National Assessing and Quoting Pty Ltd v Pacific Automotive Holdings Pty Ltd
[2021] NSWDC 227
•04 June 2021
District Court
New South Wales
Medium Neutral Citation: National Assessing & Quoting Pty Ltd v Pacific Automotive Holdings Pty Ltd [2021] NSWDC 227 Hearing dates: 25, 26, 27 May 2021 Date of orders: 4 June 2021 Decision date: 04 June 2021 Jurisdiction: Civil Before: Russell SC DCJ Decision: (1) Judgment for the plaintiff against the defendant for $209,535.36.
(2) Order the defendant to pay the plaintiff’s costs.
(3) Grant leave to approach my Associate within 7 days by email if either party wishes to seek a different costs order.
Catchwords: CONTRACTS — formation – whether an oral contract was formed between the plaintiff and the defendant for the provision of motor vehicle assessment reports –– post-contractual conduct considered as relevant to proof of the existence of a contract and its terms
CONTRACTS — performance – damages – whether the plaintiff is entitled to recovery of fees charged in outstanding invoices
EVIDENCE — whether the defendant’s failure to call its claims manager as a witness warrants the making of a Jones v Dunkel inference
Cases Cited: Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Ratcliffe v Evans [1892] 2 Q.B. 524
Texts Cited: D W McLaughlan, Contract Formation, Contract Interpretation and Subsequent Conduct (2006) 25 The University of Queensland Law Journal 77
Heydon On Contract – The General Part (2019) Thomson Reuters
McGregor On Damages, 15th Edition (1988) Thomson Reuters
Category: Principal judgment Parties: National Assessing & Quoting Pty Ltd (Plaintiff)
Pacific Automotive Holdings Pty Ltd (Defendant)Representation: Counsel:
Solicitors:
M Castle (Plaintiff)
J Raftery (Defendant)
Adelsteins Solicitors (Plaintiff)
VMC Legal Pty Ltd (Defendant)
File Number(s): 2019/201239
Judgment
Introduction
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The plaintiff National Assessing & Quoting Pty Ltd (“National Assessing”) is a corporation which assesses damaged motor vehicles and provides assessment reports. The defendant Pacific Automotive Holdings Pty Ltd (“Pacific Automotive”) is a corporation which operates a franchise of the Thrifty hire care business.
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Between October 2018 and April 2019 National Assessing conducted assessments on damaged, stolen and abandoned motor vehicles which had been hired out by Pacific Automotive. National Assessing provided a large number of reports in that period. The reports provided were either “internal” reports or “external” reports. Pacific Automotive paid for many of the reports provided by National Assessing, but has not paid invoices totalling $190,641.
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National Assessing says that it is entitled as a matter of contract to such payment. In the alternative, it relies upon a claim based in quantum meruit. Pacific Automotive resists payment for the outstanding invoices.
The Pleadings
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By an Amended Statement of Claim filed on 12 November 2019 National Assessing sues Pacific Automotive for damages for breach of an oral agreement, pleaded as follows:
National Assessing would provide the Pacific Automotive with “internal” assessments for a discounted fee of $121 including GST, on the basis that Pacific Automotive would provide at least 100 internal files per month and that payment for such assessment would be made at the end of each month.
National Assessing would provide Pacific Automotive with “external” assessments for a fee ranging from $330 to $880 including GST, on the basis that the invoices were paid from monies recovered from third parties, also known as “at fault parties”.
In the event that no recovery was made from the “at fault parties”, Pacific Automotive would pay the “external” fee.
If Pacific Automotive withdrew its instructions to National Assessing, then payment of all invoices for both internal and external services became immediately due and payable.
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In the alternative, National Assessing sues upon a quantum meruit for the internal and external services which it provided to Pacific Automotive for its benefit, and for which it has not been paid.
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National Assessing also claims interest at court rates upon any damages awarded.
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By an Amended Defence filed on 2 December 2019 Pacific Automotive admits that it entered into an agreement with National Assessing, but says that it entered into the agreement in November 2018 and not October 2018.
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Pacific Automotive pleads that while it did enter into an agreement for National Assessing to provide internal assessments at an agreed rate of $121 including GST, it denies entering into any agreement for external assessments.
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On the quantum meruit claim, Pacific Automotive pleads that any external services were provided “officiously” and that any benefit was conferred on Pacific Automotive without its knowledge.
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In pars 16-23 of the Amended Defence, Pacific Automotive raises a pleading based upon a written Agency Agreement said to have been entered into between Pacific Automotive and CME Recoveries Pty Ltd (“CME Recoveries”, but also referred to as “CME” and “CMER” at times in the evidence). The pleading alleges that CME Recoveries engaged National Assessing to obtain assessment reports, but that such act was in breach of the Agency Agreement.
Formation of Contract
Evidence of Mr Cottonaro
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The evidence for National Assessing concerning formation of the contract, and its terms, came from Mr Francesco Cottonaro, the sole director of National Assessing. His evidence-in-chief is contained in his affidavit sworn on 27 July 2020 (PX 2).
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Mr Cottonaro said that National Assessing carries on the business of providing motor vehicle assessment and quoting services following motor vehicle accidents. It employs a qualified assessor to perform the assessments and quoting. Some of the assessments are a “desktop” assessment, meaning that the assessor reviews photographs of the damage to the motor vehicle and enters the repair requirements into a computer program which produces an assessment of the fair and reasonable cost of the motor vehicle repairs.
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Mr Cottonaro is also the sole director of CME Recoveries. This company carries on business as a recovery agent for motor vehicle accident claims and arranges towing, assessing and repair of motor vehicles. It also manages any civil claim against the other driver in the accident in circumstances where the other driver is “at fault”.
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Mr Cottonaro said in his affidavit (par 12) that in September 2018 he had a conversation with Ms Joanne Nicholls, the claims manager of Pacific Automotive. He said that Ms Nicholls indicated that Pacific Automotive was having issues with its current assessor and was looking for a replacement. Ms Nicholls and Mr Cottonaro agreed to have a face to face meeting in Sydney to work out the details.
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In par 13 of his affidavit Mr Cottonaro said that in early October 2018 he flew from Melbourne to Sydney for a meeting with Ms Nicholls and Mr John Ghazala, a director of Pacific Automotive. The meeting was held at the defendant’s office in Condell Park. In par 13 Mr Cottonaro set out the effect of the words said in the meeting as follows:
“Me: How many internal assessments do you need each week?
What type of format do you require the assessments to be
produced in?
What sort of turn around time do you require for the assessments?
Joanne: We need about 25-30 assessments each week, to be produced in a professional format. The assessments need to be done within 2 to 3 days. At the moment they are taking 5 to 7 days.
For each internal assessment, Thrifty will pay a discounted fee of $88 to $121 per file (including GST). Thrifty will give you instructions directly on these.
Me: Okay. To make this commercially feasible, you would need to supply a minimum of 100 files each month.
We will issue tax invoices for the fees which will need to be payable by end of each month.
Joanne: Yes that sounds great, we can do that.
Me: In relation to external assessments where a Court claim is made, then my company would charge the industry standard fee of $330 to $680 per file.
The exact fee will depend on the type of assessment, extent of quoted repairs, type of vehicle being assessed such as whether it’s a passenger vehicle, truck, van or motorbike etc. The exact fee will also be determined by the type of report required such as whether it is total loss, quote for repairs or an expert witness report.
Instructions for the external assessments will come via my other company CME as agent for Thrifty.
Joanne: Yes, we want National Assessing & Quoting to handle all the
assessments for us.
Me: National Assessing & Quoting will issue tax invoices for these fees directly to Thrifty. The invoices are payable upon settlement of the file meaning when a recovery is made from the ‘at fault’ third party or the file is closed.
In cases where Thrifty is ‘at fault’ or no recovery is made then Thrifty will be responsible for the payment to National Assessing & Quoting.
If at any time Thrifty stop using my company for assessment services, then all our invoices become immediately due and payable by Thrifty for the full amount.
Joanne: Yes, okay that’s fine.
John: We agree to that.”
-
The impression gained from reading par 13 of the affidavit is that Mr Ghazala was present for the entire meeting, including the conversation between Mr Cottonaro and Ms Nicholls working out the terms of an agreement, and reaching an agreement. However, in cross-examination, Mr Cottonaro agreed that Mr Ghazala was there at the start of the meeting for introductions, but was busy and then left. Mr Cottonaro said in his oral evidence that Mr Ghazala came back at the end of the meeting, when the discussion between Mr Nicholls and Mr Cottonaro was summarised by Ms Nicholls. Mr Cottonaro said that Mr Ghazala then said that he agreed to the proposal put forward by National Assessing to perform assessments and provide reports on the basis set out in the conversation recited in par 13 of the affidavit.
Evidence of Mr Ghazala
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Mr Ghazala affirmed three affidavits, but only the first of these, affirmed on 11 August 2020, dealt with the crucial conversation (DX 3). In par 8(d) of that affidavit, Mr Ghazala responded to par 13 of Mr Cottonaro’s affidavit. He said:
“Regarding paragraph 13 I did not sit in on that meeting although I may have seen and greeted him on the day. I am aware that Joanne came back to me with the prices of $88 and $121 as is reflected earlier in this affidavit. But those prices are the only ones that I agreed to when Joanne sought approval from me after the meeting. To my recollection the distinction was never made between price and report type.”
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The third person at the crucial meeting, and the one who had the most extensive conversation with Mr Cottonaro, was Ms Nicholls. Ms Nicholls was not called to give evidence. In cross-examination Mr Ghazala agreed that he delegated responsibility for claims management to Ms Nicholls who was employed as the “Claims Manager”. Mr Ghazala agreed that Ms Nicholls had authority to sign documents. She had authority to instruct when claims would be settled, when they would go to litigation, when instructions would be given to CME Recoveries, and when instructions would be given to lawyers for Pacific Automotive.
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Mr Ghazala acknowledged in cross-examination that it was Ms Nicholls who had sworn the affidavit verifying both the original Defence and the Amended Defence. Mr Ghazala said in cross-examination that Ms Nicholls left the employment of Pacific Automotive in mid to late 2019. There was no evidence about her current whereabouts or availability.
Post-Contractual Conduct
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In Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153, Heydon JA held that post-contractual conduct is admissible on the question of whether a contract was formed. Post-contractual conduct is not admissible on the question of what a contract means as distinct from the question of whether it was formed. This statement of principle has been followed many times by State and Federal courts: D W McLaughlan, Contract Formation, Contract Interpretation and Subsequent Conduct (2006) 25 The University of Queensland Law Journal 77.
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Writing extrajudicially, Heydon On Contract – The General Part (2019) Thomson Reuters says at par 9.1560:
“The post-contractual conduct of the parties may be relevant to matters other than the construction of the contract. This is because it concerns the making and nature of the contract. In many of the examples about to be given, the contractual materials were not exclusively in writing. Thus, where the issue: is not one of the construction of the contract, but what were the terms of an oral and only partly expressed agreement… the Court can… take into account what was done later as a basis for inferring what was agreed when the contract was made, or as establishing later additions or variations.”
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In his affidavit (PX 2) Mr Cottonaro says at par 14:
“Between October 2018 and April 2019, the Plaintiff provided the Defendant with approximately 520 internal assessments of which approximately 375 had been paid and approximately 540 external assessment [sic] of which approximately 130 had been paid.”
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Mr Ghazala responded to par 14 in par 8(e) of his affidavit (DX 3) saying:
“Regarding paragraph 14 the defendant was only ever provided with internal assessments. The precise number and the payment situation for those has been reviewed and communicated by my staff to our solicitors for inclusion in a spreadsheet that will be annexed to an affidavit by them. I understand that CMER had also commissioned the plaintiff to provide assessments to our solicitors for recovery and defence proceedings but no such assessments were authorised, requested or had any involvement from the defendant. Any such arrangements were in the context of CMER’s actions and would have been paid by CMER from the proceeds of any litigation instructed by it.”
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Pacific Automotive used a Victorian solicitor VMC Legal Pty Ltd (“VMC Legal”, but also referred to as “VMCL” in the evidence) for recovery actions against at fault parties. Ms Maria Rueger, solicitor, swore three affidavits which were served upon the plaintiff. Ms Rueger was not called to give evidence and her affidavits were not tendered for the defendant. Certain portions of two of her affidavits were tendered by counsel for the plaintiff.
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Paragraphs 10, 11, 12 and 18 of Ms Rueger’s affidavit dated 13 November 2020 (PX 7) were tendered. In those paragraphs Ms Rueger said:
“10. In my First Affidavit at paragraph [9] and following I refer to internal and external assessments.
11. To be clear, when I refer to ‘internal assessments or reports’, I am referring to reports that are used internally by the defendant, and when I refer to ‘external assessments or reports’ I am referring to reports that are used in loss recovery matters.
12. More specifically:
(a) External reports of the kind referred to in my First Affidavit are the assessment reports, that I observed from my involvement in working on recovery files, that were provided from the plaintiff to CMER, and forwarded to VMCL, for two purposes:
(i) recovering damages from another party such as a renter for damages caused to the defendant’s rental vehicle, or by a negligent third party which caused damage to the defendant’s vehicle in a motor vehicle accident; and
(ii) CMER would also use these external reports to assess damages caused to a third party’s vehicle in a motor vehicle accident for which the renter of the defendant’s vehicle was at fault.
(b) Internal reports of the kind referred to in my First Affidavit are assessment [sic] that I now know, because of these proceedings, and which I now understand were provided by the plaintiff or CMER to the defendant. I know this because I have checked the books and records of VMCL, and I note that VMCL has no records of receiving internal reports. Internal reports were never sent to VMCL by the plaintiff.
…
18. To be clear, I was always aware of the process by which external reports were requested because of my personal involvement in working with CMER and the plaintiff on recovery files for the defendant. In other words, my awareness was based on my own observation of the processes involved.”
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The first affidavit of Ms Rueger was dated 5 August 2020. Counsel for the plaintiff tendered some of the documents which were annexures to that affidavit.
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Tendered as PX 5 (Court Book Volume 3, pp 959-975) was Ms Rueger’s spreadsheet setting out details of invoices rendered by the plaintiff to the defendant. In the right-hand column those invoices were characterised as either “At Fault” or “Not At Fault”. The second last column in the spreadsheet was headed “Recovery”. For some of the invoices, a figure was recorded under that heading, presumably to indicate that monies had been recovered from an at fault party.
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The second group of documents tendered by the plaintiff (PX 6, Court Book Volume 3, pp 842-890) were documents relating to particular invoices. These documents show the involvement of CME Recoveries, which opened its files on instructions given by VMC Legal, to do work in relation to damage to the defendant’s vehicles.
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In par 22 of his affidavit (PX 2) Mr Cottonaro said that on 24 April 2019 the defendant withdrew all of its files from CME Recoveries and ceased making any payments to the plaintiff for both internal and external assessment services. Paragraph 27 of the affidavit refers to the unpaid tax invoices issued by the plaintiff to the defendant for internal and external assessment service fees. The tax invoices themselves were annexed to the affidavit and are reproduced in the Court Books. A statement summarising all of the details of the unpaid invoices (PX 4) is reproduced in Court Book Volume 6, pp 1961-1981.
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The amount claimed by the plaintiff was reduced in final submissions (MFI 5) to a total of $190,641 made up as follows:
121 unpaid internal assessments totalling $13,728.
414 unpaid external assessments totalling $176,913.
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In relation to the termination of the services of CME Recoveries Mr Ghazala said in his affidavit (DX 3) in par 8(f):
“Regarding paragraph 22:
(i) I, my fellow director and Joanne had become increasingly concerned about the non-performance by CMER in failing to give our solicitors instructions for the conduct of cases, the behaviours of its director Frank and many practices engaged in by that company and the plaintiff.”
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Ms Nicholls, if she had such concerns, gave no evidence about them (or indeed about any other matter). There was no evidence from the “fellow director”. The evidence given by Mr Ghazala about Mr Cottonaro and CME Recoveries was vague, and often volunteered in a non-responsive fashion when questions were asked on other topics during cross-examination. Mr Ghazala kept saying that he was concerned about “lack of transparency”. While he used that phrase several times, its meaning remained opaque to the court.
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In par 8(f)(iii) of DX 3 Mr Ghazala said that he asked his lawyers “to hold on trust any monies recovered from third parties payable to us that might be distributed to the plaintiff pending discussions between the parties”.
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There was no identification by Mr Ghazala of the particular amounts or the total amount held on trust. However this evidence did suggest that for some of the external invoices there was no dispute that National Assessing was entitled to be paid. Monies had been recovered from at fault parties which included the cost of the National Assessing invoice for external assessment services.
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Mr Ghazala was cross-examined concerning his allegation that National Assessing and CME Recoveries had paid itself monies to which it was not entitled. He concluded par 15 of his affidavit (DX 3) by saying:
“Eventually I realised that enormous sums were being taken from the defendant company, potentially illegally.”
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He also said in par 16:
“Since the termination of our relationship with CMER we have become aware of practices that have caused significant loss to the defendant which due to common directorship are due to the CMER/NAQ situation [sic] and all amounts need to be considered to determine the true and just situation between the parties.”
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Mr Ghazala was cross-examined as to whether he had ever made any claim against CME Recoveries or National Assessing for such monies. One of his answers was that he proposed to engage a forensic accountant to investigate this matter. Another answer was that in future he would bring a claim against National Assessing. There was no explanation as to why he had not brought a cross-claim against National Assessing in the current proceedings.
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Nor was there any explanation as to why Pacific Automotive had paid National Assessing for a large number of internal assessments, but not for the balance, apart from the explanation that upon having concerns, all payments were simply suspended. Mr Ghazala did not dispute in his evidence that Pacific Automotive had ordered all of the internal assessments for which National Assessing made a claim in the proceedings.
Findings of Fact: Formation of Contract and Terms of Contract
Credibility and Oral Evidence
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Mr Cottonaro gave his evidence in a measured and forthright fashion. He listened carefully to the questions asked in cross-examination and provided frank answers. He made an appropriate concession, against his own interest, that Mr Ghazala had not been present during most of the crucial meeting with Ms Nicholls. I accept Mr Cottonaro as a credible and reliable witness.
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By contrast, Mr Ghazala was a less satisfactory witness. Many times he did not answer the question asked, but launched into speeches to try to get across what he saw as his important points. Mr Ghazala knew none of the details regarding the claims management process, which he fully delegated to Ms Nicholls. He struggled to explain the purpose of internal assessments. He made unsupported assertions about “lack of transparency” and improper practices of National Assessing, without going into detail or producing evidence.
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Mr Ghazala said that the problems with the previous assessor, who Ms Nicholls wanted to replace, were caused by Mr Cottonaro and his other company CME Recoveries. If that were so, it would have been very surprising if Ms Nicholls wanted Mr Cottonaro to take over the assessment role, and if Mr Ghazala had wanted him to, at least, provide internal reports at the defendant’s cost.
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Mr Ghazala said that at best National Assessing was only ever entitled to be paid for “external” invoices where such amounts had been recovered from at fault parties. But such an assertion was contradicted by the evidence of his solicitor Ms Rueger, who said that one of the purposes of external assessments was for use in cases where the defendant’s hirer/driver was at fault and was being sued for damaging a third party vehicle. Obviously in such a scenario there could be no recovery from the third party.
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I accept the evidence of Mr Cottonaro concerning the formation of the contract and its terms. His version of these matters was consistent with the tendered documentation and the post-contractual conduct of the parties, which is dealt with below.
Absence of Ms Nicholls as a Witness
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The seminal High Court case of Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 dealt with the steps which should be taken by a trial judge, when a witness who could have been called was not called. At p 308 Justice Kitto said:
“Whether that inference ought to be drawn was, of course, a question for the jury. But they should not have been sent away to consider that question without proper guidance as to the relevance of the defendants’ failure to put Hegedus into the witness-box. On that question a juryman actually asked the trial judge to supplement his summing-up, and counsel for the plaintiff submitted that if there was evidence to go to the jury they were entitled to take into consideration (meaning, obviously, on the question whether they should infer negligence) that ‘there was one person who could have told them the facts and they have no answer from that person’. In my opinion, the direction which the judge proceeded to give was insufficient, and, because of its incompleteness, was incorrect. His Honour told the jury that the fact that Hegedus had not gone into the box left them in this position, that they could accept the facts given by the plaintiff as proved, and that the question for them then was whether they thought that from the proved facts an inference of negligence ought to be drawn. It was right enough to point out, in effect, that the evidence given might be the more readily accepted because it had been left uncontradicted, and that the omission to call Hegedus as a witness could not properly be treated as supplying any gap which the evidence adduced for the plaintiff left untouched. But what should have been added, and not being added was in the circumstances as good as denied, was that any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence. The jury should at least have been told that it would be proper for them to conclude that if Hegedus had gone into the witness-box his evidence would not have assisted the defendants by throwing doubt on the correctness of the inference which, as I have explained, I consider was open on the plaintiff's evidence.”
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In the present case the evidence concerning the formation of the contract and its terms comes, on the part of the plaintiff, from par 13 of the affidavit of Mr Cottonaro. Both Mr Cottonaro and Mr Ghazala say that Mr Ghazala was only at the meeting at the very start and the very end. This confirms that there was a meeting between Mr Cottonaro and Ms Nicholls at a time when Pacific Automotive had dismissed its former assessor and was looking for a new one.
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The evidence of Mr Cottonaro concerning the conversation he had with Ms Nicholls is uncontradicted, because Ms Nicholls has not been called as a witness. The conflict in the evidence between Mr Cottonaro and Mr Ghazala, as to whether Mr Ghazala agreed with all of the terms discussed with Ms Nicholls is resolved in favour of the plaintiff – not only because I accept the evidence of Mr Cottonaro over that of Mr Ghazala, but also because the defendant did not call Ms Nicholls. While she has left the employ of Pacific Automotive, there was no explanation as to why she was not called as a witness by her former employer.
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I draw the Jones v Dunkel inference that if Ms Nicholls had gone into the witness box her evidence would not have assisted the defendant.
Post-Contractual Conduct
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I take into account the following features of the conduct of the parties which support the plaintiff’s case in relation to formation of a contract and the terms of that contract.
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The plaintiff did perform about 100 internal assessments per month (520 in six months). The evidence shows that the internal assessments were ordered by Pacific Automotive (presumably by Ms Nicholls) and sent directly to Pacific Automotive. There was no dispute that all such internal assessments were ordered and received, or that certain assessments have not been paid for. The internal assessments were paid for on a monthly basis until Mr Ghazala suspended all payments. A large number of invoices have not been paid, but there is no evidence to justify non-payment.
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The external assessments were ordered by CME Recoveries which was the agent for its disclosed principal Pacific Automotive. The external assessments were sent to VMC Legal for the purposes outlined by Ms Rueger. The external assessments supplied by National Assessing were used for the benefit of Pacific Automotive.
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Ms Nichols was the person ultimately responsible for requesting such reports and paying for them. She was not called to give evidence to dispute that the reports were obtained and deployed for the benefit of Pacific Automotive. Pacific Automotive paid without demur for a large number of the external reports, at the rates set out in the invoices.
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In some cases funds have been recovered from at fault parties which should have been paid to National Assessing. Those funds were not paid because of the suspension of payments imposed by Mr Ghazala. The evidence does not enable me to find how much is owed on that account. There was no evidence to justify these non-payments.
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At first blush I wondered why Mr Cottonaro would have specified that if the business relationship ceased, then National Assessing would require payment immediately for all of the assessment reports, both internal and external. Mr Cottonaro said in cross-examination that because of previous experiences in business, he insisted on this as a term of the contract. He was not challenged about this explanation and I accept it.
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Mr Ghazala did not call evidence to make good his vague allegations of “lack of transparency”, or illegality, or the practices of National Assessing which were said to have caused him so much concern that he suspended payments.
Conclusion
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I find that a contract was formed orally by discussions between Mr Cottonaro on behalf of National Assessing and Mr Ghazala on behalf of Pacific Automotive, in the terms pleaded in the Statement of Claim and set out in par 13 of PX 2, for the following reasons:
I accept the evidence of Mr Cottonaro.
I draw the inference that Ms Nicholls, a key player in the formation and performance of the contract, was not called as her evidence would not have assisted the case of the defendant.
The post-contractual conduct of the parties was consistent with the contract and its terms, as pleaded by the plaintiff.
Performance and Damages
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Counsel for the defendant submitted (MFI 6) that National Assessing had not proved that it performed the work to support the tax invoices issued.
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The onus is upon National Assessing to prove that it did the work recorded in the tax invoices. McGregor On Damages, 15th Edition (1988) Thomson Reuters says at par 1779:
“The plaintiff has the burden of proving both the fact and the amount of damage before he can recover substantial damages. This follows from the general rule that the burden of proving a fact is upon him who alleges it and not upon him who denies it, so that where a given allegation forms an essential part of a person’s case the proof of such allegation falls on him.”
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In Ratcliffe v Evans [1892] 2 Q.B. 524 at 532-533 Lord Justice Bowen said:
“[T]he character of the acts themselves which produce the damage, and the circumstances under which these acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be… proved. As much certainty and particularity must be insisted on… in… proof of damage as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles. To insist upon more would be the vainest pedantry.”
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In par 14 of his affidavit (PX 2) Mr Cottonaro gave broad evidence that a large number of internal and external assessments were performed by the plaintiff for the defendant. The tax invoices reflecting these assessments were tendered, but the assessments themselves, and the surrounding documentation, were not tendered. The Court Book in this matter ran to six volumes and 1,999 pages. The tax invoices were tendered (PX 3) and ran from Court Book Volume 5, p 1397 to p 1960. Each tax invoice contained a reference number provided by Pacific Automotive for a particular claim, the registration number of the Pacific Automotive vehicle, the date of loss and the type of service provided, which was either an internal or an external service.
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Mr Ghazala delegated the preparation of a spreadsheet concerning the invoices to Ms Rueger. Ms Rueger in turn produced the spreadsheet which was tendered by counsel for the plaintiff. She saw the external assessment invoices but did not say that such assessment reports were not provided.
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I accept the evidence of Mr Cottonaro that the work itemised on the invoices was done. There was no evidence to contradict the evidence of Mr Cottonaro that not only were the invoices provided, but that the assessments which resulted in the invoices were carried out.
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After judgment was reserved the plaintiff re-opened its case by consent to tender a notation contained in a document, signed by the solicitors for both parties, which was filed in court on 3 December 2020 (PX 10). The notation reads: “the Defendant concedes that in respect of external assessments it, through VMC Solicitors, received 400 assessment reports & invoices”.
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Both the defendant (MFI 7) and the plaintiff (MFI 8) filed short written submissions concerning the notation in PX 10. Counsel for the defendant reiterated his submission that the plaintiff had to prove which external assessments were done, what was charged for each assessment, and which invoices remained unpaid. Counsel for the plaintiff pointed out that the notation must be understood as referring to the 400 external assessments performed by the plaintiff for which the defendant has not paid, and for which the plaintiff sues.
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While the notation alone does not prove performance, it is an acceptance by the defendant that a substantial number of external assessments were performed by the plaintiff. If these assessments really were performed “officiously” (meaning that they were services not requested or wanted by the defendant) then it was truly remarkable that Ms Nicholls or Ms Rueger did not call a halt to the receipt of such reports after the first report. Instead, hundreds of reports were provided (400 according to the notation; 540 according to Mr Cottonaro) and the defendant paid for about 140 of them at the rate charged. Neither Ms Nicholls nor Ms Rueger called a halt to the flood of external assessment reports. Instead, they used them to recover monies from at fault third parties for the benefit of Pacific Automotive, or to defend damages claims in which Pacific Automotive was sued.
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The cross-examination of Mr Cottonaro was directed towards challenging the evidence concerning the formation of the contract and its terms, rather than the performance of the contract. While the defendant bore no onus to disprove the damages, the evidence provided by the plaintiff is sufficient to establish the quantum of damage alleged by National Assessing. As previously recited, the amount claimed was reduced in final submissions to $190,641.
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Interest will be calculated upon that amount from 24 April 2019 when Mr Ghazala suspended payments.
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The interest award will be $18,894.36 in accordance with the following table:
Start Date
End Date
Days
Rate
Amount Per Day
Total
24/Apr/2019
30/Jun/2019
68
5.5%
$28.7267
$1,953.42
01/Jul/2019
31/Dec/2019
184
5.25%
$27.4210
$5,045.46
01/Jan/2020
30/Jun/2020
182
4.75%
$24.7417
$4,502.98
01/Jul/2020
31/Dec/2020
184
4.25%
$22.1373
$4,073.26
01/Jan/2021
04/Jun/2021
155
4.1%
$21.4145
$3,319.24
Total
773
$18,894.36
Quantum Meruit
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I have found in favour of the plaintiff on the contract claim. In these circumstances the claim based in quantum meruit does not arise for consideration.
Conclusion and Orders
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There will be judgment for the plaintiff for $190,641 + $18,894.36 = $209,535.36.
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There will be an order for the defendant to pay the plaintiff’s costs. I will grant leave to approach my Associate should either party wish to seek a different costs order arising from an Offer of Compromise or a Calderbank offer.
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The orders are:
Judgment for the plaintiff against the defendant for $209,535.36.
Order the defendant to pay the plaintiff’s costs.
Grant leave to approach my Associate within 7 days by email if either party wishes to seek a different costs order.
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Decision last updated: 04 June 2021
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