Napier v Lone Star US Imports Pty Ltd

[2019] NSWCATCD 31

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Napier v Lone Star US Imports Pty Ltd [2019] NSWCATCD 31
Hearing dates:	6 December 2018
Date of orders:	03 April 2019
Decision date:	03 April 2019
Jurisdiction:	Consumer and Commercial Division
Before:	A J Halstead, General Member
Decision:	1. The proceedings are transferred from the Motor Vehicle List to the General Consumer List.  2. The respondent, Lone Star US Imports Pty Ltd is to pay the applicant, Lynda Napier and Robert Napier $19,839.47 on or before 30 April 2019.
Catchwords:	Importation of motor vehicle, verbal contract, bailment, agency, place of contract
Legislation Cited:	Civil and Administrative Tribunal Act 2013 Fair Trading Act 1987 Motor Dealer and Repairers Act 2013
Cases Cited:	EMI (New Zealand) Ltd v William Holyman and Sons Pty Ltd [1976] 2 NZLR 566 Soames v London & SW Rly Co (1919) 88 LJ KB 524
Category:	Principal judgment
Parties:	Lynda Napier & Robert Napier (Applicant) Lone Star US Imports Pty Ltd (Respondent)
Representation:	Solicitor: G Adelstein (Applicant) L Babister (Respondent)
File Number(s):	MV 18/39862
Publication restriction:	Not applicable

reasons for decision

Procedural history

1. The proceedings were commenced by an application made on 13 September 2018 and relate to a claim for damage to a motor vehicle. The matter first came before the Tribunal for conciliation and hearing on 16 October 2018 at Liverpool. The parties both attended that listing in person. In accordance with the Tribunal’s usual practice where both parties are present in person, prior to the case being called, the parties were provided with an opportunity to attempt to resolve the dispute cooperatively; this was not successful. The application was then adjourned for hearing on a date to be fixed by the Registrar. Directions were made for the parties to exchange and file documentary evidence they intended to rely upon at the hearing. Leave was also granted for the parties to be legally represented.

2. On 18 October 2018 the Registrar listed the matter for hearing on 6 December 2018 and sent related notices to the parties.

3. On 25 October 2018 the applicant requested an extension of time to comply with the orders made on 16 October 2018. On 30 October 2018 the respondent stated there was no objection to the extension of time request and also applied to the Tribunal for an interlocutory hearing on the issue of jurisdiction.

4. On 2 November 2018 the Tribunal made ex-parte orders extending the timetable for the exchange of evidence and written submissions. The application for an interlocutory hearing on jurisdiction was refused and it was noted the issue could be dealt with at hearing.

5. On 20 November 2018 the applicant requested the proceedings be transferred from the Motor Vehicles List to the General Consumer List. The Registrar replied on 21 November 2018 that the issue would be dealt with by the Tribunal at hearing.

6. A hearing of the application occurred on 6 December 2018 at Liverpool when both parties attended and were represented by legal practitioners. The Tribunal reserved its decision at the conclusion of the hearing.

Background to the claim

7. The applicant purchased a 1932 model Ford Phaeton from a vendor in the United States of America (USA). The applicant retained the respondent to import the motor vehicle to Australia. The vehicle was delivered, by the applicant (being in the USA at the time), to a freight shipping business in California, Oceans International Packing & Shipping Inc (‘Oceans’). The details for Oceans had previously been given to the applicant by the respondent. The applicant contends the vehicle was undamaged at the time it was delivered to Oceans. The applicant later attended a quarantine yard in Australia to collect the vehicle after shipping. The applicant contends damage to the vehicle was observed at the time it was removed from a shipping container. The applicant claims the vehicle was damaged while in the care of the respondent.

Nature of application – correct list

8. The application was made in the Motor Vehicle List of the Consumer and Commercial Division of the Tribunal. It is undisputed the proceedings do not arise from a claim under the Motor Dealer and Repairers Act 2013 or other related matter. It has been highlighted that the applicant was unrepresented at the time the application was made and mistakenly referred to it as a motor vehicle dispute.

9. The dispute arises from what might broadly be described as a consumer transaction between the parties. As such it falls within the category of matter types within the General List as a consumer claim.

10. Section 36 of the Civil and Administrative Tribunal Act 2013 provides the guiding principle for the Tribunal in dealing with proceedings is the just, quick and cheap resolution of the real issues. Section 38 requires the Tribunal to act with as little formality as the circumstances of the case permit according to the substantial merits of the case without regard to technicalities or legal forms.

11. The content of the application form summarises the main issues in dispute and was sufficient to put the respondent on notice of the nature of the claim. That issue being damage occasioned to a motor vehicle owned by the applicant.

12. The fact the application may have been incorrectly filed should not adversely affect the substantive issue of the claimed damage to the motor vehicle when the aforementioned legislative provisions guiding the Tribunal are taken into account. The real issues for determination concern any damage that may have been occasioned to the applicant’s motor vehicle.

13. The matter can appropriately be dealt with in the General List for determination of the real issues in dispute and the proceedings are transferred accordingly.

Jurisdiction

14. The Fair Trading Act 1987 (the FTA) confers jurisdiction on the Tribunal to hear and determine consumer claims. The Tribunal is satisfied that the applicant is a “consumer” as defined by section 79D of the FTA and the claim is a “consumer claim” within the meaning of section 79E of the FTA. Provided there is a consumer claim connected with New South Wales, the Tribunal has the power under s 79E of the FTA to consider the consumer guarantee provisions of the FTA, breach of contract and liability in tort: Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 at [149].

The applicant’s claim

15. The applicant seeks an order that the respondent pay the cost of repairs to the motor vehicle. The applicant also seeks relief from payment of the fees charged by the respondent for services associated with importation of the motor vehicle.

16. The claim is based upon a contract asserted to have been made by the parties in New South Wales on 8 February 2018 that provided for the importation and safe storage and transport of the vehicle from the USA to Australia by the respondent in return for payment by the applicant. The applicant contends the respondent engaged an agent in the USA, Oceans, to take possession of the vehicle, provide storage then transport it to Australia by ship’s cargo.

17. It is claimed the respondent took possession of the vehicle when it was delivered to its agent’s yard on 21 February 2018 and from that time a bailment arrangement came into existence.

18. The applicant claims the vehicle was damaged when in the possession of the respondent after it had been delivered to Oceans by the applicant but before leaving the USA. That is, the damage occurred in when the vehicle was stored at the Oceans warehouse prior to shipping. A breach of the contract and breach of bailment obligations are said to have arisen given the respondent’s failure to provide safe storage.

19. The applicant denies there ever having been any separate contract directly between the applicant and Oceans.

20. The applicant seeks the costs to repair the motor vehicle of $28,248.40. Relief from payment on the invoice issued by the respondent of $8,408.93 is also sought on the basis there was a “total failure of consideration given the damage to the vehicle”.

The respondent’s position

21. The respondent rejects the claims made by the applicant. It is undisputed there was a contract between the parties, but there was no written contract and “the terms of the verbal agreement were vague”. The respondent contends the contract arose on 21 February 2018 when the motor vehicle was delivered to Oceans in the USA and earlier correspondence between the parties was merely about the terms on offer for later acceptance. The respondent asserts the Tribunal lacks jurisdiction on the basis the contract arose in the USA and as a result the matter extends beyond New South Wales.

22. According to the respondent, Oceans was not its agent and there was a separate contract between the applicant and oceans for the storage and shipping of the vehicle. The respondent’s obligation was confined only to facilitating the importation of the vehicle; it did not take possession of the vehicle at any time. The respondent denies any agency relationship with Ocean, including that it was an agent for Oceans.

23. As the respondent did not have possession, custody or control of the vehicle, there was no bailment and it has no liability for any damage that may have occurred.

24. In the event it is found the contract between the applicant and respondent included shipping, then the respondent relies on the provisions of the Carriage of Goods by Sea Act 1991 (Cth) that excludes the operation of the Australian Consumer Law. The Tribunal would not be empowered to deal with such a claim as to do so would require the exercise of federal jurisdiction.

25. The respondent considers that, even if Oceans was its agent, the applicant has not proved any damage to the vehicle was occasioned when it was in storage prior to shipping and that liability was excluded given the applicant signed a warehouse receipt with an exclusion clause.

Issues

26. The issues to be determined by the Tribunal are:

27. Where and when did the contract between the parties arise?

28. What were the relevant terms of the contract?

29. Was the applicant’s motor vehicle damaged during the period relevant to the contract?

30. When did any damage occur?

31. Was Oceans the agent of the respondent?

32. Is the respondent liable for any damage occasioned to the vehicle while it was in the possession of Oceans?

33. What is the applicant’s loss?

34. Is the applicant liable to pay the costs charged by the respondent for importation of the vehicle to Australia?

Where and when did the contract arise?

35. The applicant contends agreement was reached on 8 February 2018 during a telephone call. The applicant’s evidence is that the following conversation occurred between Robert Napier and an employee of the respondent, “Sam”:

Robert:   Hi Sam, can you ship a car from the States for me?

Sam:      What kind of car is it?

Robert:   A 1932 Ford Phaeton. It is a real good car. What assurances can you give me that it will be safe during transport?

Sam:   “No, no, you don’t need to worry. It’ll be fine. We have shipped many valuable cars before. We can do it for $3,000 but depends on whether it needs a wash at the quarantine yard.

Robert:   Ok. Sounds good. It won’t need a wash. It’s a very clean car.

Sam:   “That’s not up to us. The quarantine yard will make that call. I will send you an email with all the details for shipping. It will include the address of Oceans who will pack the car into a container. They are our US agents. You will need to have the car dropped off there. The email will also include a link to a website where you can complete the import application.

Robert:   OK. No worries. How long will the car sit at Oceans?

Sam:   It should not sit there for more than a few weeks after the import application is approved. Would you like to complete the import application yourself? I can do it for you, if needs be.

Robert:   No, that’s ok. I’ll be in contact with you after I receive the email.

36. The content of the 8 February 2018 telephone discussion has not been disputed by the respondent.

37. An email was sent to the applicant by the respondent at 1:37 PM on 8 February 2018. The email contained the following:

Hello Rob,

Here is the information sheet with the address to deliver the Ford.

The link to apply for the import approval is also included.

Please ring if you have any questions?

Regards

Sam

38. The email included an attachment entitled “Client information.docx”. The content of the email and attachment is undisputed.

39. Although the respondent contends the contract only arose at the time the applicant delivered the vehicle to Oceans on 21 February 2018, the balance of the evidence is that it was agreed by the time the email was sent on 8 February 2018.

40. Essential terms of the agreement were settled during the telephone conversation. That is, the applicant would pay the respondent $3,000 to “ship a car from the States”. There was the possibility of a higher charge depending on whether the vehicle needed “a wash at the quarantine yard”, but the applicant accepted the offer made by the respondent, which was for a minimum cost of $3,000, by replying “Ok, Sounds good”. The email that followed was the provision of further information to allow for performance of the agreement, namely the details of the location where the vehicle was to be delivered in the USA.

41. The content of the email confirmed the respondent understood there was agreement with the applicant about the services to be provided. The email stated “Here is the information sheet with the address to deliver the Ford”, which is clear indication the respondent at that early stage anticipated delivery of the vehicle and would be bound by the terms agreed during the telephone discussion.

42. The Tribunal is satisfied the contract for the importation of the vehicle arose during the telephone contact between the parties on 8 February 2018, who were both in New South Wales at the time. The applicant is a resident of New South Wales and the respondent is a corporation located in this state. The agreement between the parties was concluded in New South Wales. The Tribunal is satisfied the contractual consumer dispute that can be heard and determined pursuant to the FTA.

What were the essential terms of the contract?

43. The respondent referred to the agreement between the parties as having been a “verbal contract” with terms that were “vague”. The evidence relied upon by the applicant, the telephone discussion of 8 February 2018, confirms the oral nature of the agreement.

44. Aside from those essential terms already identified regarding costs to be paid by the applicant and the primary importation service to be supplied by the respondent, other significant terms were also discussed by the parties during the 8 February 2018 telephone contact.

45. The applicant inquired as to “What assurances can you give me that [the vehicle would] be safe during transport?” to which the respondent replied “No, no, you don’t need to worry. It’ll be fine. We have shipped many valuable cars before”. Safe delivery of the vehicle was clearly a key concern for the applicant and this was an issue specifically addressed by the respondent. It became an express term of the contract that the vehicle would be safely delivered to the applicant in Australia.

46. The agreement also clearly anticipated the respondent would arrange for “shipping” of the vehicle. This was the first question asked by the applicant in the 8 February 2018 telephone discussion: “can you ship a car from the States”. The respondent referred to having “shipped many valuable cars before” and that “all the details for shipping” would follow by email (that later occurred). There can be little doubt the importation service to be provided by the respondent included arrangements for the shipping of the vehicle to Australia.

47. The Tribunal is satisfied the key relevant terms of the contract that arose on 8 February 2018 were that the respondent would arrange for the safe transportation of the applicant’s vehicle from the USA to Australia. In return the applicant would pay money to the respondent.

Was the vehicle damaged?

48. The applicant relies on photographic evidence of the condition of the vehicle. Many of the images were obtained on the day the vehicle was delivered to Oceans on 21 February 2018. Statement evidence was also produced by the applicant, about the condition of the vehicle at the time of delivery to Oceans, from Mr David Lerian and Robert Napier. Mr Lerian was the former owner of the vehicle and had it in his possession until the time it was delivered to Oceans. According to his statement evidence, Mr Lerian had undertaken the work to restore the vehicle to its condition at the time of sale to Mr Napier. The applicant also relies on the document entitled ‘Warehouse Receipt” dated 21 February 2018 that was provided to Mr Napier by a staff member at Oceans when the vehicle was delivered.

49. It was Mr Napier’s evidence that he returned to the Oceans yard on 22 February 2018 to place a “painters drop sheet over the Ford to keep the fabric roof clean and protect it from damage”. His evidence is the vehicle was in the same condition on that date as the day before when it was delivered to Oceans.

50. The evidence of the condition of the vehicle at the time it was delivered to Oceans was not the subject of challenge by the respondent at the hearing. The witnesses who made the statements were not called for cross-examination and there was no objection to the tender of the statements.

51. According to the Warehouse Receipt, at the time the vehicle was left at Oceans, it had a hairline scratch on the roof, two chips near the rear left side wheel arch, three scratches on the front bumper, two scratches on the rear window and a scratch on the front right side door. There is also reference to “hairline scratches all over vehicle”. The statement and photographic evidence is consistent with the Warehouse Receipt with respect to the condition of the vehicle.

52. The respondent contended the vehicle was not undamaged at the time it was delivered to Oceans and the applicant has no evidence it was undamaged prior to delivery. Other than the Warehouse Receipt, and the issues identified therein, the respondent produced no evidence about the condition of the vehicle at the time it was delivered to Oceans.

53. The applicant relies on the statement of Robert Napier about his observations of the vehicle when it was unstrapped and removed from a shipping container on 11 May 2018 at a quarantine yard in Australia. Mr Napier’s evidence is::

I then closely inspected the Ford. I observed damage to the front lower apron and paint chips on the front right-hand door. I observed a large scratch mark to the Ford badge at the front of the bonnet. I also observed a crack on the right-hand side deflector glass. I had not seen this damage to the Ford when I last saw it in the warehouse at Oceans on 22 February 2018.

54. Mr Napier returned to the quarantine yard on 12 May 2018 and obtained photographic images of the vehicle depicting the damage he said was observed the previous day. Those photographs were tendered in evidence.

55. The applicant obtained statement evidence, dated 12 November 2018, from Mr Stephen Mansueto, a loss assessor, who inspected the vehicle on 19 October 2018 and stated:

I physically observed the following:

1. Damage to the lower front Centre Apron panel.

2. Damage to the front “I” beam axle.

3. Damage/misalignment to the lower grille panel.

4. Damage to the left front guard.

5. Damage to the upper grille badge/emblem “Ford”.

6. Damage to the right front door.

7. Damage/misalignment of the front window and vertical posts.

8. Broken right side wind deflector glass.

9. Damage to the rear panel.

56. The statement of Mr Mansueto was tendered in evidence by the applicant without objection and the respondent did not call him for cross-examination.

57. The evidence establishes the vehicle was in a different condition from the last time Mr Napier saw the vehicle in the USA to the date he saw it removed from the shipping container in Australia. The defects identified by Mr Mansueto were not included in the Warehouse Receipt document prepared on 21 February 2018.

56. The Tribunal is reasonably satisfied on the evidence that the vehicle was damaged sometime between the time Mr Napier returned to Oceans on 22 February 2018 to put the drop sheet in place and the time it was observed by Mr Napier after being removed from the shipping container on 11 May 2018.

When did the damage occur?

59. The applicant contends the vehicle was damaged while in the Oceans warehouse and refers to a telephone discussion that occurred between Robert Napier and an employee at Oceans, Watson Chen, on or about 17 May 2018. In that conversation the issue of the damage to the vehicle was discussed and Mr Chen told Mr Napier that he would “look into it”.

60. Mr Napier contacted Mr Chen again “a few days later”, when the following conversation is said to have occurred:

Napier:   What’s happening? Have you found out how the Ford was damaged?

Chen:   We are still trying to get to the bottom of it. We have some images we have taken showing damage to the Ford. It’s probably best that you get a quote for repairing the car and have them forwarded to me. I will forward to Sam the images that were taken in the warehouse at Oceans. Between Sam and us, we will sort it out.

61. The evidence of the conversation was not challenged by the respondent at the hearing. The comments by Mr Chen confirm the vehicle was damaged while at the Oceans warehouse as it would not have been possible for “some images [Oceans had] taken showing damage to the Ford” that were “taken in the warehouse at Oceans” to have been obtained after the vehicle had been shipped.

62. This evidence establishes to the reasonable satisfaction of the Tribunal that the vehicle was damaged while it was in the Oceans warehouse, prior to leaving the USA.

Was Oceans the respondent’s agent?

63. The respondent denies that Oceans was its agent and asserts that the applicant had a direct contractual relationship with Oceans for the storage and shipping of the vehicle. There is, however, almost no evidence to support this contention.

64. During the 8 February 2018 telephone conversation between Mr Napier and the respondent’s employee (Sam), Oceans was referred to by Sam as “our US agents”. The attachment to the 8 February 2018 email that followed the telephone conversation refers to Oceans as the “Business name and address of the freighting company we use in Los Angeles”.

65. The Warehouse Receipt issued by Oceans and given to the applicant (Mr Napier) on 21 February 2018 states “Bill to: Lone Star Imports-Darkes Forest NSW”.

66. The respondent issued an invoice on 14 May 2018 for duty, GST and “freight” described as being “for shipping 1932 Ford Phaeton”. There was no payment request made of the applicant by Oceans.

67. The only document in evidence originating from Oceans that relates to the applicant is the Warehouse Receipt of 21 February 2018. The receipt contains details about the vehicle and relates primarily to the condition of the vehicle at the time it was delivered to Oceans. It is a type of document that would be expected to be provided in circumstances where a valuable item, such as a motor vehicle, was taken into the care and possession of the receiving party. The receipt is not in the nature of a contract between the applicant and Oceans as it contains no terms and conditions save for a purported limitation of liability for the “Warehouse”. There is no evidence the applicant was ever required to negotiate any aspect of the storage, packing or shipping arrangements directly with Oceans.

68. In the communications of 8 February 2018 the applicant was directed by the respondent to deliver the vehicle to its “US agent” for the vehicle to be exported from the USA to Australia.

69. Given the respondent presented Oceans to the applicant as its “US agent”, the applicant had no reason to doubt the relationship was precisely that – one of agency for which the agent, Oceans, was acting on behalf of the respondent as principal. At no time after being told Oceans was the respondent’s agent did the respondent inform the applicant to the contrary. The respondent is prevented in such circumstances from now denying the agency: Soames v London & SW Rly Co (1919) 88 LJ KB 524.

70. The Tribunal accepts that Oceans was the respondent’s agent at all relevant times.

Is the respondent liable for the damage caused by Oceans?

71. The vehicle became the subject of a bailment arrangement at the time Oceans received the vehicle from the applicant. At that point the respondent, by its agent Oceans, was obliged to store, package and transport the vehicle safely to the applicant in Australia. Safe delivery of the vehicle was an essential term of the contract that arose on 8 February 2018. In taking charge and possession of the vehicle as bailee, the respondent had a duty to take proper care of the vehicle until the time it was delivered to the applicant.

72. The respondent as bailee can be distinguished from the role provided by Oceans, which was merely to provide the means by which bailment of the vehicle was arranged and came into being. Oceans did not contract with the applicant to effect the carriage of the vehicle to Australia, it provided the necessary services for the respondent, as its agent, to do so. In such circumstances, the respondent was the bailee, not Oceans: EMI (New Zealand) Ltd v William Holyman and Sons Pty Ltd [1976] 2 NZLR 566. Accordingly, liability for the damage to the vehicle rests with the respondent.

73. The Warehouse Receipt contains reference to a purported limitation of liability that states “Warehouse and property liability is limited to $500 per vehicle and $40 per article – not to exceed $500”. The reference to the purported limitation of liability appears on a receipt, which is not a document in the nature of a contract. It makes no reference to the respondent, only “Warehouse” liability. It is plainly designed for the limitation of liability for Oceans in its own capacity rather than protection of any other party. There was no discussion about limitation of liability between the applicant and respondent during at the time the contract arose on 8 February 2018. The respondent did not directly provide the applicant with any document of a clear and unambiguous nature that purported to limit its liability. The receipt issued by Oceans is not accepted as being part of the contract reached between the parties on 8 February 2018 and it does not operate to limit the liability of the respondent.

What is the applicant’s loss?

74. The applicant relies on the statement of Mr Mansueto, loss assessor, in respect of the estimated costs that will be incurred by the applicant to conduct the repairs necessary to restore the vehicle to the condition it was in prior to being damaged at Oceans. Mr Mansueto considers $28,248.40 will be expended on the repairs.

75. The estimate by Mr Mansueto was determined following an examination of the vehicle and with reference to a quotation prepared earlier by a smash repairer. A comprehensive assessment report prepared by Mr Mansueto on 30 October 2018 is annexed to his statement. Particulars of his trade qualifications and government certification are also included as an annexure to the statement. There was no contradictory evidence tendered by the respondent and Mr Mansueto’s statement and report was not the subject of challenge.

76. Mr Mansueto’s assessment addressed the items of damage to the vehicle occasioned while at Oceans. His assessed repair cost is accepted as being a reasonable and accurate estimate of the money likely to be expended by the applicant to restore the vehicle to the condition it was in at the time it was delivered to Oceans.

77. The respondent is liable to the applicant for the repair costs of $28,248.40 arising from the damage sustained while the vehicle was in the respondent’s possession.

Is the applicant required to pay the costs charged by the respondent to import the vehicle to Australia?

78. The applicant claims relief from payment of the invoice issued in the amount of $8,408.93 (including the agreed $3,000 as well as importation duty and GST charges) by the respondent on 14 May 2018 for the importation of the vehicle to Australia on the basis there was a “total failure of consideration given the damage to the vehicle”.

79. There is no dispute the vehicle was delivered to the applicant in Australia pursuant to the agreement made between the parties on 8 February 2018; albeit in a damaged condition. The respondent performed its obligation in respect of storage, packing and shipping the vehicle. Although the respondent did not ensure due care of the vehicle whereby damage resulted, it could not be found there was a total failure of consideration by the respondent since the vehicle was imported into this country to the applicant’s benefit.

80. The issue of the damage is adequately addressed by the award of compensation in favour of the applicant for the undertaking of necessary repairs. Compensation will allow repair work that restores the applicant to the same position as existed prior to the damage. There is no basis in the circumstances for the applicant to avoid meeting the agreed importation costs.

81. The Tribunal declines to make any order relieving the applicant from the obligation to make payment on the 14 May 2018 invoice issued by the respondent.

Conclusion

82. The applicant’s vehicle was damaged while in the care and control of the respondent. The respondent is liable to the applicant for the cost of repairing the damage in the amount of $28,248.40.

83. The applicant remains obligated to the respondent for the agreed costs and charges arising from the contract between the parties, which is the invoiced amount of $8,408.93.

84. The respondent is required to pay the difference of $19,839.47 to the applicant, which takes account of the money owed by each of the parties to the other according to this decision of the Tribunal.

ORDERS

The Tribunal makes the following orders in respect of the application:

85. The proceedings are transferred from the Motor Vehicle List to the General Consumer List

86. The respondent, Lone Star US Imports Pty Ltd is to pay the applicants, Lynda Napier and Robert Napier $19,839.47 on or before 30 April 2019

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 07 June 2019