McGrath v Scott
[2012] QCATA 57
•23 March 2012
| CITATION: | McGrath v Scott [2012] QCATA 57 |
| PARTIES: | David Colin McGrath (Appellant) |
| v | |
| Kim Margaret Scott (Respondent) |
| APPLICATION NUMBER: | APL354-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Richard Oliver, Senior Member Michelle Howard, Member |
| DELIVERED ON: | 23 March 2012 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The application for leave to appeal is allowed; 2. The decision of the Tribunal of 16 September 2011 is set aside; 3. The matter is remitted to the Tribunal for rehearing by a Member other than the Member who made the decision of 16 September 2011. |
| CATCHWORDS: | LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where claim determined under s 48 Queensland Civil and Administrative Tribunal Act 2009 on basis that party causing unnecessary disadvantage to another party LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where no consideration whether necessary and appropriate in deciding to proceed under section 48 Queensland Civil and Administrative Tribunal Act 2009, ss 3, 48 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Mr Oliver
I have read the draft reasons for decision of Ms Howard. I agree with them and the orders proposed.
Ms Howard
On 18 January 2011, Kim Scott applied to the Tribunal in its minor civil dispute jurisdiction for orders that David McGrath and Premium Real Estate Group Pty Ltd pay to her the sum of $6,531.00 for holiday pay and rent which she claimed was owing to her, together with her costs and interest.
Mr McGrath filed a response seeking orders that the claim be struck out on the basis that Ms Scott was employed by Premium Real Estate Pty Ltd not him, and because he had filed a debtor’s petition and was bankrupt and leave had not been obtained by the applicant from the Federal Court of Australia to proceed against him. He also filed an application seeking an order that the claim be stayed or struck out, on similar grounds.
Ms Scott conducted a bankruptcy search in respect of Mr McGrath. It revealed that he had been made bankrupt on his own petition on 17 November 2010, but also that the bankruptcy had been annulled on 7 January 2011. The search records the ‘result’ as ‘annulled s 74-debts settled’ and contains a summary that ‘This individual is no longer bankrupt under this administration.’
On 6 July 2011, the learned adjudicator dismissed Mr McGrath’s strike out application, and directed Mr McGrath to provide a sworn statement and submissions dealing with his apparent attempt to deceive the Tribunal and the applicant about his status as a bankrupt given the annulment of the bankruptcy on 7 January 2011 and show cause why the Tribunal should not make its final decision in favour of Ms Scott against him. He was given until 20 July 2011 to file any evidence and submissions. Ms Scott was directed to reply by 22 July 2011.
The proceeding was listed for hearing on 26 August 2011. The learned adjudicator heard the proceeding and then made orders that Mr McGrath pay to Ms Scott the sum of $7,515.71 for the claim, costs and interest. The claim against Premium Real Estate was adjourned to the registry and was to be dismissed if no further step was taken against it by 31 December 2011.
Written reasons were provided by the learned adjudicator for his decision. He found that Mr McGrath had acted to intentionally deceive both the Tribunal and Ms Scott. He exercised power under section 48(2) of the QCAT Act, on the basis that Mr McGrath had acted in a way that unnecessarily disadvantaged a party by attempting to deceive her and the Tribunal about his status as a bankrupt, to make an order against him in favour of Ms Scott in the full amount of her claim. He found that consequent upon the annulment of the bankruptcy, a bankrupt was generally placed in the same position as if he had not been bankrupt, subject to sales or dispositions properly effected during the bankruptcy by a trustee or the Official Receiver. He further ordered that the claim against Premium be adjourned to the registry and that if no further step was taken in the claim by 31 December 2011, that claim was dismissed.
Mr McGrath has filed an application for leave to appeal or appeal on numerous and varied grounds. Essentially the grounds relate to alleged errors in law and fact by the learned adjudicator in that he found the debt was due by Mr McGrath as opposed to Premium Real Estate; that due to the winding up of Premium Real Estate the claim could not proceed without a grant of leave under s 471B of the Corporations Act 2001 (Cth); that the claim could not proceed against Mr McGrath in the absence of a grant of leave pursuant to s 58(3) of the Bankruptcy Act 1966 (Cth); in failing to find that the debt was a debt captured by Mr McGrath’s bankruptcy under s 73 of the Bankruptcy Act 1966; by failing to find that a scheme of arrangement accepted by creditors is binding on Ms Scott under s 75 of the Bankruptcy Act 1966; by finding that Mr McGrath had attempted to deceive Ms Scott and the Tribunal; by misunderstanding the bankruptcy, annulment and composition put in place by permitting Ms Scott to proceed with the application.
The file discloses that Ms Scott had provided some written evidence to the Tribunal that she understood that Mr McGrath had agreed, in effect, to indemnify her for any monies owed to her by Premium. However, as the proceeding was determined as described above under section 48, the issue of liability as between Mr McGrath and Premium was not considered and no finding was made about the alleged indemnity.
The Legal Considerations
[10] Leave is required to appeal the decision under section 142(3)(a)(i) of the Queensland Civil and Administrative Tribunal Act 2009 (the QCAT Act) because the original decision involves a minor civil dispute.
[11] Leave to appeal will ordinarily be granted when a question of general importance upon which further argument and a decision of the Appeal Tribunal is to public advantage;[1] there is a reasonably arguable case that the primary decision-maker made an error[2] and there are reasonable prospects that the applicant would be granted orders in its favour;[3] or to correct a substantial injustice to the applicant caused by error.[4]
[1]Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 578 and 580.
[2] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[3] Cachia v Grech [2009] NSWCA 232, [13].
[4] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[12] Under the QCAT Act, the Tribunal’s charter is to deal with matters in a way that is accessible, fair, just and informal.[5] It is to be responsive to the needs of diverse persons coming before it.[6] It is not bound by procedures applying in courts and may inform itself in any way it considers appropriate.[7] It must observe the rules of natural justice.[8] In all proceedings, it must act fairly and according to the substantial merits of the case.[9]
[5] QCAT Act, s 3(b).
[6] QCAT Act, s 4(e).
[7] QCAT Act, s 28(3)(b) and (c).
[8] QCAT Act, s 28(3)(a).
[9] QCAT Act, s 28(2).
[13] However, as the High Court of Australia recently observed ‘resolution of disputes serves the public as a whole, not merely the parties to the proceedings’.[10] Therefore, parties must take care in their dealings in Tribunal matters and act in their own interests throughout the conduct of the proceedings or accept the consequences when the proceedings are otherwise properly and legally finalised.[11]
[10]Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, 217.
[11] Breezeway Developments Pty Ltd v ADG Hydraulics Pty Ltd [2010] QCATA 69, [10-13].
[14] Under s48(2), the Tribunal may make its final decision in the favour of the applicant when another party unnecessarily causes disadvantage. One matter the Tribunal must consider in make a determination under s 48(2) is whether the party causing the disadvantage is acting deliberately.
[15] When a bankruptcy is annulled, under the Bankruptcy Act 1966, the bankruptcy is treated as if it had not happened, subject to duly made transactions effected by a trustee or the Official Receiver.[12]
[12]Oates v Commissioner of Taxation (1990) 27 FCR 289; Worrall v Westpac Banking Corp (1994) 51 FCR 304; Battenberg v Union Club (2005) 215 ALR 696; QBSA v Meredith [2010] QCATA 50; Re Fitzgerald; Ex Parte Fitzgerald (1988)99 ALR 189; Theissbacher v MacGregor Garrick Co [1993] 2 Qd R 233.
Discussion and decision
The grounds of appeal are unrelated to the basis upon which the decision was made by the learned adjudicator. He made a decision in the full amount of the claim under s 48 of the QCAT Act against Mr McGrath because he had unnecessarily caused disadvantage by attempting to deceive Ms Scott and the Tribunal about his status as a bankrupt.
The bankruptcy search discussed earlier detailing when the bankruptcy petition was filed and that the bankruptcy was annulled on 7 January 2011 was before the adjudicator. Mr McGrath’s response was filed after his bankruptcy had been annulled. It sought orders for the claim to be dismissed in part because of his bankruptcy. The learned adjudicator was entitled on the evidence before him to find that Mr McGrath deliberately acted to deceive both Ms Scott and the Tribunal about his status. As a matter of law, the adjudicator was correct about the effect of annulment of the bankruptcy.
Mr McGrath had a responsibility to act in his own interests when providing material to the Tribunal and conducting the proceeding before the Tribunal. He failed to do so in that he gave information to the Tribunal which the Tribunal found, and was entitled to find, to be deliberately misleading.
It is apparent from his grounds of appeal that Mr McGrath seeks in effect to have the matter reheard in full on its merits in an attempt to secure a different result. The question arises whether the final orders disposing of the matter under section 48 were properly made in the proceeding.
Section 48 empowers the Tribunal to make final orders determining a proceeding against a party, when the Tribunal is satisfied that a party is unnecessarily disadvantaging another party. How is this to be reconciled with the Tribunal’s obligation to act fairly and according to the substantial merits of the case in all proceedings? How is it to be reconciled to a party’s obligations to act to take care in their dealings with the Tribunal and act in their own interests or accept the consequences?
The Tribunal is not obliged to make an order under section 48. In a particular case, it may decide not to do so having regard to the apparent merits of the case of a person who is causing disadvantage.
In Moreton Island Development Group v Smith Development Pty Ltd,[13] the Appeal Tribunal held that when a member exercises a discretionary power under the Act, consideration should be given to whether it is ‘necessary or appropriate’ in the case at hand.[14] The decision under appeal in that case, which had been made under section 72 of the QCAT Act, was considered by the Appeal Tribunal to be analogous to summary judgment in the civil courts.
[13] [2012] QCATA 15.
[14]Moreton Island Development Group v Smith Development Pty Ltd [2012] QCATA 15, [34].
Further, the Appeal Tribunal said that various other factors should also be considered before a Tribunal proceeds to make what amounts to the equivalent of a summary determination of a proceeding. These factors ‘include the nature and scope of the dispute, whether it is appropriate to determine the matter without an oral hearing and whether the parties have had the opportunity to make submissions about the issues in contest.’[15] Under the Uniform Civil Procedure Rules 1999, when a court considers an application for summary judgment, the test is whether a party has ‘no real prospect’ of succeeding on or successfully defending the claim, or part of it, and there is no need for a trial.[16]
[15] [2012] QCATA 15, [35].
[16] Uniform Civil Procedure Rules 1999, rr 292, 293.
In my view, the decision made in favour of Ms Scott was in the nature of a summary judgment. Although it was made after a hearing, the hearing lasted, in total, 13 minutes. Both parties were given the opportunity to make submissions. However, it is apparent from both the transcript and the reasons of the learned adjudicator that it was a hearing about whether Mr McGrath had deliberately acted to deceive Ms Scott and the Tribunal. The reasons for decision also focus on whether Mr McGrath acted deliberately to deceive Ms Scott and the Tribunal concerning his bankruptcy and its annulment. Having concluded that he had, the Tribunal considered the power under section 48(2) should be exercised.
Consideration was not otherwise given to whether it was appropriate in the circumstances having regard to factors including the merits of the case, and in particular, whether Ms Scott would have been entitled to succeed on her claim against Mr McGrath.
That said, Mr McGrath has not taken care in his dealings with the Tribunal. He has acted in a manner which was apparently intended to deliberately mislead the other party as well as the Tribunal. Resolution of disputes by the Tribunal serves not only the parties, but the public. Generally, parties who act in such a manner must accept the consequences of their actions. In a full hearing on the merits, a likely consequence may be findings of credit against the party, which may ultimately result in an outcome against the party concerned.
However, Mr McGrath’s actions aside, the Tribunal must act in accordance with its obligations under the QCAT Act to act justly, fairly and according to the substantial merits of the case. Unfortunately, it has not done so.
It follows that the learned adjudicator erred in law. Leave to appeal should be granted and the decision of the Tribunal should be set aside. The Appeal Tribunal is able to substitute its own decision in the place of the decision appealed. However, as concerns the issues in the proceeding, including the alleged indemnity relied upon by Ms Scott in her case against Mr McGrath, the evidence of the parties needs to be tested, before a determination can properly be made. In the circumstances, the matter must be returned to the Tribunal for reconsideration by way of fresh hearing on the merits.
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