RATCHEV v Tavo - [2004] WADC 60

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: RATCHEV -v- TAVO [2004] WADC 60

CORAM: WILLIAMS DCJ

HEARD: 5-9 FEBRUARY 2004

DELIVERED : 1 APRIL 2004

FILE NO/S: CIV 2388 of 2002

BETWEEN: KRASTU RATCHEV
Plaintiff
AND
CAROL-ANNE TAVO
Defendant

Catchwords:

Contract - General contractual principles - Plaintiff suing defendant for unpaid monies under agreement to lease taxi

Legislation:

Supreme Court Act s 32

Result:

Plaintiff entitled to judgment in the sum of $55,362 together with interest

Representation:

Counsel:

Plaintiff: Mr E MacMillian
Defendant: Ms R Cosentino

Solicitors:

Plaintiff: S S Ludher
Defendant: Messrs Chilvers Marshall

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Nil

WILLIAMS DCJ:

Introduction

At all material times the plaintiff was the registered owner of a Ford Falcon Sedan, one set of taxi plates and ancillary equipment comprising of two-way car radio, taxi roof sign and taxi meter.
By a written agreement made in June or July 1990 the plaintiff let and the defendant took on hire the car, taxi plates and ancillary equipment for the period 1 July 1990 to 30 June 1995 at a rate of $300 per week payable monthly in advance the same to be deposited into the plaintiff's nominated bank account with the Australia and New Zealand Bank.
The plaintiff says that the defendant breached various terms of the lease agreement in that she:
(a)Failed and neglected to pay the agreed lease rentals at the times and in the amounts specified.
(b)Failed and neglected to return and deliver-up the car and taxi plates to the plaintiff upon expiry of the lease term.
(c)Disposed of the car without the knowledge and consent of the plaintiff in or about December 1992 and thereby converted the same to her own use and benefit.
The plaintiff acknowledges that he is statute barred from claiming the loss of the market value of the vehicle.
The plaintiff says that in or about September 1993 at a meeting held in Port Hedland the plaintiff and defendant negotiated a verbal agreement whereby the defendant undertook to revert to paying to the plaintiff the lease rentals in accordance with the rates set out in the lease agreement so long as the defendant retained the taxi plates.
The plaintiff further says that the defendant in November 1995 told the plaintiff on the telephone that she would pay him $300 per week to retain the taxi plates and the plaintiff accepted that.
The defendant returned the taxi plates without the car to the plaintiff in or about early July 2002 consequent upon written demand made by the plaintiff's solicitors on 25 June 2002.
The plaintiff alleges that the defendant remains liable to the plaintiff for breach of the agreement for an outstanding account of unpaid and under paid lease rentals by reasons of the running account between the plaintiff and the defendant pursuant to the verbal agreement made between the parties in September 1993 or alternatively pursuant to the lease agreement as orally varied in September 1993 or pursuant to a holding over under the lease agreement or alternatively pursuant to the agreement made in November 1995.
The plaintiff claims the sum of $55,362 as damages for breach of contract. This amount is alleged to be in respect of unpaid rental for the period 28 June 1996 to 25 June 2002. There is no dispute between the parties that if the plaintiff's action succeeds he is entitled to the sum of $55,362 for that period. The plaintiff abandons any claim prior to that date by reason of the fact that it is statute barred.
The defendant says that following the expiry of the lease agreement the plaintiff and the defendant entered into a contract for lease of the taxi plates only at a rate of $100 per week on an ongoing basis. The contract is said to be implied and the implication arises from the fact that the defendant retained the taxi plates and made payments of $100 per week to the plaintiff in respect to the taxi plates and the plaintiff allowed the defendant to retain the taxi plates and accepted the sum of $100 per week in respect to the taxi plates.

The evidence

At the time of the agreement in 1990 both the plaintiff and defendant were involved in the taxi industry operating out of Port Hedland. The plaintiff, who was born in Bulgaria and whose English is not good operated his own taxi. The defendant ran a number of taxis in Port Hedland. The plaintiff in May 1990 purchased a 1989 Ford Falcon motor vehicle for $24,300 with the express purpose of leasing that vehicle to the defendant.
According to the plaintiff he had driven the vehicle for approximately a week and it had travelled 15,000 km when it was leased to the defendant. According to the defendant she was interested in the condition of the vehicle but didn't have a good look at it and didn't check the odometer. Her evidence was that she gave it a cursory look as she did not wish to hurt the plaintiff's feelings. The defendant was a very experienced businesswoman and greatly involved in the taxi industry in Port Hedland. I do not accept the defendant's evidence in this aspect. It is my finding that the defendant knew precisely the condition of the vehicle that she was taking over and that she had checked the odometer reading prior to entering into the lease agreement.
The plaintiff then returned to Bulgaria to visit his parents. He remained in Bulgaria until September 1993.
Unbeknownst to the plaintiff the defendant sold the plaintiff's vehicle on 5 January 1993. According to the defendant she travelled to Karratha and traded in the vehicle on a new vehicle that she required. In explanation of this transaction she produced a notice of sale (Exhibit 5) dated 5 January 1993 indicating that the trade-in value ascribed to the vehicle was the sum of $5,000. The space for the signature of the seller has been left blank. According to the defendant she received the sum of $5,000 for this sale and paid that sum of money into the plaintiff's bank account on 6 January 1993. It is common ground that $5,000 was paid into the plaintiff's bank account on that date.
This was a most unusual transaction which was not satisfactorily explained by the defendant. For a start she did not trade the vehicle in Port Hedland where she operated her taxi business but travelled to Karratha to make the transaction. In cross-examination she agreed that this transaction was a breach of the agreement that she had entered into with the plaintiff and accepted that at the time she knew that should not have sold the vehicle and that the vehicle was not hers to sell. She accepted that the vehicle had never been her vehicle. She was unable to say whether she told the purchaser whether the vehicle was her vehicle or not. She accepted that this was the only vehicle that she had ever traded in where she was not the owner.
However, she was not able recollect the nature of the transaction. I am not prepared to accept that the defendant does not know how this transaction occurred. It was a most unusual transaction. The defendant was selling a vehicle to which she had no entitlement to sell. It was the submission of counsel for the plaintiff that she had suited herself entirely in complete contempt of the plaintiff's rights, that she had stolen the motor vehicle by trading it in and that it was a most extraordinary piece of evidence in a civil case. I agree with all of those submissions. It is my finding that the defendant knows precisely how this transaction took place and is keeping that to herself by reason of its illegal nature.
Upon sale of the plaintiff's vehicle the defendant dropped the payments back to the $100 per week. This was done unilaterally without any consultation with the plaintiff.
In August 1993 the plaintiff noted that the payments were about $400 per month and in September 1993 returned to Australia to enquire of the defendant why she had reduced the payments.
It is common ground that there was a meeting in Port Hedland in September 1993 between the plaintiff and the defendant. Also present at the meeting were Milé Nikolovsky and defendant's husband. Mr Nikolovsky was not called as a witness and the reason for that was it was agreed between both parties that he could not remember anything about the matter. It was agreed that no Jones v Dunkel inference arose in these circumstances.
The defendant's husband Lance Tavo gave evidence to the effect that the meeting took place at the defendant's residence in Acacia Way, South Hedland but otherwise could not contribute to what took place, all he could say was that he believed the meeting was in relation to taxi plates.
The defendant's evidence was that the meeting took place at her residence. The plaintiff's evidence was that the meeting took place at Mr Nikolovsky's residence in Corbett Place, South Hedland. The defendant's evidence was very vague as to what took place at the meeting and I accept the plaintiff's evidence in this respect.
The plaintiff says that at the meeting he enquired of the defendant why she was paying less. Her reply was that she did not have a car and that she was only paying $400 because she didn't have a car. She told him that she had sold his vehicle. He told her that she did not have the right to sell the car because the car was his. She mentioned the sum of $5,000. She stated that she had paid the $5,000 into his account. She did not say why she sold the car. She told him that she was sorry and that she would pay him the $300 per week and would come up with the arrears.
It is not in dispute that even taking the $5,000 into account the defendant was in arrears under the agreement and that she did not in fact pay the arrears.
The defendant's evidence as to the meeting was that she admitted that she should not have sold the vehicle and enquired as to how the position could be rectified. She did not recall how he responded. The defendant did not recall discussing anything in relation to the plates. She did not recall anything else about the meeting.
In cross-examination she initially stated that she agreed to pay until the end of the contract but subsequently stated that she could not recall if she said that and could not recall if she said anything as it was too long ago.
Thereafter the defendant paid $1,300 per month with some exceptions down to the 30 June 1995.
In October 1994 the plaintiff was involved in a serious accident and received very extensive injuries. He spent three months in Royal Perth Hospital and in Royal Perth Hospital Shenton Park Annex.
In June 1995 he travelled to Bulgaria again returning in November 1995. According to the plaintiff in November 1995 he spoke to the defendant via telephone and asked her why she was only paying $400 per month instead of the $300 per week. She replied that was because the plaintiff was not providing a motor vehicle. He told the defendant to return the car and plates or to pay the $300 per week. She told him that she would keep paying $300 per week and he agreed. According to the plaintiff he kept calling her on the telephone and asking her to pay the $300 per week or return the taxi. She told him that she would pay the $300 per week. He estimated that he spoke to her three or four times.
He did not do anything about he matter for the reason that the accident had affected his state of mind. For three or four years he was in a very depressed state and in a state of shock. On one occasion he asked her to buy the taxi plates for $60,000 but she refused.
His insurance claim in respect to his accident was settled on 18 December 1998. Finally in 2002, he saw his solicitor in relation this and his solicitor wrote a letter (Exhibit 2, document 1).
It was the defendant's evidence after the 30 June 1995 she paid $100 per week because that was the end of the legal agreement. She did not return the plates to the plaintiff but thereafter she had occasional contact with the plaintiff and on one occasion visited him in hospital when she went to Perth. She did not remember a telephone conversation in November 1995. As far as she was concerned there was no discussion about returning the plates and no discussion about the amount that she was paying.
In cross-examination she accepted that she could not rule out that she had a telephone conversation with the plaintiff in November 1995. She could not remember if he said that he wanted $300 per week but she certainly did not agree to pay $300 per week. Her reason for that was that she would never agree to pay that sum.
She accepted that she did not contact the defendant when she dropped the rental to $400 per month after 30 June 1995. She just altered the payment of her own accord.

Credibility

Where there is a difference between the evidence of the plaintiff and the defendant I much prefer the evidence of the plaintiff. In my view the defendant had a clear credibility problem. She accepted that she suited herself entirely in dealing with plaintiff. It is clear that the defendant was well acquainted with commercial matters. She was aware that the plaintiff was not born in Australia and that his knowledge of English was not good. She was also aware that he had suffered a serious motor vehicle accident and was aware that he was out of the country before September 1993. She sold the plaintiff's vehicle without any consultation with him. In January 1993 she reduced the payments to $400 per month without any consultation with the plaintiff. That was an entirely arbitrary figure because she said that she never discussed the rate with the plaintiff. In July 1995 she reverted to $400 per month. Her evidence is that she never discussed that with the plaintiff. She also said in evidence that she never discussed with the plaintiff the fact that she had sold her own three taxies at $85,000 each and retained the plaintiff's plates to use herself.
I found the defendant's evidence unsatisfactory and unreliably and where it differs from that of the plaintiff I prefer the evidence of the plaintiff.
On the other hand in my view the plaintiff was a candid witness who did not attempt to evade answering questions. In relation to both the conversations that have said to have taken place in September 1993 and November 1995 I accept what the plaintiff says in relation to those conversations in preference to what the defendant says. In any event in relation to the November 1995 conversation the only point on which the defendant disagrees with the plaintiff is that she says that she did not agree to pay the $300 per week.
In par 6 of the statement of claim the plaintiff alleges that at a meeting held in September 1993 the parties negotiated a verbal agreement whereby the defendant undertook to pay the plaintiff the rate set out in the lease agreement so long as the defendant retained the taxi plates.
In my view the plaintiff's evidence does not go that far, it only goes as far as to say that she agreed to pay the $300 per week. Nowhere in his evidence that I can see that he says that was to continue so long as the defendant retained the taxi plates.
The plaintiff's next submission that there is a holding over after the 1 July 1995 in respect to the lease agreement. As to that the defendant says that the parties can not be found to have continued the arrangement under the lease agreement beyond its terms as if nothing had changed as the vehicle the subject of the lease agreement was no longer hired to the defendant. The plaintiff knew as of September 1993 that the vehicle had been sold and the plaintiff had accepted $5,000 from the defendant being the trade-in value received in respect to the vehicle. The arrangements in place as of the 30 June 1995 were inconsistent with the terms of the lease agreement, by which the plaintiff leased a vehicle to the plaintiff and there is therefore no basis for implication that the terms of the lease agreement continued.
I do not accept this submission. Although the plaintiff was told as of September 1993 that the vehicle had been sold he never accepted the fact that the defendant has sold his vehicle and certainly never accepted the $5,000 from the defendant as being in respect to the vehicle. At all stages the $5,000 was attributed to rent. Even including the $5,000 in rent the rent was always in arrears. The plaintiff continued to assert his rights to the vehicle as late as 2002 when the solicitor's letter demanded the return of the vehicle. In my view there has been a holding over.
The plaintiff next says that in November 1995 the defendant told the plaintiff on the telephone that she would pay him $300 per week to retain the taxi plates and the plaintiff accepted that.
The defendant does not dispute what the plaintiff said about that telephone conversation except to deny the fact that she never agreed to pay $300 per week.
As I have said previously I accept the plaintiff's evidence on this and reject the defendant's evidence.
In my view also the plaintiff's explanation as to why he did nothing about the matter for a number of years is reasonable. He was pre-occupied with the after effects of a very serious motor vehicle accident and also with finalising his insurance claim in relation to his motor vehicle accident.

Conclusion

In my view the plaintiff is entitled to succeed and there should be judgment for the plaintiff in the sum of $55,362 together with interest on that amount at the rate payable pursuant to s 32 of the Supreme Court Act from the dates on which the various amounts fell due.
I will hear counsel as to the appropriate order.