Walsh v P.S. Business Holdings Pty Ltd
[2011] QCAT 636
•12 December 2011
| CITATION: | Walsh v P.S. Business Holdings Pty Ltd and Ors [2011] QCAT 636 |
| PARTIES: | Mr Jason Walsh |
| v | |
| P.S. Business Holdings Pty Ltd t/as A1 Nerang Auto Care Mr Paul Smith Mr Peter Dinoris Vincents Chartered Accountants |
| APPLICATION NUMBER: | OCL076-11 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Peta Stilgoe, Member |
| DELIVERED ON: | 12 December 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] Pursuant to s 488 of the Property Agents and Motor Dealers Act2000, the claim is allowed in the sum of $6,011.85. [2] Pursuant to s 489 of the Property Agents and Motor Dealers Act2000, at the expiration of the appeal period, the Chief Executive must pay to Mr Walsh the sum of $6,011.85 from the Claim Fund, and, if there is an appeal, payment must not be made until after the appeal is finally decided. [3] Pursuant to s 488(3)(c) of the Property Agents and Motor Dealers Act2000, P.S. Business Holdings Pty Ltd and Paul David Smith are named as the persons responsible for the financial loss of Mr Walsh. [4] Upon payment from the Claim Fund and pursuant to ss 490 and 530 of the Property Agents and Motor Dealers Act2000, P.S. Business Holdings Pty Ltd and Paul David Smith are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $6,011.85 to the Chief Executive, Department of Justice and Attorney General. |
| CATCHWORDS: | MOTOR DEALER – where odometer wound back – where dealer failed to disclose that car was a repairable write off – where owners claimed for loss of value, investigation costs, costs of repairs and cost to reset odometer Property Agents and Motor Dealers Act 2000, ss 470, 488, 490(2) |
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
In March 2010, Mr Walsh bought a Holden Commodore from Mr Smith, trading as A1 Nerang Auto Care. Mr Smith told Mr Walsh that the car was “an ex government fleet car with 50,940 kilometres on the clock” and that it was a 2004 model. Mr Walsh paid $13,450 for the car.
In July 2010, Mr Walsh found out that: the odometer had been wound back approximately 200,000 kilometres to the 5,940 that was displayed on purchase; and that the car was a repairable write off. Mr Walsh says that he would not have purchased the car had the true position been known.
Mr and Mrs Walsh made a claim on the statutory claim fund for $10,711.85 being the difference between the price paid and the value, the cost of investigations, the cost of some necessary repairs to the vehicle and the cost of registration.
A1 Auto Wholesale is the registered business name of Clovermill Pty Ltd, the principal of which is Mr McKie. Mr McKie is a licensed motor dealer but he has filed a statement denying any knowledge of this transaction. I accept that neither Clovermill Pty Ltd nor Mr McKie is in any way involved in this transaction.
The tribunal has been provided with a copy of a business names search for A1 Nerang Auto Care which shows that it is registered to Mr Smith and P.S. Business Holdings Pty Ltd. Mr Smith is the sole director and shareholder of the company.
Mr Smith received notice of the claim. He has disputed the value of the car. The tribunal has given Mr Smith opportunities to have the car valued by a valuer of his choice. He has failed to take that opportunity. The tribunal will, therefore, determine the claim for compensation based on the material to hand.
Section 488 of PAMDA sets out the process for deciding the claim. The Tribunal must be satisfied that:
a)An event as mentioned in section 470(1) happened; and
b)The claimant suffered financial loss because of the event.
The Tribunal must also take into account any amount the claimant might reasonably have received or recovered if not for the claimant’s neglect or default[1] and any amount ordered to be paid to the claimant as compensation to the claimant under sections 530A, 572D or 592A of the PAMDA[2].
[1] Section 488(2).
[2] Section 488(3)(a).
Finally in allowing a claim the Tribunal must decide the amount of the claimant’s financial loss and name the person who is liable for the loss[3].
[3] Section 488(3)(b) and (c).
The event
[10] Section 574 of PAMDA provides that a licensee must not represent in any way to someone else anything that is false or misleading in relation not the sale of property. I have no doubt that winding back an odometer and failing to disclose that a car is a repairable write off is a misleading representation within s 574 even though it may also be an offence under another provision of the Act.
[11] I am satisfied that the winding back of the odometer and the failure to disclose that the car was a repairable write off were “events” within s 470(1).
[12] I am conscious that P.S. Business Holdings Pty Ltd and Mr Smith are not licensees. Section 469 of PAMDA provides that, in claims against the fund, “licensee” includes a person who is not licensed but acts as a licensee. Clearly, P.S. Business Holdings Pty Ltd and Mr Smith have acted as licensees and, therefore, fall within the ambit of “licensee” for the purpose of determining Mr Walsh’s claim.
Financial loss
[13] I am satisfied that Mr Walsh suffered a financial loss because of Mr Smith’s breach of s 574.
[14] I have been provided with a copy of a valuation from Pickles Auctions showing an auction estimate for a 2004 Commodore with 248,000 km “on the clock” as $4,500. At the request of the Department of Employment, Economic Development and Innovation, which administers the fund, Pickles Auctions have provided a further valuation of the retail value of the car with 248,000 km “on the clock” as $8,000.
[15] Mr Walsh says that the tribunal should consider only the valuation for $4,500, not the valuation requested by the Department because:
a)The Department has no authority to request another valuation.
b)Mr Walsh has no knowledge of what conversations, if any, occurred between the Department officer and the valuer.
c)The Department material referred to “market” value, not “retail” value.
[16] While it may be true that the Department has no authority to request another valuation, I accept the Department’s advice to Mr Walsh that its request was simply to assist the tribunal and Mr Walsh in the determination of his claim. If Mr Walsh had no evidence about the proper value of his car at the time of purchase, then I would have been obliged to dismiss Mr Walsh’s claim. The Department’s action in requesting an alternative valuation kept Mr Walsh’s claim alive if I decide, as I do, that the proper method of valuation is on the retail price.
[17] The Department has assured Mr Walsh that the only communication with Pickles was to ask for a retail valuation. The Department also provided Mr Walsh with an extract from The Red Book which shows that the Pickles valuation is within an acceptable range. Mr Walsh has raised his suspicions about the valuation but he not pointed to any specific evidence that it is incorrect. He has not, for example, obtained any other valuation on a “retail price” basis that would cause me to doubt the second valuation provided by Pickles.
[18] The concept of “financial loss” and “market value” must be considered within the context of the market in which the original transaction occurred. Putting that another way, the tribunal’s task is to compare “apples with apples”. If Mr Walsh had bought the car at auction, then the market value of the car when the true facts were known would be the auction value. Because Mr Walsh bought the car retail, then it follows that the value of the car when the true facts were known must be calculated on the retail price.
[19] The first Pickles valuation of $4,500, because it does not compare “apples with apples”, is not an accurate representation of the true market value of the car. The tribunal cannot compare the retail purchase price, which is what Mr Walsh paid, with an auction price.
[20] I accept the Pickles valuation of the retail price of $8,000 and I find that Mr Walsh is entitled to $5,450 compensation for the difference between the price paid and the actual value of the car at that time.
[21] Mr Walsh has also claimed $1,200 for the cost of registration. I do not accept that this is recoverable from Mr Smith in addition to the reduction in value. Mr Walsh must have known that the registration would fall due when he bought the car and that registration is a necessary requirement of keeping the car on the road. I disallow the claim for $1,200.
[22] Mr Walsh has also claimed $300 for the cost of obtaining the valuation; this is a cost that should be recoverable from the fund. Mr Walsh has also claimed the cost of having the odometer changed to reflect the true reading plus taxi fares to and from the place where that work was done, a total of $261.85. Mr Walsh should be entitled to recover these costs.
Other matters
[23] I am required to take into account any amount Mr Walsh may have received or recovered if not for their neglect or default.
[24] There is no evidence to suggest that Mr Walsh would have been able to receive or recover any amount to reduce his loss if he had taken any different action.
Who is liable for the loss?
[25] I have already identified that the business names A1 Nerang Auto Care is registered to P.S. Business Holdings Pty Ltd, nominating Mr Smith as the person carrying on the business and that Mr Smith is the sole director and shareholder of the company.
[26] Section 490(2) provides that a person is liable to reimburse the fund if the person is:
a)A responsible person;
b)If the responsible person was a corporation, each person who was an executive officer of the corporation.
[27] As a director of P.S. Business Holdings Pty Ltd, Mr Smith was an executive officer of the company. It follows that both P.S. Business Holdings Pty Ltd and Mr Smith are a “responsible person” under s 490(2).
Orders
[28] Pursuant to s 488 of the Property Agents and Motor Dealers Act2000, the claim is allowed in the sum of $6,011.85
[29] Pursuant to s 489 of the Property Agents and Motor Dealers Act2000, at the expiration of the appeal period, the Chief Executive must pay to Mr Walsh the sum of $6,011.85 from the Claim Fund, and, if there is an appeal, payment must not be made until after the appeal is finally decided.
[30] Pursuant to s 488(3)(c) of the Property Agents and Motor Dealers Act2000, P.S. Business Holdings Pty Ltd and Paul David Smith are named as the persons responsible for the financial loss of Mr Walsh.
[31] Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act2000, P.S. Business Holdings Pty Ltd and Paul David Smith are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $6,011.85 to the Chief Executive, Department of Justice and Attorney General.
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