OTAS Investment Holdings Pty Ltd v Bergholz
[2011] QCATA 314
•21 November 2011
| CITATION: | OTAS Investment Holdings Pty Ltd v Bergholz and Anor [2011] QCATA 314 |
| PARTIES: | OTAS Investment Holdings Pty Ltd t/a OTAS Business Advisers (Appellant) |
| v | |
| Robert Bergholz Leisa Dann (Respondents) |
| APPLICATION NUMBER: | APL184-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Judge Fleur Kingham, Deputy President |
| DELIVERED ON: | 21 November 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | The application for leave to appeal is allowed.1. Leave to appeal is granted.2. Mr Robert Bergholz and Ms Leisa Dann must pay OTAS Investment Holdings Pty Ltd $14, 572.3. |
| CATCHWORDS: | APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – MINOR DEBT – where learned Magistrate reduced appellant’s claim substantially – whether there was sufficient basis to reduce claim – whether leave to appeal should be granted Queensland Civil and Administrative Tribunal Act 2009, s 142(3)(a)(i) Attorney-General v Kehoe [2001] 2 Qd R 350 applied |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of Queensland Civil and Administrative Tribunal Act2009 (QCAT Act).
REASONS FOR DECISION
This is an application for leave to appeal brought by OTAS Investment Holdings Pty Ltd, a Business Advisory/Taxation Company. The respondents, Mr Bergholz and Ms Dann are former clients of OTAS.
OTAS brought an application against Mr Bergholz and Ms Dann, in the QCAT Minor Civil Dispute jurisdiction for a minor debt relating to loans by OTAS to Mr Bergholz and Ms Dann of $14,242.01 (plus the filing fee, service fee and interest).
The matter was heard on 27 April 2011. The learned Magistrate, acting in her capacity as a Member of QCAT, ordered Mr Bergholz and Ms Dann to pay OTAS $7,461.25 in full satisfaction of the claim. OTAS has applied for leave to appeal that decision.
Leave is required to appeal from a decision arising from a Minor Civil Dispute.[1] Leave will ordinarily only be granted where there is some question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage; or, there is a reasonably arguable case of error in the primary decision and a reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is: is leave necessary to correct a substantial injustice to the applicant, caused by some error?
[1] Queensland Civil and Administrative Tribunal Act 2009, s 142(3)(a)(i).
OTAS’s grounds for leave to appeal can be summarised as follows:
a)The learned member erred in adjusting the award to take into account evidence from Ms Dann and Mr Bergholz that OTAS had been professionally negligent, when such a claim was not substantiated; and
b)The learned Magistrate failed to give adequate reasons.
Should the learned Magistrate have adjusted the award to take into account Mr Bergholz and Ms Dann’s evidence that OTAS had been professionally negligent?
Mr Bergholz and Ms Dann did not submit a counterclaim. OTAS’s application was one for a minor debt. Under the QCAT Rules, a party may not make a counter-application in response to an application for a minor debt claim.[2] QCAT could not have accepted a counterclaim by Mr Bergholz and Ms Dann even if they had lodged one. However, it was open to the learned Magistrate to take into account evidence given by Mr Bergholz and Ms Dann at the hearing and submissions contained in their reply to OTAS’s claim.
[2] Queensland Civil and Administrative Tribunal Rules 2009, r 48.
Mr Bergholz and Ms Dann engaged OTAS as business accountants for their fishing and prawn trawling business. It is not disputed that OTAS made deposits into Mr Bergholz and Ms Dann’s business accounts on two occasions: $6,742.01 in March 2006 and $11,000 in February 2008. It is the nature of these deposits that is in dispute between the parties.
At the hearing, the representative from OTAS, Mr O’Connor, gave evidence that a staff member of OTAS had deposited the amounts under verbal loan agreements to Mr Bergholz and Ms Dann. Mr Bergholz and Ms Dann gave oral evidence in turn that OTAS had taken it upon themselves to make the deposits in order to cover costs incurred through OTAS’s failure to submit business tax returns on their behalf within time. They said they had incurred losses, amounting to approximately $14,220.53 in bank over draft fees, subsequent accounting fees and telephone calls, as a result of OTAS’s failure to submit correct tax returns in a timely manner.
Mr Bergholz and Ms Dann did not produce documentary evidence to support this. Although they denied discussing loans or interest, they acknowledged they had repaid a portion of the money deposited into their account ($3,500) and that there was an outstanding balance.
[10] The transcript discloses that the learned Magistrate did her best to consider all of the allegations on the evidence before her. This included OTAS’s own admission that OTAS had not been able to lodge the tax-returns within time. OTAS submitted this was, in part, due to Mr Bergholz and Ms Dann’s failure to provide adequate paper work. Taking that into account, the learned Magistrate allowed OTAS’ claim including costs, less the $3,500 that the parties agreed had been repaid and then offset the balance by $7,110.26 which, she said, was half of the bank fees of $14,220.53 Ms Dann said they incurred. This was, unfortunately, incorrect. That sum was their total estimated loss, which was made up of bank fees, accounting fees and telephone calls.
[11] Whilst the learned Magistrate’s attempt to deal with the volume of allegations before her was admirable, the basis for finding that the debt should be reduced, essentially by half, was not reasonably based on the evidence before her. In effect, she offset a claim for damages, that was not properly substantiated, against what she accepted was a debt owed by Mr Bergholz and Ms Dann.
Did the learned Magistrate give adequate reasons for her decision?
[12] OTAS submitted that the learned magistrate failed to give adequate reasons for her decision to reduce the claim by almost half of the amount claimed.
[13] The nature and extent of the obligation to provide full reasons varies according to the nature of the case.[3] In QCAT’s Minor Civil Disputes jurisdiction, giving immediate oral decisions accords with the spirit and purpose of the Queensland Civil and Administrative Tribunal Act 2009. Those decisions will not be exposed to criticism which fails to acknowledge the circumstances in which they are given, or the pressure of the caseload.
[3]Attorney-General v Kehoe [2001] 2 Qd R 350 at 356; Tully v McIntyre [2001] 2 Qd R 338.
[14] The learned Magistrate’s decision should not be read in isolation but rather in the context of the proceeding as a whole. Whilst not correct in her finding, the learned Magistrate did give adequate reasons. She explained the basis for her finding with sufficient clarity, particularly in the context of the hearing that directly preceded the decision.
Additional Matters
[15] In their submissions to the Appeal Tribunal, Ms Dann and Mr Bergholz have included information and documents that were not produced at the hearing before the learned Magistrate.
[16] Fresh evidence is not generally received on appeal unless the evidence was not reasonably available at the hearing; and, had it been, an opposite result was likely and the new evidence is credible.[4] Ms Dann and Mr Bergholz have not provided a reason why the evidence was not before the Magistrate in the first instance. This Appeal Tribunal has not allowed that evidence and has had no regard to it in making its decision.
[4] Council of the City of Wollongong v Cowan (1955) 93 CLR 435.
[17] There has not been a determination on the merits of Mr Bergholz and Ms Dann’s case against OTAS. They are free to bring a claim for damages against OTAS if they wish and their ability to do so remains unaffected by this decision.
[18] Leave to appeal is granted, and the appeal is allowed. Mr Bergholz and Ms Dann must pay OTAS $14, 572. The learned Magistrate did not award OTAS interest in the first instance. The Appeal Tribunal does not consider that finding need be disturbed.
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