Scott v Premium Real Estate Group Pty Ltd
[2011] QCAT 459
•16 September 2011
| CITATION: | Scott v Premium Real Estate Group Pty Ltd & Anor [2011] QCAT 459 |
| PARTIES: | Kim Margaret Scott (Applicant) |
| v | |
| Premium Real Estate Group Pty Ltd (First Respondent) David McGrath (Second Respondent) |
| APPLICATION NUMBER: | MCD0127-11 |
| MATTER TYPE: | Other minor civil dispute matters |
| HEARING DATE: | 26 August 2011 |
| HEARD AT: | Brisbane |
| DECISION OF: | Michael Howe, Adjudicator |
| DELIVERED ON: | 16 September 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] The respondent David McGrath pay to the Applicant Kim Margaret Scott the sum of $7,515.71 for claim, costs and interest to the date of judgment. [2] The claim against the respondent Premium Real Estate Group Pty Ltd be adjourned to the registry. Should no further step be taken against that party by 31 December 2011, the claim against that party be dismissed. |
| CATCHWORDS: | ATTEMPT TO DECEIVE A PARTY AND THE TRIBUNAL – deception by respondent – assertion of bankruptcy – omission of mention of annulment of bankruptcy – judgment in favour of the applicant Queensland Civil and Administrative Tribunal Act 2009, s 48 Weitmann v Katies Ltd (1977) 29 FLR 336 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Kim Margaret Scott |
| RESPONDENT: | David McGrath |
REASONS FOR DECISION
Ms Scott claims that in 2010 she was employed by Premium Real Estate Group Pty Ltd (Premium) or Mr McGrath or both and is owed unpaid holiday pay and rent for her dwelling used by the Mr McGrath and Premium as their office for a period of 10 weeks. She claims against Mr McGrath and Premium $6,531.
Mr McGrath filed a Response to her claim on 23 March 2011. In that document, which was signed by him, he states Ms Scott was not employed by him but by Premium, and that “subsequent to the events the subject of the Application (he) filed a Debtors Petition with the Official Receiver and was made bankrupt. If there is a claim against (him) it vests in David Colin McGrath’s Trustee in Bankruptcy …. Leave of the Federal Court of Australia is required to commence or proceed with this application. 7. No leave … has been obtained by the Applicant. In light of paragraph 7 above it is not competent for this matter to proceed against David Colin McGrath and thus the Application should be struck out.”
Mr McGrath also filed an Application with his Response seeking an order that Ms Scott’s claim against him be stayed or struck out. The strike out Application repeated the statement that Mr McGrath had filed a debtor’s petition in bankruptcy and the claim against him vested in his trustee in bankruptcy and leave to proceed against him was required.
Bankruptcy Search
A copy of that Application to strike out was served on Ms Scott who promptly conducted a bankruptcy search in respect of Mr McGrath. That search disclosed that he had indeed been made bankrupt on his own petition on 17 November 2010, but that less than two months later that bankruptcy had been annulled on 7 January 2011. The search notes the bankruptcy was annulled on the basis of his debts being settled.
Application to Strike Out
Mr McGrath’s Application to strike out came before me for determination on the papers on 6 July 2011. The failure to inform Ms Scott of his annulment of bankruptcy and making the Application to strike out the applicant’s claim without mention of the annulment aroused suspicion that Mr McGrath was attempting to deceive both Ms Scott and the Tribunal as to his status as a bankrupt.
Accordingly I dismissed Mr McGrath’s Application to strike out the claim against him and ordered he file and serve a sworn statement of evidence and submissions dealing with his apparent attempt to deceive the Tribunal and Ms Scott as to his status as a bankrupt in failing to advise his bankruptcy had been annulled on 7 January 2011. Mr McGrath was also required to show cause why the Tribunal should not make its final decision in the proceeding in the Applicant’s favour against him pursuant to s 48 of the Queensland Civil and Administrative Tribunal Act 2009.
If the Tribunal considers a party to a proceeding acts in a way that unnecessarily disadvantages another party, including by attempting to deceive another party or the Tribunal, where the party causing the disadvantage is not the applicant the Tribunal may make its final decision in the proceeding in the applicant’s favour1.
A relevant consideration in reaching that conclusion is whether the party causing the disadvantage is acting deliberately2.
Mr McGrath filed an affidavit in purported compliance with the order of 6 July but failed to offer any explanation why no mention was made of the annulment of his bankruptcy in his Response or in his application to strike out Ms Scott’s claim. In lieu he reiterated Ms Scott had been employed by Premium and not him at all relevant times, and further that after the filing of his debtor’s petition in November 2010 Ms Scott’s claim was unenforceable without her first obtaining leave of the Federal Court.
Procedural Fairness
With a view to ensuring Mr McGrath was given every opportunity to explain his failure to mention annulment, and perhaps, generously, that he did not understand what was required of him, the matter was listed for mention on 26 August 2011 and Mr McGrath offered a further opportunity to explain what appeared to be an attempt to mislead and deceive the Tribunal.
At the hearing on 26 August 2011 Mr McGrath said he did not mean to mislead anyone and did not think to mention the annulment of his bankruptcy as being relevant.
I do not accept that Mr McGrath believed at the time of filing his Response and the Application to strike out Ms Scott’s claim against him that mention of his annulment of bankruptcy was an irrelevance.
Letter of 17 May 2011
Mr McGrath’s Application to strike out the claim was forwarded to the Tribunal under cover of a letter dated 17 May 2011 on the letterhead of Investrend Debt Solutions Pty Ltd, Licensed Commercial Agents and Insolvency Consultants. According to the letter, that company had been retained to assist both Mr McGrath and Premium in this matter.
The letter goes on to say “Mr McGrath filed a Debtor’s Petition on 17 November 2011 (sic). He was bankrupt from that date. He has filed an application to have the matter struck out against him with the Tribunal. It is not permissible for this matter to proceed to mediation involving Mr McGrath. The provisions of the Bankruptcy Act 1966 have not been complied with so it is not competent for the matter to proceed…. No application for leave has to proceed (sic) has been served upon our client or his Trustee.”
The letter was signed by Mr McGrath. Quite simply, the letter suggests he has been bankrupt since 17 November 2010 and remains such. It is not clear just what the association is between Mr McGrath and the commercial agents and insolvency consultants, Investrend, however he signs correspondence on behalf of that company.
Debt Advocate
Mr McGrath says he is a debt advocate. He knows about insolvency, though not about debt collection. He “works with debtors negotiating with creditors to assist them.” He has an understanding of bankruptcy. He said that in the hearing on 26 August 2011. As an adviser in such matters, it is undoubtedly the case that he understands the effectiveness when acting for a debtor of meeting a claim by a creditor for payment with the words, “my client is bankrupt”. In my opinion, Mr McGrath was careful to draw his Response and the application to strike out the claim against him in such a way as to suggest further action against him was futile, that he was impecunious and remained an undischarged bankrupt.
Deceiving somebody is causing another person to believe what is false3. In my opinion, having regard to Mr McGrath’s occupation and experience, Mr McGrath acted deliberately in omitting mention of his bankruptcy annulment, not because it was irrelevant, but because mention of that would spur Ms Scott on and he would have to face a hearing before the Tribunal.
Annulment of Bankruptcy
Mr McGrath’s argument that the filing of his debtor’s petition in November 2010 effectively ended Ms Scott’s claim against him personally, regardless of annulment, is irrelevant to the consideration of deceptive behaviour.
In any case however, the general effect of annulment in bankruptcy is that the bankrupt is placed in the same position he would have been in had he never become bankrupt, subject to any sales or dispositions of property which occur during the period of bankruptcy effected by his appointed trustees or the Official Receiver duly made4. The bankrupt is generally treated as never having been made bankrupt5 and an annulment has retrospective operation6. His Honour Giles JA of the New South Wales Supreme Court has stated that there is strong support for the retrospective scope of annulment to extend even to the fact of becoming bankrupt and that annulment has the effect of reversing the fact that the person had become bankrupt7.
Mr McGrath’s assertions that mention of his annulment of bankruptcy was irrelevant are clearly fanciful. Given Mr McGrath’s occupation and admitted knowledge of bankruptcy, one cannot help but conclude he could not truly have believed that mention of annulment was irrelevant at any relevant time.
Conclusion
I determine that Mr McGrath acted intentionally to deceive both Ms Scott and the Tribunal. Given the claim is for minor debt, even if an award of costs was an appropriate sanction, here it is not. Accordingly the power vested in the Tribunal under s 48(2) should be exercised pursuant to its plain terms and there should be final decision given in the proceeding in Ms Scott’s favour against Mr McGrath for the amount of her claim and allowable costs. There is no dispute as to the quantum of claim evident from Mr McGrath’s Response. In fact Mr McGrath doesn’t dispute Ms Scott’s claim at all save he points the finger of responsibility at Premium. Therefore there should be judgment in Ms Scott’s favour against Mr McGrath in the sum of $6,531 for claim plus filing fee of $92 plus service fee of $75 plus interest at 10% on the amount of claim from 16 June 2010 to the date hereof (16 September 2011) namely $817.71.
As to the claim against Premium, I note that the only Response filed has been on behalf of Mr McGrath. No Response has been filed on behalf of Premium, and whilst certain submissions have been made by Investrend (Mr McGrath) that that company has been wound up, those submissions have not been made on behalf of the company. The claim against both Mr McGrath and Premium, whilst suggestive that it is made in the alternative, may in fact be alleging joint responsibility to pay. Accordingly the judgment against Mr McGrath may not preclude the entry of judgment against Premium. In the circumstances it is appropriate to simply adjourn the claim against Premium to the Registry and if Ms Scott wishes to take the claim further she should make due enquiry as to the solvency of that company, and if the company has not been wound up, it will be up to her to consider default judgment through the Registrar. Having said that, if she recovers the money due to her from Mr McGrath she cannot recover anything from Premium – there will be nothing left owing.
Queensland Civil and Administrative Tribunal Act 2009, s 48(2)(b)(i).
Queensland Civil and Administrative Tribunal Act 2009, s 48(3)(c).
Weitmann v Katies Ltd (1977) 29 FLR 336 at 343 per Franki J.
McDonald Henry & Meek, Australian Bankruptcy Law and Practice (Thompson Lawbook Co) at 4252.
Theissbacher v MacGregor Garrick & Co (a firm) [1993] 2 Qd R 223 at 229.
Theissbacher v MacGregor Garrick & Co (a firm) [1993] 2 Qd R 223; Re Coyle (1994) 120 ALR 527; Worrell v Westpac Banking Corp (1994) 51 FCR 304.
Union Club v Lord Battenberg [2006] NSWCA 72 at [80]–[81]; and see Bailey v Johnson [1872] LR 7 Ex 263 at 265 (Cockburn CJ).
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