Tran v Pham
[2022] QCATA 104
•12 July 2022
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Tran v Pham [2022] QCATA 104
PARTIES:
HAI NGOC TRAN appellant
v
LOC PHAM respondent
APPLICATION NO:
APL238-21
ORIGINATING APPLICATION NO:
MCDO850/20
MATTER TYPE:
Appeals
DELIVERED ON:
12 July 2022
HEARING DATE:
On the papers
HEARD AT:
Brisbane
DECISION OF:
Member JR McNamara
ORDERS:
1. Leave to appeal is granted.
2. The decision of the Tribunal dated 20 July 2021 is set aside and instead it is ordered that within 28 days of this order decision being published, Hai Ngoc Tran pay Loc Pham the sum of $11,500 together with interest between the period 20 May 2020 and 20 July 2021 at a rate of $250 per month (totalling $3,500) together with filing fees of $345.80.
CATCHWORDS:
APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – where judgment against appellant for debt owed under loan agreements – whether interested awarded on claim could exceed statutory limit of the tribunal under the Queensland Civil and Administrative Tribunal Act 2009 (Qld) – whether tribunal had jurisdiction to make such an order – where interest awarded beyond decision date – application of the Civil Proceedings Act 2011 (Qld) – where interest awarded would result in substantive injustice to the appellant – where interest awarded is incompatible with s 59 of the Civil Proceedings Act 2011 (Qld)
Civil Proceedings Act 2011 (Qld) s 59
National Consumer Credit Protection Act 2009 (Cth)
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 11A, s 13, s 14, s 131, Sch 3
Tauber v Claudia Tiller Holdings Pty Ltd [2012] QCATA 1, considered
APPEARANCES & REPRESENTATION:
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
Loc Pham and Hai Ngoc Tran (known as Myke Tran) were acquaintances, and perhaps friends. Both held good and seemingly secure jobs, Loc Pham in the public service and Myke Tran in banking. Their relationship was such that Myke Tran approached Loc Pham to borrow money on numerous occasions from late 2017 to the second half of 2018 resulting in three loans (‘Loan 1’, ‘Loan 2’, and ‘Loan 3’ respectively).
Loan agreements for Loan 1 and Loan 2 were prepared by Myke Tran and signed by both men. There was no documented loan agreement for Loan 3 however the material strongly supports a view that an agreement in fundamentally similar terms to loans 1 and 2 existed. Repayment transactions on each loan resulted in a receipt being issued by Loc Pham on each occasion a payment was made.
The term of each loan differed. Loan 1 was for 12 months commencing 5 October 2017. Loan 2 was for 24 months commencing 25 January 2018. Loan 3 was for 1 month commencing 3 July 2018.
The loan agreements each provided a minimum monthly repayment amount, and a fixed monthly interest payment “until the loan is paid back in full.” [1] None of the loans were paid back in full by their respective end dates. However, in respect of Loan 1 and Loan 3, minimum monthly principle payments and agreed monthly interest payments continued to be made before the loans were paid out in full. Receipts issued by Loc Pham demonstrates this.
[1]Originating Application, Attachment 2, filed 10 July 2020.
Despite the fact that the repayment of Loans 1 and 3 was not completed in the timeframe identified in each agreement, things were going reasonably well from 5 October 2017 to around 10 May 2020. The repayment of principle and interest on Loan 3 was finalised on 16 August 2018, and on Loan 1 on 11 March 2019. Myke Tran continued with repayments of principle and interest on Loan 2 until 10 May 2020, which was approximately 3 months beyond the agreed end date, but then stopped.
The agreement entered in respect of Loan 2 was for the loan amount of $25,000 to be repaid by minimum monthly payments of $500 together with interest of $250 per month.
In relation to Loan 2, 27 regular payments of principle and interest, and one preliminary interest payment, were made consistent with the (minimum) terms of the agreement.
In the originating application filed 10 July 2020, Loc Pham sought recovery from Myke Tran of $11,500 together with $500 interest (up to the date of the application) together with the filing fee.
The matter came before the tribunal on 20 July 2021. It was ordered:
The Respondent pay to the Applicant $15,345.80 representing $15000 for claim and $345.80 for filing fee within 7 days, Plus a further $250.00 per month for interest from 10th August 2021. Then monthly thereafter until payment is made in full.
The quantum of $15,000 is made up of the $11,500 claimed together with interest for 2 months between the final payment under the agreement and the lodgement of the application, and 12 months interest for the period from application to decision.
The application to extend time and stay the 20 July 2021 decision
Myke Tran brought an application for leave to appeal or appeal, applications to extend a time limit, and an application to stay the decision of the Adjudicator. The extension of time and stay were granted on 11 October 2021.
In the reasons for granting the stay the member said:
“However, I consider that there is a possible error of law on the part of the Adjudicator in ordering that interest in an amount of $250.00 per month, as required by the loan agreement, continue to be paid until payment of the judgment sum. Without the benefit of submissions from either party it appears that the Adjudicator has exceeded the powers of the Tribunal in making such an order and even if there were powers to make such an order the result could be an award that exceeds the jurisdictional limit of the Tribunal with respect to minor civil disputes of this kind.”[2]
[2]Reasons for the decision of Member Fitzpatrick, 11 October 2021 [20].
The member also identified what she considered weaknesses in relation to the grounds of appeal raised and said: “[but for] the order for ongoing payment of interest until payment of the judgment sum, I would not consider it to be in the interests of justice to grant an extension of time for the filing of the application for leave to appeal or appeal.’”[3]
[3]Ibid [21].
I have read and considered the material that was before the Adjudicator, the transcript of the hearing before the Adjudicator, the material that was before the member considering the application to extend time and the stay application, and the 11 October 2021 reasons delivered by the member granting the extension of time and the stay. I agree with the members observations regarding the submissions of the applicant, the member’s view regarding the strength of the grounds of appeal, and I agree with her observations regarding the nature of an appeal where she said:
“Finally, an appeal is not an opportunity for an applicant to run his case for a second time. Leave to appeal will only be granted to an applicant if there is demonstrated error on the part of the Adjudicator resulting in substantial injustice to the applicant.”[4]
[4]Ibid [18].
The member having clearly articulated what she considered to be a possible error of law, and generally ‘weaknesses’ in the grounds of appeal, provided direction to Myke Tran to focus his material. The member also gave Loc Pham the opportunity to apply to lift the stay – but no such application was made.
Material filed following the decision to extend time and stay the 20 July 2021 decision
On 25 October 2021 Myke Tran filed written submissions in the application for leave to appeal and appeal, and on 15 November 2021 Loc Tran filed submissions in response.
Myke Tran’s submissions argue: that the elements of a contract were not satisfied; that the loan agreement did not include a condition that ongoing interest was to be charged beyond the term of the loan; that he had not agreed to any variation of the original loan; that interest on loans exceeding $5000 cannot be greater than 48% and that ongoing interest would cause that limit to be breached; that the income earned has not been declared for tax purposes; and broad claims that Loc Pham is a ‘loan shark’.
These matters were all canvassed in the hearing of the application before the Adjudicator. The statements are not supported by authority or evidence. They are largely speculative and generally refuted. They do not provide a basis for me to conclude that there was an error of fact or law which would justify a grant of leave to appeal. I have also considered principles of contract law, and the operation and effect of the National Consumer Credit Protection Act 2009 (Cth) and cannot deduce that there is on all or any of these grounds a reasonable argument that there is an error of law to be corrected.
In the final paragraph of Myke Tran’s written submission to the appeal tribunal however, he engages with the jurisdictional issue raised by the member:
“Lastly, I accept Member Fitzpatrick findings that the Adjudicator has exercised power that has exceeded the Tribunals jurisdiction in granting such an order and award be awarded to the Respondent is prejudiced in the interest of justice.”[5]
[5]Applicant’s Written Submission, filed 25 October 2021 [12].
The submission does not explain why the power exercised by the Adjudicator exceeded the jurisdiction of the tribunal, or that the order might exceed the jurisdictional limit of the tribunal with respect to minor civil disputes.
In submissions in response, apart from refuting many of the statements or allegations made by Myke Tran, Loc Pham says that Myke Tran has not provided any compelling evidence or submissions as to why the 20 July 2021 orders were incorrect.
Loc Pham does engage with the issues of the jurisdictional limit of the tribunal. He refers to s 13 and s 14 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) and goes on to say that the orders made by the Adjudicator could not exceed the tribunal’s jurisdiction limit because interest payable as of right under an agreement is not considered in that calculation. He does not engage with the first issue, as to whether the power exercised by the Adjudicator exceeded the jurisdiction of the tribunal.
Jurisdiction and the power to award interest
In the originating application (Form 3), Loc Pham ‘ticked the box’ relevant to interest under an agreement: ‘I want to claim interest on the amount owing from the date when the debt became due to the date of the tribunal’s final decision.’
The Form does not provide for any other options regarding a claim for interest. The rate of interest nominated was $250 per month. Attachment 1 to the Form restates the quantum claimed including interest up to the expected decision date. A copy of the loan agreement was attached. The loan agreement includes the statement: “Interest will be calculated as $250 AUD per month until the loan is paid back in full.”
Section 14 of the QCAT Act affords the tribunal a discretion to award interest at the rate it considers appropriate up to the date it decides the dispute. However, s 14 is displaced where interest is payable as of right because of an agreement.
Although interest is payable as of right because of an agreement, the period over which to award interest is discretionary and must be reasonable: Tauber v Claudia Tiller Holdings Pty Ltd.[6] In that case, after the contract was terminated there was some considerable delay in prosecuting the dispute and the delay not satisfactorily explained. On appeal, the member considered that the Adjudicator “… did not go far enough when considering the factors to be taken into account when exercising the discretion to award interest, even though the payment of interest was provided for in the contract.”[7]
[6][2012] QCATA 1.
[7]Ibid [15].
In this matter, the order made by the Adjudicator was as follows:
The Respondent pay to the Applicant $15,345.80 representing $15,000 for claim and $345.80 for filing fee within 7 days. Plus a further $250.00 per month for interest from 10 August 2021. Then monthly thereafter until payment is made in full.
It is not apparent in the reasons for decision if or how the Adjudicator exercised the discretion to award interest. It appears rather that the clause in the agreement that “interest will be calculated at $250 AUD per month until the loan is paid back in full” was simply invoked.
The term of the agreement for Loan 2 expired on 25 January 2020, however the loan had not been paid back in full and payments of principle and interest continued to be made until 10 May 2020. The minor debt claim was filed on 10 July 2020. That was in my view a reasonable and appropriate step by Loc Pham to preserve his contractual rights. I do not consider that there was any unreasonable delay in commencing recovery action. The decision of the tribunal was delivered on 20 July 2021. While this delay of just over 12 months is unfortunate, fault cannot be directed at either party.
Interest to the date of decision
Interest could, in the discretion of the Adjudicator, be ordered up until the date the dispute was decided. That is, to 20 July 2021.
Matters relevant to the exercise of discretion would include the fact that Myke Tran was aware of the dispute and the steps taken to recover the debt were commenced shortly after repayments ceased.
There was evidence of demands for repayment being made and invoices continued to be issued for interest payments which continued to be due under the terms of the agreement.
Myke Tran chose not to finalise payment under the agreement. In my view it was reasonable to allow interest at the rate set out in the loan agreement up to the date of decision.
Interest from the date of decision
A decision which results in an order for the payment of money, whether or not the amount is or includes an amount for interest or costs, is known as a ‘money order’. Whether interest is payable from or after the date of a money order is not directly addressed in the QCAT Act. Accordingly, I look to the Civil Proceedings Act 2011 (Qld) (‘CPA’).
Section 59(2) of the CPA provides that interest is payable from the date of a ‘money order’ debt unless the court otherwise orders, and s 59(3) provides that interest is payable at the rate prescribed under a practice direction made under the Supreme Court of Queensland Act 1991 (Qld) unless the court otherwise orders.
In my view there is no reasonable basis to award interest at the fixed rate set out in the loan agreements beyond the decision date.
The effect of s 59 of the CPA is that interest on a money order is set at an amount pursuant to a practice direction,[8] and if Loc Pham were to enforce the decision of the tribunal in the Magistrates Court[9] then he would be entitled to interest under the terms of the agreement until 20 July 2021, and then interest at the currently prescribed interest rate from 20 July 2021.[10]
[8]Supreme Court of Queensland, Practice Direction No. 7 of 2013: Interest rates, 31 May 2013; Magistrates Court of Queensland, Practice Direction No. 15 of 2013: Interest rates, 31 May 2013.
[9]Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 131(2).
[10]See “Interest rates”, Queensland Courts (as at 15 June 2022)
Might the ‘prescribed amount’ be exceeded as a result of the orders?
Section 13 of the QCAT Act provides that the tribunal cannot make an order that purports to grant relief of a value of more than the prescribed amount. The prescribed amount in Schedule 3 to the QCAT Act is $25,000. This amount is exclusive of interest payable as of right under an agreement.[11]
[11]Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 11A.
The amount claimed and the amount awarded, excluding interest, was $11,500. Therefore, the tribunal has, and had, original jurisdiction to decide the matter.
Conclusion
If the orders of 20 July 2021 were allowed to stand, as expressed, interest would have continued to accrue at $250 per month beyond the decision date while the appeal process, including for the duration of the stay, continued. That, in my view, is an error which would result in a substantial injustice to the appellant.
ORDERS
Leave to appeal is granted.
The decision of the Tribunal dated 20 July 2021 is set aside and instead it is ordered that within 28 days of this order decision being published, Hai Ngoc Tran pay Loc Pham the sum of $11,500 together with interest between the period 20 May 2020 and 20 July 2021 at a rate of $250 per month (totalling $3,500) together with filing fees of $345.80.
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