Maynard v MoneyGram Payment Systems Inc
[2018] VSC 7
•31 January 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2017 01547
| CHRISTINE ANNE MAYNARD | Plaintiff |
| v | |
| MONEYGRAM PAYMENT SYSTEMS, INC | Defendant |
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JUDGE: | DALY AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 October 2017 |
DATE OF JUDGMENT: | 31 January 2018 |
CASE MAY BE CITED AS: | Maynard v MoneyGram Payment Systems Inc |
MEDIUM NEUTRAL CITATION: | [2018] VSC 7 |
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JUDICIAL REVIEW AND APPEALS – Application for leave to appeal pursuant to Section 148 of the Victorian Civil and Administrative Tribunal (VCAT) Act 1998 (Vic) – Plaintiff transferred payments to third party pursuant to online scam via defendant’s kiosk in a convenience store – Defendant not liable for the loss suffered by plaintiff - Whether the Tribunal Member applied the correct legal test to determine the standard of reasonable care required by the defendant– Wyong Shire Council v Shirt (1980) 146 CLR 40, referred to - Whether the Tribunal Member’s findings were open to make on the evidence – Whether plaintiff’s challenges amounted to impermissible merits review - No arguable case that Tribunal Member erred in identifying applicable legal test – Tribunal Member’s findings open to make on the evidence – Secretary to Department of Premier and Cabinet v Hulls [1999] 3 VR 331, referred to - Myers v Medical Practitioners’ Board of Victoria (2007) 18 VR 48, referred to - Application dismissed.
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APPEARANCES: | Counsel | Solicitors |
| The Plaintiff appeared in person | ||
| For the Defendant | Ms G Crafti | Norton Rose Fulbright Australia |
HER HONOUR:
Introduction
This is an application by the plaintiff (‘Ms Maynard’) for leave to appeal a decision of the Victorian Civil and Administrative Tribunal (‘VCAT’) on 31 March 2017. Ms Maynard made a claim against the defendant (‘MoneyGram’) arising out of five payments made by her using MoneyGram’s kiosks at a 7-Eleven store in Richmond to transfer funds to a man that she met on an online dating website. It is common ground that Ms Maynard was the victim of a scam. What is in heated dispute between the parties is whether MoneyGram should be liable for the losses suffered by Ms Maynard as a result of the scam, being payments totalling $13,556, plus fees paid to MoneyGram in the amount of $269. By reason of the orders of Ginnane J made on 24 May 2017 the application for leave to appeal is to be heard, together with the appeal, should the application be successful.
The factual background to the dispute is largely uncontroversial, and is summarised accurately in the reasons for decision published on 31 March 2017 by Member D Kim of VCAT (‘Tribunal Member’):[1]
[1]Maynard v MoneyGram Payment Systems, Inc. (Civil Claims) [2017] VCAT 463 (‘Reasons’).
4Prior to 4 June 2016, the applicant, Ms Maynard, began communicating with a gentleman whom she met on a dating website and whom I will identify as “Mr C”. Mr C informed Ms Maynard that he had lived in Cronulla, Sydney, but at the time he was communicating with her he claimed to be living in Benin, a country in West Africa.
5Over the course of communicating with Ms Maynard, Mr C initially asked her if she could transfer money over to him so that he could purchase a plane ticket to leave Benin. Ms Maynard asked him whether $3,000 would be sufficient to which he replied, yes.
6Rather than sending the money to him directly, Mr C requested Ms Maynard to send the money to a Mr Idakwo Usman Godday (“Mr Godday”), who Mr C claimed was a manager of a hotel, and provided her with Mr Godday’s purported address as 15 Sekanji Street, Marina.
7On 4 June 2016, Ms Maynard went to a 7-Eleven store situated in the suburb of Richmond, Victoria (“Store”), to transfer money to Mr Godday via the money transfer service provided by the respondent (“MoneyGram”). MoneyGram does not dispute that 7‑Eleven acted as its agent in relation to the transactions in question from the Store.
8Prior to 4 June 2016, Ms Maynard had not used MoneyGram’s services. She sought the assistance of the male attendant working at the Store at the time to use the MoneyGram machine that was in the Store. MoneyGram referred to the machine as the Cullinan system or “the kiosk”. Ms Maynard likened it to an ATM. For ease of reference, I have referred to it as “the kiosk”.
9The attendant helped Ms Maynard to use the kiosk. Ms Maynard gave evidence that during this process she was not able to see the kiosk screen at times due to the attendant pressing buttons and completing portions of the process at the kiosk. However, she did recall entering some of her details into the kiosk, including her name, address, phone number and driver’s licence number.
10After going through the required steps, the kiosk printed out a voucher, which she was then required to take to the attendant with the cash payment she was intending to send to Mr Godday.
11As this was the first time Ms Maynard was using MoneyGram’s services, Ms Maynard was also required to telephone MoneyGram to obtain an 8-digit reference number required to effect the transfer.
12Ms Maynard gave evidence that she telephoned MoneyGram’s helpdesk and confirmed with the person on the other line Mr Godday’s name, her date of birth and her driver’s licence number. She was then was put on hold while the helpdesk person spoke to the attendant of the Store to verify that the attendant had checked Ms Maynard’s identification. Ms Maynard was then provided with a reference number, which she was required to provide to the intended recipient in order to for the recipient collect the funds.
13Ms Maynard subsequently gave the attendant $3,000 in cash. There was an associated fee of $57 that MoneyGram charged her as the transfer fee.
14After she completed the process at the Store, she informed Mr C that the money had been transferred and informed him of the reference number. Ms Maynard recalled that within an hour or so after she transferred the money, she received an email from MoneyGram confirming that the money had been collected.
15On 7 June 2016, Ms Maynard attended the Store on three separate occasions and on each occasion transferred money intended for Mr Godday. She did so at Mr C’s request. The amounts that Ms Maynard sent overseas that day were $3,000 plus $57 to MoneyGram as a transfer fee, $3,000 plus $57 to MoneyGram in transfer fee, and $1,349 plus $41 to MoneyGram in transfer fee.
16On each of the three occasions on 7 June 2016, Ms Maynard did not seek the assistance of the attendant but completed the process at the kiosk by herself. On each occasion the kiosk printed out a voucher, which she took to the attendant and gave the attendant the requisite money. For each of the three transactions she also received a unique 8-digit reference number - different from each other - that she provided to Mr C and informed him of the transfers.
17Subsequently, the parties agree that on three separate occasions on 7 June 2016, a gentleman showed up at the office of two of MoneyGram’s agents in Benin with documentation in support of his claim that he was Mr Godday. The gentleman showed the agents a Nigerian passport showing his photograph with Mr Godday’s name on it. The agents took photocopies of the relevant passport page, which were produced by MoneyGram. The parties also agree that Mr Godday provided the referrable 8-digit reference number to the agents for each transaction. For two of the three transactions Mr Godday went to MoneyGram’s agent in Adjovi Et Fils, Benin, and for the other transaction to another MoneyGram agent also in Benin.
18As with the first transaction, Ms Maynard was subsequently informed by MoneyGram that the monies had been collected that day, and by Mr C that he had received the funds.
19On 8 June 2016, Ms Maynard made her fifth and final transfer at the Store in the sum of $3,000, which included the sum of $57 in transfer fee. As for the other transactions, she obtained a unique 8-digit reference number that she informed Mr C about. On the same day, Mr Godday went to MoneyGram’s agent in Adjovi Et Fils, presented his Nigerian passport, provided the agent with the 8-digit reference number, and collected the transferred amount.
20In total, Ms Maynard made five transactions from 4 to 8 June 2016. All five transactions were made at the Store and Ms Maynard’s driver’s licence number was recorded on each of the five transactions. In all five transactions the name of the intended recipient was identified as Mr Godday and the destination country as Benin.
21On 15 June 2016, Ms Maynard was still communicating with Mr C and based on the text exchanges between the two I have reviewed for that day, it is clear that Ms Maynard was unaware that she was being scammed.
22Subsequently, Ms Maynard became suspicious and on 20 June 2016, Ms Maynard and Mr C had further text message exchanges where she asked him questions about where he actually lived and stated to him that he had scammed her. The following day on 21 June 2016, Mr C admitted to Ms Maynard that he had scammed her out of her money.
23Unfortunately for Ms Maynard, despite requests made by her, Mr C has not returned any of the moneys that she transferred overseas.
In the VCAT proceeding, Ms Maynard alleged that MoneyGram was liable to compensate her for her losses on the grounds of:
(a) breach of contract;
(b) negligence;
(c) breach of s 60 of the Australian Consumer Law (‘ACL’); and
(d) breach of s 18 of the ACL.
While Ms Maynard during the hearing of the VCAT proceeding articulated a number of causes of action, as shown above, each cause of action relied on substantially the same facts. In the hearing before VCAT, Ms Maynard complained of what was described by the Tribunal Member as MoneyGram’s alleged ‘pre‑transfer conduct’: that is, the processes by which Ms Maynard identified herself and conducted the transactions at the 7-Eleven store, along with MoneyGram’s alleged post-transfer conduct in Benin. However, it is clear from the written and oral submissions made by Ms Maynard in this application for leave to appeal, that her criticisms of the Tribunal Member’s decision focused on MoneyGram’s alleged post-transfer conduct. As stated by the Tribunal Member in his reasons:[2]
Ms Maynard asserts that MoneyGram, by its agents in Benin, failed to properly check the identification of Mr Godday at the time he collected the funds. Ms Maynard claims that the agents were required to, and had failed to, check the authenticity of the recipient’s address, his passport, his signatures and other details he had provided, and failed to have cameras installed. Accordingly, Ms Maynard argues that had they checked the authenticity of the information, they would have been aware that, among other things, Mr Godday was a “fake person” using a “fake name”, who had provided “fake details and ID”, and by reason, MoneyGram is responsible for the loss she has suffered.
[2]Reasons, [24(b)].
MoneyGram’s position in relation to Ms Maynard’s claim in relation to post-transfer is summarised at paragraph 32 of the reasons, as follows:
In terms of the alleged post-transfer conduct, it asserts, among other things, that:
aIts agents in Benin conducted the necessary identification checks on Mr Godday, and as they were shown Mr Godday’s passport and the unique 8-digit reference numbers, they were permitted to allow Mr Godday to collect the funds.
bAll transactions were paid out to the intended receiver, Mr Godday, as specified by the sender bearing all relevant information, including identification and knowledge of the applicable reference numbers.
cThere is no contractual or legislative or other requirement for it or its agents to verify the authenticity of the recipient’s address in Benin.
dIf it had breached its obligations whether in contract or otherwise, its breach was not the cause of her loss nor did it contribute in any way to the fraud.
The Tribunal Member, in his reasons, noted that Ms Maynard asserted that the terms of the contract between her and MoneyGram required: [3]
MoneyGram’s agents in Benin to check the authenticity of the documents and information presented by the recipient to ensure that the recipient was not a “fake person”, meaning a person with a fake identity and details ...
and that Ms Maynard alleged that MoneyGram breached the above terms, causing her to lose the money she sent to Mr Godday. Ms Maynard submitted, both before the Tribunal Member and before me, that Mr Godday’s passport was not authentic, and that MoneyGram’s agents in Benin (‘Benin agents’) should have identified this. Further, the Benin agents should have picked up certain alleged discrepancies in the information provided by Ms Maynard to MoneyGram via the kiosk, and the information provided to the Benin agents by Mr Godday. Further, the Benin agents should have realised that the addresses provided to them by Mr Godday did not exist. Finally, Ms Maynard asserted that there should have been cameras installed at the premises of the Benin agents.
[3]Reasons, [34].
MoneyGram did not directly dispute the above matters, although I, like the Tribunal Member, did not consider there was sufficient evidence available to make a positive finding that Mr Godday’s passport was a false document. Rather, MoneyGram contended that all that was required to be done was for the Benin agents to sight photo identification of the recipient of the funds, and for the recipient to provide the unique eight digit reference number provided by MoneyGram to Ms Maynard, and that is what was done.
The Tribunal Member accepted the evidence of MoneyGram’s in‑house counsel, Ms Lou, concerning the steps that Ms Maynard was required to undertake using the kiosk to send money to Mr Godday. He found that, while during the first transaction the 7-Eleven attendant obscured the screen, on each of the subsequent occasions, Ms Maynard would have had an opportunity to view MoneyGram’s Terms and Conditions prior to pressing the button labelled:
COMPLETE SEND MONEY REQUEST AND AGREE TO THE TERMS AND CONDITIONS.
The Tribunal Member also accepted Ms Lou’s evidence regarding what Ms Maynard would have seen if she had pressed the button labelled:
VIEW TERMS AND CONDITIONS.
These terms and conditions, included, relevantly, as follows:[4]
Clause 1.4:
“For cash to cash transfers, you can either send money within the same country, if permitted, or to a different “receive country”. … Once your service rep has processed this form and been given your money, the recipient can collect the money at any MoneyGram location in the receive country within minutes (during opening hours) in cash … . We will not contact the recipient when the money is ready to collect, so this is something you will need to do.”
Clause 5.3:
“You must not give the reference number, test answer or recipient's details to anyone other than your chosen recipient and do all you reasonably can to make sure no one else can obtain them. For example, by not letting anyone see the form or not writing down the test question and answer or the reference number in a way that can be recognised, nor letting anyone overhear you tell the recipient what they are.”
Clause 8.3:
“Our service is for you to send money to a private individual known by you rather than to make a commercial payment, and you must not use it for those types of transaction. You must also follow the fraud warnings on the form. If you ask us to pay someone who turns out to have defrauded you, or who fails to meet their obligations to you, we will not be liable as a result.”
[4]Reasons [48].
The Tribunal Member also accepted Ms Lou’s evidence that after Ms Maynard pressed the ‘complete send’ button, Ms Maynard would have seen another screen, described by Ms Lou as the ‘fraud warning’ screen, which stated:[5]
[5]Reasons [50].
“PLEASE COLLECT YOUR VOUCHER FROM THE PRINTER BELOW. SHOW IT WITH YOUR PHOTO ID AND MAKE PAYMENT AT THE COUNTER WITHIN 30 MINUTES.
Fraud Alerts
DO NOT send money to claim lottery or prize winnings, or on a promise of receiving a large amount of money.
...
DO NOT send money responding to an Internet or phone offer that you are not sure is honest.
DO NOT send money to someone you do not know or whose identity you cannot verify.
DO NOT give your 8-digit MoneyGram reference number to a third party.
IF YOU HAVE DONE ANY OF THE ABOVE AND WANT TO STOP YOUR TRANSFER YOU SHOULD IMMEDIATELY ASK YOUR AGENT TO CANCEL IT.”
The Tribunal Member went on to say as follows:[6]
At the bottom of the fraud warnings page was the “CONTINUE” button, which, according to Ms Lou, if the customer pressed, would cause the kiosk to print out the requisite voucher. Ms Lou stated that it was only by the customer clicking the “CONTINUE” button on the fraud warnings page that the kiosk would print out a voucher, which the customer would take to the attendant and pay the money to be transferred. Ms Maynard gave evidence that she did not recall seeing the fraud warnings page.
I accept the evidence of Ms Lou that Ms Maynard would have seen the fraud warnings page, on at least four occasions before completing the five transactions. As with the Terms and Conditions, the fact that Ms Maynard chose not to read the fraud warnings was not due to any act or omission by MoneyGram or its agent.
[6]Reasons [51]–[52].
The Tribunal Member’s findings regarding Ms Maynard’s breach of contract claims (excluding his findings with respect to MoneyGram’s pre-transfer conduct) are reproduced below (footnotes omitted):[7]
[7]Reasons [53].
Based on the evidence presented by the parties, I find that:
aThe relevant terms of the contracts between the parties were contained in the Terms and Conditions.
bBy using the kiosk and completing the five transactions, Ms Maynard accepted the terms as contained in the Terms and Conditions. It is immaterial that she did not view the terms as that was her choice. She had sufficient opportunity to do so, if not on the first occasion, the subsequent four.
…
dThere was no term in the contracts that required MoneyGram or its agents in Benin to ensure that the documentation and details provided by the recipient were genuine. I accept that MoneyGram was contractually required to check that the recipient had the reference number (for example, I refer to Clause 5.3 of the Terms and Conditions) and that the funds would go to the intended recipient, but there was no requirement for it or its agents to go beyond that and to undertake an investigative role to determine whether the intended recipient was a fraudster or scammer.
For example, there was no requirement that MoneyGram had to check to ensure that the address of the recipient was a legitimate address or to do searches or make inquiries to ensure that the name of the recipient was a name belonging to a citizen of Benin.
There were no express terms to the above effect and I see no basis to find that there was an implied term as such. In this regard, I note the requirements of finding an implied term of a contract as stipulated by the High Court in BP Refinery (Westernport) Pty Ltd v Hastings Shire (1977) 180 CLR 266, 283.
eThe obligation on MoneyGram, as stated in the Terms and Conditions, was to transfer money to people that Ms Maynard wished the funds to be transferred – this was achieved. It was not to protect Ms Maynard from third party scammers.
Indeed, in addition to the cautions stated in the fraud warnings page, as Clause 8.3 of the Terms and Conditions stated, MoneyGram’s service was aimed at assisting Ms Maynard “to send money to a private individual known by you rather than to make a commercial payment, and you must not use it for those types of transaction.”
If I am wrong in finding that MoneyGram did not breach its contractual obligations to Ms Maynard, I would have nevertheless dismissed her contractual claim on the basis that any breach by MoneyGram or its agents of those terms were not the cause of Ms Maynard’s loss. I have addressed the issue of causation below in respect of Ms Maynard’s claim in negligence.
In relation to Ms Maynard’s claim against MoneyGram in negligence, MoneyGram admitted that it owed Ms Maynard a duty of care, but that it fulfilled that duty, and if it had not, its conduct had not caused Ms Maynard’s loss.
In considering whether MoneyGram had exercised reasonable care, the Tribunal Member, referring to the decision of the High Court in Wyong Shire Council v Shirt,[8] expressed the applicable test as follows:[9]
Under the common law, a breach of duty of care is made out when a reasonable person in the respondent’s position would have foreseen that his or her conduct involved a “not far-fetched or fanciful” risk of injury to a person in the applicant’s position, and had failed to respond in the manner that a reasonable person in the respondent’s position would have done.
[8](1980) 146 CLR 40.
[9]Reasons, [58].
The Tribunal Member then went on to summarise the evidence relied upon by Ms Maynard in support of her contention that MoneyGram’s conduct was negligent, and noted:[10]
In essence, Ms Maynard asserts that MoneyGram’s agents in Benin ought to have taken an investigative role and questioned the recipient in relation to his address, his signature and the authenticity of his passport. For example, MoneyGram’s agents in Benin should have compared Mr Godday’s signature with previous records of his signature, if one had been available to the agents, checked that the address was a valid address by, for example, Googling it, before providing the funds to him. However, I was not taken to any of MoneyGram’s policies or procedures or terms of the contracts between the parties that required such investigative action to be taken by MoneyGram or its agents in Benin.
MoneyGram’s Counsel argued that considering the type of money transfer service MoneyGram was providing, there was no requirement that MoneyGram’s agents had to run authenticity checks on the addresses and passport provided by the intended recipient, Mr Godday. I agree. As Clause 8.3 of the Terms and Conditions stipulated, the scope of MoneyGram’s services was to enable Ms Maynard to send “money to a private individual” known by her, and to follow its fraud warnings. Accordingly, I find that a reasonable person in MoneyGram’s position would not have undertaken the forensic and investigative steps that Ms Maynard asserts MoneyGram ought to have undertaken.
Therefore, I am not satisfied that a failure by MoneyGram’s agents to do the above forensic and investigative steps raised by Ms Maynard meant that they had failed to exercise reasonable care.
[10]At [81]-[83].
Further, the Tribunal Member found that the absence of a camera at the premises of the Benin agent’s offices did not amount to a failure to exercise reasonable care, or indeed have any bearing on this case.
Finally, the Tribunal Member found that MoneyGram did not cause Ms Maynard’s loss, stating, in relation to both the pre-transfer and post-transfer conduct:[11]
Up until she became aware that had she [sic] been scammed, Ms Maynard wanted to transfer the moneys to Mr Godday. Indeed, she did so on five separate occasions in the period of just a few days. At the hearing, Ms Maynard did not deny that she had voluntarily sent money to Mr Godday and Mr Godday was the intended recipient. Further, Mr C had acknowledged to Ms Maynard that the funds had been received as requested by him. This is not a case where MoneyGram or its agents sent the funds to the wrong or unintended person.
MoneyGram nor its agents were not in any way involved in the fraud committed by a third party against Ms Maynard.
MoneyGram’s agents were entitled to release the funds to the recipient primarily because the recipient provided the correct reference numbers and a photo ID. As reflected in MoneyGram’s Terms and Conditions, the reference numbers were effectively a safeguard to ensure that the funds were released to the intended recipient. It was Ms Maynard’s responsibility, not MoneyGram’s, to ensure that she gave the reference numbers to someone that she trusted, and the onus was on Ms Maynard, not MoneyGram, to check that the request from Mr C was genuine. Indeed, as illustrated by the fraud warnings page, MoneyGram provided a clear message to senders that they needed to be careful when they sent money to people overseas.
[11]Reasons, [92].
The Tribunal Member also considered Ms Maynard’s claims under the ACL, including s 18 of the ACL, and s 60 of the ACL.
Section 18 of the ACL prohibits a corporation from engaging in misleading and deceptive conduct. Ms Maynard contended that at the time she transferred the money, MoneyGram had represented to her that it would comply with its policies and procedures, and it failed to do so.
The Tribunal Member found that, based upon Ms Maynard’s evidence that she had not looked at MoneyGram’s website (upon which MoneyGram’s terms and conditions could be located) prior to using the kiosk, the only information available to Ms Maynard at the time she made the transfers was the terms and conditions and fraud warnings at the kiosk. Further, the Tribunal Member notes that Ms Maynard gave no evidence that she relied upon any representation by MoneyGram of that nature, and repeated his earlier finding that Ms Maynard had suffered no loss by reason of MoneyGram’s conduct.
Section 60 of the ACL provides that a supplier of services to a consumer warrants that the services will be rendered with due care and skill. Having found that s 60 of the ACL applied to the transactions between Ms Maynard and MoneyGram, the Tribunal Member stated as follows:[12]
The first issue, therefore, is whether MoneyGram rendered its services with due care and skill.
Miller’s, Australian Competition and Consumer Law Annotated, states that due care and skill is applied to “a common law negligence standard.” In the absence of any contrary submissions by the parties, I accept that the common law standard is the applicable standard.
For the reasons I have given regarding my finding that MoneyGram failed to exercise reasonable care in respect of its pre-transfer conduct, I also find that MoneyGram failed to exercise due care and skill in respect of that conduct. However, for the reasons I have also provided in respect of Ms Maynard’s claim in negligence, I find that MoneyGram’s failure in its pre-transfer conduct did not cause Ms Maynard the loss she suffered.
Likewise, for the reasons I have set out regarding my finding that MoneyGram did not fail to exercise reasonable care it [sic] its post-transfer conduct, I find that MoneyGram did not fail to exercise due care and skill in respect of that conduct.
[12]Reasons, [97]-[100].
In conclusion, the Tribunal Member stated as follows:[13]
At the heart of Ms Maynard’s complaint about MoneyGram’s conduct is the argument that MoneyGram and its agent should have prevented Ms Maynard from being scammed by a third party either by not allowing her to send money to Mr Godday or not allowing Mr Godday to collect the funds. I am unable to accept that such an obligation fell on MoneyGram.
Whilst I acknowledge that Ms Maynard genuinely feels aggrieved by the services provided by MoneyGram, and that MoneyGram’s agent in Melbourne failed to exercise reasonable care and due care and skill in the receipt of funds from Ms Maynard, those failures did not cause Ms Maynard’s loss. Ms Maynard’s loss was as a result of being a victim of a scam perpetrated by a third party.
In making my decision I am not stating, nor should it be inferred, that I consider MoneyGram has engaged in exemplary or excellent practice. It may be that this matter may prompt MoneyGram to re-examine or reconsider its processes or the implementation of them. What I have found is that I do not accept Ms Maynard’s claim that MoneyGram should be liable for the loss she has suffered.
[13]At [107]-[109].
Ms Maynard seeks leave to appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’). Her originating motion dated 27 April 2017 proposes the following questions of law:
Did VCAT apply the correct legal test to determine the standard reasonable care required by Moneygram Payment Systems Inc?
Was the conduct of the Moneygram Payment Systems Inc agent in Benin capable of constituting the exercise of reasonable care of Moneygram.
Was VCAT Member Kim correct in finding that Moneygram agents did not fail to exercise due care and skill within the meaning of s 60 of the Act in relation to the post-transfer conduct?
Was VCAT correct in finding that a breach of the terms of the contract by the Moneygram agent would not have caused Ms Maynard’s loss?
Was VCAT correct in finding that the parties did not ‘go beyond’ requiring the Moneygram agent to confirm the recipient had a reference number?
These questions of law were paraphrased and perhaps better articulated in the MoneyGram’s outline of submissions dated 16 August 2017, as follows:
Did the Tribunal apply the correct legal test to determine the standard of reasonable care required by MoneyGram? (Question 1)
Did the Tribunal err in finding that MoneyGram’s agent in Benin exercised reasonable care? (Question 2)
Did the Tribunal err in finding that MoneyGram’s agents did not fail to exercise due care and skill within the meaning of section 60 of the ACL in relation to the post-transfer conduct? (Question 3)
Did the Tribunal err in finding that a breach of the terms of contract by MoneyGram’s agent did not cause her loss? (Question 4)
Did the Tribunal err in finding that MoneyGram’s agent in Benin was not required to “go beyond” confirming that the recipient had a reference number? (Question 5)
The principles of law governing the applications for leave to appeal under s 148 of the VCAT Act are settled. Essentially, the position is that the applicant must identify a question of law which is material to the decision sought to be reviewed, and the applicant must show that there is a real or significant argument to be put that the Tribunal Member has erred. Leave is more likely to be granted in cases where the order under review (as is the case in the current proceeding) is a final order, and/or a question of law has been identified which is of general or public importance. The need to identify an arguable question of law arises as this Court is not empowered under s 148 of the VCAT Act to review the merits of a tribunal member’s decision.
In Secretary to Department of Premier and Cabinet v Hulls,[14] the Court of Appeal made a number of observations about when an application for leave to appeal under section 148 will be granted. Chief Justice Warren summarised those observations in Myers v Medical Practitioners’ Board of Victoria,[15] as follows (omitting citations):[16]
Whether leave is granted or not must always depend upon the justice of the particular case;
If leave is to be granted, the applicant must at least identify a question of law (as distinct from a question of fact), which is important to the substantive appeal’s succeeding or failing;
The applicant need not establish an error below – that is for the appeal itself. Rather, the applicant will be required to show that there is a real or significant argument to be put that error exists.
Although not essential, the applicant may identify a question of law that is of general or public importance. This will weigh in favour of granting leave;
[14][1999] 3 VR 331.
[15](2007) 18 VR 48.
[16]Ibid, [29]-[32].
For the reasons which follow, I would dismiss the application for leave to appeal, on the basis that Ms Maynard has failed to establish an arguable case that the Tribunal Member erred in identifying the applicable legal test, or in his application of the relevant law. While the question of whether the Tribunal Member applied the correct legal test is a question of law, the Tribunal Member did in fact apply the correct legal test to the facts before him, as considered further below.[17] Once it is established that the Tribunal Member did apply the correct legal test, the remaining challenges to the findings of the Tribunal amount to impermissible merits review: that is, Ms Maynard is merely seeking to re‑litigate the issues ventilated at VCAT. That much is evident from her written submissions and the oral submissions made by her at the hearing.
[17]Indeed, to the extent that there were flaws in the Tribunal Member’s reasoning, in that there was no reference as to whether MoneyGram owed a duty of care to Ms Maynard, but went straight to the question of breach of any duty of care, this worked in Ms Maynard’s favour.
In her written submissions filed 26 July 2017, Ms Maynard:
(a) stated:
The errors of law I want to appeal relate to Member Kim’s findings about what happened in Benin;
(b) summarised the Tribunal Member’s findings concerning MoneyGram’s post‑transfer conduct;
(c) identified a number of inconsistencies in the information provided to MoneyGram’s agents in Australia and Benin by both her and the recipient of the funds, and stated that no reasonable person in the position of MoneyGram’s Benin agent would have released the funds in those circumstances;
(d) stated that the Tribunal Member had not addressed these alleged failures in determining whether MoneyGram met its obligations to her;
(e) stated:
The approach that Member Kim took to reasonable care and due care and skill was narrow and wrong because it did not deal with [the alleged discrepancies in information];
(f) disputed the Tribunal Member’s findings that the conduct of MoneyGram’s Benin agent did not cause her loss; and
(g) she submitted as follows:
In addition, in considering Moneygram’s obligations to me and what is reasonable for it to do or not do in the circumstances, Member Kim ought also to have considered the following:
· Moneygram have profited from this scam by collecting fees and other revenues on each of my “5” fraudulent transactions.
· Moneygram failed to follow Austracs AML/CTF legislation which was proven during the VCAT hearing.
· the finding of Moneygram business practices in paragraph 109 of the decision.
· the fact that Moneygram is aware of the importance of verification given it has received many large finds both in Australia and in the USA for breaching the FinCEDMoney laundering act in the USA and Austrac’s in Australia. Moneygram were also fined $100 million in November, 2012 under the Bank Secrecy Act (BSA). Krebsonsecurity.com has written a detailed articular in regards to this fine which was for Anti-Money laundering.
AUSTRAC have only ever issued 4 fines in Australia under their AML/CTF legislation and “2” of them were for Moneygram. The first was dated in January, 2015 for contravention of AUSTRAC’s AML/CTF for providing money remittance services through unregistered remittance businesses. The total of the find was $122,400. The second was in April, 2015 under AUSTRAC’s AML/CTF legislation which totalled $336,600.
In the circumstances, I ask that the Court grant the leave to appeal. I request that the order be set aside so that the above issues can be properly considered by the Court.
Ms Maynard’s oral submissions during the course of the hearing largely mirrored her written submissions, and the submissions recorded in the Tribunal Member’s reasons. Ms Maynard:
(a) asserted that documents provided by the Australian Consulate in Nigeria proved that Mr Godday used a false passport;
(b) the receipts filled out by Mr Godday at the premises of the Benin agents referred to three different addresses (which do not exist), and contained information inconsistent with the information provided by Ms Maynard to MoneyGram;
(c) MoneyGram has not put forward any evidence as to how Mr Godday’s identity was verified. She stated:
I understand that a passport was given, but under the terms and conditions that person needs to be verified and the other party has not shown any evidence to me how he was verified, just that he provided a passport and to me that’s not good enough.[18]
[18]T5, 3-8. This, in essence, is the nub of Ms Maynard’s case.
(d) if the Benin agents had checked with her after noting the incorrect information provided by Mr Godday, she would have told them it was incorrect;
(e) it is clear from the evidence that MoneyGram did not follow their own policies and procedures;
(f) the information provided by MoneyGram to AUSTRAC (being the date of the first transfer) was incorrect, and as such, MoneyGram’s conduct was “highly illegal”; and
(g) information available on the internet shows that MoneyGram has been fined on many occasions.
In its written outline of submissions, MoneyGram provided an extensive summary of the background to the dispute, the Tribunal Member’s decision, and the legal principles applicable to applications for leave to appeal under s 148 of the VCAT Act. In relation to the (reformulated) questions of law, MoneyGram submitted, in summary, as follows:
(a) in relation to Question 1, which it said should be read as asking whether the Tribunal Member applied the correct legal test to determine whether MoneyGram breached its duty of care;
(b) the Tribunal Member identified and followed the test articulated in Wyong Shire Council v Shirt[19] and subsequent authorities, and did so correctly in relation to the post-transfer conduct, and no error of law has been demonstrated; and
[19](1980) 146 CLR 40.
(c) in relation to the balance of Ms Maynard’s questions of law, MoneyGram submitted that, given that Ms Maynard is seeking to impugn the factual findings made by the Tribunal Member on the evidence before him, she would need to demonstrate that the Tribunal Member reached conclusions not open to him;
(d) referred in some detail to the conclusions reached by the Tribunal Member in relation to each of these matters; and
(e) stated as follows:
The conclusions that Ms Maynard seeks to impugn in Questions 2, 3, 4 and 5 were conclusions that were open to the Tribunal on the evidence. It was not the case that the evidence, rationally, allowed only for one conclusion that the Tribunal nevertheless failed to reach. For those reasons, Ms Maynard is unable to pass the threshold test that required her to identify a question of law for this Court to consider. Accordingly, her application for leave should be dismissed.
If MoneyGram does not succeed in that submission, the appeal should nonetheless be dismissed because Ms Maynard has failed to demonstrate that the Tribunal’s conclusions were vitiated by errors of law. She impermissibly seeks to have this Court substitute its own view of the facts.
In her oral submissions at the hearing, counsel for MoneyGram made the following observations and submissions:
(a) in her submissions, Ms Maynard relied upon information from MoneyGram’s website, not its terms and conditions;
(b) there is no contractual or statutory obligation upon MoneyGram to verify the authenticity of the identification documents provided by a recipient of funds;
(c) other than the first question identified by Ms Maynard in her draft notice of appeal, Ms Maynard has not identified a question of law. In any event, the Tribunal Member’s conclusions on the issues identified by the remaining questions are correct, particularly the Tribunal Member’s conclusions concerning causation; and
(d) she stated as follows:
I understand Ms Maynard very much wants to pursue MoneyGram for her loss and damage but it is very much MoneyGram’s position, as it has to be if it’s going to continue to operate, and it well intends to, that it can’t do much more than warn people repeatedly through big flashing warnings, “Do not send money to people you don’t know.” It can’t do more than that, and that’s precisely the finding that Member Kim made, and he said that that is what Ms Maynard is, I guess, I supposed deemed to have accepted.
That is part of the terms and conditions of using [the] MoneyGram service. MoneyGram doesn’t provide a – it’s not a right that a person has. It enters into a contract with MoneyGram to use its services to transfer money to other individuals. And there are consumer protection laws. In our submission they were all complied with.
If we’re wrong about that we’re sure to hear about it from the relevant authorities in due course, but this court is not the forum that can regulate MoneyGram in relation to this transaction. It has jurisdiction to review the decision of Member Kim.
Ms Maynard’s submissions in reply largely focussed upon MoneyGram’s corporate status, its failure to properly deal with her complaints, and the representations she has made to the regulatory authorities. Essentially, she criticised MoneyGram for allowing her to be scammed.
As noted above, I agree with the submissions advanced on behalf of MoneyGram to the effect that Ms Maynard has failed to establish an arguable case that the Tribunal Member has identified the wrong legal test, or misapplied the legal test to the facts he found. As previously noted, it was clear that Ms Maynard was aggrieved by the conduct of MoneyGram (including its rather clumsy response to her initial complaints), and strongly disagrees with the Tribunal Member’s decision. However, there is no doubt that the Tribunal Member applied the correct legal principles to the claims made by Ms Maynard. To the extent that Ms Maynard is dissatisfied with the result of the application of those principles, she asks the Court to do what s 148 of the VCAT Act does not allow: that is, to review the merits of the Tribunal Member’s decision.
That much is evident from Ms Maynard’s written and oral submissions, as summarised above. For example, Ms Maynard attacks the Tribunal Member’s findings that:
(a) MoneyGram was not required to investigate the authenticity of the recipient’s identity documents and verify the correctness of the information provided by Mr Godday; and
(b) the actions of the Benin agents did not cause Ms Maynard any loss.
The Tribunal Member’s findings in relation to these matters arose out of an orthodox application of established principles of the law of negligence.[20] They are not, and could not be errors of law. The Tribunal Member’s finding that, notwithstanding Ms Maynard’s evidence that she had not read MoneyGram’s terms and conditions as available to her at the kiosk, Ms Maynard was bound by those terms and conditions, is once again simply an orthodox application of the principles in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd.[21] Similarly, no error can be identified in the Tribunal Member’s statements as to what is required to establish liability under ss 18 and 60 of the ACL, and in any event, he made an express factual finding that Ms Maynard had not relied upon any representation made by MoneyGram when making the transfers.
[20]See Wyong Shire Council v Shirt (1980) 146 CLR 40, recently endorsed by the Court of Appeal in southern Colour (Vic) Pty Ltd v Parr [2017] VSCA 301, [56]-[58].
[21][2004] 219 CLR 165.
Finally, Ms Maynard submitted that the Tribunal Member failed to consider the following matters;
(a) ‘MoneyGram have profited from this scam by collecting fees and other revenues’ from the fraudulent transactions;
(b) MoneyGram failed to comply with relevant anti-money laundering and other legislation;
(c) the Tribunal Member’s apparent disquiet concerning MoneyGram’s business practices;[22] and
(d) MoneyGram’s awareness of the ‘importance of verification’ given that it has received large fines in both Australia and the United States in connection with its business.
[22]Reasons [109].
However, setting aside the question of whether MoneyGram has in fact failed to comply with relevant legislation and regulations, which, contrary to Ms Maynard’s submissions, has not been established,[23] these matters are irrelevant to the issues before the Tribunal Member, and indeed this Court. The issues between Ms Maynard and MoneyGram are whether MoneyGram breached the terms of its contract with Ms Maynard, breached any duty of care owed to Ms Maynard, or otherwise engaged in any misleading and deceptive conduct. These issues have been resolved in MoneyGram’s favour. The matters raised by Ms Maynard are matters of policy for the regulators and the legislature, not courts or tribunals.
[23]Although there may have been an error in the date of a reported transaction, but nothing turns on this for the purposes of this application.
It could not be said that the conclusions drawn by the Tribunal Member based upon the facts as found by him, were illogical, irrational, or otherwise not open for him to make on the evidence, which is the only basis upon which the Tribunal Member’s factual findings and conclusions could be overturned.[24] To the contrary, it is difficult to find fault with the Tribunal Member’s analysis of the facts and issues in this case. Accordingly, the application for leave to appeal is dismissed.
[24]See S v Crimes Compensation Tribunal [1998] 1 VR 83.
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