Fleet Partners v Salikin
[2018] VCC 249
•16 March 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-16-00051
| FLEET PARTNERS PTY LTD (ACN 006 706 832) | Plaintiff |
| v | |
| SALEM SALIKIN | Defendant |
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JUDGE: | HER HONOUR JUDGE MARKS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 11, 12, 13, 18 October, and 23 and 24 November 2017 | |
DATE OF JUDGMENT: | 16 March 2018 | |
CASE MAY BE CITED AS: | Fleet Partners v Salikin | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 249 | |
REASONS FOR JUDGMENT
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Catchwords: CONTRACTS – LEASE – Master Finance Lease Agreement (MFLA) entered setting up terms and conditions for future leases by company – Guarantee of company’s obligations under MFLA - Whether leases of three cars were entered into pursuant to MFLA – Leases not entered into – Nothing owing under guarantee – Judgment for the defendant.
CIVIL PROCEDURE – TRIAL – Application to reopen case to adduce evidence – Application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Freeman | Sphere Legal Pty Ltd |
| For the Defendant | Mr F Lim, Solicitor Advocate | Francis Lim Barristers & Solicitors |
CONTENTS
Fleet’s case
Difficulties in documents and evidence relied on by Fleet
No evidence of leases of the 2013 cars
Application to reopen case
Documents about the cars
Did Fleet pay Aerotop any money?
Fleet’s theory of what happened
Conclusion
HER HONOUR:
Fleet Partners Pty Ltd (‘Fleet’) has sued Salem Salikin for $204,919.16, and interest, on the basis that he guaranteed debts of MCVC P/L due to Fleet.
Fleet says that, at MCVC’s request, it purchased three specific cars manufactured in 2013 from a car dealer, Aerotop Pty Ltd, and that it then leased them to MCVC pursuant to a master finance lease agreement on 12 October 2013.
Mr Salikin, however, says that no leases were entered into for those cars because the documentation to set up leases on the basis required by the master finance lease agreement was not complete. It says further that there is no evidence that those specific cars were ever purchased by Fleet or provided to MCVC.
For the reasons detailed below, Fleet has not established that it leased the cars to MCVC. Accordingly, it has not established its case against Mr Salikin as guarantor of MCVC’s debts.
I will give judgment for Mr Salikin.
Fleet’s case
By its statement of claim, Fleet pleads:
3. On or about 12 October 2013 the Plaintiff and the [sic] MCVC Pty Ltd (ACN 126 904 345) (now deregistered) (‘MCVC’) entered into a contract for the lease of motor vehicles (‘the Contract’).
PARTICULARS
a.The Contract comprises of a written agreement entitled “Master Finance Lease Agreement” dated 12 October 2013.
b. The Plaintiff intends referring to the Contract at the trial of this action for its full terms and effect.
4. Pursuant to the Contract MCVC leased the following motor vehicles from the Plaintiff:
a.Nissan 370Z 2013 Model with registration number 1AI6DV and VIN number JN1BCAN14A0504013 (‘the Nissan’);
b.Holden Calais V8 2013 Model with registration number 1AI5YY and VIN number 6H8VSK19HTL866542 (‘the Holden’); and
c.Ford G Series 2013 Model with registration number 1A16CR and VIN number 6FPAAAJGWARR50305 (‘the Ford’).
(collectively ‘the Vehicles’)
5. Pursuant to the Contract each of the vehicles was leased by the First Defendant from the Plaintiff at agreed rates resulting in payments owing in the sum of $204,919.66 (‘the Charges’).
As all the cars Fleet says that it leased are 2013 models, I will call the cars described in the statement of claim by reference to model number, registration number and VIN number the ‘2013 cars’. I will otherwise refer to them as they were defined in the statement of claim, as ‘the Holden’, ‘the Nissan’, and ‘the Ford’.
Further and better particulars were filed for Fleet, including details of Quote/Requisition forms said to have been signed for MCVC for each of the 2013 cars on 12 October 2013, and Delivery Acceptance forms said to have been signed for MCVC when these cars were said to have been delivered to MCVC in November 2013.
Fleet said the following are the key events relating to its claim.
Mr Salikin was initially one of the directors of MCVC. By the time the relevant master finance lease agreement was entered into, he was its only director.
Mr Peter Tillott was a finance broker who had previously assisted MCVC, and a related company, MCVC Traders Pty Ltd to obtain vehicle finance.
In early 2013, Mr Salikin and Muhamed Zakaria approached Mr Tillott for finance for the purchase of vehicles by MCVC through Fleet.
On 27 July 2013, Mr Tillott compiled finance documentation and submitted a credit application for MCVC to obtain vehicle finance from Fleet.
On 2 October 2013, Fleet approved finance for three 2013 cars.
On 12 October 2013, Mr Salikin executed the master finance lease agreement in his capacity as a director of MCVC, and executed the guarantee. He also completed a direct debit authority for repayment of financed funds by MCVC. He also signed Quote/Requisitions forms for the purchase of the 2013 model Nissan, the 2013 model Ford and the 2013 model Holden.
Fleet says the 2013 cars were purchased by it from a car dealer, Aerotop Pty Ltd. It said Aerotop delivered the 2013 cars to MCVC on 15 November 2013. It says that Delivery Acceptance forms were signed by Mr Salikin and two of his ‘associates’. On 15 November 2013, Mr Salikin signed a Delivery Acceptance for the Ford. Jaffar Yusof signed a Delivery Acceptance for the Holden and Mohammad Abdul signed a Delivery Acceptance for the Nissan.
MCVC registered and comprehensively insured the 2013 cars.
MCVC then went into liquidation.
Payments were made to Fleet totalling $25,328.64 after MCVC’s liquidation. Fleet did not know about MCVC’s liquidation and thought the payments were from MCVC. There was no evidence before the Court as to who made the payments.
No payments were made from at least 14 August 2014.
Fleet’s claim is based on amounts it says are calculated pursuant to the leases.
Difficulties in documents and evidence relied on by Fleet
Whilst Fleet’s claim looks straightforward as set out above, the evidence and submissions put were anything but straightforward.
There was a great deal of evidence about much older cars being owned by MCVC, MCVC Traders or Mr Mohamed Nawami, who was said by Fleet to be associated with MCVC or Mr Salikin. Fleet said that a fraud had been carried out which involved Mr Salikin and what were described as his associates, to do with switching number plates from the older cars to the 2013 model cars purchased by Fleet and delivered to MCVC. I discuss this further below.
Records of VicRoads indicated that the older cars had the registration number and VIN numbers which Fleet claims the 2013 cars it purchased and leased to MCVC had.
The veracity of most of the documents produced by Fleet was challenged by Mr Salikin. All of the documents Fleet relied on were only kept in scanned copy in its records. There were no originals produced to the Court. Evidence was given of Mr Tillott sending the version of the master finance lease agreement signed for MCVC, and the guarantee signed by Mr Salikin, to Fleet. There was no evidence by anyone involved at Fleet at the time of the relevant events of how the other copy documents it relied were sent to it, or who they were sent from.
Although forms purporting to indicate someone at Fleet had checked or authorised certain things were put into evidence, no-one was called who was involved in approving or overseeing the relevant transactions. It was apparent from the copy documents that checks that were supposed to have been carried out never were. By way of example, no-one at Fleet checked that ‘authorised signatories’ of MCVC had in fact signed the copy documents sent it.
Fleet’s practice is to register a security interest in cars it purchases and leases. The security interests registered after this transaction were of the older cars, not the 2013 models.
The witnesses called for Fleet were only able to give evidence of its current practices about documents.
Jason McMillan was called on behalf of Fleet. He is the head of accounts receivable for a group of companies including Fleet. He was not employed with Fleet until April 2017 and had no personal knowledge of relevant events or the circumstances in which documents he referred to had been produced to Fleet. He gave evidence of the fact that various documents relating to the application for credit and provision of finance regarding this matter were on Fleet’s files and that he had reviewed them. He gave some explanation of Fleet’s usual documentation and procedure. He said originals of the guarantee and contract could not be located by Fleet, despite searches.
It was apparent that he would state something as definitely so when he was making an assumption about it. By way of example, one of the documents he gave evidence about was numbered page ‘3/3’ at the bottom of the page. As it was not connected to any other document in the court book I asked him if he knew what the other two pages were. With apparent certainty he immediately stated what the other two pages were, referring to other documents in the court book. Queried as to whether he was just making an educated guess he was determined that he knew this to be the case as these documents are three specific pages that need to be completed and ‘to us, it is a document’, and that it is part of ‘one document’. However, there were different file number references at the bottom of two of the pages, and later he was taken by the solicitor for Mr Salikin to the entirety of the document of which page ‘3/3’ was the third, and he conceded that the pages he had described as being the first two pages were not the first two pages of the one document.
Given his approach to giving evidence, and his lack of involvement at the relevant times, I only accept his evidence where it is supported by contemporary documents or other witnesses.
Samuel Fieldes was also called for Fleet. He has been a collections officer since 2014, and involved in the administration of repossession of vehicles for it since 2015. He said he had been charged with the responsibility for recovering motor vehicles from MCVC and MCVC Traders once they defaulted under their leases. He produced what were called ‘dossiers’ regarding attempted recovery of a Nissan with the number plate 1AI6DV, which was not recovered, and of a truck with the number plate ZQQ311, which was seized and sold. He admitted that he had had little involvement other than sending one email in those attempted recoveries. In cross-examination, it became clear that his involvement in the dossiers amounted to looking at documents in it and printing up a PDF file from Fleet the day before coming to court.
Mr Peter Tillott of Anzus Finance Corporation was the finance broker who organised the initial credit application for MCVC. He gave evidence of various meetings he said occurred with Mr Salikin, and of the circumstances in which the exhibited MFLA was signed.
Mr Tillott is unfortunately suffering from cancer and, perhaps as a result, his evidence was vague and contradictory in parts, and he appeared confused in his recollections.
Mr Tillott said he assisted MCVC by making an initial credit application for it in June or July 2013. That application sought $250,000 in order for MCVC to purchase a 2012 Hino FeX Long 12 pallet refrigerated van (‘the Hino’), a 2013 demo Toyota Tarago Ultimate (‘the Tarago’), and a 2013 demo Toyota Hi Lux SR (‘the Hi Lux’). In cross-examination he was taken to quotation requests filled out by him for the Hino, Tarago, and Hi Lux, which he said he submitted to Fleet in order to claim commission at 4% on the value of those vehicles.
There is no evidence of how Fleet was first told about the 2013 cars. There is an internal Fleet letter of 2 October 2013 approving credit of $153,000 for the 2013 cars. There is no evidence of it being sent to anyone outside Fleet.
Mr Tillott’s evidence was that he had nothing to do with the 2013 cars leased, and knew nothing about them. He knew nothing about that letter of 2 October 2013. He only knew about the credit application which referred to the Hino, Tarago and Hi Lux.
Mr Tillott said he was told by phone by someone at Fleet that the credit application of MCVC had been approved. He was then sent a master finance lease agreement by email in PDF form so that he could get it signed for MCVC.
He said that he took that PDF document to a meeting with Mr Salikin and Muhamed Zakaria on 12 October 2013 to get it executed. He was definite that the meeting was 12 October 2013, and that he saw Mr Salikin execute the master finance lease agreement and the guarantee on that day. He said he later posted the five pages of the master finance lease agreement in evidence (‘the exhibited MFLA’) back to Fleet.
An important issue in this case is whether the exhibited MFLA contained any terms and conditions or annexures. As discussed further below, I am not satisfied on the balance of probability that Mr Tillott had any recollection of what was contained in the document signed by Mr Salikin when the exhibited MFLA was signed.
No explanation was given for the failure to call anyone at Fleet who had been involved with the transactions, or to call anyone who was employed by the car dealer, Aerotop, at the relevant time, to give evidence of the forms that were supposedly sent by it to Fleet, or of the cars it supposedly sold to Fleet and delivered to MCVC.
Mr Salikin gave evidence on his own behalf. English is not his first language but he did not request an interpreter and I found he understood the questions being asked. He had worked as a tool maker for Toyota until June/July 2013. His evidence about what he had seen and signed was contradictory and confusing in part. Whilst on occasion he said a signature was not his on a document he was cross-examined about, I am satisfied on the balance of probabilities that he signed the relevant documents he was cross-examined about. He variously admitted his signature, or recognised his signature but did not know he had signed the relevant document, or said it was not his signature, or said it was his but said he did not know why he had signed, or did not remember if he signed. However, very little turned in the end on his evidence as Fleet did not establish that it entered the leases of the 2013 cars in any event.
No evidence of leases of the 2013 cars
On 12 October 2013, Mr Salikin signed the exhibited MFLA. As indicated above, the original was not in evidence. Fleet relies on a scanned copy in bringing its case against Mr Salikin. The exhibited MFLA is five pages long. I will set out in some detail what it includes. What it does not include is important.
Page 1 states ‘Master Finance Lease Agreement.’
Page 2 states:
This Master Finance Lease Agreement sets out the terms on which Lessee may enter into finance leases with the Lessor from time to time.
1. Entering into Leases
1.1 Each time the Lessee wishes to lease goods from the Lessor, the Lessee must execute a Quotation and Requisition (‘requisition’) in the form or to the effect of the form set out in Annexure B and on taking delivery of the goods execute a Delivery Acceptance (‘acceptance’) in the form or to the effect of the form set out in Annexure C. Upon the signing of the requisition and acceptance (if and when accepted by the Lessor) by an Authorised Signatory, the Lessee will hold the goods as Lessee under the Finance Lease Terms and Conditions set out in Annexure A at the entire rent set out in the requisition (as amended in the Delivery Confirmation (‘confirmation’) as set out in Annexure D).
1.2 A reference in the Finance Lease Terms and Conditions to information contained in the “Table” will be taken to mean that information as set out in the relevant requisition form (as amended in the confirmation).
1.3 The Lessor is not obliged to accept any requisition or acceptance.
1.4 For the purposes of section 275 of the PPS Act and subject to clause 13(b) of the Finance Lease Terms and Conditions, the terms of Fleet Partners’ security interest in the goods are wholly contained in the Finance Lease Terms and Conditions and the acceptance relevant to the goods.
2.Authorised Signatories
2.1Lessee confirms that each person whose name and specimen signature appears in the Schedule to this Master Finance Lease Agreement is its Authorised Signatory, duly authorised:
(a)to complete and sign any requisition and acceptance on Lessee’s behalf; and
(b)to bind Lessee in all respects to any Finance Lease formed.
2.2Lessee must not change its Authorised Signatories except by signing and delivering to the Lessor a notice, in a form approved by the Lessor, confirming the change of the Authorised Signatories. This notice will take effect only upon actual receipt by the Lessor.
Page 3 is a schedule for authorised signatories, which was signed by Mr Salikin. He is the only ‘authorised signatory’.
Page 4 is an execution page which was signed for MCVC by Mr Salikin. It contains the date 12 October 2013.
Page 5 contains a heading: ‘Annexure A - Finance terms, lease terms and conditions attached’. There is nothing attached.
The five pages of the exhibited MFLA say that they are page 1 of 8, page 2 of 8, and so on. None of those five pages are Annexures A, B, C or D as described in clause 1.1 of the exhibited MFLA.
There are no pages 6, 7 or 8 in evidence.
Each of the pages has the Fleet form description at the bottom right hand side: FP 180.1 MFLA 24.01.2012.
It will be seen that clause 1.1 sets out what ‘must’ happen each time MCVC wishes to enter a finance lease with Fleet for a particular car. Taking each point there set out in turn for a finance lease for a particular car to be entered into the following is required:
(1)An authorised signatory of MCVC ‘must execute a Quotation and Requisition in the form or to the effect of the form set out in Annexure B’.
(2)On taking delivery of the car an authorised signatory of MCVC ‘must execute a Delivery Acceptance in the form or to the effect of the form set out in Annexure C’.
(3)A Delivery Confirmation as set out in Annexure D may then amend the amount of rent set out in the requisition.
(4) If and when the Quotation and Requisition form, and the Delivery Acceptance form are accepted by Fleet, MCVC holds the car as lessee under the Finance Lease Terms and Conditions set out in Annexure A at the entire rent set out in the requisition (as amended in the Delivery Confirmation).
I cannot be satisfied that any individual car leases were entered into since the exhibited MFLA is incomplete. No evidence was before me of the details of what was required under clause 1.1 of the exhibited MFLA for such leases to be entered into, or that it had occurred. (I deal below with an application made in the course of closing submissions to tender generic terms and conditions, and the reasons I refused that application).
I am not satisfied on the balance of probabilities that any additional terms or annexures were given to, or in front of, Mr Salikin when the exhibited MFLA was signed.
There was no evidence before me of what the terms and conditions supposed to be in Annexure A might have consisted of.
Nor was there are evidence of what the Delivery Confirmation supposed to be contained in Annexure D might have consisted of.
However, Fleet submits that I should find that three documents it put into evidence that are headed ‘Quote/Requisition’ and contain details pertaining to each of the 2013 cars, are in fact documents in the form of missing Annexure B that is referred to in the exhibited MFLA to which details have later been added. That is, that they have been filled in. It says that I should find that those documents were actually with the exhibited MFLA in blank (uncompleted) form when Mr Salikin executed the MFLA.
Fleet also submits that I should find that three documents that it put into evidence that are headed ‘Delivery Acceptance’ and contain details pertaining to each of the 2013 cars, are documents in the form of the missing Annexure C referred to in the exhibited MFLA, to which details have been added. That is, that they have been filled in. It says that I should find that those documents were actually with the exhibited MFLA in blank form when Mr Salikin executed the MFLA.
I am not satisfied on the balance of probability that those documents were with the exhibited MFLA when it was executed. The typed part of the Quote/Requisition forms includes details of the relevant 2013 car, but they are also dated, in type, 11 October 2013. They could not have been in blank form with the exhibited MFLA on 12 October 2013 as they were filled in before then. Details of which of Fleet’s form numbers they are supposed to be are blurred on each document so that it is illegible. What can be read makes it clear that it is not part of the same form as the exhibited MFLA (that is FP 180.1 MFLA 24.01.2012). Whilst the other documents in evidence by Fleet have form numbers that are legible at the bottom left hand side of the documents, these Quote/Requisitions have illegible form numbers on the right.
Contradictory evidence was given by Mr Tillott as to what he gave Mr Salikin when the exhibited MFLA was signed, and whether there were any terms and conditions present.
Initially, Mr Tillott said that the pages of the exhibited MFLA were all the documents he received from Fleet, ‘and that's all I sent.’
When asked by me, ‘Does that mean you didn't send back any terms and conditions?’ Mr Tillott said he was not required to. When asked by the solicitor for Mr Salikin, if terms and conditions were ever given by him to Mr Salikin or Mr Zakaria, he said, ‘There’s no real terms and conditions, it was just straightforward, there was no special clause’. He said no terms and conditions were given.
Later, Mr Tillott gave evidence that he had sent Mr Salikin and Mr Zakaria away to get a solicitor's signature to the schedule to the guarantee. He was asked, did he send ‘just that page or the whole guarantee?’ He said in answer to that question, ‘Just that page. The terms and conditions and that page.’
Asked, ‘what terms and conditions?’, he said:
There's a whole heap of terms and conditions. I don't think they're on the file, but they should be. They're just standard, generic terms…
Asked by Counsel for Fleet, ‘Do you mean the terms and conditions of the lease?’ he answered, ‘The lease of contract, yes.’ Mr Tillott was not shown any document to establish what terms and conditions he was referring to.
Counsel for Fleet invites me to find Mr Tillott was confused when he said there were no terms and conditions attached to the lease. Counsel points to his medical difficulties. However, that evidence was given immediately after a one and a half hour lunch break.
It was not put to Mr Salikin that any terms and conditions, or annexures, had been attached to or with the exhibited MFLA when he signed it.
There was evidence that both MCVC and MCVC Traders had previously entered into lease agreements with Fleet for the provision of cars. I need not make a finding about this, but note that these documents could have been copied by someone from earlier applications, and changes made to them before they were sent to Fleet by an unknown person.
I am not satisfied on the balance of probability that anything other than the exhibited MFLA was in front of Mr Salikin when he signed the exhibited MFLA. In other words, I am not satisfied that it contained any annexures. There is thus no evidence of the terms and conditions of the exhibited MFLA, meant to be Annexure A to it.
There is nothing to establish the basis on which leases of the 2013 cars could have been entered into, or that they were.
There are further missing links in Fleet’s endeavour to prove its case.
The Delivery Acceptance forms in evidence for the Nissan and the Holden are signed by people other than Mr Salikin. Mohammad Abdul signed the Delivery Acceptance form for the Nissan. Jaffar Yusof signed the Delivery Acceptance form for the Holden.
But Mr Salikin is the only authorised signatory who binds MCVC under the exhibited MFLA.
Fleet submits that I should find that MCVC, via its then sole director, Mr Salikin, authorised Mr Abdul and Mr Yusof to accept delivery of the cars, and that the form of the Delivery Acceptance forms allow them to be signed by the driver of the car.
However, Fleet’s case was not pleaded on the basis that the authorised signatory (Mr Salikin) himself could, or did, authorise someone else to be authorised signatory for MCVC. Regardless of what a particular Delivery Acceptance form produced by Fleet says, the exhibited MFLA clearly states that the Delivery Acceptance form must be signed by an authorised signatory. This is a necessary precondition of the relevant leases for the cars coming into existence.
Further, no Delivery Confirmation forms (referred to in the exhibited MFLA as Annexure D) were in evidence for any of the 2013 cars.
Counsel for Fleet submitted that I should be satisfied on the balance of probabilities that the Delivery Acceptance forms in evidence also contained the Delivery Confirmation forms.
In the absence of any evidence of what ought to have been in Annexures C and D or any evidence from anyone at Fleet that they were contained in the same form, I am unable to be satisfied of that. They appear on their face to be documents completed at different times by different entities.
Application to reopen case
After evidence was concluded, the case was adjourned to allow written submissions to be prepared. Detailed written submissions were filed. The matter then came back to Court for final oral submissions.
In the course of his oral submissions after that adjournment, I asked Counsel for Fleet questions about the missing pages of the exhibited MFLA and what I should make of it. Later that day, Counsel for Fleet sought to hand up what he described as ‘generic terms and conditions’. That was objected to by the solicitor for Mr Salikin. Counsel for Fleet then indicated he would make an application to reopen the case.
An application to reopen the case was filed that night. The next morning, an affidavit of Ms Miriam Elliott dated 23 November 2017 was filed.
Ms Elliott is a legal practitioner in the employ of the solicitor for Fleet. She produces documents in her affidavit that she says are derived from business records of Fleet that she believes are true and correct. She swore that she had confirmed ‘today’ with a representative of Fleet that the contents of her affidavit are true.
At paragraph 4, she produces as Exhibit ME-01 what she is ‘instructed by the plaintiff’ is a copy of the terms and conditions as referred to in page 5, Annexure A of the exhibited MFLA, ‘being the applicable terms and conditions at the time of execution of the contract’.
At paragraph 5 she produces as Exhibit ME-02 what she is instructed are blank copies of Annexures B, C and D of the MFLA.
At paragraph 6 of Ms Elliott’s affidavit dated 23 November 2017 she says:
Now produced and shown to me and marked “ME-03” is what I am instructed is a completed copy of the Master Finance Lease Agreement between the Plaintiff and MCVC Pty Ltd together with annexures B and C which have already been tendered into evidence in this case (‘completed annexures’).
In fact, Exhibit ME-03 only contains the three Quote/Requisition forms and the three Delivery Acceptance forms Fleet relies on in evidence in this case. It does not contain a copy of the Master Finance Lease Agreement.
At paragraph 7 she says:
I am familiar with schedules “A”, “B”, “C” and “D” forming part of the Master Finance Lease Agreement as the complete set of those documents with terms and conditions are part of documents in related proceedings where documents were signed in April 2013.
At paragraph 8 she says:
In preparing the evidence in this matter, I attached the completed forms of these documents and not the blank forms. I overlooked including the terms and conditions which I had included in other proceedings involving Mr Salikin.
At paragraphs 9 and 10, Ms Elliott says she understands that the solicitor for Mr Salikin had been provided with a copy of these terms and conditions in early 2017, and she recalls having provided him with a copy of these terms and conditions in this proceeding.
On the basis of this affidavit, Fleet sought to reopen its case to tender the generic terms and conditions. It was put by its Counsel that there was an inadvertent error in that the terms and conditions were not before the Court.
A case may be reopened where it is in the interests of justice and procedural fairness: Ezra Abrahams Pty Ltd v Milburn [2017] VCC 123 at [46]. In Ezra Abrahams at [47], Judge Millane summarised four times when leave may be given to reopen a case:
where fresh evidence, unavailable or not reasonably discoverable previously, becomes known and available; where there has been inadvertent error; where there has been a mistaken apprehension of the facts; and where there has been a mistaken apprehension of the law. [Citations omitted]
I did not allow Fleet to reopen its case to tender the documents annexed to Ms Elliott's affidavit. This is for a number of reasons.
As discussed above, I was not satisfied on the evidence that any terms and conditions or additional annexures were attached to the exhibited MFLA when it was signed by Mr Salikin on behalf of MCVC.
No evidence was provided by Fleet in this application that the annexures or terms and conditions in the form contained in Ms Elliott's affidavit were ever given to Mr Tillott by Fleet in the first place, or that these documents are the terms and conditions that were given to Mr Salikin when he signed the exhibited MFLA.
The highest Ms Elliott's affidavit goes is that these were ‘the applicable terms and conditions’ at the time of the execution of the exhibited MFLA.
Nobody from Fleet gave evidence that they were the only Fleet MFLA terms and conditions or related annexures in circulation generally at that time. The fact they were not the only such annexures in circulation is highlighted by the fact that the completed Quote/Requisition forms that are in evidence, are in a different form to the blank Schedule B produced by Ms Elliott, and the completed Delivery Acceptance forms in evidence are in a different form to the blank Schedule C produced. Some information in those blank documents is not contained in the versions that are in evidence.
Counsel for Fleet invites me to make a finding that Fleet had sent the full version of its master finance lease agreement, including the terms and conditions and blank schedules to Mr Tillott, and he took that to his meeting with Mr Salikin and Mr Zakaria.
There is nothing in the application or the evidence before the Court to satisfy me of that on the balance of probabilities.
I accept that it was an error on the part of Fleet’s legal team to not appreciate that it had failed to put before the Court any evidence of terms and conditions and annexures of the exhibited MFLA. An error of this nature is one of the reasons leave may be given to reopen in appropriate circumstances.
I am not satisfied, however, that the terms and conditions now sought to be tendered, were in fact the terms and conditions sent to Mr Tillott by Fleet in the first place. I am further not satisfied that any terms and conditions or draft schedules were actually attached to the exhibited MFLA when it was signed by Mr Salikin for MCVC.
Granting leave to reopen on the basis sought would be futile.
Further, the solicitor for Mr Salikin said that if the evidence was allowed in he would need to recall Mr Salikin and cross-examine Mr Tillott.
Counsel for Fleet said that as at the time of his evidence being given, Mr Salikin denied signing the exhibited MFLA and guarantee, he should not need to be called now. I disagree. The entire case had been conducted without there being any evidence of there being attached terms and conditions or schedules to the exhibited MFLA.
Mr Tillott's evidence as to what he had before him and what he gave Mr Salikin was confusing. The solicitor for Mr Salikin would need to be given the opportunity to cross-examine about what Mr Tillott actually had and what Mr Tillott gave to Mr Salikin, and to ask Mr Salikin questions about the documents, if they now went into evidence. The need to recall those witnesses would have delayed finalisation of this case even further.
I took into account that this matter was listed for two days. It was heard on 11, 12, 13 and 18 October 2017. It was then adjourned to 23 November 2017 on the basis that each party could in the meantime file written submissions on the matters they wanted to put in closing.
It was not until after Mr Salikin’s solicitor had put his oral submissions in closing on the afternoon of 23 November 2017 that Counsel for Fleet first sought to hand up ‘generic terms and conditions’. The application was made on the final day of the trial, on 24 November 2017. The interests of justice in this case were served by rejecting the application.
There is no evidence of any leases of the 2013 cars having been entered into pursuant to the exhibited MFLA.
Documents about the cars
As discussed above, the veracity of the documents relied on by Fleet to establish that it purchased the 2013 cars from Aerotop and delivered them to MCVC was challenged. I deal briefly with the major aspects of what the documents do – and do not – establish.
The relevant evidence about the Nissan follows. On 10 October 2013, Fleet says it received a document entitled ‘Quotation Request’ sent by Aerotop to Fleet detailing a 2013 Nissan 370Z for $68,990. This document is unsigned, and refers to salesman ‘Jeff Dukes’.
Two days later, on 12 October 2013, there is a Quote/Requisition form for a 2013 Nissan. It is unclear who filled this in. It is signed by Mr Salikin. There are two versions of this document in evidence (one with a different quote number). ‘Requester approval’ is supposed to be given. That part of the form is blank.
On 1 November 2013, there is a Fleet vehicle activation checklist indicating that various checks were carried out. That same day, there is a Supplier Vehicle Order from Fleet to ‘Geoff’ (with no surname) at Aerotop, asking for the supply of a 2013 model Nissan. It refers to terms and conditions that make clear no vehicle is to be released without Fleet’s authorisation, and that ‘VIN, ENGINE and REGO details must be provided within one week of the physical vehicle delivery.’
Importantly, the Supplier Vehicle Order states that the motor vehicle dealer (Aerotop) is authorised to register the vehicle, and that it is to be delivered to MCVC at the Victorian address there set out.
Fleet relies on a scanned copy of a VicRoads registration certificate purporting to set out that the 2013 Nissan was registered to MCVC on 4 November 2013. It in fact has a slightly different VIN number to that Fleet pleads as the 2013 Nissan (there is an extra ‘5’ in the number). There is no evidence of how Fleet received this. Its veracity is challenged. Given that there are records subpoenaed directly from VicRoads that show that a much older Nissan in fact had the registration number, VIN number and engine number referred to in the copy VicRoads certificate Fleet relies on, I do not accept that the registration certificate is authentic. Someone has tampered with a certificate to produce a fraudulent copy and sent that to Fleet.
On 14 November 2013, there is a tax invoice purportedly from Aerotop to Fleet and Fleet says it paid the $68,990 to Aerotop that day.
On 15 November 2013, the Delivery Acceptance form was supplied to Fleet.
On 21 November 2013, Fleet registered a security interest in the much older Nissan.
The documents in evidence for the Holden and Ford are to similar effect.
The authenticated VicRoads records show that the 2013 cars Fleet says it supplied to MCVC never existed.
Did Fleet pay Aerotop any money?
Mr Salikin does not admit that there was a payment by Fleet to Aerotop for the cars. As this matter took some time at trial I will deal with it briefly. This issue was not specifically pleaded in the defence. However, it was raised in opening by the solicitor for Mr Salikin. Although he initially objected to this defence being raised, Counsel for Fleet said Fleet was in a position to call evidence to answer this defence. I consider that it is in any event part of the chain of proof for someone asserting they have lost money as result of an advance to show that they made the advance. I ruled that this issue could be raised by way of defence.
The evidence that was called for Fleet on this issue was inconclusive. Evidence was given of scanned copies of invoices that, on their face, were sent by Aerotop. An internal Fleet email was put into evidence dated as at the time of trial and attaching a screenshot that appeared to be of a bank statement which did not have any name on it or details of who it belonged to, indicated a payment to the value of the invoices for the 2013 cars was made to Fleet ‘PA’ on 12 October 2013. Jason McMillan, presently Head of Collections for Fleet, gave evidence that ‘PA’ stood for ‘partners account’, and that Aerotop was at that stage a partner of Fleet. No evidence from anyone at Fleet who was actually involved with the payment was given. No evidence from anyone then at Aerotop was given.
Whilst I am satisfied that money left Fleet’s account, I am not satisfied on the balance of probabilities that it went to Aerotop. I am not satisfied as to where it went.
Fleet’s theory of what happened
There was a great deal of evidence in the case as to different cars and different VIN numbers, and issues raised as to what cars had and had not been registered with VicRoads.
It was difficult to follow what theory of events Counsel for Fleet was submitting the Court should find occurred. It altered as the case progressed.
Throughout both written and oral submissions, Fleet’s Counsel referred to documents being doctored and to fraud.
The details of how the fraud was said to have occurred changed, and were difficult to follow, but it seemed to go something like this. Counsel for Fleet variously said that Fleet’s documents had been corrupted and that various VicRoads records had been corrupted. He said that Mr Salikin or his associates changed the registration of older models cars which they owned, to the registration details claimed by Fleet as being on the 2013 cars. He said that I should be satisfied that the 2013 cars were in fact originally at Aerotop with no number plates. He argued a theory that Mr Salikin and his colleagues flew to New South Wales to get the cars, then put the number plates on them at Aerotop. Aerotop then invoiced Fleet for the 2013 cars with those number plates. Later, Mr Salikin and his associates took the number plates off again.
He said Fleet then relied on the documentation at hand to think that it had purchased and leased the 2013 cars with those number plates on them. When it took out PPSR protection, the PPSR notification showed that it had in fact registered something different. It did not see that. It thought it had leased out the 2013 cars. It was then paid about $24,000 and later sought to take possession of the 2013 cars, and found that the cars had disappeared.
Fleet argues that Mr Salikin was involved with all of this. It says he was at the relevant time the only director and controlling mind of MCVC.
But Fleet’s case before me was not a case about fraud. It was not a case where Fleet pleaded against Mr Salikin that he was a party to an intention or conspiracy to defraud. All of those matters therefore are not matters that I can make any findings about. The case pleaded, the case opened, and the case Mr Salikin came to meet was that the 2013 cars with the specified number plates and VIN numbers in fact were leased to MCVC.
There has been no attempt to replead that case. It is not made out.
In any event, I would not have been satisfied on the evidence that Aerotop ever had the 2013 cars or that people from MCVC put number plates acquired in some other way onto those cars and then drove them home from New South Wales. Counsel for Fleet sought to persuade me that the details on the delivery acceptance forms must have been filled in by Mr Salikin. The delivery acceptance form clearly states it is to be filled out by the delivery agent and that ought to have been, had the delivery occurred, someone from Aerotop. The Supplier Vehicle Order form directs Aerotop to deliver the vehicles to MCVC in Victoria.
It was not put to Mr Salikin in cross-examination that he filled in the delivery acceptance forms. In fact, most of the case theory posited by Counsel for Fleet was not put to Mr Salikin. The case was not opened that way.
Photocopies can be tampered with. It is for that reason that when someone is sighting identification documents such as this, it is often a requirement that they certify that they have sighted original identification documents. I note that on the delivery acceptance forms there was provision for someone to certify they had seen originals. These parts of the documents were not completed.
The solicitor for Mr Salikin submits that it is Fleet’s business model or the indifference of its employees that have led it to suffer loss. I do not need to make a finding about this. However, I have detailed above the difficulties with the documentation it relies on.
Written submissions for Mr Salikin quoted the Court of Appeal of the Victorian Supreme Court in Violet Home Loans Pty Ltd v Schmidt & Anor [2013] VSCA 56 at [67]:
Undoubtedly, there are many commercial advantages for lenders in simplifying the processes for what might be described as routine small lending (whether for home loans or small investors). Outsourcing functions that traditionally were performed by lenders to mortgage originators and managers also has advantages for lenders. There may also be benefits for borrowers because the simplified processes and outsourcing likely lead to lower costs. Lenders’ manuals and guidelines to assist clerks in processing loan applications attempt to address the risks associated with this simplification and outsourcing. However, sometimes a risk eventuates and, depending on all the circumstances, the lender may be held responsible for the consequences, partly because the very system the lender has established facilitates the perpetration of frauds upon borrowers. No doubt lenders take this into account when pricing their products and determining that, overall, it is in their commercial interests to proceed with the simplified and, in some senses, automated, processing and outsourcing of lending functions. [Citation omitted]
This quote is not completely apt, as the case here does not involve a fraud upon a borrower. Here, to the extent that a fraud occurred, it appears to have been visited on the lender, Fleet. However, to the extent it discusses the system that a lender has established facilitating a fraud, there is some relevance to it to what has occurred here.
Conclusion
The documents Fleet relied on in evidence did not include documents to establish that leases of the 2013 cars were entered into by MCVC pursuant to the exhibited MFLA. The document signed by MCVC relied on by Fleet as being the exhibited MFLA was incomplete. It did not include necessary terms and conditions or other necessary annexures. The documents put into evidence by Fleet purporting to show leases were entered into pursuant to the exhibited MFLA did not establish that.
I am also not satisfied, on the evidence in this case, that the 2013 cars supposedly leased ever existed. It follows that I am not satisfied that they were purchased by Fleet, or were able to be leased to MCVC in any event.
As I am not satisfied that MCVC owes anything to Fleet pursuant to the exhibited MFLA, this means that I am not satisfied that Mr Salikin owes anything to Fleet as a result of his guarantee of MCVC’s obligations under the exhibited MFLA.
I will give judgment for Mr Salikin. I direct that the parties enter consent orders, or file submissions as to costs and any other consequential orders that each says should be made, by 4pm on 20 March 2018. If necessary, I will list the matter for further hearing in relation to those orders.
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Certificate
I certify that these 24 pages are a true copy of the reasons for decision of her Honour Judge Marks, delivered on 16 March 2018.
Dated: 16 March 2018
Samantha Marinic
Associate to Her Honour Judge Marks
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