Mirimbiak Aboriginal Nations Corporation v Peninsula Prestige Cars Pty Ltd
[2000] VSC 556
•13 December 2000
| SUPREME COURT OF VICTORIA | |
| COMMON LAW DIVISION | Not Restricted |
No. 6400 of 2000
| MIRIMBIAK NATIONS ABORIGINAL CORPORATION | Plaintiff |
| v | |
| PENINSULA PRESTIGE CARS PTY LTD | Defendant |
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JUDGE: | Nathan J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 December 2000 | |
DATE OF JUDGMENT: | 13 December 2000 | |
CASE MAY BE CITED AS: | Mirimbiak Nations Aboriginal Corporation v Peninsula Prestige Cars Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 556 | |
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Motor Car Traders Act 1986 s.46 – ostensible authority to contract – no actual contract concluded.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Ms S. Hinchey | Holding Redlich |
| For the Defendant | Mr P. Santamaria | Moores Solicitors |
HIS HONOUR:
This case concerns a new four-wheel drive Landrover delivered by Peninsula Prestige Cars to Keith Saunders. He test drove it from Melbourne to Alice Springs, where it was subsequently found in a damaged and sad condition. It was then returned to the vendor, Peninsula Prestige.
Identification of the parties is as follows: the Mirimbiak Nations Aboriginal Corporation, the appellant, is an incorporated body. Its function is to distribute funds to various aboriginal organisations. Peninsula Prestige Cars Pty Ltd is a vendor of new cars including Landrovers.
Keith Saunders is, or perhaps was, a director of Mirimbiak and the key actor in this case. I must refer to Keith Saunders because he should not be confused in any way with his brother, Ken Saunders. As I have said, it concerns a new Landrover delivered by Peninsula into the hands of Keith Saunders for the purposes of a test drive. He drove it from Melbourne to Alice Springs without the knowledge or consent of Peninsula and, it may be inferred, Mirimbiak.
Because it was dilapidated and damaged when found, Peninsula sued Mirimbiak for the costs of repair, contending that Keith Saunders had the ostensible authority of Mirimbiak to enter into a contract to purchase. The issue then becomes: who should carry the loss in respect of restoring of the Landrover?
On 12 July of this year, a Magistrate ordered that Mirimbiak pay to Peninsula the sum of $16,000-odd for costs of repair and depreciation. That finding forms the subject of the appeal. The questions of law raised are: (1) Having regard to the whole of the evidence, could the Magistrate, properly instructed, have concluded that Keith Saunders was the servant or agent of Mirimbiak? In particular, was there any evidence to find that Keith Saunders had the actual or ostensible authority of Mirimbiak to enable him to contract with Peninsula for the purchase of the vehicle? (2) Was there any contract for the purchase of the vehicle between Peninsula and Mirimbiak? The other questions in the orders as prepared by the Master are not relevant.
Of significance is the Motor Car Traders Act 1986, particularly s.46, which sets out that a licensed motor car trader must obtain written confirmation of a sale, identification of the vehicle involved and a statement of the purchase price. The conditions and provisions are not entirely dissimilar to the statute of frauds, except of course that a contract which fails to comply with s.46 is voidable rather than void ab initio.
I observe that Peninsula was mindful of the provisions of this section during the time it was dealing with Keith Saunders. Peninsula knew of the statutory requirement to obtain from the purchaser written confirmation and details of the purchase before the same could constitute a binding and enforceable contract.
I have had recourse to the classic authorities dealing with ostensible authority, namely, Freeman and Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, particularly the judgment of Lord Diplock at p.503. All the authorities relating to ostensible authority have been gathered together and closely examined by this court: see Powercor Australia v Pacific Power [1999] VSC 110.
These authorities and all other authorities and texts relating to ostensible authority involve a formal and completed contract. In this case, as I shall go on to find, there never was a complete and formal contract. Negotiations between the parties were on foot. Accordingly, although Keith Saunders was a consummate con man and sleaze artist, no contract for which he had ostensible authority to enter was ever concluded.
Had I been obliged to proceed to the issue of ostensible authority, I would have found that the Magistrate was not in error. I would have found that the conduct of Mirimbiak, in allowing Keith Saunders to urge his way around that organisation, had resulted in him being vested with the ostensible authority to contract on its behalf.
I specifically find that Mr Webster of Peninsula Prestige Cars was in no way culpable and is not to be regarded as at fault in any way in respect of this transaction. Mr Webster was set up by Keith Saunders, who then abused his trust and abused his purported authority to obtain possession of the four-wheel drive vehicle, which, it is only reasonable to infer, was stolen for the purposes of giving himself passage to Alice Springs and to many other places as well, as is evident from the odometer readings. When the new vehicle was delivered to Keither Saunders, the odometer read 50 kilometres. When it was recovered in Alice Springs in its somewhat tattered and sad condition, the odometer read more than 13,000 kilometres. It is not 13,000 kilometres from Melbourne to Alice Springs. However, it might have been if the vehicle had been taken via Sydney, Manangatang, Patchewollock or other places. It is quite plain that Saunders travelled vastly and loosely with the vehicle in the few days in which he had it.
As I have found there was no contract underpinning the issue of ostensible authority, it becomes necessary to go somewhat tediously into the actual documentation and events which occurred and to that task I now turn.
Mr Hepplewhite was the executive officer of Mirimbiak. He gave evidence that Keith Saunders was, at the relevant time, a director of the Mirimbiak Corporation and that he remained so during the period of the negotiations with Webster. Hepplewhite said, and it cannot be contested, that Saunders, as well as being a director at Mirimbiak, held meetings with Webster, apparently at the registered offices of Mirimbiak, and that he was at various times contacted by telephone on the Mirimbiak phone numbers. Faxes were both received by and sent to Keith Saunders from Peninsula at the Mirimbiak offices and on Mirimbiak letterheads. And for whatever it is worth, Mr Hepplewhite said that Keith Saunders looked like a Mirimbiak person. It is now apparent that Keith Saunders was not a member of the executive or of the governing committee of Mirimbiak, but he was on some subsidiary committees.
I now turn to Mr Webster's evidence. He said that he would speak to a receptionist when telephoning Mirimbiak and that he would then be put through to Keith Saunders, or if he left a message, it was apparently received by Keith Saunders, who would then reply. On 26 May 1999, Keith Saunders told Webster that: "They would be buying them sales tax exempt and they had a tax exemption entitlement." Keith Saunders then gave Webster Mirimbiak's address and fax number and Webster sent letters to him and there were phone calls back and forth.
On 18 June 1999, Webster actually met with Keith Saunders in the board room of the Mirimbiak registered offices. No other person was present. Webster then produced some paperwork relating to the proposed purchase, together with a draft contract, and told Keith Saunders the following: "I assume the car is to go to the Mirimbiak Nations Aboriginal Corporation." Keith Saunders then replied: "Well, what I want to do is talk further before signing the paperwork. I want to talk further with the other directors, other council members, in regard to the quantity of cars, whether it was going to be just the one or whether it was to be a multiple." I am satisfied that indeed it was to be a multiple and 15 was mentioned. Obviously, Webster must have considered the position to be a highly profitable one for himself and for his employer as there was a likely sale of a quarter to half a million dollars worth of motor vehicles. Nevertheless, in my view, Webster proceeded cautiously and properly. He was further gulled by Keith Saunders and the ambience which Saunders built around himself.
On that occasion, Keith Saunders handed Webster an annual report of Mirimbiak Nations and then offered to tell Webster something about it. He said: "I will tell you a little about us as an organisation. Look, we are a governing body that oversees all the Koori tribes in both Victoria and Tasmania and as a result of things such as the Mabo claim there are many millions of dollars coming into the Aboriginal community and Mirimbiak has been set up to assess the disbursement of funds to the various communities." Perhaps somebody more acute than Mr Webster would have realised that there are several lies in that statement. Firstly, the notion of Koori tribes is wrong. Koori people do not refer to their various clan and family groups or language groups as tribes and, certainly, the decision in Mabo did not lead to the automatic disbursement of funds to Koori organisations such as Mirimbiak. Perhaps it was asking too much of Mr Webster to have realised that that statement was an enticement to let him believe that Mirimbiak was flush with funds, as indeed it might have been, and that it was in a position to fulfil the possible purchase of 15 Landrovers.
I accept that Keith Saunders then told Webster of his involvement with Mirimbiak and said that he was a committee member or director of Mirimbiak and that he performed a variety of functions for them. The following exchange occurred when Keith Saunders said he was a committee member. Webster said: "Well, is that the same as a director?" To which Keith Saunders replied: "Well, yes, I am one of the deciding members of the group."
At that stage, no paperwork was completed. When asked "why not?", Mr Webster truthfully replied that the transaction had not proceeded to documentation stage as they were still discussing the number and types of vehicles to be purchased.
On the following day, 22 June 1999, Keith Saunders telephoned Webster and Webster said, in response to a request from Keith Saunders, that he could have the use of the motor vehicle for a couple of days. Keith Saunders said that he, or possibly they, only needed it for a couple of days to show the other parties. Keith Saunders was given a diesel manual to test drive. Though it must be observed that the subsequent order, insofar as it is evidenced in writing, was for a V8 automatic vehicle.
On the weekend, Keith Saunders telephoned Webster again and asked to keep the car for the weekend. He said that Webster would have it back early the following week and Webster indicated that he had no difficulty with that.
On the Wednesday of the following week, 30 June 1999, Keith Saunders sent a fax to Webster on Mirimbiak letterhead which dealt with identification matters that are not pertinent to this case. However, the fax and letter were addressed to Webster and signed by Keith Saunders "For and on behalf of the treasurer of the Gundit‑Jamara Aboriginal Corporation Incorporated". This was a fiction. There is no such corporation and certainly nothing of that style or title on the register.
It is evident that Saunders was keeping alive the fiction that he was somehow empowered by aboriginal corporations, flush with funds, to purchase a number of Landrovers. Keith Saunders kept the fiction going by sending a further signed fax including banking details and fax numbers. Keith Saunders fostered the cover story to Webster that the vehicle was to be purchased by Mirimbiak but that it would be going to the Gundit-Jamara people.
On Friday 2 July 1999, again a week following, Webster received a further fax from Keith Saunders which read: "Please be advised all documentation for final contracts are following." Now, on any view, this is a plain indication that the contract had not yet been completed. Attached to that fax was a copy of an order form. That order form was found to be unsatisfactory by Webster and, as a result, he sent a fax back to Keith Saunders on 6 July 1999 which stated, inter alia "Dear Keith, please read both attached letters and give me a call when you are able. I have re-drafted the order for your vehicle. If you could sign and stamp where indicated and fax back." This is a plain indication that Mr Webster required a contract evidenced in a form which was satisfactory to him and in compliance with the Motor Car Traders Act.
It is a clear indication that he did not accept the Saunders documentation. As this event subsequently occurred a second time, it is necessary to stress the importance I attach to this exchange. And I reiterate, the contract at that time had not been finalised, as required by both the vendor and the Motor Car Traders Act.
There was discussion between the parties about the state of tax exemption and the benefits that would follow. Keith Saunders kept the fiction going by further conversations with Webster about what was required.
On 3 July 1999, or thereabouts, Webster received a phone call from a man called Andrew White, one of the people involved in financing the vehicle. White told Webster that he had heard from Keith Saunders and that Keith Saunders now wished to purchase the vehicle, that is, the diesel vehicle he was then driving instead of the eight cylinder automatic vehicle. This led to correspondence of some seminal importance.
Webster then wrote to Keith Saunders again at Mirimbiak in the following terms: "I spoke with Andrew White yesterday afternoon who mentioned that he had spoken with you. He advised me that you wished to order an SE manual TDI, the vehicle you are driving, in place of the V8 auto you have ordered. I have no problems with that and have enclosed an order to reflect the lower price which I will need signed and returned."
The requirement set by Peninsula, namely, signed and detailed documentation, as per its order form, was never complied with by Keith Saunders. The order was never signed and returned by him in a form which was acceptable to Peninsula. Therefore, there was no contract between Mirimbiak and Peninsula and, accordingly, the issue of whether Keith Saunders had ostensible authority to act, becomes otiose.
If this were not enough, I refer to a fax of 13 July 1999, which was purportedly signed by Eugene Lovett of the Mirimbiak peoples. That fax acknowledged Webster's letter to Keith Saunders of 8 July 1999 and stated: "All relevant information including common seal of the organisation is being made available. Please stand by." Again, this is unequivocal evidence that the contract had not become choate. Whether that fax was fraudulent or otherwise and whatever the status of Eugene Lovett, the fact remains that the contract had not been concluded.
Webster, in cross-examination, said that it was pretty clear to him that the Gundit‑Jamara people were going to enter into an agreement and that Lovett was calling him to advise him to get the stamps together and these sort of things so that the agreement could be executed. That never happened. This is clear evidence coming from Webster's own lips that the agreement had not been concluded.
It follows then that the Magistrate who proceeded upon the basis that there was a contract, although he did not address himself very specifically to the issue, failed to address a key matter and, I regret to say, fell into error. This is what the Magistrate said: "It is not disputed that Saunders negotiated with Stuart Webster of the plaintiff for the purchase of the vehicle and possibly other vehicles, and that the vehicle in question was never in fact purchased." So, having come to the conclusions which I say were available to him on the evidence, the Magistrate then proceeded to dispatch the case as if he had not made that finding.
The Magistrate did set up the issue of ostensible authority in a manner which is legally correct. He said this: "The probabilities are therefore, and I find, that any contract negotiated between the plaintiff and the defendant, whom it was asserted would be paying for the vehicle, was not the plaintiff in the Gundit‑Jamara, as the defendant asserts." So, he seems to have moved from there was no contract to maybe there was one and then went on to ostensible authority.
The next issue which arises in this case is whether or not it has been proved on the balance of probabilities that agency exists. That is, whether or not it has been proved that Keith Saunders was acting with the apparent and ostensible authority of the defendant so as to make the defendant liable for the damage suffered by the plaintiff.
The Magistrate then examined the evidence, as I have just done so, and came to the view that there had been an extension of ostensible authority by Mirimbiak to Keith Saunders, a position which they would then be estopped from denying. Accordingly, if there had been a contract, Mirimbiak would have been liable for it. He did find, as I have found, that there is no doubt that Mirimbiak was not aware of the representation at the time it was made but that it is irrelevant whether the agent, that is, Keith Saunders, had the actual authority, as it is the ostensibility of that authority which is in issue. The Magistrate found that there was no reason for Webster's evidence to be rejected.
I observe, and repeat again, that I think the Magistrate was correct insofar as he made findings about ostensible authority for the following reasons: Keith Saunders was permitted by Mirimbiak to operate as a director in its registered offices. He was permitted to have access to its board room, with all the ambience relating to authority, to act for and on behalf of a corporation. It knew, or must have known, of his dealings with Peninsula vís a vís the purchase of the Landrover because the company facilities were being used. It would be uncommonly lax for a corporation not to know of the activities of one of its directors when its telephones, fax machines and mailing facilities were being utilised by that director in pursuit of the purchase of motor vehicles which, incidentally, it was in the interests of Mirimbiak to purchase.
Lackadaisical, inert, uncaring, gulled, deceived – such words might be applied to Mirimbiak's conduct. However, there is no doubt that it was manipulated by Keith Saunders. Knowing of the lackadaisical approach apparently inherent in Mirimbiak's business practices, Keith Saunders managed to gull Webster and keep him dangling on the end of a possible contractual line while he made off with the new Landrover, which he drove for the better part of a month and a half, exceeding 13,000 kilometres.
For the reasons provided above, the essential platform of a formulated and completed contract upon which this ostensible authority could be exercised was not made out and could not have been made out. The Magistrate's first indication of a finding was correct. Unfortunately, he later fell into mishap and error by finding, as he must have found, that there was a contract and, therefore, ostensible authority.
The appeal must succeed. The second question must be answered in the negative – there was no formulated and completed contract. Accordingly, the first question becomes otiose and is unnecessary to answer. I shall so order.
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