Sumont Pty Ltd v Chapman
[2021] QCATA 36
•17 March 2021
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Sumont Pty Ltd & Anor v Chapman [2021] QCATA 36
PARTIES:
SUMONT PTY LTD T/AS BRISBANE MOTORCYCLES
(first applicant/appellant)
MOTORCYCLE TRADING PTY LTD T/AS BRISBANE MOTORCYCLES
(second applicant/respondent)
v
GREGORY CHAPMAN
(respondent)
APPLICATION NO/S:
APL064-20
ORIGINATING APPLICATION NO/S:
MCDO34-19 Wynnum
MATTER TYPE:
Appeals
DELIVERED ON:
17 March 2021
HEARING DATE:
On the papers
HEARD AT:
Brisbane
DECISION OF:
Member Howe
ORDERS:
1. Leave to appeal granted.
2. The appeal is allowed.
3. The order made 13 February 2020 is set aside.
4. Sumont Pty Ltd must pay the sum of $2,510 to Gregory Chapman.
CATCHWORDS:
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – where the respondent purchased a motorcycle from a business – where the corporate entity conducting the business changed - where the vehicle was defective – where the respondent sued both entities and was awarded damages against both for breach of a guarantee of acceptable quality pursuant to the provisions of the Competition and Consumer Act 2010 (Cth) Schedule 2 – where the issue of responsible entity was not ventilated at final hearing but was the subject of comment in earlier proceeding – where the failure to consider appropriate entity for the purpose of liability was an oversight by the Tribunal – where leave to appeal granted and appeal allowed
Competition and Consumer Act 2010 (Cth) Schedule 2 s 54
APPEARANCES & REPRESENTATION:
First Applicant:
Self-represented by S Sood
Second Applicant:
Self-represented by J Mutton and S Sood
Respondent:
Self-represented
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
On 25 May 2019 Mr Chapman purchased a used BMW motorcycle from a motorcycle dealer trading as Brisbane Motorcycles.
The motorcycle was delivered to his home on 30 May 2019 and he rode it for the first time on Saturday 1 June 2019. He rode to the North Coast. He found that when he slowed down at traffic lights however the motorcycle stalled.
He contacted Brisbane Motorcycles and they said they would look at the motorcycle but nothing was resolved.
Brisbane Motorcycles said they would replace faulty parts but at Mr Chapman’s cost. Mr Chapman found that unacceptable and commenced proceedings in the Tribunal on 8 August 2019. He filed a minor civil dispute – consumer application naming Brisbane Motorcycles as the respondent and claimed a refund of the money he had paid for the motorcycle, $10,651, plus damages of $500 for interest paid on a loan funding his purchase, and costs.
The matter came on for hearing before an Adjudicator at Wynnum on 24 October 2019. Mr Chapman appeared, but no one from Brisbane Motorcycles. Brisbane Motorcycles instead requested an adjournment, which was granted on the day. The Adjudicator not only adjourned the proceedings but also made an order joining Motorcycle Trading Pty Ltd T/as Brisbane Motorcycles, Sumont Pty Ltd T/as Brisbane Motorcycles and James Mutton as respondents.
The matter returned for hearing before a different Adjudicator on 7 November 2019 and that Adjudicator made further orders concerning the parties. He ordered Brisbane Motorcycles be removed as a respondent, as too James Mutton. The Adjudicator suggested to Mr Chapman that he conduct an ASIC search of Sumont Pty Ltd, serve the originating application on Sumont Pty Ltd and file the search results.
The Adjudicator adjourned the proceedings part heard until 13 February 2020. At the resumption of the hearing the Adjudicator took evidence and heard submissions and found in favour of Mr Chapman for the cost of repairs of the motorcycle rather than return of the motorcycle and repayment of the original price. He ordered both Sumont Pty Ltd T/as Brisbane Motorcycles and Motorcycle Trading Pty Ltd T/as Brisbane Motorcycles to pay Mr Chapman $2,510 within 21 days.
The respondents seek leave to appeal that decision.
This is an appeal from a decision made in the Tribunal’s minor civil dispute jurisdiction. Therefore leave to appeal must be obtained before any appeal can proceed.[1]
[1]Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(3)(a)(i).
Leave to appeal will only usually be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.[2]
[2]Pickering v McArthur [2005] QCA 294.
The grounds of appeal
The application for leave to appeal has been brought by both Sumont Pty Ltd and Motorcycle Trading Pty Ltd, both trading as Brisbane Motorcycles. The grounds of appeal set out in the application for leave to appeal lack precision but are essentially that Mr Chapman was happy with the motorcycle when he purchased it, there was no statutory warranty because it was a used motorcycle and any problem with the motorcycle only arose during Mr Chapman’s use.
The applicants inappropriately seek to reargue the matter heard below in this appeal. An appeal is not an opportunity to conduct a second hearing, however. There is no error identified by the applicants made by the Adjudicator below. The applicants are simply unhappy with the result of the hearing before the Adjudicator. They have no prospect of success in an appeal in respect of the grounds of appeal as formulated.
Not only do they seek to reargue the matter, they appear not to be able to comprehend that the claim raised by Mr Chapman and the decision by the Adjudicator was not based on any breach of a claimed statutory warranty, but concerned the Australian Consumer Law guarantee provisions. The Adjudicator made clear in his oral reasons for decision at the hearing on 13 February 2020 that there had been a major failure of the guarantee prescribed by s 54 of the Competition and Consumer Act 2010 (Cth) Schedule 2 (ACL) in that he found the goods concerned (the motorcycle) were not of acceptable quality.
That was a reasonable finding open to the Adjudicator given the evidence that on Mr Chapman’s first outing on the motorcycle after purchase, the motorcycle had broken down in dangerous fashion (it stalled in passage) and he then discovered that the motorcycle, for which he had just paid over $10,000, had a mechanical problem.
The correct entity
At the hearing of the appeal, Mr Mutton for Motorcycle Trading Pty Ltd and also Mr Sood (for both Motorcycle Trading Pty Ltd and Sumont Pty Ltd), argued that the decision given against Motorcycle Trading Pty Ltd should be set aside on the basis that Motorcycle Trading Pty Ltd was never a party to the sale of the motorcycle to Mr Chapman.
This ground of appeal was not set out in the initial application for leave to appeal filed on 4 March 2020. Shortly after that however, on 7 April 2020 an application for miscellaneous matters was filed seeking the following directions:
I/we Motorcycle Trading Pty Ltd apply to the Tribunal for the following directions … Motorcycle Trading should be removed from the decision that was made against us on 13th February, 2020 under court case Q34/19.
The reasons I seek these directions are: Motorcycle Trading Pty Ltd previously had no dealings with the person that has brought forward this matter. The legally binding sales contract was made with a different entity, therefore, Motorcycle Trading Pty Ltd should not be liable to pay any damages to the applicant….
At the hearing of the application for leave to appeal, Mr Mutton claimed there had been a number of hearings before the final hearing on 13 February 2020, and in one of them the Adjudicator had decided that Sumont was the responsible entity to answer Mr Chapman’s claim, not Motorcycle Trading Pty Ltd.
Matter MCDO34-19 was first set down for hearing on 24 October 2019. The respondent named was Brisbane Motorcycles. The audio record is available for that hearing.
No one appeared for Brisbane Motorcycles because Mr Mutton, who was the appropriate person to attend, was not available because he was out of the country. The issue of the correct entity behind the business name had been raised in an email to the Tribunal from Brisbane Motorcycles when seeking an adjournment of that hearing. The email claimed there had been a change in the corporate entity conducting the business trading as Brisbane Motorcycles after Mr Chapman had made his purchase.
In consequence the Adjudicator joined additional respondents Mr Mutton and Motorcycle Trading Pty Ltd to the action and adjourned the matter until 7 November 2019.
On 7 November 2019 the matter again came on for hearing but before another Adjudicator. Again the audio record of that hearing is available and I have listened to it. Mr Mutton appeared as a director and shareholder of Motorcycle Trading Pty Ltd but said he did not represent Sumont Pty Ltd.
A copy of Mr Chapman’s contract of sale for the motorcycle was presented, as too a copy of documents said to evidence the sale of the business Brisbane Motorcycles from Sumont Pty Ltd to Motorcycle Trading Pty Ltd. The Adjudicator found Sumont Pty Ltd had not been served with the application for minor civil dispute – consumer dispute and a further adjournment was necessary.
At that hearing the sale of business document was returned to Mr Mutton and not made an exhibit. Significantly, the audio recording reveals that the issue about the correct respondent was discussed and the Adjudicator said, “Is there any dispute that Sumont is the correct entity?” There was no response made to that comment from either Mr Mutton or Mr Chapman.
The Adjudicator removed Brisbane Motorcycles and Mr Mutton as respondents but said he would leave Motorcycle Trading Pty Ltd in as a respondent on the basis that whilst Sumont Pty Ltd was the appropriate respondent to answer Mr Chapman’s claim, to ensure the matter was determined as quickly and efficiently as possible he would leave Motorcycle Trading Pty Ltd as a party in case Sumont Pty Ltd claimed an indemnity from Motorcycle Trading Pty Ltd arising from the sale of the business.
When the matter came on for final hearing on 13 February 2020 nothing was said by anybody, including the Adjudicator, about Motorcycle Trading Pty Ltd not being an appropriate respondent.
It appears this was simply oversight on the part of the Adjudicator, and understandable given the burdensome and busy lists they are obliged to attend to amongst their responsibilities. It is strange that the representative for Motorcycle Trading Pty Ltd did not raise the matter with the Adjudicator, but it is not inconceivable that he thought the matter was no longer an issue.
Mr Chapman agreed at the hearing of the appeal that the issue of Motorcycle Trading Pty Ltd not being a responsible party to answer his claim had been mentioned in an earlier hearing.
Regardless of oversight, regardless of the failure of Motorcycle Trading Pty Ltd to act responsibly in its own interests and raise the issue at the final hearing, and regardless that the issue of the correct party as a ground of appeal was raised late and by way of miscellaneous application, there has clearly been a significant oversight in the proceedings below. It is an error that should be corrected.
It is appropriate to grant leave to appeal.
Appeal
I proceed to determine the appeal by way of rehearing.
The facts and chronology set out above need not be repeated and are apposite for consideration on appeal.
The Adjudicator concluded that there had been a major breach of s 54 of the ACL because the motorcycle sold to Mr Chapman had not been of acceptable quality. He found the appropriate award was damages in the sum of $2,510. I concur with those findings on the evidence, given the price paid, the short distance travelled after purchase and the age of the vehicle (six years).
I determine, as did the Adjudicator, that an amount of $2,510 for breach of the s 54 ACL guarantee is appropriately to be paid by Sumont Pty Ltd to Mr Chapman.
I turn to consider whether Motorcycle Trading Pty Ltd should also be responsible for payment of that sum.
A copy of the receipt given Mr Chapman for his initial deposit of $500 was tendered below. It is on Sumont Pty Ltd letterhead and also bears the name Brisbane Motorcycles. It is dated 25 May 2019.
Mr Chapman paid a further deposit of $2,151 on 29 May 2019. The receipt is again on Sumont Pty Ltd/Brisbane Motorcycles letterhead.
There is also available a copy of the contract of sale dated 25 May 2019. The name Sumont Pty Ltd appears at the top of the first page, as too does Brisbane Motorcycles. The selling agent is identified as Sumont Pty Ltd. On page three of the document there is reference to a statutory warranty. It states there that there is no statutory warranty given, but it notes that the owner of the motorcycle at the time of sale was Sumont Pty Ltd.
There is a business name search of Brisbane Motorcycles as at 8 August 2019, and there the business holder is noted as Sumont Pty Ltd.
At the hearing before the Adjudicator on 7 November 2019 the issue about whether Motorcycle Trading Pty Ltd was an appropriate respondent was aired and Mr Chapman was given an opportunity to make submissions. It is clear that the only reason that party remained a respondent to the action was because the Adjudicator tried to ensure all issues, which potentially extended to a claim for indemnity by Sumont Pty Ltd against Motorcycle Trading Pty Ltd following sale of the business, could be quickly and conveniently dealt with together.
Mr Mutton stated that he had no directorship or shareholding in Sumont Pty Ltd but he was a director of Motorcycle Trading Pty Ltd which company had purchased the Brisbane Motorcycles business from Sumont Pty Ltd.
All the available documentation shows Mr Chapman purchased his motorcycle from Brisbane Motorcycles and at the time that business was conducted by Sumont Pty Ltd, not Motorcycle Trading Pty Ltd. Mr Chapman made no challenge to Mr Mutton’s claim about that at the hearing of 7 November 2019.
On the material available I find the owner and vendor of the motorcycle was Sumont Pty Ltd, not Motorcycle Trading Pty Ltd. Sumont Pty Ltd, not Motorcycle Trading Pty Ltd, is responsible for payment of the award given for breach of the ACL guarantee provisions.
Accordingly the appeal brought by Motorcycle Trading Pty Ltd is allowed.
To the extent the decision below grants relief against Motorcycle Trading Pty Ltd the order must be set aside. It is Sumont Pty Ltd that is responsible for paying damages to Mr Chapman in the amount of $2,510.
Motorcycle Trading Pty Ltd has asked for their costs of appeal. It is in large part their failure to address the issue of the correct identity of the contracting seller at the hearing before the Adjudicator on 13 February 2020 that has necessitated an appeal. I decline to make any order for costs.
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