,250 together with Mr Andela and Mr Royston and for reimbursing the fund.
Orders
The claim against the fund is rejected.
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