Evans v LeasePlan Australia Pty Ltd [2010] QDC 144

DISTRICT COURT OF QUEENSLAND CITATION: Evans v LeasePlan Australia Pty Ltd [2010] QDC 144 PARTIES: DAVID EVANS (Appellant) V LEASEPLAN AUSTRALIA PTY LTD ACN 006 923 011 (Respondent) FILE NO/S: 2640/09 DIVISION: Civil PROCEEDING: Appeal ORIGINATING COURT: Magistrates Court, Brisbane DELIVERED ON: 30 March 2010 DELIVERED AT: Brisbane HEARING DATE: 22 March 2010 JUDGE: Jones DCJ ORDERS: (1) Appeal dismissed. (2) The parties are to be heard on costs CATCHWORDS: CONTRACT- breach of contract- conditions and terms of contract to be read in context. T.C.Whittle Pty Ltd v T & G Mutual Life Society Ltd (1978) 52 ALJR 177, considered. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) HCA 52, 11 November, considered. COUNSEL: Mr B.W. Kidston appeared for the appellant Ms H. Blattman appeared for the respondent SOLICITORS: Potts & Co appeared on behalf of the appellant Guernsey & Co appeared on behalf of the respondent [1] David Evans, the appellant, has appealed a decision of his Honour Magistrate C.J. Callaghan. On 19 August 2009 his Honour ordered the appellant to pay -- 1 of 9 -- 2 LeasePlan Australia Pty Ltd, the respondent in this appeal, the sum of $4,521 as damages for breach of contract. Background [2] On 25 July 2006 the appellant entered into a Finance Lease (Novated) Agreement (FLA) with the respondent. The purpose of the agreement is described on its front sheet in the following way: “The lessee wishes to lease a motor vehicle from time to time from LeasePlan. LeasePlan and the lessee have agreed to enter into this agreement to set out the terms and conditions on which the motor vehicle described in the schedule will be leased by LeasePlan to the Lessee.”1 [3] On 19 December 2006, after what His Honour described as “an unexpected delay in the supply of the vehicle”, the appellant, by email, advised the respondent to the effect that he no longer intended to be bound by the agreement. 2 Despite some attempts by the respondent to convince the appellant to continue on with the contractual arrangements, the respondent eventually accepted that the contract between them was at an end. There was no suggestion that the delay in the supply of the vehicle constituted a breach of the agreement by the respondent. [4] The contract provided for certain steps and remedies in the event of a default under the contract by the lessee, 3 but the respondent elected not to avail itself of those clauses. [5] Instead, the respondent sued for what were described by counsel as common law damages for breach of contract. It was common ground before me that in the event that I did not find that either Clause 4 or Clause 7 of the FLA applied, such relief 1 Exhibit 1 p 1. 2 Exhibit 13. -- 2 of 9 -- 3 was available. The amount of $4,521 awarded below was calculated, as I understand it, by reference to the 10% cancellation fee the respondent was charged by the supplier of the motor vehicle when the order for the supply of the vehicle intended to be leased to the appellant was cancelled. [6] In the court below it was argued that Clause 4.1 of the FLA or, in the alternative, Clause 7.3 of that agreement governed the respective obligations and liabilities of the parties. Clause 4 provides: “Early termination of leasing arrangement 4.1 The lessee may give written notice to LeasePlan at any time which is more than 31 days prior to the end of the term of the termination of the leasing arrangement for any reason. Where the lessee notifies LeasePlan of the termination of the leasing arrangement under this clause, then all of the following paragraphs (a) to (c) will apply: (a) the lessee shall immediately return to LeasePlan the vehicle together with current registration papers; (b) LeasePlan will dispose of the vehicle at public auction or by tender or private treaty at the best price it can reasonably obtain and subject to such conditions as LeasePlan shall determine to facilitate the sale; and (c) if the net proceeds of sale proceeds after deduction from the proceeds of sale of all costs incurred in disposing of the vehicle, including, but not limited to, transport, preparation, tender, auction and repair fees: (i) is less than the written down value of the vehicle then the lessee shall forthwith on demand pay to lessee the shortfall; or (ii) is greater than the written down value of the vehicle then LeasePlan shall forthwith pay to the lessee the excess (a) to (c) of this Clause 4.1 will also apply where any other provision in this agreement states that Clause 4.1 shall apply. …” [7] Clause 7.3 provides: 3 Exhibit 1 Clauses 11 and 12. -- 3 of 9 -- 4 “The lessee covenants and agrees with LeasePlan to take delivery of the vehicle within seven days of being notified by LeasePlan that the vehicle is available for delivery. If the lessee fails to do so, the lessee will nevertheless be liable to LeasePlan as if the lessee had taken delivery of the vehicle on the contract start date and then immediately returned it to LeasePlan and terminated the leasing arrangement under Clause 4.1.” [8] The “contract start date” is defined to mean the first day of the “Term”, being the date the relevant dealer or other vendor delivers the vehicle to the lessee. The word “Term” is defined to mean the period of the lease in months commencing on the “contract start date”. A “leasing arrangement” is formed by the incorporation of the the FLA and what is described as “the schedule” which becomes an annexure to the FLA. It is common ground that the vehicle was never delivered to the appellant and that no leasing arrangement as defined by the FLA was finalised between the parties. [9] The court below rejected the appellant’s arguments that Clause 4.1 or Clause 7.3 governed the parties under the contract,4 and, accordingly, awarded damages in the sum of $4,521.00. The parties were to be heard further as to interest and costs. The appeal to this court [10] The complaints against the judgment below are articulated in the notice of appeal: “1. The learned primary magistrate erred in finding that the respondent had not notified the appellant that the vehicle … was available for delivery or alternatively that there was no evidence of same, in circumstances where either or both of those findings is contrary to evidence. 2. The learned primary magistrate erred by finding that the appellant’s email dated 19 September 2006 to the respondent did not constitute written notice from the appellant to the respondent of the termination of the leasing agreement pursuant to Clause 4.1 of the FLN agreement and 4 See at paragraphs 12 to 18. -- 4 of 9 -- 5 [the] consequently the FLN agreement was not terminated by the appellant to that said clause. 3. The learned primary magistrate erred by finding that Clause 7.3 of the FLN agreement did not apply in the circumstances.” The Clause 4.1 argument [11] At the heart of the appellant’s case is that the court below erred by unnecessarily and improperly reading down the introductory paragraph of Clause 4.1. The appellant’s position is quite elegantly put in the written submissions of his counsel, where in paragraphs 37 and 38 it is said: “37. The learned primary magistrate has, it is submitted erroneously, construed Clause 4.1 by, in effect, inserting the words ‘after the commencement of the term’ such that the clause [should] read: ‘The lessee may give written notice to LeasePlan at any time after the commencement of the term which is more than 31 days prior to the end of the term of the termination of the leasing arrangement for any reason’. 38. Put another way, the learned primary magistrate has read down the expansive express words ‘at any time’ to mean ‘at any time after the commencement of the term’.” [12] At first blush these submissions carry some weight. However, when read in context with the whole of the clause, they are, in my view, submissions that must fail. Clause 4.1 is concerned with early termination of the leasing arrangement. It would only be in circumstances where a leasing arrangement had been formalised could subclauses (a) to (c) of Clause 41 become operative. They are obviously concerned with the situation where the lessee has taken possession of the vehicle. As I have already said, it is common ground that no leasing arrangement was ever formalised between the parties and, accordingly, the appellant never took possession of the vehicle. It would be nonsensical to construe Clause 4.1 in such a way as to provide -- 5 of 9 -- 6 for the termination of something that did not infact exist. It is also nonsensical to construe Clause 4.1, as was submitted on behalf of the appellant, to mean that in circumstances where the leasing arrangement has been ended before it starts, the respondent would be required nonetheless to still take possession of the motor vehicle from the supplier and then dispose of it at public auction or tender and thereafter account to the lessee. The absurdity of this situation is highlighted by the potential operation of Clause 4.1(c) (ii). [13] When read as a whole, the context and structure of Clause 4.1 points to a construction which limits the operation of the right to terminate to any time after the leasing arrangement has commenced.5 The language used in Clause 4.1 would not, in my opinion, lead the reasonable person to give to it the meaning and effect contended for on behalf of the appellant. 6 The Clause 7.3 argument [14] Reliance on Clause 7.3 of the FLA gained some prominence before me. This can be contrasted with the situation below, where reliance on Clause 7.3 seemed to have been little more than an afterthought. So much can be inferred from counsel’s submissions below. By leave of the court, then counsel for the appellant, Mr Jurth in supplementary submissions, referred the court to Clause 7.3 and, relying on the pleadings of the respondent, contended that the respondent must have notified the appellant that the vehicle was available for delivery. [15] The pleading of the appellant, relied on was that “the vehicle became available to the defendant and the defendant failed, refused or neglected to take delivery of the vehicle”. 5 T.C.Whittle Pty Ltd v T & G Mutual Life Society Ltd (1978) 52 ALJR 177 at 177 per Barwick J. -- 6 of 9 -- 7 [16] The court below, rightly in my respectful opinion, concluded that that pleading did not amount to evidence of or an admission to the effect that the respondent had notified the appellant for the purposes of Clause 7.3 that the vehicle was available for delivery. In the proceedings below, the appellant elected to call no evidence and there was no attempt to elicit any evidence of such notification from any of the witnesses called by the respondent. In such circumstances, it was not at all surprising that it was found that there was no evidence that the respondent had notified the appellant that the vehicle was available for delivery.7 [17] Before me, no reliance was placed on the respondent’s pleadings but considerable weight was placed on email correspondence that occurred between 19 September 2006 and 26 September 2006, and on a passage of evidence given by a Mr Sharp, one of the witnesses called by the respondent. [18] Dealing first with the evidence of Mr Sharp, I was referred to a response to a question given by him at p 17 line 10 of the transcript. That evidence is equally consistent with no notice being given to the appellant as it is with notice being given. This evidence does not assist the appellant. [19] Turning then to the email correspondence, as I have already said, the appellant himself gave no evidence that he was given notice. Instead, it is submitted on his behalf, that that inference can be drawn from the email correspondence to which I have referred. In particular, extracts from the email sent by the appellant to the respondent on 19 September 2006 are relied on. In that email, the appellant refers to the supplier of the vehicle “cancelling original delivery dates”, to a “second 6 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at para [40]. 7 At paragraphs 13 and 18. -- 7 of 9 -- 8 delivery date” and to warning that the vehicle was to be collected by 3 pm on a certain date. [20] Clause 7.3 specifically refers to notification being given by the respondent. However, in circumstances where it is envisaged that the supplier of the vehicle might deliver the vehicle to the lessee8 , I am prepared to proceed on the basis that from time to time the supplier of the motor vehicle would be properly authorised to act as the respondent’s agent for the purposes of notifying that the vehicle was available for delivery. [21] Some of the contents of the email sent by the appellant to the respondent on 19 September 2006 suggest that some form of notification that the vehicle was available for delivery might have been given. However, the contents of other emails tend to suggest that delivery might not have been able to be effected until the appellant provided certain documents to the supplier. Some reference to this is made in the appellant’s own email. But reference is also made in another email later the same day that refers to trying to convince the appellant to “provide the required documentation and take delivery (the vehicle is sitting at the dealership waiting to be registered)…” The failure of the appellant to provide documentation is also referred to in an email sent by the supplier of the vehicle to the respondent on 26 September 2006.9 [22] The contents of the emails referred to; in part suggest that the vehicle was available for delivery, but in other parts suggest that it might not have been. When read in context, the word “delivery” in Clause 7.3 should, in my opinion, be construed to mean to convey or transfer possession of the vehicle. 8 FLA, Clause 6.1. 9 See part of Exhibit 12. -- 8 of 9 -- 9 [23] In circumstances where the email evidence is so ambiguous, I am not prepared to draw the inference that the respondent, either itself or by its authorised agent, notified the appellant that the vehicle was available for delivery pursuant to Clause 7.3 of the FLA. It was open for the appellant to lead more probative evidence on this matter in the hearing below but chose not to. [24] On balance, I have reached the conclusion that the appellant has not shown that the court below erred in its findings concerning Clause 7.3 of the FLA. [25] For the reasons given above the appeal must be dismissed and accordingly I order as follows. Order 1. The appeal is dismissed. 2. The parties are to be heard on costs. -- 9 of 9 --