Wesfarmers General Insurance Ltd v Insurserv Australia Pty Ltd

[2012] QCAT 144

CITATION: Wesfarmers General Insurance Ltd v Insurserv Australia Pty Ltd and Anor [2012] QCAT 144

PARTIES:	Wesfarmers General Insurance Ltd t/as Lumley Insurance
v
Insurserv Australia Pty Ltd Scott Andrew Hallewell

APPLICATION NUMBER:   OCR129-11

MATTER TYPE: Other civil dispute matters

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Peta Stilgoe, Senior Member

DELIVERED ON: 5 April 2012

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 $19,412.70.

[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 Wesfarmers General Insurance Ltd the sum of $19,412.70 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, Insurserv Australia Pty Ltd and Scott Andrew Hallewell are named as the persons responsible for the financial loss of Lumley.

[4] Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act2000, Insurserv Australia Pty Ltd and Scott Andrew Hallewell are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $19,412.70 to the Chief Executive, Department of Justice and Attorney General.

CATCHWORDS: 

COMMERCIAL AGENT – where agent appointed to collect third party motor vehicle claims – where agent failed to remit funds recovered to principal

Property Agents and Motor Dealers’ Act 2000, ss 470(1)(c), 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

1. Lumley Insurance retained Insurserv Australia Pty Ltd to provide debt recovery services from 2000 to some time in 2008.  Insurserv was appointed to recover third party motor vehicle damage claims.  It would locate the third party, enter into a payment arrangement and, from June 2007, remit the payments directly to Lumley net of commission and fees.

2. Mr Hallewell was the sole director of the company for the period 6 October 2006 to 14 October 2009.  Both the company and Mr Hallewell were licensed commercial agents.

3. Towards the end of 2008, Lumley began to suspect that Insurserv had failed to remit funds owing.  Lumley made a claim on the statutory claim fund for $23,098.31.

4. In early 2009 Ms Julie Williams was appointed to manage the trust account.  A liquidator was appointed to Insurserv on 9 May 2009.  Ms Williams’ investigations verify an amount of $19,412.70 owing to Lumley. 

5. Insurserv and Mr Hallewell received notice of the claim as calculated by Ms Williams.

6. The tribunal is required to determine whether there should be a payment from the fund. Section 488 of the Property Agents and Motor Dealers Act 2000 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.

7. 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 PAMDA[2]. 

   [1] Section 488(2).

   [2] Section 488(3)(a).

8. 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

1. Ms Williams has provided a schedule of the individual claims.  They all relate to money collected by Insurserv but not remitted to Lumley.  Ms Williams has provided supporting documentation, in the form of bank records and repayment agreements, to verify each claim.  It is apparent, but not explicit, that the basis of each claim is that Insurserv misappropriated money entrusted to it as agent for Lumley.

2. Misappropriation in those circumstances is an “event” under s 470(1)(c).  I am satisfied that Insurserv’s failure to remit funds to Lumley is an “event” within s 470(1).

Financial loss

1. I am satisfied that Lumley suffered a financial loss because of Insurserv’s breach of s 470(1)(c).

2. I am further satisfied that $19,412.70 is a proper assessment of Lumley’s loss.

Other matters

1. I am required to take into account any amount Lumley may have received or recovered if not for their neglect or default.

2. There is no evidence to suggest that Lumley would have been able to receive or recover any amount to reduce its loss if it had taken any different action.

Who is liable for the loss?

1. Insurserv, as licensee and the entity operating the debt recovery business, is liable to Lumley for its loss.

2. 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.

3. As a director of Insurserv, Mr Hallewell was an executive officer of the company.  Because I have found that the company is a responsible person, it follows that Mr Hallewell must also be a responsible person.

Orders

1. Pursuant to s 488 of the Property Agents and Motor Dealers Act2000, the claim is allowed in the sum of $19,412.70.

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 Lumley the sum of $19,412.70 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, Insurserv and Mr Hallewell are named as the persons responsible for the financial loss of Lumley.

4. Upon payment from the Claim Fund and pursuant to ss 490 and 530 of the Property Agents and Motor Dealers Act2000, Insurserv and Mr Hallewell are liable (and if more than one, jointly and severally) to reimburse the Claim Fund by paying the sum of $19,412.70 to the Chief Executive, Department of Justice and Attorney General.