INTERIM ADVANCE CORPORATION PTY LTD -v- FAZIO [2008] WASCA 140 (16 July 2008)

INTERIM ADVANCE CORPORATION PTY LTD -v- FAZIO [2008] WASCA 140 (16 July 2008) - WASCA 2008 case summary — Zoe

[136]

The learned judge erred in law in finding at paragraphs [132] and [161] of his Reasons that, notwithstanding the prohibitions imposed by sections 4 and 123 of the Legal Practice Act 2003 (WA), the business or functions of a debt collector for the purpose of the Debt Collectors Licensing Act 1964 could include preparing and signing a Local Court summons and sending that summons to another person to arrange for its filing in the Court.
The learned Judge erred in fact and in law in finding at paragraph [145] of his Reasons that it was incumbent upon the Magistrate at the hearing of the complaints against the appellants to hold that the respondent had negatived or ruled out the honest claim of right defence raised under s 22 Criminal Code because there was insufficient evidence before the Court that the appellants had asserted an honest claim of right to the debts the subject of the complaints.
The learned judge erred in fact and in law in finding at paragraphs [102] and [103] of his Reasons and at paragraph [143] that in his evidence the second appellant was referring, in relation to the power of attorney and to the debts particularised in the complaints, to the capacity or power to act on behalf of another rather than asserting a claim to ownership of the item of property in question (the rights associated with the promissory notes including the right to enforce the notes) and that the function being performed was the collection of a debt on behalf of another.
The learned judge erred in law in finding that the first appellant had an 'expectation of gain' within the meaning and for the purposes of the definition of 'debt collector' in s 3 of the Debt Collectors Licensing Act 1964 by reason of the fees that were payable to it.
The learned judge erred in law in finding that it was open to the respondent to contend by ground 3 of his notice of appeal that the term 'gain' when used in the definition of 'debt collector' in s 3 of the Debt Collectors Licensing Act 1964 could include intangible benefits.
The learned judge erred in finding, in effect, that it was open to the respondent to contend by ground 4 of its notice of appeal that the first appellant had prepared, signed and sent the Local Court summonses for a fee or gain or reward or in the expectation of a fee or reward.
The learned judge erred in fact and in law in allowing ground 6 of the respondent's notice of appeal. The learned judge ought to have dismissed the appeal in its entirety and held that the Magistrate was right to have dismissed each of the complaints sworn against the appellants.

[191]

Finally, in relation to the charges against the corporation, your Honour will be aware that we have relied upon section 22 of the Criminal Code as to what is often described as an honest claim of right. That's an honest claim of right as to property. The term 'property' as defined in section 1 of the Criminal Code includes real and personal property and everything animate or inanimate capable of being the subject of ownership. The view of Mr Douglas and through him, the belief or the honest claim of the corporation was that by virtue of the power of attorney provisions in clause 10 of the franchise agreement, the corporation became the holder in due course of the promissory notes [in] question in relation to the matters the subject of the six summonses.

Now, my friend asked Mr Douglas about clause 10 in the franchise agreement and the power of attorney provision and he'd given evidence in-chief and he repeated that evidence that that was the basis and on top of that, the company had received legal advice that it was entitled to consider itself the holder in due course of a promissory note and upon that basis, in each case, as your Honour will see, the summonses proceeded in the name of Interim Advance Corporation Pty Ltd as plaintiff by reason of being holders in due course of a named promissory note.

Now, it's true, your Honour, we don't resile from it, that we conceded that as a matter of law, there was no basis in law for proceedings to issue by the plaintiff as though it were [sic] as being the holder in due course of the promissory note in each case, but that's not the question in relation to section 22 of the Criminal Code. It is whether or not there was an honest claim held by the company. ...

My friend may have misunderstood the concession, but the concession's clear that we don't dispute that as a matter of law the corporation did not become holder in due course of the promissory notes. Section 22 of the Criminal Code and the cases upon section 22 of the Criminal Code have pointedly demonstrated that the question is not what is the relevant law. In fact, it's the whole basis for the defence of honest claim of right that usually it's not the law, that the claim to the right to the property is in fact baseless in law ...

... if he had an honest belief that he was entitled to take it or if the jury had a reasonable doubt whether he had such a belief, he should have been acquitted. However wrong his belief may have been and however tenuous and unconvincing a ground for it may seem to a judge, the onus of establishing that the honest claim of right did not exist is upon the prosecution. At the very least, one would expect in these circumstances, it's for the prosecutor to put as a proposition of fact to Mr Douglas that he had no such claim or no such honest claim or the company had no such honest claim through him, but that wasn't done and in our respectful submission, that's a glaring omission in the way that that defence and the onus of negativing the defence has been dealt with in this case (ts 127 - 128).

[202]

94 I consider that Hasluck J was in error, with respect, in deciding that, on the evidence, the learned magistrate was bound to find that the respondent had negatived the defence of honest claim of right. First, his Honour's observations that the evidence did not include 'any document that could arguably be regarded as an assignment of the subject debts' [108] or that 'the promissory notes themselves did not suggest that this was intended, or that Interim Advance was to be characterised as a holder in due course' [108] related, principally, to whether the right existed or not as a matter of law. These observations do not address the initial question in relation to s 22, namely, whether Interim Advance, through Mr Douglas, had satisfied the evidential onus by adducing evidence of an honest claim of right. Secondly, his Honour's observations that 'there was insufficient evidence before the [learned magistrate] that [Interim Advance and Mr Douglas] had asserted an honest claim of right to [the debts in question] at the time the offences were committed' [145] does not distinguish between whether Interim Advance had satisfied the evidential onus by introducing evidence of an honest claim of right, on the one hand, and whether the respondent had discharged the burden of negativing against the defence, on the other. Once Interim Advance had satisfied the evidential onus, it was necessary to determine whether the respondent had negatived the defence beyond reasonable doubt and not merely to determine whether Interim Advance had adduced 'sufficient evidence' of its 'assertion' of the claim. Thirdly, upon it being concluded (as, in my opinion, it should have been) that Interim Advance had satisfied the evidential onus, the learned magistrate's failure to make any relevant findings on the s 22 defence became important in evaluating whether it was open to an appellate court, in those circumstances, to be satisfied beyond reasonable doubt that the defence had been negatived. In my opinion, it was not open for Hasluck J (and it is not open for this court) to make a finding as to whether Mr Douglas's alleged belief was honestly held or not. Mr Douglas's evidence as to his belief was not challenged, and the learned magistrate did not make any relevant findings. His Honour did not make adverse findings in relation to Mr Douglas's credit generally. It is true that his Honour preferred the evidence of Mr Macdonald to the evidence of Mr Douglas on one disputed issue of fact, but that issue did not bear upon the honest claim of right defence.

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INTERIM ADVANCE CORPORATION PTY LTD -v- FAZIO [2008] WASCA 140 (16 July 2008)

Legislation Cited (6)

Cases Cited (3)