Zurich Australian Insurance Ltd v Insurserv Australia Pty Limited
[2011] QCAT 663
•15 November 2011
| CITATION: | Zurich Australian Insurance Ltd v Insurserv Australia Pty Limited and Anor [2011] QCAT 663 |
| PARTIES: | Zurich Australian Insurance Ltd |
| v | |
| Insurserv Australia Pty Limited Scott Andrew Hallewell |
| APPLICATION NUMBER: | OCL103-11 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Sandra G Deane, Member |
| DELIVERED ON: | 15 November 2011 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | [1] Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $84,218.31. [2] Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period the Chief Executive must pay to Zurich Australian Insurance Ltd the sum of $84,218.31 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 section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the Respondents, Insurserv Australia Pty Limited and Mr Scott Andrew Hallewell are named as the persons liable for the financial loss of Zurich Australian Insurance Ltd. [4] Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, the Respondents, Insurserv Australia Pty Limited and Mr Scott Andrew Hallewell are jointly and severally liable to reimburse the Claim Fund by paying the sum of $84,218.31 to the Chief Executive of Employment, Economic Development and Innovation. |
| CATCHWORDS: | PROPERTY AGENT AND MOTOR DEALER ACT – claim against fund – whether a commercial agent – meaning of ‘debts’ – whether liquidated sums only – natural and ordinary meaning preferred – failing to account in relation to monies recovered – whether relevant person – receiver appointed Property Agents and Motor Dealer Act 2000, ss 10, 339, 344, 385, 417, 469, 470, 476, 488, 490, 530, 573 |
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
Background
Zurich made a claim against the statutory fund (the Claim Fund) established under the Property Agents and Motor Dealers Act 2000 (the Act) for financial loss in relation to its dealings with Insurserv Australia Pty Ltd and Mr Scott Andrew Hallewell.
Insurserv was a company which provided services to insurance companies. Those services involved recovering amounts payable to insurance companies. Mr Hallewell was a director of Insurserv.
On 3 April 2009, pursuant to section 417 of the Act, a Receiver was appointed over Insurserv’s trust accounts.
On 6 May 2009 Insurserv was ordered to be wound up.
Both of the Respondents are parties whose actions are alleged to give rise to the claim.
In July 2011 the Office of Fair Trading (OFT) referred the claim to the Tribunal for determination.[1]
[1][1] Section 476(1) of the Act requires that the Chief Executive refer the claim to the Tribunal if it exceeds $10,000.00.
The Tribunal received a copy of the OFT claim file which included material from Zurich and the Receiver’s Reports dated 8 September 2010 and 27 June 2011.
These reasons should be read together with the reasons for decision in OCL189-10 dated 14 November 2011.
Law
Section 488 of the Act provides that the Tribunal may allow a claim for compensation only if it is satisfied, on the balance of probabilities:
a) that an event mentioned in section 470(1) of the Act happened;
b) the claimant suffered financial loss because of the happening of the event.
The events are actions by a relevant person.
Section 469 of the Act provides that relevant person includes a licensee, former licensee, a person who is not a licensee but who acts as a licensee and a person having charge or control of a licensee’s registered office or business.
Further pursuant to section 488 of the Act 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 and any amount ordered to be paid to the claimant as compensation to the claimant under sections 530A, 572D or 592A of the Act.
If the Tribunal allows the claim wholly or partly it must decide the amount of the loss and name the person liable.
Section 530 of the Act provides that the Tribunal may make the following orders in relation to a claim against the fund—
a) an order allowing the claim, wholly or partly, or rejecting the claim;
b) an order stating that a named person is liable for a claimant's financial loss and the amount of the loss;
c) an order about recovery of an amount payable in relation to a claim;
d) an order that no amount is recoverable in relation to a claim.
Section 385(4)(b) of the Act provides that a licensee must pay trust monies less any appropriate transaction fees within 42 days to the person entitled to those monies after the person first had a right to the balance. This section is contained in Chapter 12, Part 1 of the Act.
Section 573 of the Act applies if a licensee, in the performance of the activities of a licensee, receives an amount belonging to someone else. A licensee who dishonestly converts the amount to the licensee’s own or someone else’s use commits a crime.
Evidence and Submissions
Zurich relied upon the file of material provided by the OFT and the Receiver’s Reports.
Mr Hallewell has not filed any material or submissions in this matter. In proceeding OCL189-10 Mr Hallewell filed an affidavit sworn 27 April 2011 and detailed submissions were filed on 27 April 2011. The factual circumstances are similar. Accordingly the Tribunal has considered the matters raised by Mr Hallewell in OCL189-10 as they appear to also be relevant to this claim.
In addition to the matters set out at [18] of the OCL189-10 reasons for decision the evidence before the Tribunal is as follows:
a) Zurich entered into arrangements with Insurserv for certain services involving recovering amounts payable to Zurich from August 2000 until December 2008;
b) A Panel Service Agreement dated 1 July 2005 with an expiry date of 30 June 2007 was produced and relied upon;
c) Insurserv were entitled to claim fees based on amounts recovered and to recover certain expenses;
d) Funds recovered on Zurich’s behalf were banked to Insurserv’s trust accounts and were to be remitted to Zurich on a monthly basis;
e) Zurich claimed unremitted trust moneys recovered on its behalf held by Insurserv and not remitted in accordance with the terms of the contract or the Act;
f) The Receiver has verified and quantified the amount owing to Zurich in the sum of $84,218.31. In doing so the Receiver deducted commission which was payable by Zurich to Insurserv under the contract from the claimed amounts.
Discussion and Decision
The claim may be allowed, either partly or wholly, only if, on the balance of probabilities, an event described in section 470(1) of the Act happened, and the claimant suffered financial loss because of the happening of the event. Further, if the claim is allowed wholly or in part, the matters referred to in section 488(3) of the Act must be considered.
Was there an event?
The Tribunal accepts that moneys were paid into Insurserv’s two trust accounts and were not paid to Zurich when it became entitled to the funds less amounts Insurserv was entitled to deduct. These amounts were not available to be paid to Zurich as the total of the trust account balances was less than the amount which ought to be paid to Zurich and others with claims against the trust accounts.
The contract provided that the services Insurserv was to provide included the ‘recovery of outstanding debts’.[2]
[2] Schedule 1 Panel Services Agreement.
It is clear that Insurserv was appointed by Zurich to perform services on behalf and for the benefit of Zurich and that this was for reward.
The Tribunal repeats and relies upon [22]-[24], [26], [28]-[36] of the OCL189-10 reasons for decision. There is nothing in the material in this proceeding which causes me to alter my views set out.
I therefore find that on the balance of probabilities Insurserv and Mr Hallewell were relevant persons involved in a contravention of Chapter 12, Part 1 and therefore an event within the meaning of section 470(1) of the Act occurred.
On the balance of probabilities I find that Insurserv, as licensee, received amounts belonging to someone else and has in contravention of section 573 of the Act dishonestly converted the amounts to the licensee’s own or someone else’s use.
Did the Event Cause Financial Loss?
If Insurserv had accounted to Zurich in accordance with the contract or Act then Zurich would have received the amounts recovered less commission.
Accordingly the Tribunal finds that Zurich suffered financial loss as a consequence of the events.
Section 488(3) Matters
The Tribunal is satisfied that there has been no relevant neglect or default by Zurich identified and there is no evidence that any amounts of compensation have been ordered to be paid under sections 530A, 572D or 592A of the Act.
The Tribunal accepts that Zurich has suffered a financial loss in respect of loss of the amounts to be remitted in the sum of $84,218.31.
Section 490 Matters
The Tribunal accepts that Insurserv and Mr Hallewell contravened the Act and are therefore responsible for the financial loss.
The Tribunal is satisfied that Insurserv and Mr Hallewell either in his own right or as an executive officer of Insurserv are persons liable for the financial loss.
Orders
Pursuant to section 488 of the Property Agents and Motor Dealers Act 2000, the claim is allowed in the sum of $84,218.31.
Pursuant to section 489 of the Property Agents and Motor Dealers Act 2000, at the expiration of the appeal period the Chief Executive must pay to Zurich Australian Insurance Ltd the sum of $84,218.31 from the Claim Fund, and if there is an appeal, payment must not be made until after the appeal is finally decided.
Pursuant to section 488(3)(c) of the Property Agents and Motor Dealers Act 2000 the Respondents, Insurserv Australia Pty Limited and Mr Hallewell are named as the persons liable for the financial loss of Zurich Australian Insurance Ltd.
Upon payment from the Claim Fund and pursuant to sections 490 and 530 of the Property Agents and Motor Dealers Act 2000, the Respondents, Insurserv Australia Pty Limited and Mr Hallewell are jointly and severally liable to reimburse the Claim Fund by paying the sum of $84,218.31 to the Chief Executive of Employment, Economic Development and Innovation.
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