Parker v Jay McCormack t/a Phoenix Cars Australia

[2010] QCAT 607

CITATION: Parker v Jay McCormack t/a Phoenix Cars Australia [2010] QCAT 607

PARTIES:	Mr Bernard Charles Parker
v
Jay McCormack t/a Phoenix Cars Australia

APPLICATION NUMBER:   OCL070-10  

MATTER TYPE: Occupational regulation matters

HEARING DATE:     6 October 2010

HEARD AT:  Brisbane

DECISION OF: Alexander Crawford, Member

DELIVERED ON: 24 November 2010

DELIVERED AT:      Brisbane

ORDERS MADE:	The application is dismissed There will be no order to costs.
CATCHWORDS :	Claim against the Claim Fund - financial loss because of misrepresentation by a relevant person - Property Agents & Motor Dealers Act 2000 - Sections 408, 470, 488 & 490.

APPEARANCES and REPRESENTATION (if any):

APPLICANT:	Mr Bernard Charles Parker appeared in person
RESPONDENT:	Jay McCormack t/a Phoenix Cars Australia appeared in person

REASONS FOR DECISION

Background

[1]    On or about 14 October 2009 Jay McCormack (“the respondent”) sold a 1965 Ford Mustang Fastback (purchased by him on or about 6 June 2009 from a licensed motor dealer in Ringwood, Victoria), to Bernard Charles Parker (“the applicant”).

[2]    On 28 January 2010 the applicant made a claim against the Claim Fund which was established under the provisions of the Property Agents and Motor Dealers Act 2000 ( the “PAMD Act”) in respect to Jay Gerald McCormack.

[3]    On 12 April 2010 Mr Greg Fraser the acting manager of the Claims and Recoveries Branch, wrote a letter to the applicant referring to his claim against the claim fund.

[4]    Relevantly, in that letter, the applicant was informed from the information that he had provided in support of his claim the actions of the respondent in relation to the claim did not constitute a breach of s.470 of the PAMD Act which would give rise to a valid claim against the Claim Fund. Particularly he was told he could not demonstrate that he had suffered a financial loss because of the contravention of a claimable event listed in s.470(1) of the PAMD Act by a relevant person.

[5]    S.469 of the PAMD Act defines a relevant person as:

(a)A licensee; or

(b)A licensees employee or agent, or a person carrying on business with a licensee; or

(c)A person having charge or control, or apparent charge or control of a licensees registered office of business.

[6]    The letter went on further to say that s.469 of the PAMD Act defines a licensee as including a former licensee and a person who is not licensed but who acts as a licensee. The respondent has never held a license under the PAMD Act and there does not appear to be any evidence that he was acting as a licensee.

[7]    The amount claimed by Mr Parker was $61,995.00 and the claim was referred to the Tribunal on 24 June 2010 for determination by the Tribunal under the provisions of Chapter 14 of the PAMD Act.

[8]    The Chief Executive did not direct an investigation into this claim.

The Law

[9]    The jurisdictional provisions of the PAMD Act are contained in s.450. The provisions with regards to the functions of the Tribunal are contained in s.488 of the PAMD Act. The Claim Fund is established under s.408 of the PAMD Act and in accordance with s.409 of the PAMD Act the fund must be used to pay the amounts of all claims allowed against the fund.

[10]  A person may make a claim against the fund if a person suffers financial loss because of the happening of any of the events set out in s.470 of the PAMD Act. Relevantly, one of the events is the contravention of s.574 of the PAMD Act by a relevant person.

[11]  Section 574 of the PAMD Act says as follows:

574 False representations about property

(1) A licensee or registered employee must not represent in any way to someone else anything that is false or misleading in relation to the letting, exchange or sale of property.

Maximum penalty--540 penalty units.

(2) Without limiting subsection (1), a licensee or registered employee must not, in connection with the sale, or the possible sale, of an interest in land or in connection with the promotion in any way of the sale of an interest in land, represent in any way to someone else anything that is false or misleading in relation to--

(a) the value of the land at the date of sale; or

(b) the potential income from the leasing of the land; or

(c) if the land has been previously sold, the date of the sale and the consideration for the sale; or

(d) how the purchase of the land may affect the incidence of income

taxation on the buyer.

Maximum penalty--540 penalty units.

(3) Without limiting subsection (1) or (2), a representation is taken, for the subsection, to be false or misleading if it would reasonably tend to lead to a belief in the existence of a state of affairs that does not in fact exist, whether or not the representation indicates that that state of affairs does exist.

(4) Also, if a person makes a representation in relation to a matter and the person does not have reasonable grounds for making the representation, the representation is taken to be misleading.

(5) The onus of establishing that the person had reasonable grounds for making the representation is on the person.

(6) It is not a defence to a prosecution under subsection (1) or (2) for the defendant to prove that an agreement with the person was terminated or that the person did not enter into an agreement because of the representation.

(7) This section does not limit another Act or law about false or misleading representations.

(8) In this section--

false or misleading, in relation to a representation includes the willful concealment of a material fact in the representation. licensee includes a person acting as a licensee, but does not include a commercial agent. registered employee includes a person acting as a registered employee, but does not include a commercial subagent.

[12]   There are limits on the recovery which is allowable under the fund which is are set out in s.492 of the PAMD Act as follows:

s.492 - Limits on Recovery From Fund

(1)A claimant cannot recover form the fund an amount more than the balance of the claimant’s financial loss after deducting from the claimant’s loss:

(a) the amount, including the value of all benefits received or recovered by the claimant from a source other than the fund in reduction of the loss; and

(b) the amount, including the value of all benefits, the chief executive or the Tribunal considers the claimant might reasonably have received or recovered if not for the claimant’s neglect or default.

Examples at paragraph (a):

1. compensation received from the licensee for the loss.

2. a payment from a receiver for the loss.

(2)A claimant may not recover from the fund for a single claim an amount more than the amount prescribed under a regulation.

(3)Also, the claimant may not recover more than $35,000 from the fund for a single claim for financial loss if the claim relates to a non-investment residential property purchased by the claimant because of, or arising out of, a marketeering contravention.

(4)A regulation may prescribe the total amount that may be paid from the fund because of, or arising out of, a contravention, failure to ensure clear title to a vehicle, stealing, misappropriation or misapplication by a single person.

(5)Interest is not payable from the fund in relation to a claim allowed against the fund.

Evidence

[13]  The applicant did not rely upon any statement filed by him with the Tribunal but gave oral evidence and referred to a number of documents, in particular a series of emails. Mr Parker said he believed Mr Jay McCormack to be a trustworthy person and he believed that the roadworthy certificate that was provided was correct. He believed that Mr Jay McCormack was selling Ford Mustang vehicles under the heading of Phoenix Cars Australia via a website. For example, in an email dated 13 September 2009, 12:28pm from [email protected] to the applicant “Bernie” the respondent said as follows:

“The cars we represent on our website are within our USA Affiliate Dealer Network. Most cars are in the USA and we work from our inventory there. We bring 3-5 cars into Australia at any given time, most of which are sold  whilst on the boat to Australia.”[1]

In an earlier email to the applicant dated the same day, the email finished with the words “Kind Regards, Phoenix Cars Australia, Jay McCormack, General Manager.”

[1] Exhibit 5; Annexure JGM2.

[14]  The applicant said the motor vehicle was transferred from Mr Jay McCormack’s name to Mr Parker’s name in Queensland at the office of Queensland Transport in Spring Hill, Brisbane on or about 14 October 2009.

[15]  After the vehicle was transported to Melbourne, Mr Parker had difficulty starting the vehicle. Further, he had trouble in re-registering the vehicle and in Victoria the car failed a roadworthy test, Vic Roads issued a defect notice and the vehicle has been in security storage for a year at a cost of $20.00 a day up until 14 October 2010.

[16]  The applicant said he assumed form the emails that the respondent was a licensed motor car dealer because of the way he wrote about the car. He paid $43,250.00 for the car and he thinks that he has been conned. Under cross-examination, Mr Parker agreed that he purchased a vehicle that was never on the website.

[17]  To assist the Tribunal, Mr C.J. McKenzie, an Office of Fair Trading investigator, gave evidence at the request of the Tribunal. Mr McKenzie along with Mr Darren Brown had interviewed Mr Jay McCormack at the Porsche Centre Brisbane, New Farm on 29 March 2010 and a transcript of the interview was provided to the Tribunal by the applicant.

[18]  Mr McKenzie said that the allegations against Mr McCormack were that he made misrepresentations in relation to the quality of the vehicle he had sold to the applicant and that he was representing himself as a licensed second hand motor vehicle dealer when in fact that was not the case and that certain investigations were still continuing.

[19]  Mr McCormack did not object to Mr McKenzie’s giving evidence. Mr McKenzie and Mr Darren Brown had been observers at the Tribunal hearing.

[20]  Mr McCormack who described himself as unemployed relied upon his affidavit sworn 29 September 2010 and some written submissions.

[21]  Mr McCormack spoke to his Affidavit and referred among other matters to Annexure JGM2, the above mentioned email of 13 September 2009 at 12:28pm and emphasised the fact that the email contained the words “the Fastback has been my personal car for a year or so”. He further referred to Annexure JCM5 which included the words “my 1965 Mustang Fastback” and referred to paragraph 6 of his Affidavit which says: “The vehicle was then presented to Queensland Transport in Spring Hill and inspected by an official on or about 6 August 2009 for registration in my personal name (CRN85760475) and all relevant stamp duties and applicable licensing fees for the acquisition and private use of the vehicle were paid”.

Submissions

[22]  In his submissions the applicant said he believed that Phoenix Cars Australia was a big website with cars for sale on it as well as a website where enquiries for insurance and finance could be made. The first email he received was on 12 September 2009 which was a standard reply following his enquiry. He had asked for the details regarding the orange Mustang 1970. He said the emails and viewing the website led him to believe that Mr McCormack was a licensed motor vehicle dealer. He said also the fact that in the email dated 3 September 2009 at 12:25pm that Mr McCormack had represented that “we bring 3-5 cars into Australia at any given time, most of which are sold whilst on the boat to Australia” added to this view in his mind.

[23]  Mr McCormack in his submissions referred to his written submissions. He referred to s.488 of the PAMD Act which says that the Tribunal may allow the claim only if it is satisfied, on the balance of probabilities, that:

(a)an event mentioned in s.470(1) happened; and

(b)the claimant suffered financial loss because of the happening of the event.

[24]  Mr McCormack submitted that he did not hold a license; therefore he was not a relevant person. The fact that he did not hold a license was confirmed by Mr McKenzie. The respondent submitted that what emerged from the evidence was that the transaction was isolated, that it dealt with the respondent’s personal vehicle upon which he, relevantly, made a loss. He submitted that there was no evidence that there was a business being run by the him that included, as part of that business, the sale of this vehicle. Any alleged, misleading or false representations must be in respect of the subject vehicle and be in connection with the respondent’s actions as a motor dealer.

[25]   The respondent submitted that s.574 relates to false representations about property. Property is not defined in the PAMD Act. However, certainly where the PAMD Act proscribes conduct in relation to motor dealers or motor vehicles, the phrase motor vehicle is specifically used and defined in s.15 of the PAMD Act. Mr McCormack submitted that the use of the words property rather than the specific term motor vehicle would lead to an interpretation that what the section seeks to proscribe is conduct in relation to real property.

[26]  Further, the respondent said that it was asserted that “the respondent made false statements deliberately to give a false impression in a conscious effort to deceive me by misrepresentation and misleading words about the vehicle through the many emails”. Mr McCormack said that it is firstly not for the respondent to make sense of an allegation such as this. If the applicant wishes to bring himself into the bounds of s.574, it is for him to do a number of things, including:

(a)Isolate the representation alleged to misleading or false;

(b)prove on the balance of probabilities that such an allegation was in fact false or misleading; and

(c)Show that the false or misleading conducting caused the respondent to suffer loss.

[27]  The respondent  submitted that the subject vehicle was purchased in the respondent’s personal name, complied for Australian roads, a safety certificate was obtained in the respondent’s personal name, the vehicle was registered in the respondent’s personal name, using the respondent’s personal customer reference number with Queensland Transport. It was common ground that the personal customer reference number was the personal license number.

[28]  The respondent submitted that some of the statements alleged by the applicant to be misrepresentations were in effect mere puffery but even if the statements go beyond mere puffery, the applicant must also prove that the statements were incorrect so as to constitute a material misrepresentation. Further, the applicant had to prove that such misrepresentations had led to the alleged loss suffered by the applicant in the sum of $68,019.80[2], which he had not done.

[2] Exhibit 3

Observations and Findings

[29]  I find that on the evidence that the respondent was acting as a licensee even though he was not the holder of a license at the relevant time, pursuant to s.469 of the PAMD Act. I find this on the basis of the existence of the website for Pheonix Cars Australia at the relevant time. I note also in the respondent’s written submissions at paragraph 30 the respondent says “any reference to the respondent operating as a motor dealer in respect of this transaction can only be references to the Phoenix Cars Australia website, which is admitted to be owned and run in an ad-hoc way by the respondent.”

[30]  However, in respect of the particular transaction the subject of this hearing I find that the respondent was a private individual selling a private vehicle to another private individual. What lends support to this view is the number of references to the Fastback being a personal car in the emails but also the fact that the vehicle was purchased in the respondent’s personal name, that it complied for Australian roads, a safety certificate was obtained in the respondent’s personal name and the vehicle was registered in the respondent’s personal name, using the respondent’s personal customer reference number with Queensland Transport.[3]

[3] Affidavit of Jay McCormack paragraphs 4-6 inclusive.

[31]  Accordingly, while I find that he was acting as a licensee in respect of the website, for the purposes of the transaction the subject of the complaint, the respondent was not a relevant person as defined under s.469 of the Act.

[32]  Having made the findings that I have in paragraphs 30 and 31 above I do not consider it is necessary for me to make any further findings regarding the alleged misrepresentations leading to financial loss (the damages).  However I wish to state that I consider that s.574(1) of the PAMD Act does proscribe conduct in regard to motor dealers and motor vehicles.  Further I agree with the respondent’s submission in paragraph 23 above and I say that on the evidence before the Tribunal I would have difficulty in finding that the alleged misrepresentations did lead to the damages claimed.

[33]  Regarding the damages alleged by the applicant, in the Tribunal’s view there are real difficulties in the evidence in respect of the quantum of the claim advanced by the applicant. For example, the Tribunal agrees with the respondent’s submission that there is no credit given to the amount claimed for the value of the vehicle in its current state.

Costs

[1]    There will be no order as to costs. [4]

[4] See s.100 of the QCAT Act.