McIver v McLean
[2005] QDC 37
•25 February 2005
DISTRICT COURT OF QUEENSLAND
CITATION:
McIver and Anor v McLean & Anor [2005] QDC 037
PARTIES:
STEPHEN RICHARD McIVER
First plaintiff
and
MASTERSPORT MOTOR RACING DEVELOPMENTS PTY LTD ACN 087 551 451Second plaintiff
v
ALEXANDER WILLIAM McLEANFirst defendant
and
WARANDER PTY LTD ACN 091 260 829Second defendant
FILE NO:
1135 of 2001
DIVISION:
Civil
PROCEEDING:
Claim
ORIGINATING COURT:
District Court of Queensland, Southport
DELIVERED ON:
25 February 2005
DELIVERED AT:
Southport
HEARING DATE:
8,9,10 February 2005
JUDGE:
Robin QC DCJ
ORDER:
Judgment for the plaintiffs against the first defendant for $15,000, enforcement thereof stayed until return to the first defendant of Nissan Skyline R33 VIN no. ECR 33-007308 in good condition;
Judgment for the plaintiffs against the second defendant for $3,050;
The receiver is authorised to return to the plaintiffs items in his possession other than the said Nissan Skyline;
No order as to costs.
CATCHWORDS:
CONTRACT CLAIM – whether defendant was bound by a “consultancy agreement” proposed to be in writing to pay fees, notwithstanding that neither of the drafts under consideration was ever signed or assented to – oral agreement held established – circumstance in which “successful” plaintiffs were denied interest and costs.
Justices Act 1886
Cases cited:
Rosanove v O’Rourke (1988) 1 Qd R 171
Masters v Cameron (1954) 95 CLR 351
Ward v Eltherington (1982) Qd R 561COUNSEL:
Mr G Radcliff for the plaintiffs
Defendants self-represented
SOLICITORS:
Quinn & Box for the plaintiffs
Defendants self-represented
The plaintiffs’ claim arises from actions taken for the disposal of a business, or part of a business, to the first defendant. The business centred on importation of used “high performance motor vehicles and spare parts from Japan.” The gravamen (although subsidiary claims are characterised in various ways) is the plaintiffs’ seeking to recover the outstanding balance of the agreed purchase price and, additionally, relief in respect of chattels that may be seen as stock of the business by way of its return and/or payment of the value of it and/or damages the plaintiffs claim to have suffered in their continuing business activities by having been kept out of their money. There is a counterclaim, seeking to recover $16,000, representing two payments of $10,000 for consideration which the plaintiffs never supplied, less $4,000 said to be the agreed value of a Hilux vehicle made available as “security”.
The roles played by the individual and incorporated parties are not really clear. Mr McIver’s affidavit sworn on 13 November 2001 and used in support of a successful ex parte application for appointment of a receiver was presented as evidence in the plaintiffs’ case. According to it, the plaintiff company carried on the business. The statement of claim (paras 1(f) to (j)) contends that the business, chattels and the like belonged to “the plaintiffs” (plural). That pleading identifies the first defendant as the purchaser of the business, linking him with the trading name AMC Conversions. The second defendant, which is in his sole control, is pleaded as having carried on a business called Tokyo Toys since 23 February 2000 at identified premises at Labrador; it is sued as complicit in what has occurred in relation to the stock. No attempt was made by Mr Lytras, an accounting expert who prepared a report for the plaintiffs calculating trading losses which can supposedly be sheeted home to the defendants, to separate out the respective plaintiffs’ shares. It seems to me appropriate, given the way in which the trial was conducted, to regard the plaintiffs as a single entity. It does not appear that the second defendant plays any particular role; however, since the stock in question was taken to its premises, it was a sensible course for the plaintiffs to include the second defendant in the action against the possibility that it, rather than Mr McLean has entertained and/or wrongfully converted goods and/or made itself liable to account for profits.
Mr McLean was self-represented at the trial and also was permitted to represent his company. At earlier stages of the proceeding there were solicitors and counsel representing the defendants. Unfortunately, Mr McLean’s competencies do not extend to advocacy.
The receiver mentioned, appointed by Judge Hall on 13 November 2001, is Mr Ross. He became a party by third party proceedings designed to recover chattels from him. He retains some items in his possession. There was no appearance by or for him at the trial, although it is clear he knew it was listed; the third party proceedings appear to have been discontinued. The plaintiffs had a particular concern regarding him, of which it seems he has been made aware. They assert that he may, by his non-appearance, have lost any claim to remuneration, at least against them. Some assistance in this regard may be found in Rosanove v O’Rourke (1988) 1 Qd R 171.
The plaintiffs’ business involved importing from Japan vehicles for sale as such and also parts, which might be imported as such, or by the importation of whole vehicles which would be dismantled for parts. Supposedly, there is tight regulation of such activities, to ensure that vehicles which will be used in Australia comply with defined safety standards, and that vehicles imported for parts are used only in that way. A clear distinction is made in connection with the requisite authority to import being obtained. One need not be too cynical to suspect that abuses might occur – in particular, that persons with access to a drivable vehicle imported for purposes of being dismantled into parts, might be tempted to use it on the roads. The evidence confirmed experience in the court’s criminal jurisdiction that on occasions people associated with the industry might “rebirth” or “re-identify” vehicles by incorporating in a composite parts of a vehicle duly registered or entitled to be registered (but wrecked) in some other vehicle whose provenance was problematic, because, for example, it was stolen or because it was imported for dismantling, not for use. The evidence may be seen as showing two instances of Mr McLean using in that way imported vehicles made available to him by or at the direction of Mr McIver, the Hilux mentioned above, and also a “Subaru shell”. Although Mr McIver says he remonstrated with Mr McLean, notably in his statement given to police on 17 January 2001 under s110A(5)(c)(ii) of the Justices Act 1886 (Exhibit 8 to his affidavit), the opportunity of repetition given to Mr McLean strongly suggests connivance on Mr McIver’s part. According to the diary kept by his wife, which she insisted was accurate, and the event she said was recorded, Mr McLean drove the Hilux away from their premises on 29 October 1999, long before March 2000, when the police statement says he discovered Mr McLean was doing the wrong thing. The “Subaru shell”, it seems, was sold under invoice 77 on 20 December 1999 – one of the few documents in evidence to bear signatures. This is but one of the factors which, sadly, lead me to have serious reservations about the reliability of evidence given by the parties themselves, and to be inclined to accept that evidence only where it goes against the witness’s interest or where it is supported by something else in the evidence. The obvious antipathy of the two men towards each other is another factor which has compromised the evidence of both, in my assessment.
The two men had dealings from about 1998, when Mr McLean was working at The Spoiler Factory; he was engaged to employ his skills in doing fibreglass work on vehicles for the plaintiffs. He purchased a vehicle. Around this time Mr McLean expected to (and ultimately did) come into possession of a substantial amount of money (the quantum of which he was very coy about revealing) from a personal injury claim. He expected to have money to invest. The two men got talking about Mr McLean’s purchasing “the business”. Mr McIver and his wife decided to retain the vehicle proper activity, and to offer the parts business for sale. This would fit in neatly with a new business activity Mr McIver hoped to pursue, of selling (I think worldwide) Volvo parts to be sourced in Japan. If it matters, I think Mr McIver was as keen as, probably keener than, Mr McLean to achieve a deal. They key to the whole business was Mr McIver’s contacts with people based in Japan who would not only locate suitable vehicles and/or parts to purchase, but do the work of getting them packed in containers for shipment to Australia.
Although Mr McIver repeatedly refers to a “Contract of Sale” in his police statement, the contractual document his solicitor produced was in the form of a “Consultancy Agreement” in which he was a consultant providing “Services”. There may well have been other factors, including tax considerations, leading the drafting solicitor to proceed in that way. The “Services” to be provided over two years for a consultancy fee of $30,000 “payable upon execution of this agreement by both parties” were to include introductions to six named businessmen and assistance to “the Company’s nominated representative” on visits to Japan. The first draft in evidence (Exhibit 2 to Mr McIver’s affidavit) names him as consultant, but does not identify the company. It appears to have been produced in late October or early November 1999. It was never signed. Advantage had already been taken of the opportunity of Mr Ali Akhter Lak’s presence in Australia with his brother, Mr Asad to make an introduction in terms of the introduction referred to in paragraph 2(b)(i)(a) of the draft. According to a diary note in Mrs McIver’s writing for 10 September 1999, Mr McLean ordered cars from Ali and was “to purchase through us in Japan in future…Steve agreed to not import any more parts.” On or about 28 September 1999 (he says the 26th) Mr McLean paid $10,000. A few days later, there were telegraphic transfers to Mr Ali, according to diary entries of 30 September and 5 October, of ¥300,000 and ¥500,000, said with fees to be “1,500 (dollars) over” the $10,000. Documentary proof to show that funds did go to Ali is, surprisingly, unavailable. Mr McLean complained that such documents as there were were not originals.
The plaintiffs’ case is that the $10,000 payment to them (by cheque written out to the company) goes to establish that, although nothing had been committed to paper, the agreement was under way. They say a more significant payment, in the form of another cheque for $10,000, was made on or about 8 November 1999 – “Part Consultancy”, according to the diary. The next day, Mr McIver and Mr Cosmo Longo departed for Japan. The parties’ cases were diametrically opposed regarding whether Mr McLean was supposed to be on that trip, for purposes of introductions, etc. He says he was never going to go to Japan, except for one planned trip on another occasion, which never happened, to check some vehicles. It was common ground that Mr McIver was to look at vehicles organised by Mr Ali for Mr McLean, and to email to Mr McLean pictures of them, presumably to permit him to make a judgment as to whether he was prepared to accept those vehicles and make payment of the balance of the price of them. In what strikes me as amazing incompetence in the circumstances, particularly when assessed against what the “consultant” was required to do pursuant to Exhibit 2, Mr McIver failed to email pictures. He says he could not master the digital camera he had got. One would think that, given his vaunted contacts in Japan, he could have found someone to take pictures and transmit them electronically. In the end, Mr McLean got only a handwritten list of the vehicles, giving a brief description of them. There seems to have been disagreement between Mr McLean and Mrs McIver (manning the fort at home) as to what the balance of the price of the vehicles (presumably acquired for parts only) should be. He paid no more, I would think justifiably, given the failure of Mr McIver to supply the promised pictures and, on the plaintiffs’ case, lost his deposit.
Mr McIver says that, in a gesture of sympathy in the foregoing circumstances, he agreed with Mr McLean to reduce the consideration he was receiving from $30,000 to $25,000. That change is reflected in a redraft of the consultancy agreement, which Mr McIver says is Exhibit 5 to his affidavit. I do not accept this, but find that Exhibit 24, produced at the trial by Mr McLean with suggested amendments written in in red biro, is what was given to him for his consideration. He says he provided a photocopy of Exhibit 24 (which contains about nine pages) to Mr McIver. Mr McIver says he was given a single sheet of suggested changes to the draft agreement under consideration by Mr McLean. That document did not surface. Exhibit 24 reflects the reduction of the consultancy fee to $25,000, payable in two instalments:
“(i) $15,000 payable upon execution of this agreement by both parties;
(ii) $10,000 payable immediately upon return of first trip as per
clause 3(ix)(c).”
There are other changes, including substitution of an obligation upon Mr McIver to arrange for the Company’s nominated representative a “Businessman’s hotel” “at its expense” rather than accommodation in his own apartment in Japan. I consider the version exhibited to the affidavit to be spurious, although not necessarily in a sinister way. Crowded into the top of the first page (but not in Exhibit 24) is the following:
“ CONSULTANCY AGREEMENT
AGREEMENT made the day of 2000”
which I think was an addition made after Mr McLean was given Exhibit 24.
There is a third draft of the consultancy agreement, Exhibit 6 to the affidavit. It contains the same heading as Exhibit 5, but sitting more comfortably on the page. For the first time, “the Company” is named as “Alex McLean (AMC Conversions)”. There is an amateurishly expressed collection of “Romalpa” clauses added in clause 4 – Remuneration:
“(b) The parties expressly acknowledge that all motor vehicle parts transferred to the Company’s premises remain the property of the Consultant until the final instalment of Agreement is paid.
(c) The parties expressly acknowledge that all motor vehicles and motor vehicle parts purchased by the Company from the Consultant to begin the agreed Agreement are priced according to his Agreement being fulfilled. The Company acknowledges that it will be liable and agrees to pay full retail prices as set by the Consultant for purchased motor vehicles and motor vehicle parts outside this agreement.
(d)The parties expressly acknowledge that all titles remain with the Consultant until the completion of this Agreement.”
In the schedule, the term of the agreement (as it was in Exhibit 2) is reduced to 12 months and there is added to the list of instalments of the unchanged consultancy fee:
“(iii) $33,100.00 as per invoice no. 77 dated February 11, 2000 subject to clause 4(b), 4(c), 4(d).”
I reject Mr McIver’s assertions in paragraphs 38 and 39 of his affidavit that he gave the new draft of the consultancy agreement to Mr McLean and was told words to the effect: “Thanks, I will just show it to my solicitor and I will sign it in front of him” and that Mr McLean had “reassured me that he would be executing the third version of the Contract”. In the witness box, Mr McIver was evasive as to how the document had supposedly got to Mr McLean, attributing that action to his wife, the writer of the diary note “Contract 3 finalised to Alex” for 15 February 2000. Mr Radcliff, counsel for the plaintiffs, even took Mr McLean to task for failing to challenge the proposition (never clearly advanced) that the delivery had been made by Mrs McIver while she was in the witness box.
Mr McLean’s theory was that the document, which he denied ever having, was a fabrication generated to assist Mr McIver in defending a charge of stealing a Nissan Skyline vehicle of his, the subject of “Invoice no. 77”. Mr Radcliff put Mr McLean’s evidence, and that of his wife, given at the committal hearing on 3 September 2001, before the Court. The Romalpa provisions, if they existed, might have provided a defence to the stealing charge, by confirming title to the vehicle in Mr McIver. No “invoice no. 77 dated February 11, 2000” was ever produced to this Court. A document purporting to meet that description could have been generated by a word processor at any time. The true invoice of that number, for the appropriate amount of money ($33,100) signed by Messrs McIver and McLean and a witness is dated 20 December 1999. It relates to the Nissan Skyline, the “Subaru shell” and a third vehicle, another Nissan. The two Nissans, the Skyline at the least, would appear to be in the receiver’s position. On the basis of the genuine invoice, they are Mr McLean’s property, and there never was any justification for the receiver’s taking them into possession. The evidence before the Court is persuasive that the account Mr McLean gave at p 60 ff of the committal transcript of how Mr McIver, or agents of his, by a ruse, got possession of the Nissan Skyline is correct; it would seem that in due course Mr McIver made it over to the receiver. (Paperwork regarding the Nissan Skyline is conflicting; it seems Mr McIver sold it as a 1995 model, when in truth it was a 1993 one.)
Mr McLean presented as an astute person. I do not think he would have contemplated for a second agreeing that title in the vehicles referred to in invoice no. 77 (paid in full in December 1999) should revert or be made over to Mr McIver. I am at a loss to know where the idea of ascribing the date of February 11, 2000 to Exhibit 6 to the affidavit came from; the natural conclusion would be that it was adopted as a date close enough in time to that to be ascribed to Exhibit 6 to make the reservation of title credible.
It has not been shown that Mr McLean’s theory about Exhibit 6 is correct, but I am satisfied the document is completely spurious, and that it was never shown to or attracted any assent from Mr McLean. The use made of it in the claim, including at the ex parte hearing before Judge Hall, and at the trial, leads me to have to regard Mr McIver as a person careless of the truth in presenting evidence to the Court, and to take an extremely adverse view of the plaintiffs’ attitude to and conduct in these proceedings. (It is not only Exhibit 6 that creates reservations. Another detail relevant to the “carelessness” aspect, in paragraph 39 of the affidavit, is the assertion that Mr McIver delivered all his “vehicle parts and body shells imported for wrecking purposes” to Tokyo Toys “on consignment…on or about 18 February 2001.” Mr McIver confirmed to me that that date was correct. The better view is that it was erroneous, and should have been 18 February 2000. That is consistent with other evidence in the case. However, this particular date has been the subject of particular attention in amendments to the statement of claim, which by the time of trial, was the “further further further amended statement of claim” – there has been chopping and changing by the plaintiffs to an extent rarely encountered. The original statement of claim in paragraph 5 said the date was “on or about the 18th day of February, 1999”. The latest pleading in that paragraph shows a change to “18th day of February, 2000”, which has been crossed out, but reinstated. Particulars in paragraph 2 (subsequently deleted) adopt the 2001 date. One would have thought that, in the plaintiff’s camp, rather than have Mr McIver lightly swear the affidavit was “true and correct” (at p 26) some care would have been taken about the matter, particularly in relation to a date which had proved troublesome in the drafting of the statement of claim. As indicated already, the plaintiffs’ approach to presenting evidence has been, at the least, careless.
Mr McLean set great store by his never having signed any agreement with Mr McIver. In that assertion, he is correct; he did not sign any agreement. He misunderstood references by the plaintiffs to payments being made “on the signing” of some document or other as assertions that he had signed. A lawyer would know that the references were simply to terms set out in documents. The plaintiffs’ case has never been that Mr McLean signed anything, rather that he agreed to sign or be bound by certain things. The three drafts of the “Consultancy Agreement” are relied on as evidence of what he agreed to. It follows from the foregoing that the plaintiffs’ claims in reliance on “Exhibit 6” are totally discredited; it is difficult to see how they could have been presented honestly. That said, the plaintiffs’ contention that there was “an agreement entered into by virtue of negotiations…partly oral, and partly in writing …for purchase of the plaintiff’s business…for the sum of $25,000” was essentially admitted by Mr McLean before the committal Magistrate. I think he has been mistakenly believing that, unless he signed something, he was not bound to anything. Without the concessions made in cross-examination at the committal, Mr McLean would probably have carried his point, and established the situation was in the third category identified in this famous passage in Masters v Cameron (1954) 95 CLR 351, 360:
“Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.”
At the committal (p 36 of the committal transcript) Mr McLean said Mr McIver offered the spare parts business to him, and that he expressed interest in wanting to buy it, discussions taking place in 1999 and 2000, because he had the intention of setting up the type of business he ultimately had (“I’ve done it…without your client’s assistance”). To the suggestion he had not paid for information or property obtained from Mr McIver he said, “He didn’t give me any information.” He agreed there was a draft contract produced for his consideration, which he got looked at by his solicitor. He appears to be wrong in ascribing the date September 1999, in that the letter of Holyoake & Associates sending Mr McIver a draft for his consideration is not dated until 1 November 1999. At p 37 he said that “Steve (Mr McIver) offered introductions, actually”, rather than that he had asked for introductions. Mr Jacobson asked, “On that basis that you’d agree that you’d fulfil the contract?”, to which he responded, “Yeah.” Mr Jacobson went on to suggest he was buying:
“Knowledge. Knowledge of how to do it, how to run the business?-- Yeah.
Who to deal with. That was a valuable…?-- That was the essence of the
matter, yes.” (p 38)
He was charged by Mr Jacobson with “stalling”. He said, at p 43: “That contract was never signed or validated…until such time as my car had turned up from Japan that I paid for, I wasn’t going to enter any contract.” Again he confirmed that Mr McIver was getting a contract drawn up, following receipt of which he took it to his own solicitor for advice. He said he had no intentions of signing the contract as it was presented. He was questioned at p 52 about the meeting with Messrs Ali and Assad:
“All right. Now the purpose of that meeting was for you to be introduced to my client’s sources of vehicles and parts in Japan, isn’t it?-- No, that wasn’t the purpose of the meeting at all.
All right. What do you say it was for?-- The purpose of the meeting was to meet these two gentlemen that come from Japan and during the course of being introduced to them, I discussed with them my intention to set up a automotive business here in Australia specialising in import business, particularly in the Silvia and Skyline and they said they would be only too happy to help me out through Mr McIver.
Right, okay. So, their assistance to you was conditional upon it going through Steve McIver?-- It was, yes.
All right. And no doubt, that’s why you proceeded along indicating to Mr McIver that you would no doubt have him on as a consultant or buy his business?-- At that stage, we were – we were going to buy Mr McIver’s business, yes.”
The following occurred in relation to the delivery of “stock”:
“Now, when this truckload of property came down to your workshop – and that was February last year?-- Yes.
Right. You accepted that on the basis that you were still to go through with the payment to my client for the consultancy agreement; is that right?-- Yes, that was what was supposed to have happened, yes.” (p 59)
Significantly, in relation to the invoice 77 transaction, the following occurred at p 57:
“…after Christmas of 2000, when you say you got these – these other cars, the three cars and there are - according to the contract was on [indistinct] you’d have to pay originally 30,000 to Mr McIver and that was reduced to 25, is that right?-- Yes, that’s correct, yes.
Yeah. So, at that stage, he was doing – he was supplying you with parts and vehicles in accordance with the agreement?-- Ah, he had to supply me with no parts in accordance with the agreement. I purchased the parts that I got off him and the cars that I’d purchased off him, I paid for.”
The concessions that Mr McLean made at the committal tip the balance narrowly in the plaintiffs’ favour, so that the Court finds there was an agreement for the sale of a “business” or “Services” by way of introductions, et cetera, the consideration being payment of $25,000. The delivery of stock, while not necessarily amounting to “past performance”, lends support to the finding of an agreement. There is no reason to doubt that, if Mr McLean had been willing to participate, in Japan or elsewhere, in introductions to Japanese contact persons, those introductions would have occurred. I think the plaintiffs are entitled to the unpaid balance of the “consultancy fee”, or damages in lieu. Although the contractual time for payment never arrived, the plaintiffs’ entitlement would be to payment after a reasonable time: Ward v Eltherington (1982) Qd R 561. Although Mr Alexander’s evidence seemed a bit vague, it provides support for the plaintiffs’ claim, regarding the Assad-Ali meeting. He said that Mr McLean “said that he was going to buy the business off (Mr McIver)…I think it was around 30,000 I think for the business
At some later date, well into 2000, Mr Alexander, being indebted to Mr McIver, made over certain car parts of his, which he and Mr McIver took to Toyko Toys. This is stock which Mr McLean has suggested in particulars belonged to Alexander, rather than to the plaintiffs. Alexander’s evidence confirms the plaintiffs’ entitlement to it. These are items listed in Exhibit 19. Another pertinent passage in Mr Alexander’s evidence at p 212 was:
“Well tell us about – so, after you’ve delivered the parts to Mr McLean, you’ve had another conversation with him about his buying Mr McIver’s business?-- Yes.
Tell us what he said to you in that conversation?-- He said he had no intention of paying Steve for the company ‘cause he already had his contact overseas.”
At this point Mr Alexander required a break because he was “not feeling too good”, following which he returned to repeat:
“He just told me that he had no intent in paying him ‘cause he had the two contracts overseas.”
I accept this evidence, and not just as hearsay. I think it is factually true, at least as to Mr Alexander’s first try. Mr McLean nominated a Mr Tau as a contact through whom he had successfully imported items to Australia. It is not shown that Ali/Assad were used, except in the disaster occasioned by Mr McIver’s alleged technological deficiencies.
Mr McLean presented his own explanations for the two payments of $10,000 each made by him, in an effort to show they do not support the plaintiffs’ assertion of an agreement. He says the first payment was on account of a vehicle to be imported for him from Japan by Mr McIver, similar to one he saw at the plaintiffs’ premises, except that one was turbo-charged, the other not. A curiosity is that he accepted without demur escalation of the price from $8,000 to $10,000. He says that something went wrong, and the vehicle to be imported was never available, so that he took the one he had seen instead, paying for it again in invoice 77. That vehicle is identified by a Vehicle Identification No. in the invoice, and in numerous other documents tendered in the plaintiffs’ case, which appear to show that when the $10,000 was paid over at the end of September 1999, that vehicle could not have been at Mr McIver’s premises; it is uncertain whether it had even landed in Australia. Mr McLean’s difficulties in this regard persisted after he had successfully insisted on the tender of original documents on top of copies of documents relating to the shipment in Exhibit 9 (see Exhibit 9A). His attempts to circumvent the difficulties by claiming he may have seen in the showroom a car which looked identical (he not having seen the VIN numbers ECR 33-007308) were not convincing. His account of his reason for paying $10,000 in September appears to be untrue, which points to the probability of Mr McIver’s being the right one.
Mr Alexander was permitted to respond (affirmatively) to a leading question by Mr Radcliff to the effect that Exhibit 19 was a list of the parts he transferred to Mr McIver but which were delivered to Mr McLean. The document is as follows:
“ 15-5-2000 Parts List
3 x Nissan SR20 engines complete
5 x Nissan CA 18 engines complete
1 x Nissan VG30 engine complete*
2 x Nissan CA18 Cylinder Heads*
1 x Nissan SR20 Cylinder Head*
1 x Nissan front suspension
2 x Nissan Rear suspension
1 x VG30 5 speed gearbox*
3 x Nissan 5 speed gearboxes
3 x Nissan silvia exhausts
6 used turbos (assorted)
12 used clutch and pressure plates*
1 x Nissan GTR rear suspension*
1 x Nissan GTR rear half cut*
parts delivered to Tokyo Toys pty ltd Brisbane road Labrador.
All parts are on consignment and are the property of Mastersport
Motor Racing Developments pty ltd.
Outstanding debt of $15,500 is payed in full
Christopher John Alexander
7-6-2000”
The document is curious in bearing two dates. No explanation of those was given. I would infer that the delivery is attributed to 15 May 2000 and the preparation and signing of the list to 6 June 2000. It was not suggested that Mr McLean ever had a copy of the list or acknowledged its accuracy. Particulars given on his behalf by his then solicitors, dated 28 January 2002, appear to acknowledge that the 5th to 9th items and the last two were received from Mr Alexander. (See document 28 on the Court file.) The particulars assert that the third item was the defendant’s and that the other items did not exist (so far as the defendants are concerned). Other comments are made, including that the 6th and 7th items were retrieved by Mr Alexander. Mr McLean’s cross-examination of Mr Alexander was completely ineffectual. He failed to challenge what Mr Alexander said about Exhibit 19, of which he may or may not have had notice; he did not put his own contentions to Mr Alexander, which would have seemed somewhat churlish given the witness’s appearance of being ill.
I have no particular confidence in Exhibit 19 as a list of parts actually delivered. The document appears to contend they were delivered to the second defendant, rather than to Mr McLean. The use made of the document in the plaintiffs’ case suggests that the value of whatever stock Mr Alexander delivered to the plaintiffs was $15,500. The plaintiffs’ present contention (in documentary form in Exhibit 10) is that the Alexander stock is valued at $27,600. No values are assigned to items in Exhibit 19. The receiver took into possession the asterisked items (five only in respect of the used clutch and pressure plates). Applying the plaintiffs’ values, those items are worth $12,650. I am not persuaded that the Alexander stock (whatever it was) was delivered to the defendants on the same basis as that delivered in February. Accepting that its value to the plaintiffs was $15,500, there appears to be a shortfall of $2,850, for which the second defendant may be liable to the plaintiffs. (Exhibit 19 is initialled at the bottom, but there was no evidence as to whose initials they were.) Although not cross-examining Mr Alexander about Exhibit 19, Mr McLean gave evidence (p 248) in support of the contentions made in his particulars.
He was cross-examined about Exhibit 19 at p 260 and I accept his evidence there that he knew nothing of Exhibit 19 until it was tendered.
As to stock that went to the defendants otherwise than through Mr Alexander, I accept that the defendants received the following items as listed in a document prepared by Mr McIver, a copy of which was Exhibit 4 to Mr McLean’s principal affidavit:
“ 1 GTR bumper
1 400R bumper
1 Skyline rear bumper $ 80.00
2 HR-31 LHxRH fenders (front) $400.00
1 300ZX bonnet $400.00
3 Skyline bumpers $300.00
1 Fairlady 2 seater bumper (rear) $ 80.00
1 Nissan Sylvia bumper (rear) $ 80.00
1 Soarer fender RH– Taken$150.00
1 LH 32 GTR door $150.00
1 RH 300ZX door shell $350.00
1 LH 300ZX door shell $350.00
1 LH HR31 Skyline coupe door $150.00
1 LH 2 seater door $350.00
1 RH 2 seater door $350.00
1 RH damaged GTR door -
1 Racecar 32 Skyline boot lid $ 50.00
1 32 boot lid $150.00
2 31 Skyline tail lights $150.00
3 33 Skyline rear spoiler $100.00
2 Fairlady T-top covers $100.00
1 2 seater Fairlady hatch $650.00”
In addition, I accept that those items acknowledged in the particulars as being delivered were. The plaintiffs have not proved delivery of other items to my satisfaction. An attempt was made by means of Exhibit 9, which relates to shipment of parts from Japan, to establish delivery. Assuming that the documents establish receipt by the plaintiffs of the parts referred to in them, it is a totally unjustifiable leap to conclude that all or any particular ones of those parts went to the defendants. The documents in Exhibit 9 cover a range of dates, the latest of which is in May 1999, months before the delivery to the defendants. One would assume, if the business was as successful as the plaintiffs would have it, that many of the parts ordered in from Japan would be sold. (If that were not the case, the plaintiffs could not possibly have any complaint against the defendants for not effecting more sales.)
In respect of the document set out immediately above. I would accept that the deletion of the reference to a Soarer fender correctly records items being taken by or for the plaintiffs, or with their authority. I cannot imagine that, if Mr McLean were minded to tamper with the document inappropriately, he would have confined himself to a single item. But for that item deleted, and the penultimate item, everything in Mr McIver’s list was taken into possession by the receiver and restored to the plaintiffs by an order made by Judge McGill in September 2002. The items in Mr McIver’s list are hardly high value ones. If my arithmetic is correct, the aggregate of values placed on them is $5,240.
One would have thought Mr McIver would be careful to get some contemporaneous written record of the higher value items to which he makes claims. There has been added, for example, “2 x GTR aluminium bonnets” at $800 each, which the defendants concede were “delivered for mould purposes” and a $450 “32 GTR cross member” which the particulars (I would think reasonably) note was “installed on white Vspec” – a reference to a body shell added to the plaintiffs’ list valued at $12,000 and noted “Not For Sale”. With three other items (claimed by the defendants in their particulars) in what was called paragraph 1 of the plaintiffs’ list of stock, $5,240 becomes $9,390. The second paragraph adds items (which the defendants say were theirs, otherwise non-existent) valued at $19,450, and the third paragraph adds the Alexander items, valued, as noted elsewhere, at $27,600.
Other items valued at an aggregate of $39,800 (four of them) are added in a final paragraph, to produce an aggregate of $96,240, which in my view represents a rather cheeky attempt to present the case as involving parts to values far in excess of the truth of the matter. Those four items were all noted to be “Not For Sale” and two of them (which happen to be the first two in Mr McIver’s list, set out above) are noted “supplied for mould purposes”. All four items were included in Judge McGill’s order, likewise the 32 GTR cross member and the two GTR aluminium bonnets.
The bottom line is that of the items proved by the plaintiffs to have been delivered to the defendants, everything is accounted for except “2 x Fairlady T-Top Covers” said in Exhibit 10 to be worth $100 each, likewise in Mr McIver’s list (i.e. Exhibit 4 to Mr McLean’s affidavit). Paragraph 9 of the further amended defence and counterclaim provides:
“With respect to paragraph 7(b) of the Statement of Claim the Defendants admit that the Second Defendant has sold 2 Nissan bumpers pursuant to the consignment agreement referred to in paragraph 4(b) hereof and the agreed value of such bumpers was the sum of $200.00. The Defendants set off the sum of $200.00 owed to the Plaintiffs against the moneys owed by the First Plaintiff to the Defendants as pleaded in the Counterclaim.”
It is a curiosity that the list has two bumpers (recovered through the receiver) at $80 each. The description in the pleading may be mistaken. In my opinion, in the circumstances the plaintiffs have established entitlement to an order that the second defendant pay $200 on this account.
The receiver apparently still has in possession in relation to “paragraph 1” 2 x RB20 Heads and two sets Mag wheels (which may or may not correspond with “2 sets Mag rims” in paragraph 1. Also, he has a Subaru rear suspension from paragraph 2, and a “Nissan 300ZX bonnet” which may or may not correspond with the GTR aluminium bonnet mention in paragraph 2, also a “1997 Skyline GES” mentioned in paragraph 2. As I understand matters, notwithstanding the contest about proprietorship of those items, Mr McLean is content that an order be made requiring the receiver to hand those matters over to the plaintiffs. I will not make an order to that effect without allowing Mr McLean an opportunity to make further submissions if he wishes to.
The item Mr McLean wants from the receiver, which he is entitled to have and which neither the plaintiffs nor the receiver ever had any entitlement to deprive him of, is the 1995 (or 1993) Nissan Skyline R33 VIN no. ECR 33-007308.
There are some other matters that ought to be mentioned in these reasons.
The Plaintiffs’ Diaries
The diaries kept by Mrs McIver in “week to an opening” volumes for 1999 and 2000 were put in evidence (as were some for later years, presumably in order to demonstrate the authenticity of the material ones). The Court can understand Mr McLean’s misgivings about the diaries, given that all he had prior to trial were photocopies of entries considered relevant by the plaintiffs, which contain a surprising number of references to him; of course, measured against the full years, his name would be much less prominent. The diaries and the entries in them of themselves prove nothing. Mr Radcliff and the McIvers informed the Court that the status of particular entries was uncertain, without amplification. They might refer to matters Mrs McIver knew about, or to matters which she knew nothing about, except for information from someone else, usually Mr McIver. Having perused the photocopied entries included at tab 1 in the book entitled “Plaintiff’s bundle of documents” supplied by Mr Radcliff, I can understand why Mr McLean made the assertion that all of the entries appeared to have been made by the same pen – meaning, among other things, that they could not be regarded as contemporaneous and their genuineness might be doubtful. Examination of the diaries themselves shows that a number of different pens have been used. The diaries themselves give no appearance of having been written out on some single occasion or occasions long after events happened. Mr McLean apparently did not avail himself of the opportunity of looking at the diaries. The Court has no idea whether a detailed analysis of entries might reveal anything untoward, casting doubt on the reliability of some or all of the entries. Mr McLean labours under obvious difficulties, being self-represented, but if there was to be any exercise embarked on of impugning the diaries, the onus was on him to perform it, and not on the Court. Suffice it to say that nothing was pointed to by him casting doubt on the contents of the diaries. The consequence is that entries are available as support for other evidence in the plaintiffs’ case. It is not possible to accept the diary entries alone as proving what they appear to state – unless, of course, that is something in the nature of an admission against the interest of the plaintiffs.
Missing Witnesses
Two witnesses whose contributions might have been helpful who were not heard from were Mr Ali and Mr Cosmo Longo, whose evidence the plaintiffs and the defendants respectively were desirous of using. Written statements or affidavits were apparently available. Neither side would consent to reception of telephone evidence by the other’s putative witness. I was unimpressed by the plaintiffs’ excuse for not having Mr Ali available (that there was not sufficient time to arrange a visa for him, as a person using a Pakistani passport post “September 11”) or Mr McLean’s excuse (that Cosmo Longo was afraid of Mr McIver). Neither witness was heard from.
Cosmo Longo was mentioned at various points in the evidence. Just as Mr McLean and Mr McIver are hostile to each other, it is clear that Mr McIver’s relations with Mr Longo broke down in a similar way. A diary entry suggests that Cosmo Longo, in serious ways, may have “blotted his copybook” while in Japan with Mr McIver, which may well, in turn, have damaged Mr McIver’s standing there. I thought an attempt was being made in the case (although there is no claim pleaded in this regard) to hold the defendants responsible for losses to the plaintiffs attributable to Mr McLean’s not doing the right thing by Japanese contacts. On the evidence, that seems to me something which could not have been sustained. It may have been different in the case of Cosmo Longo. He, as the Court heard, was involved in litigation with Mr McIver. The evidence includes a grovelling apology to Mr McIver from Cosmo Longo: see Exhibit 3 to his affidavit. The impression the Court has is that Cosmo Longo made or negotiated towards a consultancy agreement like that under consideration with Mr McLean, or some equivalent, and, no doubt, involving handsome remuneration for Mr McIver. Mr McLean and Mr Longo, it seems, began to compare notes, and they may well have resented how well Mr McIver appeared to be doing at their expense. This explains the plaintiffs’ belief that the two men were working together against him, but I think that it was only very late in the picture that any cooperation occurred. Whether anything Mr McIver did or proposed to do for either of them undercut what he was supposed to do for the other, was never gone into.
Another matter which I think is important from the point of view of the defendants being held responsible for any decline in the plaintiffs’ fortunes is that they can have had nothing to do with the relatively dreadful “bottom line” in the accounts to 30 June 1999. Asked about this, Mr McIver indicated that the cause may have been a dispute which went on with somebody called Hubbard. The plaintiff company’s accounts were offered, but not tendered. On the basis of what appears regarding them from Mr Lytras’ report, the Court can only take the view that, whatever the turnover might have been, the profits earned by the plaintiff company were plummeting. There is no basis whatever for regarding the business as a profitable one other than Mr McIver’s assertions, which I am not prepared to accept.
Mr Lytras’ Report and Evidence:
Mr Lytras’ work, whether or not competently done, was beside the point, in that the factual basis for it has not been made out by the plaintiffs. There is no justification for charging the defendants with the cost of it.
The Hilux:
The plaintiffs’ list of stock said to have been delivered to the defendants includes a 1990 Hilux utility. This is not part of the consignment stock, having been released to Mr McLean months before. It is the subject of a diary note for 29 October 1999 as follows:
“Alex took white
Hilux ute – for
‘display’ only.”
This is an example of an entry which might have been cross-examined upon by Mr McLean, if it was to be asserted it had been made or altered after the event. There was no such cross-examination. The plaintiffs’ case was that Mr McLean was allowed to take the Hilux for purposes of demonstrating to anyone interested the kind and quality of parts he would be able to supply. He gave a different version, the substance of which was set out in his affidavit:
“…McIver arranged for his lawyers to draft a contract which I was shown for the first time in early November 1999. I immediately referred the contract to my solicitor, Mr John Connors for advice. Before Mr Connors had an opportunity to provide me with advice, I met McIver again at his premises when he told me in the presence of Mr Longo that Messrs Ali & Assad had purchased 16 Nissan Silvias at an average cost of $600.00 each and were seeking to be paid. I told McIver that I have not ordered any vehicles. McIver agreed that I had not and suggested that Messrs Ali & Assad had at his request purchased the vehicles in the expectation that I was ready to establish my own business. I told McIver that I was not responsible for the purchase of the vehicles and should not be expected to pay for them. After again discussing with McIver the ins and outs of establishing my own business, he convinced me to take the opportunity of purchasing the 16 Nissan Silvias that were now available. I was reluctant to agree as I was endeavouring to establish the prawn trawler business. I had paid $200,000.00 for the trawler.
I considered my position for several days before deciding on 8th November 1999 to purchase the 16 Nissan Silvias on certain conditions. I met McIver and told him and I would purchase the vehicles from him provided I was first supplied with email photographs of each vehicle and security was given for the funds I would be advancing for the purchase of 16 vehicles sight unseen. In response, McIver said in the presence of Mr Longo that he would arrange for email photographs of each vehicle to be supplied to me when he was in Japan. He also agreed to give me with a Toyota Hilux utility (which was to be used for wrecking and salvage of spare parts). McIver told me the utility was worth $4,000.00 and said that it was mine to keep if he did not perform his end of the bargain.”
Mr Radcliff included this among a considerable number of Brown v Dunn points, as to which he submitted Mr McLean was stuck with evidence given by the plaintiffs which he had not challenged. I have some misgivings about applying the rule in Brown v Dunn in anything like its full rigour against a self-represented lay person. The plaintiffs’ knew perfectly well from the defendants’ pleading of the contention that the Hilux was delivered by way of security. It was reasonable for them to anticipate that, as Mr McIver’s affidavit had been used as part of his evidence at the trial, the same would happen in respect of Mr McLean’s affidavit. There was nothing to stop Mr Radcliff from covering this issue. Mr McIver’s evidence that the Hilux “didn’t have to be back that day or anything. –He was to have it for a few days to drive around to show potential customers” (p 109) is difficult to reconcile with the apparent lack of interest in the vehicle again until Mr McIver (as he told the police) saw Mr McLean driving around in it in March 2000. The lack of interest is also somewhat difficult to reconcile with the plaintiffs’ asserted value for the Hilux of $10,000. In the end, I think there is something in Mr McLean’s “security” assertion. On any view, the plaintiffs had received at least $10,000 from Mr McLean, who had nothing to show for it. My impression is that the parties were active in an area of commerce in which possession is “nine-tenths of the law”, and that there was more to the handing over of the Hilux than Mr McIver volunteered. The email debacle in Japan, for which the plaintiffs must take responsibility, produced a loss for Mr McLean, as both sides concede. On no view did the value of the Hilux exceed that loss.
Documents in Evidence:
Just as I entertain misgivings regarding the sworn evidence adduced by the principal protagonists, so do I have reservations about the reliability of documents produced by them other than where the documents have been accepted or were unchallenged. It might be more useful to state that where documents are challenged, I do not accept what they purport to be or show. As to the contentious draft of the Consultancy Agreement (Exhibit 6 to Mr McIver’s affidavit), there was nothing to support it comparable with the solicitor’s letter of 1 November 1999 which corroborated evidence given about the original draft. No explanation whatever was given for the absence of something similar to corroborate the existence of Exhibit 6 to the affidavit in February 2000. Except for the signed original invoice 77, I have no confidence in the plaintiffs’ invoices, which it seems to me could have been generated at any time, or for any purpose. The numbers ascribed to invoices did not appear to correlate with dates, if one has any expectation that chronological order will be adhered to. Mr McLean was taken to task for telling the committal Magistrate he had an invoice (never produced) for the 1995 (1993?) Nissan Skyline R33, the subject of the stealing charge brought against Mr McIver, which he never produced, in the sum of $22,000. He did produce at the trial Exhibit 26 which is, or purports to be, an invoice for that same vehicle dated January 7 2000 for a price of $12,000. I think that document was generated by the second plaintiff. Its purpose is unknown. It may have been to separate out a price from the $33,100 paid for it and two other items on 20 December 1999 (invoice no. 77), although it is rather difficult to reconcile the prices. One would have expected the R33 (the famous ECR 33-007308) to have been higher, possibly. (One of the plaintiffs’ assertions was that Mr McLean was given unduly favourable prices for the invoice no. 77 items on the faith that he would perform this side of the consultancy agreement. If this were so, the plaintiffs obtain appropriate redress if they recover the $15,000 outstanding.) I do not regard the second plaintiffs’ invoice no. 84 (September 28 1999) for $10,000 (acknowledged received) being “part payment for vehicles ordered from Japan” as a genuine contemporaneous document.
Mr McLean’s documents fare no better. He set great store by his own note “GTS Skyline” on the butt for cheque 2102, which shows otherwise only the date (29.9.99) and amount of $10,000. The vehicle described, which Mr McLean contended was ECR 33-007308, is shown as the “payee”, there being nothing under “detail”. This is far from being the only instance of a cheque butt giving details of the product or services apparently acquired under “payee” (in other instances a payee is named), but my reservations regarding Mr McLean’s reliability are such that I decline to accept what he has (at some time about which I am not certain) written on a cheque butt.
Costs and Interest:
I decline to make any award of interest in favour of either of the plaintiffs. Mr McIver’s incompetent performance in relation to photographing the vehicles acquired through Ali has cost the defendants dearly. His actions in respect of the Nissan Skyline, which, on the Court’s findings, were totally without justification, likewise.
So far as costs are concerned, the amounts recovered by the plaintiffs would indicate that any costs order in their favour ought to be on the appropriate Magistrates Court scale. It might be said it was necessary to have recourse to the District Court to get appointment of a receiver, something which I doubt was justifiably done ex parte, on highly exaggerated allegations. I think the receivership was abused, in respect of the Nissan Skyline. Recourse to the District Court considerably inflated the costs the defendants had to bear in presenting their case. On some important issues, the plaintiffs have failed. Another consideration is their having obtained costs orders against the defendants on interlocutory applications. (The defendants obtained one such order from Judge Wilson.) While I make no criticism of those orders, on the basis of the fuller information available at trial, it is problematic whether they would have been made. The plaintiffs’ claims now emerge as wildly excessive; they have been pursued using means which merited criticism. In all the circumstances, I would make no order as to costs.
Orders:
In light of the foregoing, I propose the following orders:
§ Judgment for the plaintiffs against the first defendant for $15,000, enforcement thereof stayed until return to the first defendant of Nissan Skyline R33 VIN no. ECR 33-007308 in good condition;
§ Judgment for the plaintiffs against the second defendant for $3,050;
§ The receiver is authorised to return to the plaintiffs items in his possession other than the said Nissan Skyline (this matter being subject to Mr McLean’s not persuading the Court otherwise);
§ No order as to costs.
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