LBMST Pty Ltd v The Chief Executive, Office of Fair Trading
[2011] QCAT 681
•29 September 2011
| CITATION: | LBMST Pty Ltd v The Chief Executive, Office of Fair Trading and Ors [2011] QCAT 681 |
| PARTIES: | LBMST Pty Ltd |
| v | |
| The Chief Executive, Office of Fair Trading Mr Randall Hughes Vehicle Solutions Pty Ltd |
| APPLICATION NUMBER: | GAR102-11 |
| MATTER TYPE: | General administrative review matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Member |
| DELIVERED ON: | 29 September 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The Chief Executive’s decision of 11 March 2011 is confirmed. 2. The application is dismissed. |
| CATCHWORDS: | MOTOR DEALER – where cheque sent to dealer – whether sent under cover of letter nominating cheque as deposit for car – where dealer indorsed cheque to repairer for repairs to car owned by claimant – where claim on the fund refused – where application for review of the Chief Executive’s decision Queensland Civil and Administrative Tribunal Act 2009, s 20(2) |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
Dr Ladewig is the sole director of LBMST Pty Ltd. He is also the sole director of LBEE Pty Ltd. On 21 September 2007, in his capacity as director of LBEE, Dr Ladewig instructed Vehicle Solutions Pty Ltd (in external administration) to market a Nissan Maxima. On the same day, Dr Ladewig sent Vehicle Solutions a cheque for $2,630 drawn on the LBMST account.
Dr Ladewig says that he sent that cheque to Vehicle Solutions as a deposit on the purchase of a car. Vehicle Solutions did not buy a car for Dr Ludwig. It endorsed the cheque and sent it to the repairer of the Nissan Maxima owned by LBEE. The repairer banked the cheque.
Dr Ladewig made a claim against the statutory fund under s 470 of the Property Agents and Motor Dealers Act2000 for $2,630. He says that Vehicle Solutions misappropriated the funds. The Chief Executive refused the claim so Dr Ladewig has applied to the tribunal for a review of that decision.
Dr Ladewig says that the Chief Executive erred in his decision on these grounds:
a)The Chief Executive did not consider the estoppel raised by the decision of Mr Thomas[1] when he granted an extension of time for LBMST to lodge this claim.
b)The Chief Executive did not consider the significance of LBMST and LBEE being separate entities.
c)The Chief Executive did not give sufficient weight to an unsigned letter of 21 September 2007 from LBMST to Vehicle Solutions.
d)The Chief Executive erred in determining an absence of a relationship of agency between LBMST and Vehicle Solutions.
e)The Chief Executive failed to differentiate between Sircorp Motors Pty Ltd, Auto Co, Auto Co Mechanical and Auto Co Mechanical/LPG.
f)The Chief Executive failed to consider the character of Vehicle Solutions and the entities listed in the paragraph above when considering credibility.
g)The Chief Executive did not consider other bases for the claim.
[1] LBMST Pty Ltd v Vehicle Solutions Pty Ltd (in liquidation) [2009] CCT PE007-09.
The tribunal’s review of the Chief Executive’s decision is by way of a fresh hearing on the merits.[2] It is for Dr Ladewig to persuade the tribunal, on the balance of probabilities, that his claim should succeed.
[2] PAMDA, s 483; QCAT Act, s 20(2).
The question I have to determine is the character of the payment of $2,630. Dr Ludwig’s version of events is as follows:
a)LBEE’s Nissan Maxima needed extensive repair. Mr Hughes, a former director of Vehicle Solutions suggested that Dr Ladewig get a quote from Vehicle Solutions’ preferred repairer, Auto Co.
b)Auto Co provided a verbal quote of $6,000. Dr Ladewig did not want to spend that sort of money on the Nissan. An Auto Co employee advised Dr Ladewig that he would see if he could get second hand parts and provide a cheaper quote.
c)A few days later, a representative from Auto Co phoned Dr Ladewig to advise that the repairs had been done at a cost of $5,990. Dr Ladewig advised that he would talk to Mr Hughes and get back to Auto Co.
d)Dr Ladewig spoke to Mr Hughes. Mr Hughes offered to market the Nissan but said that Dr Ladewig would first have to pay Auto Co for the repairs and pay Vehicle Solutions pre-marketing costs of $1,100.
e)Dr Ladewig did not reach final agreement with Mr Hughes. On 21 September 2007, he drew a cheque on the LBEE account and sent it to Mr Hughes under a covering letter of the same date. The letter authorised Vehicle Solutions to undertake some repairs to the Nissan at a cost of $1,100.
f)At the same time, Dr Ladewig drew a cheque on the LBMST account for $2,630 and sent it to Mr Hughes under a letter that says:
“Please find enclosed a cheque for $2630.00 being a payment towards the purchase of a vehicle through you.
The vehicle will need to have the following features….
…
I look forward to your suggestions.”
The copy of that letter is unsigned. Dr Ladewig says that $2,630 is about 1/3 of the price he wanted to pay for a vehicle.
There is no dispute that Vehicle Solutions indorsed the cheque for $2,630 to Auto Co and it was paid into Auto Co’s account. Dr Ladewig never paid any other amount for the repairs to the Nissan. Auto Co released the Nissan to Vehicle Solutions under written instruction from Dr Ladewig. Mr Hughes’ ex-wife sold the Nissan without authority. Dr Ladewig recovered $5,600 from the statutory fund in separate proceedings in the tribunal[3] for the unauthorised sale of the Nissan.
[3] LBEE Pty Ltd v Vehicle Solutions Pty Ltd and Anor [2011] QCAT 203.
Not surprisingly, Mr Hughes has a different recollection of events:
a)Dr Ladewig agreed to the repair of the Nissan at a cost of about $6,000. This agreement was made between Dr Ladewig and Auto Co and Mr Hughes thought that he would have no more involvement in the matter.
b)Dr Ladewig rang Mr Hughes some time later and said that he (Dr Ludwig) did not authorise the repairs and that he would not, or could not pay for them. Dr Ladewig asked Mr Hughes to help him sell the Nissan.
c)Mr Hughes agreed to help Dr Ladewig. Mr Hughes told Dr Ladewig that the repair bill would have to be paid so that Auto Co would release it. Mr Hughes agreed that Vehicle Solutions and Dr Ladewig would pay half each on the understanding that Vehicle Solutions would recoup its costs when the car was sold.
d)Dr Ladewig authorised the release of the car to Vehicle Solutions so that it could be sold. At about the same time, Dr Ladewig forwarded the two cheques. Mr Hughes denies receipt of the unsigned letter of 21 September until Dr Ladewig sent him a copy in December 2007.
e)Mr Hughes forwarded both cheques to Auto Co together with its own cheque for the balance of the repair costs and the Nissan was released to Vehicle Solutions for sale.
f)In December 2007, Mr Hughes received a letter from Dr Ladewig withdrawing permission to sell the Nissan. At the same time, Mr Hughes received the unsigned letter of 21 September 2007.
g)Had he received the unsigned letter, Mr Hughes would not have accepted the instruction because it would not have been possible to find a car for “that very odd amount of money” which “coincidentally happened to be 50% of his repair bill.”
h)Dr Ladewig has never paid the balance of his repair bill and Vehicle Solutions was out of pocket by approximately $3,000, as evidenced by a letter from Vehicle Solutions’ lawyers dated 13 December 2007.
[10] Dr Ladewig says that the tribunal should not accept Mr Hughes’ evidence because of the commercial history of Vehicle Solutions and Auto Co in its various guises. Deregistration and commercial failure may indicate many things but it is not necessarily an indication of dishonesty.
[11] I find Dr Ladewig’s affidavit in support of his claim self serving and unconvincing. He received an invoice from Auto Co for $5,990 dated 5 September 2007 and, apparently, faxed to him on 18 September 2007. Dr Ladewig is a prolific letter writer yet there is no letter from him to Auto Co disputing responsibility for the invoice, nor did he write to Vehicle Solutions complaining about the repair cost.
[12] Dr Ladewig does not dispute that the $2,630 in dispute was applied to part payment of the invoice. He received full Redbook value for a car that was, on his own admission, in need of about $6,000 worth of work, including a new gear box.
[13] Dr Ladewig does not say that he asked Mr Hughes for a trust account receipt. He is an educated man who operates his own medical practice. The concept of a receipt for money paid should not be foreign to him.
[14] By letter of 16 November 2007, the Commonwealth Bank told Dr Ladewig that the cheque had been deposited to the account of Auto Co. There is no evidence that, between 21 September 2007 and 16 November 2007, Dr Ladewig asked Mr Hughes what was happening about the search for a new car. Dr Ladewig does not say what prompted his inquiry to the bank in November 2007 or why he waited until 6 December 2007 to ring Mr Hughes to ask for his money back.
[15] Mr Hughes’ explanation of events seems more likely. He admits receiving every letter from Dr Ladewig except the one that purports to instruct him to apply the cheque in the search for a suitable car. I agree with his observation that it would be an unusual practice to send a cheque for an odd amount to encourage a dealer to initiate the search for a car. The dealer’s receipt for the car Dr Ladewig did buy shows that it is more usual to link payment to a specific vehicle.
[16] I am not persuaded that Dr Ladewig has suffered a financial loss because of the happening of the event. He acknowledges that he had a dispute with Auto Co about the payment of the repairs to the Nissan. The cheque was deposited against that disputed amount. The car was repaired and Dr Ladewig received compensation at the top of the Redbook range for a car of that age and mileage. Auto Co has not chased him for money and he has not been left with a car that, if unrepaired, may have been difficult to sell.
[17] Mr Thomas’ comment that Dr Ladewig had a prima facie case has to be read in context. Mr Thomas was concerned only with an application to extend time. He did not have the benefit of the material now before the tribunal and he did not have any material from Vehicle Solutions. His finding of a prima facie case is not binding on either the Chief Executive or the tribunal.
[18] I do not agree that the Chief Executive failed to consider that LBEE and LBMST are separate entities. The Chief Executive acknowledged that the cheques were drawn on different accounts but took the whole of the dealings between the parties into consideration.
[19] The Chief Executive gave careful consideration to the unsigned letter of 21 September 2007. Because that letter was the only unsigned letter in a series, and because Dr Ladewig took no action between September and December to ask Mr Hughes what was happening, the Chief Executive was not persuaded that Vehicle Solutions received the letter. I have formed a similar view. For the same reason, the Chief Executive did not find that Vehicle Solutions was Dr Ladewig’s agent. Again, I agree with this finding.
[20] The allegation of misappropriation is against Vehicle Solutions. The nomenclature or identity of Auto Co is irrelevant. I have already commented on the relevance of those entities’ commercial irregularities when considering credibility. Something more is required.
[21] It is true that the Chief Executive’s decision does not refer to a possible claim under s 573 of PAMDA or a claim under Chapter 12, Part 1. That is not to say that the Chief Executive did not consider the claim however, for completeness, I will make some comments.
[22] Section 573 makes it an offence if a licensee, in the performance of the activities of a licensee, receives an amount belonging to someone else and converts it to his own or someone else’s use. Dr Ladewig can only succeed under s 573 if he can demonstrate that Vehicle Solutions was not permitted to bank the cheque to its own account and/or pass it on to Auto Co. For the reasons already identified, I am not satisfied that Dr Ladewig can demonstrate that Vehicle Solutions has infringed s 573.
[23] Chapter 12, Part 1 concerns dealings with trust money. As I have already noted, Dr Ladewig has never asked for a trust account receipt and has only recently asserted that the cheque should have been paid into trust. It is a telling omission. The obligation to pay the cheque into trust only arises if I accept that it was sent under cover of the unsigned letter. I do not accept that it was and, therefore, I do not accept that Vehicle Solutions should have paid the cheque into trust.
[24] The Chief Executive’s decision should be confirmed and Dr Ladewig’s application dismissed.
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