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[2023] QCAT 220
General information, not legal advice.
Queensland Civil and Administrative Tribunal
2023-05-31
Original judgment source is linked above.
MINOR CIVIL DISPUTE - action for debt - where monies paid to voluntary association for a share in the association - whether the Tribunal has jurisdiction to hear and decide the proceeding - whether director had the authority of the board of directors of association to obtain funding from members by the sale of shares in the association - whether the money paid was to purchase a share or a donation - whether the money is repayable
Corporations Act 2001 (Cth), s 126, s 127
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 11, schedule 3
Padarath & Anor v Queensland Vedic Cultural Centre Pty Ltd & Ors (MCDO 60589/20) (heard on 22 November 2022).
Pal v Queensland Vedic Cultural Centre Pty Ltd & Anor (MCDO 60617/20) (heard on 22 November 2022).
Padarath & Anor v Queensland Vedic Cultural Centre Pty Ltd (MCDO 60610/22) (heard on 23 November 2022)
Prasad v Singh & Anor (MCDO 523/21) (heard on 24 November 2022)
Junker v Hepburn [2010] NSWSC 88
Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd [2016] FCA 764
Singh v Queensland Vedic Cultural Centre Pty Ltd (MCDO 970/20, decided on 18 May 2021)
Prasad v Queensland Vedic Cultural Centre Pty Ltd & Ors [2022] QCATA 174
Hill v Berghofer [2011] QCATA 34
Ziegeler t/a Ziegco Pty Ltd v Recochem Incorporated [2010] QCATA 78
Spain v Union Steamship Co. of New Zealand Ltd [1923] HCA 21; (1923) 32 CLR 138
[1] This proceeding, and four other proceedings arising out of similar facts, were heard by this Tribunal on 22, 23 and 24 November 2022.[1] The decision in each proceeding should be read together.
[2] For the reasons in this proceeding following, the decision of the Tribunal is that the second respondent, Queensland Vedic Cultural Centre Pty Ltd (QVCC), pay to the applicant, Mr Soneel Deo (Mr Soneel Deo), $1,123.20, $1,000.00 in respect of the share in QVCC he agreed to purchase but did not receive together with $123.20 the fee on filing the application in the proceeding, within 14 days of this order.
[3] On 17 July 2020 Mr Soneel Deo made application to the Tribunal for an order that the first respondent, Dr Sukhvir Singh (Dr Singh) pay to him $1,240.00 together with the filing fee on the application of $123.20, a total of $1,363.20 (application). The application contains the following explanation for the order sought:
I HAD PAID TO GET MY SHARES IN THE COMPANY AND TILL DATE HAVE NOT RECEIVED THE SHARES. ACCORDING TO AGREEMENT (ATTACHED) I CAN CLAIM MY MONIES BACK.
[4] A share agreement was filed with the application (share agreement). It is signed by Mr Soneel Deo but not the other parties to the agreement.
[5] On 20 August 2021 QVCC was joined as second respondent in the proceeding.[2]
[6] On about 14 August 2020 Dr Singh filed a response to the application (response). In paragraph 1 of part D, the orders sought by Dr Singh, it is said:
1. That the relief sought is a declaration that would need to be heard in another jurisdiction. 2. The matter of claim and relief sought is subject of proceeding in The District Court of Queensland, Brisbane wide Registry No. 610/2020. 3. The purported documentary evidence attached with application is not an evidence is not signed by anyone. 4. In the alternative any funds provided by the applicant were DONATIONS, as by many others, which he is now trying to claim as a debt.
(a) the Tribunal is without jurisdiction to hear and decide the proceeding;
(b) the share agreement is not a valid agreement because it is not signed by all parties; and
(c) the money paid by Mr Soneel Deo to QVCC was a donation.
[8] Dr Singh does not dispute payment of the money by Mr Soneel Deo to QVCC.
[9] On 2 July 2021 the Tribunal made orders for the filing of documents.
[10] Mr Soneel Deo, on 15 July 2021, filed the following documents:
(a) a bundle of emails. Included in the bundle are the following:
(i) an email sent by Mr Jitendra Deo (Mr Jitendra Deo) (Mr Jitendra Deo is Mr Soneel Deo's father and a witness in the proceeding) to members of QVCC on 8 June 2015 providing an update on the community hall project;
(ii) an email sent by Mr Jitendra Deo to members of QVCC on 6 November 2015 again providing an update on the community hall project;
(b) bank transaction acknowledgement for a deposit of $1,120.00 into the account of QVCC on 28 March 2017;
(c) QVCC and Arya Pratinidhi Sabha of Queensland (APSQ) treasurer's report listing Mr Soneel Deo as having paid $1,120.00 to QVCC on 28 March 2017. The remarks against his name read, "share Contribution";
(d) QVCC's financial statements for the year ended 30 June 2017. The notes to the statements show a liability of $153,471.00 in 2016 and $288,891.00 in 2018 for "Share Agreement - Loans" and, under the heading "Share Agreement Loan", list members for amounts, including directors of QVCC and Mr Soneel Deo for $1,120.00 in 2017. The statements are not signed;
(e) a current and historical company search of QVCC as at 20 September 2018. It lists as current and former directors and secretaries of QVCC:
(f) an email sent by Dr Singh to Mr. Jitendra Deo on 12 February 2019. The letter, in part, reads:
(i) As per the initial understanding one share was to be allotted to those who have contributed $1000.00. Despite my repetitive reminders I have not been provided copy of share Register despite the fact that I am one of the four Directors & am entitled to have access to such records.
(ii) - (iv) ...
(v) This is violative of our initial understanding that one share shall be allotted to an individual contributing $1000.00 I am shocked to see that persons like Shri MulChand & Shri S.P. Singh who have contributed $30,000 & $20,000 respectively do not have even a single share. They feel aggrieved/cheated & may resort to any legal action against the company which may put all of us in dock. I would not like to be a party to this immoral act of ours.
...
(Emphasis added);
(g) emails sent and received by Mr. Dick Sen and C.A.D. Accounting on 18 and 19 February 2019. The emails discuss the issue of shares in QVCC and the drafting of the share agreement; and
(h) letter Mr Soneel Deo to QVCC dated 28 February 2020. The letter demands repayment of the money paid under the share agreement.
[11] QVCC, on 26 November 2021, filed a letter addressed to the Tribunal and dated 25 November 2021. The opening paragraph of the letter reads, "This has reference to Notice of Hearing scheduled on 1st December 2021, in the subject matter of Brisbane Claim 0000524/21 Soneel Deo vs QVCC. The Applicant has submitted a purported "Share Agreement" which is not signed by any one on behalf of the Respondent except the signature of Applicant himself. It may be mentioned here that the Applicant is the son of Mr. Jitendra Deo, who have signed similar agreement for other applicant members of this group. Though there is NO agreement, but the Respondent (QVCC) hereby provide its statement of defense to facilitate your understanding of our side of the case." (Emphasis in original letter) The letter accuses Mr. Jitendra Deo of fraud, exhibiting a copy of an order made by the Supreme Court of Queensland on 30 August 2019 and a letter from QVCC to Santoshi Development Consultants Pty Ltd dated 20 October 2017, on Santoshi Development Consultants Pty Ltd letterhead.[3]
[13] QVCC relies on the decision of the Tribunal in Singh v Queensland Vedic Cultural Centre Pty Ltd[6] and refers to sections 124 - 127 of the Corporations Act 2001 (Cth) and an article on executing documents on behalf of a company by Donnie Harris Law[7]. The share agreement, QVCC points out, is only signed by Mr Soneel Deo.
[14] The Tribunal, on 19 July 2022, made orders for the parties filing affidavits deposing to facts and evidence on which they will rely at the hearing of the proceeding. Neither party filed affidavits.
[15] QVCC, on 8 December 2022, after the hearing of the proceeding, filed further submissions. The opening paragraph of the submissions reads:
This is in reference to the decision taken by the Tribunal on 24th November 2022 in response the objection raised by the Respondent about the fairness of the proceedings in the light of the Tribunal Order dated 19 July 2022, in the subject matter of Brisbane Claim 0000523/21 Lalta Prasad vs QVCC. The objection related to all claims heard by the Adjudicators. The adjudicator considered the points raised by the respondent and made the decision as communicated to the respondent through email dated 24 November 2022. Though this act does not alleviate the disadvantage caused to Respondent, however, as per the decision of the Tribunal the Respondent (QVCC) hereby submits the following facts for consideration before the Tribunal gives its decision in the matter of applicant's claim.
[16] The submissions were filed without the leave of the Tribunal and without serving the submissions on Mr. Deo. In the circumstances, they will be put to one side.
[17] The proceeding was heard by the Tribunal on 23 November 2022. Mr Soneel Deo appeared in person. Dr Singh appeared in person and, with Mr Singh, on behalf of QVCC.
[18] Mr Soneel Deo and Mr Singh addressed the Tribunal and delivered closing statements.
[19] Mr Jitendra Deo was called by Mr Soneel Deo to give evidence.
[20] He stated in evidence he had the authority of the board of directors of QVCC to obtain funds from members by the sale of shares in QVCC and monthly contributions to be applied in repayment of the bank loan.
[21] The QVCC 2016 financial statements, he said, were signed by the directors.
[22] All monies paid by members were paid to QVCC and applied by it as agreed.
[23] Mr Jitendra Deo was cross-examined by Mr. Singh.
[24] The documents referred to in paragraph [10] of these reasons for decision were tendered in evidence and marked as exhibits, as follows:
(a) exhibit A: The letter Mr Soneel Deo to QVCC dated 28 February 2020;
(b) exhibit B: The bank transaction acknowledgement recording a deposit of $1,120.00 on 28 March 2017;
(c) exhibit C: The QVCC and APSQ treasurer's report;
(d) exhibit D: The Australian Securities and Investments Commission current and historical company search of QVCC as at 20 September 2018;
(e) exhibit E: The bundle of emails; and
(f) exhibit F: QVCC's financial statements for the year ended 30 June 2017.
[25] Also tendered in evidence, and marked as exhibit G, was a copy of QVCC's financial statements for the year ended 30 June 2018. The notes to the financial statements list liabilities of $105,000.00 in 2015 and $153,471.00 in 2016 for "Share Agreement - Loans" and, under the heading "Share Agreement Loan", list members for amounts, including directors of QVCC.
[26] The issues to be determined by the Tribunal in this proceeding are different to the issues in the proceedings previously heard by the Tribunal[8] because the share agreement was not signed for QVCC. They may be summarised in the following terms:
(a) does the Tribunal have jurisdiction to hear and decide the proceeding;
(b) did Mr. Jitendra Deo have the authority of the board of directors of QVCC to obtain funding from members to service the bank loan by the sale of shares in QVCC;
(c) was the money paid by Mr Soneel Deo to QVCC to purchase a share in QVCC, or a donation;
(d) is the money repayable by QVCC to Mr Soneel Deo despite the share agreement not being signed for QVCC?
Does the Tribunal have jurisdiction to hear and decide the proceeding?
[27] QVCC asserts the Tribunal is without jurisdiction to hear and decide the proceeding. It relies on the ex-tempore decision of the Tribunal in Singh v Queensland Vedic Cultural Centre Pty Ltd[9]. There, on the evidence available to it, the Tribunal decided the share agreement was invalid. Whilst there was discussion about jurisdiction in the context of a claim under the Corporations Act, the Tribunal did not decide it was without jurisdiction.
[28] The Tribunal has jurisdiction to hear and decide a minor civil dispute.[10] Minor civil dispute is defined in the dictionary in schedule 3 to the QCAT Act. Relevantly, it includes a claim to recover a debt or liquidated demand of money of up to the prescribed amount. In Hill v Berghofer[11], Alan Wilson J, then President of the Tribunal, said:
A 'debt or liquidated demand' is, as the Deputy President explained in Ziegeler t/a Ziegco Pty Ltd v Recochem Incorporated[12], one where the amount is determined and, in effect, beyond dispute as to how it is calculated.[13] If the amount depends upon assessment by the court or tribunal, it is not liquidated.
[29] The prescribed amount is $25,000.00.[14]
[30] The claim by Mr Soneel Deo, in our opinion, falls within the definition of minor civil dispute. The assertion is rejected.
Did Mr. Jitendra Deo have the authority of the board of directors of QVCC to obtain funding from members to service the bank loan by the sale of shares in QVCC?
[31] The relevant sections of the Corporations Act and the principles applicable to determining whether an agent has the actual, either express or implied, or apparent authority to agree for a company are set out in the reasons for decision in Padarath & Anor v Queensland Vedic Cultural Centre Pty Ltd & Ors.[15] Here, taking into consideration the evidence in this proceeding and applying the principles, we find Mr Jitendra Deo had the express actual authority of the board of directors of QVCC to obtain funding from members to service the bank loan by the sale of shares in QVCC and payment of monthly contributions. The principal sum paid by members was to be held in trust by QVCC and the monthly contributions applied in repayment of the bank loan.
[32] Alternatively, the directors, as a board, stood by while Mr. Jitendra Deo agreed for QVCC with members to obtain funding in the manner and for the purpose outlined with the consequence it granted him, by implication, actual authority to so agree with members.
Was the money paid by Mr Soneel Deo to QVCC to purchase a share in QVCC, or a donation?
[33] QVCC asserts the money paid by Mr Soneel Deo to it was a donation.
[34] The evidence, however, shows the board of directors of QVCC agreed to sell shares in QVCC with a monthly contribution of 10% of the principal sum paid for the share or shares to be applied in repayment of the bank loan. The terms, reflected in the documents filed and tendered in evidence, including the share agreement circulated to members and, here, signed by Mr Soneel Deo but not for QVCC, included payment of a principal sum of $1,000.00 for each share and the monthly contribution. QVCC's bank refused consent to the issue of shares. It was therefore agreed the principal would be held in trust until the shares could be issued with the purchaser having the right to terminate the agreement and a refund of the principal sum. The monthly contribution was non-refundable.
[35] We accept the evidence of Mr Soneel Deo and Mr Jitendra Deo, supported by the written evidence filed and tendered in evidence, and find the money paid by him to QVCC was to purchase a share in QVCC, not a donation. There is no satisfactory evidence to support the assertion it was a donation.
Is the money repayable by QVCC to Mr Soneel Deo despite the share agreement not being signed for QVCC?
[36] As has been said, the share agreement was signed by Mr Soneel Deo but not for QVCC.
[37] An agreement between parties may be oral, in writing, or partly oral and partly in writing. Here, the agreement was in writing constituted by the documents filed and the documents tendered in evidence, including the share agreement notwithstanding it not being signed for QVCC.
[38] Mr Jitendra Deo, for QVCC, offered members shares in the company on terms clearly articulated. He did so in writing. Mr Soneel Deo accepted the offer and paid the money for one share. He doing so is documented.
[39] He was entitled to terminate the agreement and did so on 28 February 2020[16], asking for repayment of the principal sum and contributions. The principal sum was repayable within ninety days. The monthly contributions, however, are not repayable.
[41] It follows, in our opinion, the money paid by Mr Soneel Deo to QVCC for one share in the company is repayable despite the share agreement not being signed for QVCC.
[42] The earlier decision[17] relied on by QVCC is distinguishable on the evidence before the Tribunal hearing and deciding the proceeding. It is of no assistance to QVCC.
[43] Further, and in any case, the decision is not binding on this Tribunal.
[44] In summary, taking into consideration the whole of the evidence before it, including the material filed by the parties, the oral evidence, and the submissions by the parties, the Tribunal finds as follows:
(a) the Tribunal has jurisdiction to hear and decide the proceeding;
(b) the executive committee and board of directors of QVCC agreed to offer members shares in QVCC to fund repayment of a bank loan and interest on the loan;
(c) on 28 March 2017 Mr Soneel Deo agreed to purchase one share in QVCC and paid to it $1,120.00, $1,000.00 for one share in QVCC and $120.00 for monthly contributions;
(d) on 10 November 2014 Mr Soneel Deo signed the share agreement. It was not signed by the other parties;
(e) the money paid by Mr Soneel Deo to QVCC was paid for the purpose stated by Mr Soneel Deo, it was not a donation;
(f) Mr Jitendra Deo had the express actual authority of the board of directors of QVCC to obtain funding from members to service the bank loan by the sale of shares in QVCC and payment of monthly contributions. The principal sum paid by members was to be held in trust by QVCC and the monthly contributions applied in repayment of the bank loan. Alternatively, the directors, as a board, stood by while Mr Jitendra Deo did so with the consequence it granted him, by implication, actual authority to agree with members; and
(g) the term of the loan has ended. Mr Soneel Deo was entitled to ask for repayment of the principal sum paid for the share not issued to him and did so. The principal sum was not repaid within ninety days or at all.
[45] It follows Mr Soneel Deo is entitled to the order sought by him in respect of the principal sum paid to QVCC for the share in QVCC not issued to him.
[46] The decision of the Tribunal is that QVCC pay to Mr Soneel Deo $1,123.20, $1,000.00 in respect of the share in QVCC he agreed to purchase but did not receive together with $123.20 the fee on filing the application in the proceeding, within 14 days of this order.
[1] Padarath & Anor v Queensland Vedic Cultural Centre Pty Ltd Ors (MCDO 60589/20) (heard on 22 November 2022); Pal v Queensland Vedic Cultural Centre Pty Ltd & Anor (MCDO 60617/20) (heard on 22 November 2022); Padarath & Anor v Queensland Vedic Cultural Centre Pty Ltd (MCDO 60610/20) (heard on 23 November 2022); Prasad v Singh & Anor (MCDO 523/21) (heard on 24 November 2022).
[2] Order of the Tribunal made 20 August 2021.
[3] Exhibits A and B to the letter QVCC to the Tribunal dated 25 November 2021.
[6] MCDO 907/20, exhibit C to the letter.
[8] Padarath & Anor v Queensland Vedic Cultural Centre Pty Ltd & Ors (MCDO 60589/20).
Pal v Queensland Vedic Cultural Centre Pty Ltd & Anor (MCDO 60617/20).
[10] Section 11 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
[11] [2011] QCATA 34, at [7].
[13] Spain v Union Steamship Co. of New Zealand Ltd [1923] HCA 21; (1923) 32 CLR 138.
[14] Prescribed amount is defined in the dictionary in schedule 3 to the QCAT Act.
[15] See paragraphs [70] - [74] of the reasons for decision in Padarath & Anor v Queensland Vedic Cultural Centre Pty Ltd (supra). See also sections 126 and 127 of the Corporations Act, Junker v Hepburn [2010] NSWSC 88, per Hammerschlag J at [39] - [48], and Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd (supra), per Moshinsky J at [279].
[17] Singh v Queensland Vedic Cultural Centre Pty Ltd (MCDO 970/20, decided on 18 May 2021). See also Prasad v Queensland Vedic Cultural Centre Pty Ltd & Ors [2022] QCATA 174.
Deo
Singh & Anor [2023] QCAT 220
(1923) 32 CLR 138