Laurence v Chief Executive, Department of Justice and Attorney General
[2012] QCAT 698
| CITATION: | Laurence v Chief Executive, Department of Justice and Attorney General [2012] QCAT 698 |
| PARTIES: | George Laurence |
| v | |
| Chief Executive, Department of Justice and Attorney General |
| APPLICATION NUMBER: | GAR226-12 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Senior Member |
| DELIVERED ON: | 12 November 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | [1] Paragraph 1 of the Chief Executive, Department of Justice and Attorney General's decision dated 29 May 2012 is set aside. [2] The claim is allowed in the sum of $2,128. [3] Pursuant to s 489 of the Property Agents and Motor Dealers Act2000, at the expiration of the appeal period, the Chief Executive must pay to Mr George Laurence the sum of $2,128 from the Claim Fund, and, if there is an appeal, payment must not be made until after the appeal is finally decided. [4] Pursuant to s 488(3)(c) of the Property Agents and Motor Dealers Act2000, Mr Abdulgani Ada and Mr George Ader are named as the persons responsible for the financial loss of Mr George Laurence. [5] Upon payment from the Claim Fund and pursuant to ss 490 and 530 of the Property Agents and Motor Dealers Act2000, Mr Abdulgani Ada and Mr George Ader are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $2,128 to the Chief Executive, Department of Justice and Attorney General. |
| CATCHWORDS: | MOTOR DEALER – where odometer wound back – true value of car at the time of sale Queensland Civil and Administrative Tribunal Act 2009, ss 20(1), 20(2) |
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.
REASONS FOR DECISION
Mr Laurence bought a 1996 Subaru Outback from Master Cars. He paid $5,600 “drive away”. The purchase price included a one year warranty with National Warranty Company Ltd. The car was presented with an odometer reading of 181,630 km. In fact, the odometer reading should have been about 264,593 km.
Mr Laurence made a claim on the statutory claim fund for $4,461.50. The Chief Executive allowed the claim at $1,620. Mr Laurence has applied to review the Chief Executive’s decision.
The purpose of a review is to produce the correct and preferable decision.[1] I must consider Mr Laurence’s claim by way of a fresh hearing on the merits[2].
[1] Queensland Civil and Administrative Tribunal Act 2009, s 20(1).
[2] QCAT Act, s 20(2).
In considering a claim against the fund, I must be satisfied[3] that an event as mentioned in section 470(1) happened and that Mr Laurence suffered financial loss because of the event.
[3] Property Agents and Motor Dealers Act 2000, s 488(2).
I must also take into account any amount Mr Laurence might reasonably have received or recovered if not for Mr Laurence’s neglect or default and any amount ordered to be paid to Mr Laurence as compensation to the claimant under sections 530A, 572D or 592A of PAMDA[4].
[4] PAMDA, s 488(3)(a).
Finally, in allowing a claim I must decide the amount of Mr Laurence’s financial loss and name the person who is liable for the loss[5].
[5] PAMDA, s 488(3)(b) and (c).
I am satisfied that the Subaru’s odometer was wound back. The Chief Executive has correctly identified that the effect of winding back the odometer is that Master Cars has represented something that is false or misleading in relation to the sale of property. This is an “event” under s 470(1).
The real question is the extent of Mr Laurence’s loss. He quantified his claim as:
Actual price of car (less warranty) $5,200.00 (True value of car) (3,500.00) 1,700.00 Repair to odometer 137.50 Repair to brakes and axle 399.00 Certification of odometer tampering and engine light diagnosis 330.00 285.00 RAC safety inspection 210.00 Transfer fees, stamp duty and warranty 400.00 General compensation 1,000.00
There is no invoice for the claim of $285.00. I do not allow that sum as part of Mr Laurence’s financial loss. Mr Laurence claims $1,000 as compensation for the lies, loss of enjoyment, anxiety and delays. These are not matters of financial loss to which the statutory fund responds. I do not allow that part of Mr Laurence’s claim. The transfer fees, stamp duty and warranty costs would have been payable in any event. They are not costs that arise from Master Cars' misrepresentation. I do not allow that part of Mr Laurence’s claim.
Mr Laurence has claimed the cost of repairing the car and bringing it up to what he says is a roadworthy condition. He relies upon the statutory warranty under Chapter 9 Part 5 of PAMDA. The breach of a statutory warranty is not an “event” under s 470. Because the breach of a statutory warranty is not an event under s 470, Mr Laurence has not suffered financial loss because of the happening of an event. It follows, therefore, that amounts cannot be the subject of a claim on the fund.
In addition, the difference between the purchase price and the true value of the car reflects the repairs necessary to bring the car up to the standard which a purchaser would expect. Mr Laurence is, in effect, claiming twice for the same loss.
Of course, Mr Laurence may still have a claim against the seller.
The claim for the recalibration of the odometer is a direct consequence of the event and should be allowed.
The calculation of the difference between the price paid and the true value is made difficult by the nature of the valuation evidence.
Mr Laurence provided the Chief Executive with five valuations. K.S. & Sons provided a valuation of $800. Melville Mitsubishi provided valuations on four different assumptions. If the car was in very poor condition, Melville Mitsubishi stated that its wholesale value was $400 and its retail value was $1,500. If the car was in poor condition, the wholesale value was $1,000 and the retail value was $3,000; if in fair condition the wholesale value was $3,000 and the retail value $7,500; and if in good condition the wholesale value was $4,000 and the retail value $9,000.
Master Cars bought the Subaru from Alliance Motor Auctions on 17 March 2011 for $2,300, only two months before Mr Laurence bought the car. At that time, the car showed its correct odometer reading.
The valuation from K.S. & Sons must be discarded. It is inconceivable that a motor dealer would have paid $2,300 for a car that was worth only $800. For the same reason, I reject the Melville Mitsubishi valuations of the car in very poor, and poor, condition. It is clear that the car was never in good condition, so the valuation from Melville Mitsubishi on that basis is not helpful. If I accept that car was in fair condition, then, according to Melville Mitsubishi, Mr Laurence got a bargain. It is likely that the car was somewhere between poor and fair condition but the valuations are of no assistance.
The Chief Executive obtained online valuations as at the date of claim that gave a range of valuation for private sale of between $3,600 and $5,600 and trade in prices of between $1,700 and $3,500. In coming to the decision under review, the Chief Executive took the lowest retail value and added back $600, which it said was the ATO depreciation allowance for one year, giving a total of $4,200.
While I understand why the Chief Executive has added back the depreciation allowance, the assessment is flawed. The table submitted by the Chief Executive assumes that the car has an effective life of seven years. I think it unlikely that this car will survive that long. The Chief Executive has assumed no private use of the car, highlighting the fact that depreciation is an accounting concept, not a valuation concept, and the results does not easily transfer to anther context. Finally, if I did accept adding back the depreciation, the decline in value for the first year (2011-12) is $92, not $600.
I take the Chief Executive’s point that it is for Mr Laurence to demonstrate his loss and that, in some respects, he has failed to do so. However, there is no doubt that he has suffered financial loss and it is appropriate that the statutory fund responds to that loss.
Even though the Chief Executive’s analysis is flawed, I am satisfied that it provides the best assessment of Mr Laurence‘s loss, save that the add back should be $92, not $600. The proper assessment of Mr Laurence’s loss is $5,600 less $3,692 ($3,600 + $92) plus the cost of recalibrating the odometer ($220), a total of $2,128.
Other matters
I am required to take into account any amount Mr Laurence may have received or recovered if not for their neglect or default.
There is no evidence to suggest that Mr Laurence would have been able to receive or recover any amount to reduce their loss if they had taken any different action.
Who is liable for the loss?
I confirm the Chief Executive’s decision that Mr Abdulgani Ada and Mr George Ader are responsible for the loss.
Orders
Paragraph 1 of the Chief Executive, Department of Justice and Attorney General decision dated 29 May 2012 is set aside.
The claim is allowed in the sum of $2,128.
Pursuant to s 489 of the Property Agents and Motor Dealers Act2000, at the expiration of the appeal period, the Chief Executive must pay to Mr George Laurence the sum of $2,128 from the Claim Fund, and, if there is an appeal, payment must not be made until after the appeal is finally decided.
Pursuant to s 488(3)(c) of the Property Agents and Motor Dealers Act2000, Mr Abdulgani Ada and Mr George Ader are named as the persons responsible for the financial loss of Mr George Laurence.
Upon payment from the Claim Fund and pursuant to ss 490 and 530 of the Property Agents and Motor Dealers Act2000, Mr Abdulgani Ada and Mr George Ader are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $2,128 to the Chief Executive, Department of Justice and Attorney General.
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