Quikfund (Australia) Pty Ltd v Point to Point Cutting Services Pty Ltd
[2013] VSC 501
•23 September 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2012 03778
| QUIKFUND (AUSTRALIA) PTY LTD (ACN 116 768 711) | Appellant |
| v | |
| POINT TO POINT CUTTING SERVICES PTY LTD (ACN 104 722 554) | Respondent |
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JUDGE: | GARDE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 August 2013 | |
DATE OF JUDGMENT: | 23 September 2013 | |
CASE MAY BE CITED AS: | Quikfund (Australia) Pty Ltd v Point to Point Cutting Services Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 501 | |
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CONSUMER CREDIT – Whether credit provider – Whether linked credit provider – Trade Practices Act1974 (Cth) s 73(1) and (14) – Whether a director – Corporations Act2001 (Cth) s 9 – Quikfund (Australia) Pty Ltd v Prosperity Group International Pty Ltd (in liq) (2013) 209 FCR 368 discussed – Appeal from Magistrates’ Court of Victoria – Magistrates’ Court Act1989 (Vic) s 109 – Issues not raised before Magistrates’ Court – Not permitted to be raised on appeal – Appeal dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr S Bell | Coopers Lawyers |
| For the Respondent | Mr T Sowden | Harwood Andrews |
HIS HONOUR:
Introduction
This is an appeal by Quikfund (Australia) Pty Ltd (ACN 116 768 711) (‘Quikfund’) from a decision of the Magistrates’ Court of Victoria in a complaint by Point to Point Cutting Services Pty Ltd (ACN 104 722 554) (‘Point’).[1] Point claimed that Quikfund was a linked credit provider to a supplier of telecommunications and computer equipment and was liable for losses suffered by Point in consequence of a misrepresentation made by the supplier’s salesman. Point succeeded against Quikfund in the amount of $9,629.89, interest and costs.
[1] Point to Point Cutting Services Pty Ltd v Service AA Pty Ltd & Anor (Unreported, Magistrates’ Court of Victoria, Lauritsen DCM, 4 June 2012) (‘Reasons’).
Six grounds were relied on by Quikfund in its notice of appeal. In substance, they allege that his Honour erred when he held that:
(1)The proper plaintiff was Point in its own right;
(2)John Gioskos was authorised to bring the proceedings and give evidence on behalf of Point;
(3)Quikfund was a credit provider on its own behalf;
(4)Quikfund executed a rental agreement on its own behalf;
(5)Quikfund was a linked credit provider; and
(6)Quikfund was liable for alleged misrepresentations in respect of services provided by third parties being telecommunication companies.
In its complaint, Point sought relief against Quikfund and another party formerly known as Axsiom Victoria Pty Ltd (ACN 126 049 161) (‘Axsiom’). Axsiom was the telecommunications and computer equipment supplier, and was later known as Service AA Pty Ltd.
On 21 September 2007, Joseph Minichiello (‘Minichiello’), a salesman with Axsiom made an unannounced visit to Point’s premises at Campbellfield (‘the premises’). Point occupied the premises together with another company called Mode Industries Pty Ltd (‘Mode’). Mode and Point conducted their businesses from the premises. Mr Minichiello spoke to John Gioskos, a cabinet maker, and director of Mode. After studying Point’s telephone accounts, he told Mr Gioskos that for $1,070 plus GST per month, he could hire new telecommunications and computer equipment (‘the equipment’) and make phone calls using it. That is, the total cost of the equipment and telephone calls would not exceed the total figure of $1,070 plus GST (or $1,170) per month except rarely.[2]
[2]Ibid, 1 and 7.
According to ASIC records, Mr Gioskos was not a director of Point. However, Mr Gioskos gave evidence that he was a director and half owner of Point with Jeffrey Hager (‘Hager’). ASIC records show Mr Hager to be the sole director of Point.
Mr Gioskos and Mr Minichiello signed a number of documents. They included:
(a)an order for the supply and installation of the equipment by Axsiom;
(b)a rental agreement (‘rental agreement’) including a tax invoice and rental schedule for the rental of the equipment from Quikfund for a monthly rental of $1,070.00 plus GST with personal guarantees signed by Mr Gioskos and Mr Hager; and
(c)fixed line and mobile telephone rate cards in the name of Prime Telecoms.[3]
[3]Prime Telecoms Pty Ltd changed its name to Service PT Pty Ltd and was deregistered on 15 April 2011.
After the equipment was installed, Axsiom billed Quikfund for the cost. Subsequently, Point found that the rental payments and phone charges exceeded $1,170 each month. Point discontinued payments.
Mr Minichiello had misrepresented the true position. What he told Mr Gioskos was false. If Mr Gioskos had known the true position, Point would not have entered into any of the agreements. Mr Minichiello was not called as a witness.
None of this was in dispute before me. There was no challenge to any of the findings to these fundamental matters. This appeal solely concerns the matters raised in the grounds of appeal.
Error on a Question of Law
Under s 109 of the Magistrates’ Court Act1989 (Vic), appeals to this court are confined on a question of law. The authorities concerning appeals under s 109 are helpfully set out in State of Victoria v Subramanian[4] and S v Crimes Compensation Tribunal.[5] Although not expressed in this form, the questions sought to be raised in this appeal are almost all to the effect that there was ‘no evidence’ on which his Honour could have arrived at the factual findings that he did. As was said in Subramanian, it is rarely easy to establish that the decision of the lower court was ‘not open’.[6]
[4](2008) 19 VR 335, 344-8 [24]-[32] (Cavanough J) (‘Subramanian’).
[5][1998] 1 VR 83, 88-9 (Phillips JA). See also S E Vineyard Finance Pty Ltd (recs & mgrs apptd) v Casey [2011] VSC 403 [28]–[33] (Habersberger J) and TAC v Hoffman [1989] VR 197.
[6]Subramanian (2008) 19 VR 335, 348 [34].
Ground 1 – Standing of Point
Quikfund contends that Point entered into the rental agreement as trustee for the Point to Point Plant Hire Unit Trust. Point has an Australian company number (ACN 104 722 554). The trust has an Australian business number (ABN 321 787 133 09). Quikfund contends that Point was not the true renter.
His Honour held that Point was the correct plaintiff as:[7]
(a)Point was the corporate entity referred to in the agreements, and the contracting entity.
(b)All payments of rent came from Point’s bank accounts.
(c)The rental agreement referred to Point and to the Point to Point Plant Hire Unit Trust.
(d)There was no evidence of any other entity behind the name ‘Point to Point Cutting Services’ or of any other company containing the words ‘Point to Point’.
(e)It did not matter that Point had not proven the trust of which it was the trustee. The existence of the trust was immaterial.
[7]Reasons, 4.
His Honour is plainly correct. In addition to the reasons which he gave:
(a)Point is the company referred to in all of the documentation, and should be the plaintiff in the proceeding. The existence of a business name or business registration is immaterial.
(b)The Point of Point Plant Hire Unit Trust played no role in the factual matrix underlying this proceeding. It is not referred to in the amended complaint and statement of claim. It is not referred to in the notice of defence.
(c)The trustee is the appropriate legal person to protect the interests of the trust in legal proceedings.
Ground 2 – Was Mr Gioskos a director of Point?
Quikfund contends that:
(a)ASIC records show Mr Hager to be the sole director and shareholder of Point;
(b)only Mr Hager had the power to act for and bind Point;
(c)there was no evidence that Mr Gioskos was cloaked with any authority by Mr Hager to bring proceedings or give evidence on behalf of Point; and
(d)Mr Gioskos’ belief to the contrary was irrelevant.
His Honour held that Mr Gioskos was a director of Point because:[8]
(a)Mr Gioskos believed that he was a director of Point, and that Point’s accountant had attended to the necessary steps to make him a director;
(b)it was Mr Gioskos who signed Point’s cheques; and
(c)Mr Gioskos had little understanding of the structure of companies.
[8]Ibid, 6.
Section 9 para (b) of the Corporations Act2001 (Cth) defines a ‘director’ of a company as including a person not validly appointed as a director (unless the contrary intention appears) if:
(i) they act in the position of a director; or
(ii)the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes.
The evidence of Mr Gioskos and the executed agreements show that:
(a)Mr Gioskos signed the rental agreement including tax invoice and rental schedule as a director of Point. Mr Minichiello witnessed his signature and capacity.
(b)Immediately below Mr Gioskos’ signature is that of Mr Hager. He also signed as a director. Mr Minichiello also witnessed his signature and capacity.
(c)Both Mr Gioskos and Mr Hager gave personal guarantees, as might be expected if they were directors of Point.
(d)Quikfund accepted the Point proposal on the footing that Mr Gioskos and Mr Hager were directors of Point.
(e)Mr Gioskos executed the Axsiom supply and installation order describing himself as the contact for Point.
(f)Mr Gioskos signed Prime Telecoms’ documentation on behalf of Point.
(g)Mr Gioskos is a signatory to Point’s cheque account.
(h)Mr Gioskos made rental payments and paid phone bills out of Point’s bank account.
(i)Both Point and Mode operate out of the same premises. Mr Gioskos described Mr Hager as his partner.
(j)Both businesses were conducted as one shop. Mode operated the manufacturing side of the business. Point undertook the machining side.
(k)Mr Gioskos and Mr Hager looked after each other’s businesses. Each was responsible for the other’s business; and made contracts, payments, and attended to accounts on behalf of the other’s business. Both companies operated as one, and shared resources.
It was clearly open to his Honour on the evidence to conclude that Mr Gioskos was a director of Point, as he believed he was, and that he acted in the position of a director.
Grounds 3 and 4 – Was Quikfund a credit provider to Point?
Point relied on s 73 of the Trade Practices Act 1974 (Cth) (‘the Act’).[9] Section 73(1) provides:
[9]For cases that have referred to or considered s 73 of the Act see generally: Enterprise Finance Solutions Pty Ltd v Austec Pty Ltd [2013] FCA 491 (Nicholas J); Landy DFK Finance v Rasaratnam [2000] VSC 322 (Balmford J); Business & Professional Leasing Pty Ltd v Dannawi [2008] NSWSC 902 (Young CJ in Eq); Technology Leasing Ltd v Lennmar Pty Ltd [2012] FCA 709 (Cowdroy J); and New Holland Credit Aust Pty Ltd v Vandeleur [2006] SADC 57 (Judge Smith).
73 Liability for loss or damage from breach of certain contracts
(1)Where:
(a)a corporation (in this section referred to as the supplier) supplies goods, or causes goods to be supplied, to a linked credit provider of the supplier and a consumer enters into a contract with the linked credit provider for the provision of credit in respect of the supply by way of sale, lease, hire or hire‑purchase of the goods to the consumer; or
(b)a consumer enters into a contract with a linked credit provider of a corporation (in this section also referred to as the supplier) for the provision of credit in respect of the supply by the supplier of goods or services, or goods and services, to the consumer;
and the consumer suffers loss or damage as a result of misrepresentation, breach of contract, or failure of consideration in relation to the contract, or as a result of a breach of a condition that is implied in the contract by virtue of section 70, 71 or 72 or of a warranty that is implied in the contract by virtue of section 74 of this Act or section 12ED of the Australian Securities and Investments Commission Act 2001, the supplier and the linked credit provider are, subject to this section, jointly and severally liable to the consumer for the amount of the loss or damage, and the consumer may recover that amount by action in accordance with this section in a court of competent jurisdiction.
His Honour held that Point was a consumer as defined in s 4B of the Act. This finding was not challenged on appeal.
Point alleged in paragraph 14 of its amended complaint that Quikfund was at all material times:
a corporation providing or proposing to provide, in the course of a business carried on by it, credit to consumers in relation to the acquisition of goods or services.
Quikfund responded in its notice of defence in paragraph 15:
[Quikfund] admits paragraph 14 of the Complaint in that it normally carries on a business of a credit provider but in this case, it did not finance the equipment subject of the rental agreement, has no contractual relationship with [Point] …[10]
[10]Underlining added.
In substance, Quikfund admitted it carried on the business of a credit provider, but said that it was not the credit provider on this occasion.
Section 73(14) of the Act defines ‘credit provider’ to mean:
(14) In this section:
credit provider means a corporation providing, or proposing to provide, in the course of a business carried on by the corporation, credit to consumers in relation to the acquisition of goods or services.[11]
[11]Underlining added.
The Macquarie Online Dictionary gives among the meanings of the word ‘propose’:[12]
[12]
…
4. to put before oneself as something to be done; to design; to intend.
5. to present to the mind or attention; state.
…
8. to form or entertain a purpose or design.
Section 73 formed part of Part V – the consumer protection part of the Act. As consumer protection legislation, it is considered remedial and beneficial, and interpreted liberally.[13]
[13]D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 7th ed, 2011), 293 [9.3], citing Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470, 503-4; Webb Distributors (Aust) Pty Ltd v Victoria (1993) 179 CLR 15, 41; Qantas Airways Ltd v Aravco Ltd (1996) 185 CLR 43, 60; Jonsson v Arkway Pty Ltd (2003) 58 NSWLR 451, 456.
The definition of ‘credit provider’ in s 73(14) construed beneficially and liberally is wide enough to cover circumstances where the credit provider acting in the course of its business and in relation to the acquisition of goods or services by a consumer:
(a)provides credit to the consumer in relation to a transaction;
(b)has decided to provide credit to the consumer in relation to the transaction;
(c)intends to provide credit to the consumer in relation to the transaction;
(d)will provide credit to the consumer in relation to the transaction if another credit provider fails to do so;
(e)will provide credit to the consumer if the transaction satisfies certain conditions, requirements or matrices that the credit provider requires be satisfied before it will provide credit in any particular transaction; or
(f)seriously entertains the provision of credit to the consumer in relation to a transaction.
Quikfund submitted that it was acting for Australian Integrated Finance Pty Ltd (‘AIF’), as undisclosed principal, and that there was no evidence that it proposed to provide finance or credit to Point. It submitted that when Point signed the rental agreement, it offered to rent equipment. While Quikfund received and processed the application to rent equipment, it did not ultimately finance the purchase of the equipment.
His Honour held that:[14]
A linked credit provider is a credit provider, which is a corporation providing or proposing to provide credit to consumers in relation to the acquisition of goods or services. At the time Point executed the agreement, Quikfund was unsure whether it would finance the purchase. If no one else wanted to be the principal, then Quikfund would. When Point executed, one would say Quikfund was proposing to provide finance. Viewed objectively, then Quikfund was providing the finance. The goods belonged to Quikfund because the agreement said so. [Axsiom] invoiced it for the price of the goods. There are many terms in the agreement referring to Quikfund’s ownership of the goods.[15] According to the agreement, the direct debit went to Quikfund; in reality, it went to AIF. Quikfund was the credit provider. It was also the linked credit provider.
[14]Reasons, 7.
[15]For example, cls 5.1, 5.6, 9.1, 9.3 and 9.4.
In her evidence, Ms Micheline Semaan, the account receivables manager of Quikfund, described Quikfund’s business as being the provision of finance for small to medium businesses either in the form of being a principal, lending the money, or as an agent on behalf of the principal lending the money. Quikfund had acted since 2006 for a number of companies. In about 80% of transactions, it acted as the broker or middle person. It funded the transaction itself in about 20% of cases.[16]
[16]Transcript of Proceedings, Point to Point Cutting Services Pty Limited Service AA Pty Ltd & Anor (Magistrates’ Court of Victoria, B12367600, Lauritsen DCM, 8 May 2012) 156.27–157.8 (‘Transcript’).
Ms Semaan gave evidence that when Quikfund received an application from a supplier, it would show that application to the proposed principal. The principal would have a look at the application, and send either an approval advice or a decline advice.[17] Following receipt of an approval advice, Quikfund would go back to the supplier, which would then decide whether or not to adhere to the terms of the approval. Quikfund dealt with the supplier, and it dealt with the principal. She described this process as ‘stock standard’, and that this was the process that Quikfund had with AIF.[18] Quikfund was the broker so all dealings were with Quikfund.[19]
[17]Ibid 158.9-17.
[18]Ibid 158.5-30.
[19]Ibid 172.19-20.
When asked in cross-examination why Axsiom would send an invoice to Quikfund in the first place, Ms Semaan responded that Quikfund was the broker so all dealings were with Quikfund.[20] In relation to the Axsiom invoice for rental goods that was addressed to Quikfund (and not to AIF), she said that until Quikfund say yes, AIF is willing to finance it, it is assumed that Quikfund will finance it.[21] Ms Semaan stated that she had dealt with Axsiom in the past, and where Quikfund had been the principal lender. She agreed that Axsiom would in the circumstances raise an invoice very similar to the one she had before her when giving evidence. The invoice would be for products that Axsiom had purchased and delivered to a customer, and Quikfund typically had financed. After Axsiom had been paid, it did not completely disappear from the picture. If customers raised disputes, Quikfund needed Axsiom to go out and see them. Axsiom got paid, and remained there if Quikfund needed Axsiom to provide a customer service or maintenance or something along those lines.[22]
[20]Ibid 172.16-20.
[21]Ibid 173.13-17.
[22]Ibid 178.10 – 179.9.
Ms Semaan’s said that the arrangements between Quikfund and Axsiom extended not only to the supply of equipment, but also to customer service and maintenance of that equipment. In answer to a question as to whether Axsiom would ever have dealt with AIF, she said that it’s common practice that AIF deals with just the agent, and the agent (Quikfund) deals with Axsiom.[23]
[23]Ibid 180.5-14.
In re-examination, Ms Semaan described the process when a document came to Quikfund from Axsiom. Quikfund would put it out to a financier, and it would be approved or declined. If declined, Quikfund would not necessarily take it on. Quikfund could decline in its entirety, and not provide finance. Quikfund had certain levels and matrices that the transaction had to fall into and if it doesn’t fall into any of those it doesn’t get any finance.[24]
[24]Ibid 183.21-31.
It is apparent from Ms Semaan’s evidence that the credit transaction might have taken one of two different forms. Quikfund could decide to finance the purchase of the equipment from Axsiom itself, and enter into the rental agreement as principal; or it might act as the broker or middle person, with another finance company acting as the principal. Quikfund would have provided finance to Point if the transaction satisfied certain levels and matrices which the transaction had to fall into, unless another credit provider provided the finance and Quikfund acted as broker. Quikfund was seriously entertaining the provision of finance itself, and was prepared to do so if this was needed and if the transaction met its eligibility requirements.
His Honour’s conclusion that Quikfund was a credit provider is strengthened by a number of features of the executed documentation:
(a)the Axsiom tax invoice dated 5 October 2007 invoiced the equipment to Quikfund, and not to AIF;
(b)clause 2.1 of the rental agreement was an offer by Point to rent the goods from Quikfund;
(c)clause 9.1 of the rental agreement described the goods as Quikfund’s property, and the customer as a bailee of the goods only;
(d)clause 9.2 of the rental agreement was a printed term whereby the customer acknowledged that Quikfund entered into the rental agreement as agent for an undisclosed principal, while cl 9.4 permitted Quikfund to sell or assign its rights under the rental agreement without notice to the customer;
(e)the schedule to the rental agreement described the customer as having agreed to rent the equipment from Quikfund upon the terms and conditions of the agreement;
(f)under the direct debit service agreement, the direct debit went from Point’s bank account to Quikfund’s bank account;
(g)while AIF ultimately provided finance to Quikfund, these arrangements were not disclosed to Point which understood from the documentation provided by Mr Minichiello that it was dealing with Quikfund;
(h)the preamble of an agreement made between Quikfund and AIF on 19 April 2007 (undisclosed to Point) referred to Quikfund carrying on the business of introducing equipment rental (operating lease) transactions for its customers to a number of banks and other finance companies;
(i)the preamble also provided that Quikfund and AIF entered into the agreement to allow Quikfund to act as an undisclosed agent of AIF for the purpose of supplying equipment rentals to those customers; and
(j)clause 2.4 of the same agreement provided that the parties should not at any time make disclosure to any customer the Agency under this Agreement [sic].
Given the evidence and documentation, it was open to his Honour to conclude, as he did, that in the circumstances Quikfund was a credit provider, and was providing or proposing to provide in the course of a business credit to consumers in relation to the acquisition of goods or services.
Ground 5 – Was Quikfund a linked credit provider to Axsiom?
The sixth question (which is the question that relates to ground 5) is whether an agent for an undisclosed principal is a linked credit provider for the purposes of s 73 of the Act.
Ground 5 of the Notice of the Appeal states that ‘His Honour erred in law in finding that Quikfund was a linked credit provider to Axsiom Pty Ltd.’
Near to the conclusion of the appeal, when in reply, counsel for Quikfund indicated that he was considering amending this question and the related ground. However after taking instructions, no amendment was sought.
Section 73(14) of the Act defined ‘linked credit provider’ in the following terms:
(14) In this section:
…
linked credit provider, in relation to a supplier, means a credit provider:
(a)with whom the supplier has a contract, arrangement or understanding relating to:
(i)the supply to the supplier of goods in which the supplier deals;
(ii)the business carried on by the supplier of supplying goods or services; or
(iii)the provision to persons to whom goods or services are supplied by the supplier of credit in respect of payment for those goods or services;
(b)to whom the supplier, by arrangement with the credit provider, regularly refers persons for the purpose of obtaining credit;
(c)whose forms of contract or forms of application or offers for credit are, by arrangement with the credit provider, made available to persons by the supplier; or
(d)with whom the supplier has a contract, arrangement or understanding under which contracts or applications or offers for credit from the credit provider may be signed by persons at premises of the supplier.
To understand the point that was sought to be made by Quikfund below, it is necessary to describe the context, and to identify the issue that was before the Magistrates’ Court.
Paragraph 12 of Point’s statement of claim alleged that:
At all material times, [Quikfund] was in relation to [Axsiom] a linked credit provider within the meaning of s. 73 of the Trade Practices Act 1974 …
PARTICULARS
[Quikfund]:
a)Had a contract arrangement or understanding with [Axsiom] relating to:
i.the supply to [Axsiom] of goods in which [Axsiom] dealt;
ii.the business carried on by [Axsiom] of supplying goods or services; or
iii.the provision to persons to whom goods or services are supplied by [Axsiom] in respect of payment for those goods or services.
b)was, by arrangement, regularly referred to persons by [Axsiom] for the purpose of obtaining/providing credit;
c)had an arrangement with [Axsiom] whereby forms of contract of forms of applications or offers of credit were made available to persons by [Axsiom].
d)had a contract arrangement or understanding under which contract [sic] or applications or offers for credit from [Quikfund] might be signed by persons at the premises of [Axsiom] and/or [Point].[25]
[25]Affidavit of James Anthony Bowlen (affirmed 17 May 2013), ex JB1 amended complaint paragraph 12.
In paragraph 13 of its notice of defence, Quikfund denied Point’s allegation and said:
…
b.[Quikfund] acted as an agent for the credit provider AIF and did not provide credit to [Point] and therefore is not a ‘linked credit provider’ as alleged by [Point] or indeed credit provider of any kind to [Point];
c.That [Point’s] claim under s 73 of the Trade Practices Act (Cth) 1974 must fail because it should have instigated proceedings against AIF, the credit provider in this case;[26]
…
[26]Ibid, ex JB3 notice of defence paragraph 13. Paragraph 13(a) denied that Point was a consumer, and is omitted as no longer in issue. Paragraph 13(d) concerned the losses that could be claimed, and is not relevant. Paragraph 13(e) challenged the pleading of ss 218-278 of the Australian Consumer Law and is not relevant.
It was not suggested at any time during the hearing in the Magistrates’ Court that the denial was intended to dispute any issue other than those listed in paragraph 13(a) to (e). The basis of Quikfund’s defence to this aspect of the claim was that Quikfund was an agent for AIF, that AIF was the real credit provider and that Quikfund was not in its own right the linked credit provider, or indeed, a credit provider of any kind to Point. This was the sole defence to this aspect of the proceeding that was pressed before his Honour. There is no other paragraph of the notice of defence that takes this aspect of the claim any further.
The limited nature of Quikfund’s defence to the linked credit provider allegation before the Magistrates’ Court is also clear from the relevant part of the closing address of Quikfund’s counsel to his Honour:
a. First, counsel for Quikfund addressed the basis on which it was said that Quikfund was not a linked credit provider:[27]
[27]Transcript 213.10-18.
You are not a linked credit provider merely because, in the course of your business, you’re sometimes a linked credit provider. It must be referring to your conduct in respect of this transaction. For example, if the Commonwealth Bank of Australia is a linked credit provider in respect of some transactions, it couldn’t be sued by the plaintiff under this provision. You need to be a linked credit provider in respect of this transaction.
b. Counsel for Quikfund then referred to the definition of linked credit provider in the following terms:[28]
[28]Ibid 213.21-28.
The definition then of linked credit provider means a credit provider - sorry, and then (indistinct) saying, with whom the supplier is linked. And it then identifies the ways in which you may be linked. And I say that it may be the case that Quikfund - sorry, that Quikfund and Axsiom are linked in a general sense and that they undertake other transactions together. I don’t know, I’m only involved in this case.
c. Counsel for Quikfund then reiterated the basis on which the claim that Quikfund was a linked credit provider was resisted:[29]
[29]Ibid 213.29 – 214.5.
But I say that in this case, Axsiom provided Quikfund’s documents to the plaintiff. Quikfund’s documents were then forwarded to AIF, which made a decision whether to finance. AIF then financed and it would be surprising if Quikfund was the linked credit provider and AIF was not, given that AIF has had all of the benefit of the contract and moreover, is proposing to sue the plaintiff on the contract ...
d. The following discussion then occurred between his Honour and Quikfund’s counsel:[30]
[30]Ibid 214.15 – 214.26 (underlining added).
HIS HONOUR: But if you look at the definitions, if you look at 14, linked credit provider in relation to supplier is a credit provider and then (a) has three matters and then there’s (b), (indistinct) supplied by nature of a credit (indistinct) first person to the credit. (c), whose forms of contract or forms of application (indistinct) by arrangement of credit provider made available to persons (indistinct), isn’t it?
COUNSEL: Yes, they are in general terms they are – sorry. Quikfund on my reading of this is a linked credit provider of Axsiom by reason of the practice of Quikfund provided its forms to Axsiom.
e. It is clear from this exchange that counsel was acknowledging that Quikfund was a linked credit provider to Axsiom by reason of its practice of providing its forms to Axsiom.
f. This acknowledgement prompted his Honour to ask:[31]
[31]Ibid 214.27 – 215.6.
HIS HONOUR: So wouldn’t that enable me to conclude that Quikfund was the linked credit provider for this transaction?
COUNSEL: No, because I say you should look at s.73(1)(b) and I say that it applies where a consumer entered into a contract with linked credit provider, assume that the – then for the provision of credit in respect of the supply by the supplier of goods or services and I say that Quikfund was not a credit – did not supply credit in respect of any goods or services. It does not come within this subsection.
This was the same contention as was set out in Quikfund’s notice of defence.
g. Although the exchange is not completely transcribed, the limited scope of the linked credit provider issue before his Honour was clear:[32]
HIS HONOUR: (Indistinct) agreement with [Point] relate to the provision agreement in relation to the supply (indistinct)?
COUNSEL: The agreement relates to that but it didn’t do it. It didn’t provide credit …
[32]Ibid 215.7–11.
When his Honour decided that Quikfund was a credit provider in relation to the transaction between Point, Axsiom and Quikfund, it was logical, indeed inevitable, on the sole defence that Quikfund had mounted to the linked credit provider allegation that he would conclude that Quikfund was a linked credit provider. The fact that AIF provided the funds for the particular transaction did not mean that Quikfund could not be a credit provider as defined in s 73(14) in relation to the transaction for the reasons that his Honour gave.[33] This finding was open on the evidence.
[33]See [29] above.
The reasons that I have given above as to grounds 3 and 4,[34] inevitably result in the failure of ground 5 arising, as it does, from question 6.[35] However, at the hearing of the appeal Quikfund’s counsel sought to raise a new basis on which it might be contended that Quikfund was not a linked credit provider. He contended that there was no evidence of any of the conditions required by s 73(14) to show that Quikfund was a linked credit provider, or linked in any way.[36]
[34]See [19]–[37] above.
[35]See [38]-[39] above.
[36]Quickfund (Australia) Pty Ltd, ‘Amended Submissions of the Appellant’, Submission in Quikfund (Australia) Pty Ltd v Point to Point Cutting Services Pty Ltd, S CI 2012 03778, 20 June 2013, [25]–[27]; Quickfund (Australia) Pty Ltd, ‘Appellant’s Submissions in Reply to Those of the Respondent’, Submission in Quikfund (Australia) Pty Ltd v Point to Point Cutting Services Pty Ltd, S CI 2012 03778, 9 August 2013, [12].
Quikfund relied on the decision of the Full Court of Federal Court of Australia in Quikfund (Australia) Pty Ltd v Prosperity Group International Pty Ltd (in liq).[37] This decision was not before his Honour. It was handed down seven months later. Both counsel acknowledged in the argument before me that the issues raised in the Prosperity Group case were not before his Honour below. Perusal of the transcript of the hearing in the Magistrates’ Court shows that they were correct.
The Prosperity Group decision
[37](2013) 209 FCR 368 (Foster, Barker and Griffiths JJ) (‘Prosperity Group’).
In its reasons for judgment, the Court made a number of observations about the construction of the definition of the expression ‘linked credit provider’ in s 73(14):[38]
Subparagraph (a) of s 73(14) requires that there be a contract, arrangement or understanding in relation to one or more of the matters described in subparas (a)(i)-(iii). Subparagraph (c) requires that the requisite forms be made available to persons by the supplier “by arrangement with the credit provider”. Similar expressions appear in subparas (b) and (d).
For a corporation to be a linked credit provider in relation to a particular supplier there must have been a consensus reached between that corporation and the supplier prior to the transaction with the consumer who seeks to rely upon s 73. That consensus must relate to one or more of the subject matters covered by subparas (a)-(d) of s 73(14).
[38]Ibid 394 [103]-[104].
The Court described the rationale underlying s 73 in the following terms:[39]
The rationale behind s 73 is to make credit providers liable for the wrongful conduct of certain suppliers of goods and services being those suppliers whom the credit provider has permitted, indeed encouraged, to procure credit business on the credit provider’s behalf pursuant to consensual arrangements reached between them. Section 73 brings about a deemed statutory agency as between the credit provider, as principal, and the relevant supplier, as agent, in respect of contraventions of the kind specified in s 73(1) in the circumstances described in s 73(1)(a) and (b). It is critical to the imposition of liability on the credit provider that the credit provider has formed an association with the supplier in one or more of the ways specified in s 73(14)(a)-(d).
[39]Ibid [106].
The Court held that there had been insufficient evidence in the case before it to support the primary judge’s conclusion that Quikfund was a linked credit provider:[40]
In the present case, there was no direct evidence of any arrangement between QCC and either Quikfund or AER. Furthermore, the only facts from which the requisite arrangement are sought to be inferred are those which we have summarised at [105] above. Those facts do not support the required inference. The arrangements contemplated by s 73(14) are all arrangements which must be in existence prior to the consumer transactions in question.
[40]Ibid 394-5 [108].
The Court also considered what was necessary for the provision and use by the supplier of the credit provider’s forms of contract, applications or offers for credit to constitute Quikfund a linked credit provider for the purposes of s 73(14):[41]
In the case of subpara (c), the provision of forms to the consumer is the activity which must be separate from but contemplated by the antecedent arrangement. That arrangement cannot be proven merely by the fact that the forms were made available to the consumer in a particular case or even by the fact that they were in the possession of the supplier. At the very least, evidence establishing that the documentation had been supplied by Quikfund and AER to QCC for the purpose of being passed on to consumers was required. No such evidence was forthcoming. For all the Court knows, the relevant documentation may have been downloaded by QCC from the websites of Quikfund and AER without either corporation knowing that this had occurred. The fact that that documentation was available to be downloaded from the website by any member of the public would not be a basis for inferring an arrangement of the kind contemplated by s 73(14). The documentation may have been obtained in some other way. It is not for the Court to speculate about these matters. It was incumbent upon Prosperity to prove facts that constituted a proper basis for the Court to infer the existence of the requisite arrangement. It has failed to do so.
[41]Ibid 395 [109].
The expressions ‘contract’, ‘arrangement’ and ‘understanding’ are all found in s 73(14). ‘Contract’ is not defined in the Act, and takes its common law meaning. The expressions ‘arrangement’ and ‘understanding’ describe concepts which mean something less than a contract. They may not be legally enforceable as a matter of common law, but do involve a meeting of the minds of those who are parties, and a consensus as to what is to be done.
In ACCC v Construction, Forestry, Mining and Energy Union, Finn J described elements of an arrangement or understanding in the following terms:[42]
[42][2008] FCA 678 [10].
The concepts in these various provisions have not been defined. However, they have been the subject of judicial illumination. For present purposes I need refer only to the following, presently uncontroversial, propositions. First, for an “arrangement or understanding” to be found, there must be a “meeting of the minds” of the parties under which one or both of them committed to a particular course of action: CEPU at [15] and [175]; Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 at [75]. As Smithers J observed in Top Performance Motors Pty Ltd v Ira Berk (Qld) Pty Ltd (1975) 24 FLR 286 at 291:
Where the minds of the parties are at one that a proposed transaction between them proceeds on the basis of … the adoption of a particular course of conduct, it would seem that there would be an understanding within the meaning of the Act.
Secondly, a mere expectation, as a matter of fact, or a hope that something might be done or happen or that a party will act in a particular way, is not of itself sufficient to found an arrangement or understanding: see Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission (2005) 159 FCR 452 at [45]; IPM Operation at [104]-[112]. Thirdly, the necessary consensus or meeting of minds need not involve, though it commonly will in fact embody, a reciprocity of obligation: Amcor Printing Papers at [75].
In ACCC v Amcor Printing Papers Group Ltd, Sackville J summarised previous cases in a similar manner:[43]
An arrangement or understanding … is apt to describe something less than a binding contract or agreement … However, in order for there to be an arrangement or understanding … there must be a meeting of the minds of those said to be parties to the arrangement or understanding. There must be a consensus as to what is to be done and not merely a hope as to what might be done or happen … Ordinarily, an arrangement or understanding involves communication between the parties arousing expectations in each that the other will act in a particular way … There is no necessity for an element of mutual commitment between the parties to an arrangement or understanding, although in practice such an arrangement or understanding would ordinarily involve reciprocity of obligation.
[43](2000) 169 ALR 344, 359-60 [75].
The term ‘arrangement’ is defined in a well known passage in Re British Basic Slag Ltd’s Agreements followed in many subsequent cases:[44]
Though it may not be easy to put into words, everybody knows what is meant by an arrangement between two or more parties. If the arrangement is intended to be enforceable by legal proceedings, as in the case where it is made for good consideration, it may no doubt properly be described as an agreement. But the statute clearly contemplates that there may be arrangements which are not enforceable by legal proceedings, but which create only moral obligations or obligations binding in honour … For, when each of two or more parties intentionally arouses in the others an expectation that he will act in a certain way, it seems to me that he incurs at least a moral obligation to do so. An arrangement as so defined is therefore something “whereby the parties to it accept mutual rights and obligations”.
[44][1963] 2 All ER 807, 814 (Willmer LJ).
In Commissioner of Taxation (Cth) v Lutovi Investments Pty Ltd, Gibbs and Mason JJ said:[45]
It is, however, necessary that an arrangement should be consensual, and that there should be some adoption of it. But in our view it is not essential that the parties are committed to it or are bound to support it. An arrangement may be informal as well as unenforceable and the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it.
[45](1978) 140 CLR 434, 444.
The concept of an ‘understanding’ is broad and flexible. In L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd, Smithers J said:[46]
It may arise merely where the minds of the parties are at one that a proposed transaction proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct …
[46](1978) 34 FLR 81, 89.
In ACCC v Leahy Petroleum Pty Ltd, Merkel J held:[47]
[T]he term “understanding” is apt to describe something less than a binding contract or arrangement. An understanding will usually, but may not necessarily, involve some reciprocity of obligation … At the least, there must be a meeting of minds of those said to be parties to the understanding and a consensus as to what is to be done; not merely a hope as to what might be done or might happen.
[47](2004) 141 FCR 183, 200 [54]. This case was reversed on appeal in Apco Service Stations Pty Ltd v ACCC (2005) 159 FCR 452 with special leave refused by the High Court in ACCC v APCO Service Stations Pty Ltd [2006] HCATrans 272.
Should Quikfund be permitted to raise new issues?
This is not the first time that new issues have been sought to be raised on an appeal under s 109 of the Magistrates’ Court Act 1989 (Vic). In Mond v Lipshut, Ashley J said:[48]
[48][1999] 2 VR 342, 350-1 [40]-[41] and [43]-[45].
Appeal is available under s. 109 of the Magistrates’ Court Act “on a question of law, from a final order of the [Magistrates’] Court”. In respect of an analogous provision of the Administrative Appeals Tribunal Act 1984 a majority of the Full Court in Transport Accident Commission v. Hoffman [1989] V.R. 197 said this at 199:
It is not to be construed as limited to an appeal from a decision of the Tribunal on a question of law. Nor is it to be construed as granting an appeal from any decision which involves a question of law. The via media we think is to construe the section as granting a right of appeal from any decision of a Tribunal on a question of law which is involved in the Tribunal’s decision.
The import of that passage was highlighted by Tadgell J.A. in Frugtniet v. Secretary to Department of Justice (No. 2) (1996) 10 V.A.R. 314 at 317. The appeal must be brought on a question of law (contrast a decision of fact) which is involved in the decision of the tribunal which is the subject of appeal.
…
The predecessor of s. 109 of the Magistrates’ Court Act 1989 was s. 91 of the Magistrates’ Court Act 1971, which provided for the order to review procedure. The apparent breadth of its application, as disclosed by grounds upon which orders nisi had been made, is revealed by Motor Accidents Board v. Coutts [1984] V.R. 790 at 794-6.
Under the order to review procedure, according to Brooking J. in Coutts at 799:
The principle that, unless the proceedings below took a course which make it unjust to allow the matter to be relied on now, a point not taken below may be raised on appeal if the defect could not have been cured (Edmondson v. Macan (1878) 4 V.L.R. (L.) 422; Suttor v. Gundowda Pty. Ltd. (1950) 81 C.L.R. 418, at p. 438) has been applied to these orders nisi for as long as the procedure has existed, whether the new point was advanced by way of attacking the order below . . . or by way of supporting it . . .
and
. . . where the point is used to assail the order below, it must of course be covered by the grounds of the order nisi.
The ability of a party to raise a point for the first time on appeal, in order to support the order appealed from, has been held to apply in the case of appeals brought under s. 92 of the Magistrates’ Court Act 1989: Director of Public Prosecutions v. Makris (unreported, Batt J., 16 March 1994) referring to Director of Public Prosecutions v. Webb [1993] 2 V.R. 403 (see particularly per Ormiston J. at 414-17). I consider that there is no difference between s. 92 and s. 109 in this respect.
In Emer v Queen Victoria Women’s Centre Trust, McDonald J said:[49]
[49][1999] VSC 115 [44] and [47].
In Carter v. Reid [1992] 1 VR 351, Hedigan, J had before him an appeal, pursuant to s.92 of the Magistrates' Court Act 1989, on a question of law from a final order of a Magistrates' Court in a criminal proceeding. Under s.92(7), which is in the same terms as s.109(6), it is provided that the court “after hearing and determining the appeal” ... “may make such order as it thinks appropriate, including an order remitting the case for re-hearing to the court with or without any direction in law.” At p.363 of his judgment Hedigan, J identified the nature of an appeal to this court under s.92 of the Magistrates’ Court Act. He said –
“The appeal is an appeal on a question of law and the only question formulated was as to whether the Magistrate erred in the manner set out in the ground. This is not a re-hearing, nor is it a review of the Magistrate's decision. It is an appeal strictly so-called, being an appeal on a question of law. The terms of s.92 of the Magistrates’ Court Act 1989 require the appeal on a question of law under s.92(1) to be in accordance with the Rules of the Supreme Court. The section itself makes no provision for the reception of further evidence. The court may make such order as it thinks appropriate, but only after determining the appeal. This, to my mind reinforces the conclusion that the court is not at large, so to speak, save as to dispositive orders required after determining the question of law.”
That statement of his Honour has direct application to an appeal under s.109 of the Magistrates’ Court Act 1989 as is the present case.
…
In University of Wollongong v. Metwally [No. 2] (1985) 59 ALJR 481 at p.483 the court in its judgment said -
“It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which whether deliberately or by inadvertence, he failed to put during the hearing when he had the opportunity to do so.”
In Hodgkinson v Yarra Valley Country Club Inc, Ashley J again said:[50]
There is authority that this court, though it may not amend a Master's order in a case such as this, “may direct that an appeal be decided upon questions of law identified and canvassed in the arguments advanced where this is necessary to achieve the effective, complete and economic determination of the appeal and is otherwise just and convenient”. On the other hand, I have expressed considerable doubt whether an appeal such as this can be used as a platform to raise an argument of law not raised below; and I have said that this should not be permitted where the flow of evidence may have been different had the argument been raised.
[50][2001] VSC 364 [36] (footnotes omitted).
Osborn J in Equuscorp Pty Ltd v Rigert addressed similar issues in considering an appeal from the Magistrates’ Court:[51]
[51][2003] VSC 343 [56]–[61] (footnotes omitted).
The predecessor to s.109 of the Magistrates' Court Act was the order to review procedure which provided for an appeal by way of review on questions of law. In MAB v Coutts Brooking J stated:
“The principle that, unless the proceedings below took a course which make it unjust to allow the matter to be relied on now, a point not taken below may be raised on appeal if the defect could not have been cured (Edmondson v Macan (1878) 4 VLR(L) 422; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at p.438) has been applied to these orders nisi for as long as the procedure has existed, whether the new point was advanced by way of attacking the order below, as in Noonan v Potter (1892) 14 ALT 164 and Warracknabeal Urban Waterworks Trust v Snow (1895) 18 ALT 40; 2 ALR 12, or by way of supporting it, as in Cameron v Moore (1894) 20 VLR 66 at p.70; Jones v Lorne Sawmills Pty Ltd [1923] VLR 58 at pp.62-3; Taig v Fawcett [1962] VR 58 and Nevill v Halliday [1983] 2 VR 553 at p.568; …”
Reference might also be made to longstanding authority of the High Court. In Adams v Chas. S. Watson Pty Ltd a Magistrate dismissed a claim by the Deputy Federal Commissioner of Taxation because it had not been instituted within the 12 month period stipulated by the Justices Act 1928 (Vic). The appellant argued on appeal that the then provisions of the Commonwealth sales tax legislation excluded the application of the Justices Act provision. It was objected that the point was not raised before the Magistrate. Latham CJ stated on behalf of the Court (which also included Rich and Dixon JJ):
“The court is of the opinion that the objection should be overruled. It is entirely a question of law. I refer to George Hudson Ltd v Australian Timber Workers’ Union (1923) 32 CLR 413 at p.426, per Isaacs J, where he says: ‘In Ex part Markham (1869) 34 JP 150 the Court of Queen's Bench (Cockburn CJ and Blackburn, Mellor and Lush JJ) held that a fatal objection in law may be taken in the appellate court, though not noticed before the justices, the condition being that it could not be cured by further evidence.’ The principles there expressed by Isaacs J appear to apply completely to this case. As Mr Ashkanasy has said, it is a matter which may be taken into account in considering the question of costs, but that will depend upon the view which the court takes of the whole matter.”
There are three underlying considerations which support the approach stated above. First it is appropriate that the Supreme Court exercise its supervisory role in a manner which recognises that proceedings in the Magistrates' Court may well be more summary in nature than those in better resourced jurisdictions. In the George Hudson case referred to by Latham CJ, Isaacs J stated as follows in words which reflect a continuing reality although the Magistrates’ Court jurisdiction has been expanded:
“I should like to add another observation before parting with this point. The Court of Petty Sessions is par excellence the poor man's court, and is intended rather for a broad and speedy decision on facts than for any ruling on a difficult point of law. Section 101 is perhaps, as to parties in civil cases at all events, the most extensive and least expensive method of appeal so as to obtain a Supreme Court decision on the legal obligations of the parties. Whether represented by counsel or not or, being represented by counsel, whether or not he is habitually accustomed to the recondite intricacies of scientific jurisprudence, if a litigant, merely because some decisive but unusual point escapes attention, were to be debarred from the benefit of a Supreme Court's ruling on the point, Parliament would have failed to meet an obvious necessity.”
In Fiorelli Properties Pty Ltd v Professional Fencemakers Pty Ltd, Kaye J considered whether a party was entitled on appeal to raise a point which was not taken at trial:[52]
[52](2011) 34 VR 257, 268 [44], 270 [48] (footnotes omitted).
The conclusion to the question, whether the appellant might now rely on the point advanced by it, is not to be resolved solely by reference to the manner in which the causes of action, relied upon by the appellant at first instance, were formulated in the statement of claim, or, indeed, articulated in argument. Rather, it is necessary to consider the substance, and not just the form, of the proceeding which was brought before the magistrate. However, that said, it is clear that the appellant is now seeking to rely on a significantly different right of action to that which it propounded before the magistrate. The claim before the magistrate was made strictly on principles of law. The appellant now seeks to rely on an alternative, different, claim in equity. In effect, the appellant is now submitting that, notwithstanding the position at law, equity should and would intervene, to provide relief to it against the forfeiture of its deposit, which would otherwise take place according to the terms of the contract between itself and the first respondent, and according to the principles of law that apply to that contract.
…
If I am wrong in that conclusion, I consider that, in any event, the established principles, relating to the raising on appeal of a new point, which was not relied on at trial, would preclude the appellant from relying on the alternative argument advanced by Mr D’Abaco. Those principles, as stated by the High Court in Whisprun Pty Ltd v Dixon, are to the effect that a party is not entitled, on appeal, to raise a point which was not taken at trial, unless that point “could not possibly have been met by further evidence at the trial”.
I am of the view that Quikfund should not now be permitted to raise new matters such as whether there was sufficient evidence of an arrangement or understanding between Quikfund and Axsiom as discussed in the Prosperity Group case. These topics were not the subject of evidence, argued or even mentioned other than in the most cursory way in passing before the Magistrates’ Court. Any need for further proof had they been raised could have been met by further evidence at the hearing.
It is clear that had the existence of an arrangement or understanding between Quikfund and Axsiom been in issue, the evidence before the Magistrates’ Court might have taken a very different course, particularly the evidence-in-chief and examination of Ms Semaan. Evidence would have been led, or cross-examination undertaken as to the issues considered in the Prosperity Group case.
In addition, if the notice of defence had extended to matters such as those successfully raised by Quikfund in the Prosperity Group case, Point is likely to have sought discovery from Quikfund of documents such as:
(a)documents relevant to the existence of a contract, arrangement or understanding between itself and Axsiom as to any of the matters listed in subparas (a)(i), (ii) or (iii), (b), (c), or (d) of the definition of ‘linked credit provider’ in s 73(14) of the Act;
(b)documents relating to past transactions between Quikfund and Axsiom as supplier where it acted as credit provider or as agent for an undisclosed principal; and
(c) documents relating to the use by Axsiom personnel of Quikfund’s forms.
Evidence of an arrangement or understanding between Quikfund and Axsiom might have been proved by Point in many ways, for example, through evidence or cross-examination directed to establish that:
(a)Quikfund and Axsiom personnel acted in parallel or in concert in making consumer transactions and credit arrangements;
(b)Quikfund and Axsiom personnel acted jointly to obtain and make consumer transactions and credit arrangements such as that which occurred here;
(c)there was common management action or cooperation to achieve consumer transactions and credit arrangements such as that which occurred here;
(d)there was an agreement, arrangement or understanding between Quikfund and Axsiom as to commissions or brokerage fees to be charged by Quikfund in relation to credit provision and consumer transactions made by Axsiom personnel; or
(e)there were meetings or discussions between representatives of Quikfund and Axsiom with the object of arriving at protocols, practices, or mutual arrangements for the use of Quikfund as a credit provider, agent or broker in association with the sale of Axsiom products by Axsiom personnel.
No such matters were raised in the notice of defence, and no other notice was given to Point. It would be unfair and unjust to Point for Quikfund to be able to raise new matters now of which Point was not given notice before or during the hearing in the Magistrates’ Court, and which were not argued before that Court.
Given Quikfund’s failure to raise these matters before the Magistrates’ Court, it should not be permitted to do so now.
This case is a consumer complaint heard by the Magistrates’ Court. The amount recovered was less than $10,000. The proceedings before the Magistrates’ Court were more summary in nature than might be experienced in this Court or in the Federal Court. Not all possible points were or could be contested. But this is not to say that there was any error on a question of law in what was done, having regard to the limited scope of the case before the Magistrates’ Court.
Ground 6 – Was Quikfund liable for the alleged misrepresentation in respect of services provided by Axsiom?
Quikfund submits that it has been found liable for losses attributable to the telecommunications agreement with Prime Telecoms – not the rental agreement. It submits that there is no evidence of any loss by Point attributable to the rental agreement. It says that it did not finance the telecommunications agreements and cannot be liable for any losses attributable to them.
His Honour held that Point paid invoices from telecommunications suppliers addressed to it totalling $9,629.89. These invoices were additional to the amount of rent paid by Point to Quikfund under the rental agreement. He was satisfied that Point had suffered loss and damage in this amount.
In assessing damages as a consequence of misrepresentation under s 73(1) of the Act, a number of principles apply:
(a)the consumer must have suffered loss or damage as a result of the misrepresentation;
(b)the misrepresentation must be ‘in relation to’ the contract with the linked credit provider;
(c)s 73 is a consumer protection provision and should be construed beneficially and liberally;[53]
(d)the words ‘in relation to’ are of ‘broad import’ and have been described as ‘among the broadest which could be used to denote a relationship between one subject matter and another’; [54]
(d)a comparison must ordinarily be made between the position in which the consumer is in, and the position that the consumer would have been in had there been no contravention of s 73(1);
(e)the loss and damage is not limited to, but will ordinarily be economic loss; and
(f)the economic loss will ordinarily reflect the fact that the consumer has sustained a prejudice or disadvantage as a result of altering his or her position under the inducement of the misleading conduct.[55]
[53]See [26] and footnote 10 above.
[54]Pearce and Geddes, above n 13, 376-7 [12.7], citing O’Grady v Northern Queensland Co Ltd (1990) 169 CLR 356, 374 (Toohey and Gaudron JJ), 376 (McHugh J); and Nordland Papier AG v Anti-Dumping Authority (1999) 93 FCR 454, 461 (Lehane J).
[55]I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1.
The misrepresentation made by Mr Minichiello was a misrepresentation made by him ‘in relation to’ the rental agreement, and the charges payable under the rental agreement, as well as relating to likely telephone charges from telecommunication suppliers. There was a sufficient nexus with the rental agreement and Quikfund’s role as credit provider and broker. Point relied on the misrepresentation and loss was suffered in consequence. Point incurred significantly greater costs than were expected in that its total rental costs and telecommunication charges exceeded the amount represented by Mr Minichiello.
His Honour approached the assessment of loss and damage carefully, reviewing the individual accounts charged to Point. He allowed only some accounts as set out in his reasons.[56] His conclusion and assessment of loss and damage was open to him. There is no basis on which his findings can be disturbed.
[56]Reasons, 7-8.
Conclusion
I am satisfied that each of grounds 1-6 inclusive as raised by Quikfund in its notice of appeal must fail. The appeal will be dismissed with costs.
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