Secure Funding Pty Ltd v Mascotbury Pty Ltd trading as Brisbane Auto Centre & Bazvand (No 2)

[2010] QCAT 656

CITATION: Secure Funding Pty Ltd v Mascotbury Pty Ltd trading as Brisbane Auto Centre & Bazvand (No 2) [2010] QCAT 656

PARTIES:	Secure Funding Pty Ltd Ref: 1270371 & 1227467
v
Mascotbury Pty Ltd trading as Brisbane Auto Centre And Djalalddin Bazvand And Homa Bazvand

APPLICATION NUMBER:   OCL086-10    

MATTER TYPE: Other civil dispute matters

HEARING DATE:      21 December 2010

HEARD AT:     Decision on the papers

DECISION OF: Ms Peta Stilgoe

DELIVERED ON: 21 December 2010

DELIVERED AT:       Brisbane

ORDERS MADE: The application is dismissed.

CATCHWORDS : 

MOTOR DEALERS – where financier did not receive payout of loan when vehicle allegedly traded – where financier took no action for five months

Property Agents and Motor Dealers Act 2000 subsection 470, 488

APPEARANCES and REPRESENTATION (if any):

This matter was heard on the papers in accordance with section 32 of the

Queensland Civil and Administrative Tribunal Act 2009

REASONS FOR DECISION

1. Secure Funding Pty Ltd (“Secure”) has made a claim on the statutory fund for $20,836.58. It says that the basis of the claim is as follows:

aIn March 2007, Liberty Funding Pty Ltd financed the sale of a Kia Carnival through Brisbane Auto Centre.

bThe Kia was traded back through Brisbane Auto Centre in September 2007.

cOn 4 January 2008, Secure’s client advised Secure that the loan should have been paid out by Brisbane Auto Centre. It seems that Secure was not previously aware that the vehicle was no longer in the purchaser’s possession

dAn officer from Secure spoke to “Dean” at Brisbane Auto Centre on 30 January 2008 in which it was advised that the loan would be paid out within seven days. At that time, the loan balance was $18,698.88.

eSecure made many more attempts to contact Dean between January and June 2008.

fOn 27 May 2008, Secure received confirmation that the Kia was held at the premises of Brisbane Auto Centre.

gThe Kia was recovered on 25 July 2008. The Kia is valued at $1,500.

hThe loan has not been paid out, and the account is in now in debit for $22,520.37.

1. The Tribunal may allow a claim for compensation only if it is satisfied, on the balance of probabilities[1]:

aThat an event mentioned in section 470(1) of the Property Agents and Motor Dealers Act 2000 (“PAMDA”) happened.

bThe claimant suffered financial loss because of the happening of the event.

[1] Section 488 Property Agents and Motor Dealers Act 2000 (“PAMDA”)

1. Secure has not articulated the “relevant event” on which it relies. It is implicit in its submissions that it is relying on s470(1)(e) of the Property Agents and Motor Dealers Act 2000:

“a stealing, misappropriation or misapplication by a relevant person of property entrusted to the person as agent for someone else in the person’s capacity as a relevant person “

1. It appears that Liberty Funding Pty Ltd has changed its name to Secure Funding Pty Ltd but the Tribunal has not been provided with any evidence to this effect. There are some other problems with Secure’s claim:

aSecure has not provided the Tribunal with a copy of the loan account to verify the amount outstanding.

bSecure has not obtained any statement from the original purchaser to verify the fact that they traded the Kia in 2008.

cIt does not explain why the fact of the trade did not come to its attention for almost four months.

dIt has not provided any evidence of the current value of the Kia, or explained why it is now worth so little.

1. Further, Secure has failed to mitigate its loss:

aIt apparently acted on a telephone call from the original purchaser.

bApart from “many” phone calls to “Dean”, it failed to take any action for five months after receiving notice that the Kia had been traded.

cIt did not pursue the original purchaser for the balance of the loan.

1. I am disturbed by the similarity of this claim to the claim in OCL084-10. The original purchase was around the same date, the purchaser contacted Secure to advise of the trade at around the same time and Secure sat on its hands for about the same length of time. Cynical minds may consider that this is more than a coincidence. Surely, Secure must have been put on some notice that these transactions may not have been all that they seemed. In that context, its delay of five months in taking any action is mystifying.

2. It is necessary to repeat my comments in OCL 084-10:

aThe presence of the statutory fund is no reason for financiers of motor vehicles to be complacent. There is no reason to think that the fund will be available to cover a finance company’s losses if it fails in its due diligence, does not take appropriate action to secure its loans or fails to mitigate its loss.

bSimilarly, a financier should not expect that the Tribunal will order compensation from the statutory fund based upon the flimsiest of material. While it is true that the Tribunal is required to deal with matters in a way that is informal and quick[2] the fact remains that the Tribunal is dealing with public money. Finance companies are, or should be, well versed in the requirements of business and the need for adequate documentation. The Tribunal is entitled to expect thoughtful, properly articulated claims that are supported by appropriate evidence. Secure has failed to meet this standard and, therefore, I am not satisfied on the balance of probabilities, that its loss occurred as a result of an event mentioned in section 470(1) of PAMDA.

[2] s3(b) Queensland Civil and Administrative Tribunal Act 2009

1. The application should be dismissed.