LeasePlan Australia Ltd v Evans
[2009] QMC 5
•19 August 2009
MAGISTRATES COURTS OF QUEENSLAND
CITATION:
LeasePlan Australia Ltd v Evans [2009] QMC 005
PARTIES:
LEASEPLAN AUSTRALIA LTD
(plaintiff)
v
DAVID EVANS
(defendant)
FILE NO/S:
M11352/08
DIVISION:
Magistrates Court
PROCEEDING:
Claim
ORIGINATING COURT:
Magistrates Court at Brisbane
DELIVERED ON:
19 August 2009
DELIVERED AT:
Brisbane
HEARING DATE:
4 August 2009
MAGISTRATE:
Callaghan CJ
ORDER:
Judgement for plaintiff
CATCHWORDS:
CLAIM – BREACH OF CONTRACT – LEASE AGREEMENT - if employee novates lease to employer is employer responsible for damages from breach of contract
COUNSEL:
Blattman appearing for the plaintiff
Jurth appearing for the defendant
SOLICITORS:
SJ Gurnsey and Company for the plaintiff
Potts and Company for the defendant
David Evans, the Defendant, was employed by Young and Rubicam Brands Pty Ltd (also known as George Patterson Y & R). He wished to obtain a vehicle and his employer agreed to enter into a novation agreement for finance lease for the vehicle.
On 25 July 2006 Mr Evans signed a Finance Lease (Novated) Agreement as between himself and LeasePlan Australia Ltd, the Plaintiff (“LeasePlan”). LeasePlan had signed it through its authorised officer Mr Henry Sharp on 24 July 2006. That agreement is Exhibit 1 in the proceedings.
On the same day, 24 July 2006, Mr Evans also signed a Novation Agreement for Finance Lease (Novated) Agreement as between himself, as the employee, his employer by its authorised officer Elvasio Basile and LeasePlan through its authorised officer Henry Sharp. The employer entered into that agreement by Mr Baselle signing the same on 27 July 2006. Mr Sharp on behalf of LeasePlan had already signed it on 24 July 2006. That agreement is Exhibit 3 in these proceedings.
There seems to have been an unexpected delay in the supply of the vehicle to Mr Evans which vehicle is seemingly only described in Exhibit 3 as a Honda Accord Eurolux Navi sedan.
By email dated 19 September 2006 Mr Evans stated that he was “not going to continue with (the agreement) any longer.”
In the result, LeasePlan cancelled the order for the Honda with the dealer, Highway Auto Group, which then charged a 10% cancellation fee to LeasePlan. LeasePlan claims that Mr Evans is liable for that amount namely $4,521.00. The onus of proving the claim against Mr Evans rests with LeasePlan, which must prove its case on the balance of probabilities.
Prior to the lease agreement and novation agreement, Exhibits 1 and 3, being entered into, an agreement was entered into for a vehicle to be provided to Mr Evans whilst he was awaiting delivery of the vehicle. This agreement was for the temporary loan of a large vehicle to Mr Evans and was entered into on the 10th of July 2006. The vehicle was used by Mr Evans from 12 July 2006 to 11 December 2006, a period of five months. LeasePlan also claims against Mr Evans for the five months rental namely $6,242.29 plus GST making a total of $6,866.52. Again the onus of proving this part of the claim against Mr Evans rests with LeasePlan, which must prove its case on the balance of probabilities.
Mr Evans denies liability in respect of both portions of the claim submitting that LeasePlan ought to have brought proceedings in respect of both items against his employer.
THE NOVATED LEASE CLAIM FOR DAMAGES
Mr Evans argues that by clause 1.1 of Exhibit 3, the novation agreement, the Defendant novates or gives to his employer the rights and obligations for the novation period, and the Employer, being a party to that agreement, accepted the same. The rights and obligations are defined in clause 12 of Exhibit 3 to mean all of the rights and obligations of the Defendant under the lease, Exhibit 1. “Novation period” is also defined in clause 12 of Exhibit 3 to mean “the period from the commencement date up to and including the date that exhibit 3 is terminated pursuant to clause 6.”
Therefore, Mr Evan’s argument is that any obligation to pay for damages pursuant to a termination of the finance lease agreement Exhibit 1 is passed by agreement between him, LeasePlan and the employer, to the employer.
It is perhaps not as simple as that though, as LeasePlan has pointed out in its submissions that the novation period (which, as I’ve said earlier by clause 12 means the period from the “Commencement Date” up to and including the date of the termination of the agreement) had not begun. The “Commencement Date” is, pursuant to clause 12, the “contract start date (as defined in the lease).” The lease, Exhibit 1 defines “contract start date” in the interpretation section on page 2 of same as meaning “the first day of the Term, being the date the relevant dealer or other vendor delivers the Vehicle to the Lessee”. “Term” is also defined in the interpretation section of Exhibit 1, the finance lease, to mean “the period of the lease of the Vehicle described as “number of months” in the schedule commencing on the contract start date”.
The contract start date of the lease is plainly the date that the relevant dealer (in this case Highway Auto Group) delivers the vehicle to the lessee. This never occurred. It follows there was no commencement date of the novation agreement for finance lease (Exhibit 3) and therefore the “novation period” had not commenced. Accordingly that there was no novation by Mr Evans to his employer of his rights and obligations. In coming to the above decision I have taken into account clause 7.3 of the finance lease agreement, Exhibit 1, which says:
“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.”
It was argued by Mr Evans that paragraph 18 of the further statement of claim filed by LeasePlan on 21 May 2009 which read:-
“The vehicle became available to the Defendant and the Defendant failed, refused or neglected to take delivery of the vehicle”
is proof of the fact that the vehicle was available for delivery. It was argued that pursuant to clause 7.3 above when construing the “Contract Start Date” that physical possession of the vehicle is irrelevant in that the Contract Start Date being the first date of the term should really be read as the date upon which Mr Evans is notified by LeasePlan that the vehicle was available for delivery. It follows, according to the argument, that LeasePlan has made an admission in clause 18 above that the vehicle was available for delivery. The pleading is not evidence. The third amended defence of the Defendant filed on 29 May 2009 did not admit particular 18 of the further statement of claim. Furthermore there’s no evidence of LeasePlan notifying Mr Evans that the vehicle was available for delivery.
Mr Evans has raised an alternate submission to the above and that effectively is that even if the finance lease agreement Exhibit 1 is binding upon him, clause 4 determines what is to happen once he notifies LeasePlan of the termination of the lease. Clause 4.1 provides that Mr Evans 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. It is also provides that where Mr Evans notifies LeasePlan of the termination under that clause (4.1) then all of the following paragraphs apply:-
(a)The lessee shall immediately return to LeasePlan the vehicle together with the current registration papers;
(b)Lease Plan 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 Lease Plan shall determine to facilitate the sales; 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 Lease Plan the shortfall; or
(ii)is greater than the Written Down Value of the Vehicle then Lease Plan shall forthwith pay to the lessee the excess.”
There was evidence from Lisa Humplik, an account development manager with LeasePlan that the vehicle was not disposed by LeasePlan at public auction or by tender or private treaty.
For the reasons given earlier the “Term” had never begun. Therefore the LeasePlan argues that the Mr Evans did not give written notice to it at any time more than 31 days prior to the end of the term. Clause 7.3 lends some weight to Mr Evans’ argument that clause 4.1 is the only basis upon which one could determine the parties rights in these circumstances. However the method of determining the parties rights upon written notice of termination given by Mr Evans to LeasePlan as set in that clause are not to the exclusion of all other rights LeasePlan may have.
The construction of the agreement and surrounding acts which I prefer is that Mr Evans did not terminate the leasing arrangement or the lease agreement Exhibit 1 by giving written notice under Clause 4.1 because the term had not begun. But rather Mr Evans’ email of the 19th of September 2006 referred to earlier was an indication by him that it was his plan not to be bound to proceed with the lease of the vehicle (as he was so bound pursuant to clause 1.4(b) of the lease agreement Exhibit 1.
Again, because there is no evidence that LeasePlan notified Mr Evans that the vehicle was available for delivery pursuant to clause 7.3 of Exhibit 1, that clause does not apply in bringing in the termination under clause 4.1.
In my view LeasePlan has the right to damages against Mr Evans for Mr Evans’ default in not proceeding with the lease of the vehicle pursuant to clause 1.4(b) of Exhibit 1.
I find that LeasePlan has proven its loss by the claim upon it by Highway Auto Group for the cancellation fee of $4,521.00 (refer exhibit 9) and by its payment of the same on the 19th of October 2006 (refer exhibit 10).
THE RENTAL AGREEMENT
This document, Exhibit 2, is in the form of a request form. It’s dated 10 July 2006. Opposite the words “Driver Name:” is the name “David Evans”. Opposite the words “Company Name:” is the name “George Patterson Y & R”. Opposite the words “Client No:” are the numbers “500300”. After some further details on the form which are not relevant for these purposes, the parties to the form can either indicate by a cross in a box that they wished to obtain by way of a temporary loan an additional vehicle (box A) or obtain by way of a temporary loan a vehicle whilst awaiting delivery (box B). In this instance the parties or one of them which has been agreed to by the rest has crossed the B loan for the awaiting delivery type and a large vehicle which was expressed to be at $1,550.00 per month.
The terms and conditions of the form are not relevant for these proceedings. But the next part of the form headed “authorisations” is. It says:-
“By signing below, you agree to the specified charges and terms and conditions noted above. Please be aware that for Rental Rate B invoicing for this vehicle will be sent direct to the employer (normal payment conditions apply). Rental Rate A is driver direct via the existing vehicle lease… Employer note: replacement vehicles MAY affect the FBT Liability for the employee. Please seek ATO advise (sic) on these implications”.
The form is signed by Michael Harris an authorised officer of the employer and by David Evans the Defendant. Both signed it on the 10th of July 2006. The question is, is Mr Evans liable for payment to LeasePlan for charges under this form.
On 11 July a Ford sedan registered number 744 IIF was inspected and the form concerning that inspection, exhibit 7 indicates that the car was given over on the 12th of July 2006. It was returned on 30 November 2006 and exhibit 8 indicates a replacement car being a Ford registered number 027 IWY was given over on the 30th of November 2006. A copy of a postal note attached to that indicates that it was returned on the 6th of December 2006.
Someone is liable for the charges. Is it the employer solely, is it Mr Evans, the Defendant solely or are the employer and Mr Evans jointly and severally liable for the charges? The word “you” (it appears before the word agree under the authorisations section of exhibit 2) can either mean the singular or the plural in normal language. So there is, prima facie, an ambiguity on the face of exhibit 2.
By Exhibit 11 the Plaintiff sent four invoices for these rental/loan motor vehicles to George Patterson Y & R. Those invoices were sent on the 21st of August, the 19th of September, the 19th of October and the 21st of November 2006. On each of those invoices to George Patterson Y & R there appears opposite the words “Account No” the number “500300” which is precisely the same as the number opposite the words
“Client No”on exhibit 2.
On 29 January 2009 LeasePlan sent to Mr Evans a tax invoice numbered 2612513 for the rental charges which it is now claiming from him totalling $6,866.52. It says on the face of that tax invoice that the account number is 1000309, a number different to that attributed to George Patterson Y & R.
Further, on Exhibit 4 (which is a precalculation document for the supplier of the Honda pursuant to the novated lease arrangement) the customer is said to be “500300 George Patterson Y & R” and on Exhibits 7 and 8 (the Mini Lease Vehicle Inspection documents compiled upon delivery of the rented vehicles – twice - and completed upon their return) opposite the word “Customer” there appears the words “George Patterson Y & R”
These factors all add weight to the argument that the client or customer with whom LeasePlan was agreeing was George Patterson Y & R.
Furthermore in the authorisations section of exhibit 2 as rate B was crossed the authorisations provided for invoicing for the rented vehicle to be sent directly to the employer, George Patterson Y & R whereas if rental A box was ticked it would have been sent to the driver direct.
For that reason and when coupled with the earlier descriptions as to who the client and customer was I find that the party agreeing with LeasePlan to rent the vehicle was in fact George Patterson Y & R. And that the Defendant who is described on exhibit 2 as being the driver/employee is not liable for payment of these rental charges. In coming to that conclusion I am cognisant of the fact that the Defendant signed the document in the authorisations section. The reason for the requirement for the driver/employee to sign there could simply be an acknowledgement of the fact that “any infringements remain the responsibility of the driver.”
There is nothing on the face of the request form exhibit 2 which indicate that Mr Evans is solely liable or that he is jointly or severally liable for those charges with his employer. The onus of proving this fact rests with the Plaintiff on the balance of probabilities and the Plaintiff has not proven that the Defendant is liable for the rental charges.
Accordingly I give judgement for the Plaintiff against the Defendant for $4,521.00. I will hear argument as to interests and costs.
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