Skinner v Ford Motor Company of Australia Ltd

[2011] VCC 326

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE
COMMERCIAL LIST

GENERAL DIVISION

Case No. CI-10-05839

GRANT JASON SKINNER	Plaintiff
v
FORD MOTOR COMPANY OF AUSTRALIA LTD	Defendant

---

JUDGE:	HIS HONOUR JUDGE GINNANE
WHERE HELD:	Melbourne
DATE OF HEARING:	10 March 2011
DATE OF JUDGMENT:	29 March 2011
CASE MAY BE CITED AS:	Skinner v Ford Motor Company of Australia Ltd
MEDIUM NEUTRAL CITATION:	[2011] VCC 326

REASONS FOR JUDGMENT

---

Catchwords: DEBT – claim that vehicle defective – whether plaintiff able to sue in debt – previous litigation – Limitation of Actions Act 1958 (Vic) s 5 (1)(a)

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	In person	-
For the Defendant	Mr A G Cameron	Norton Gledhill
HIS HONOUR:

1          Mr Grant Skinner commenced a proceeding against the Ford Motor Company of Australia Ltd (“Ford”) by a Writ issued on 14 December 2010. The proceeding concerned a vehicle that he acquired by a hire purchase agreement and that he found to be defective.

2          By an amended Summons, Ford sought orders that the proceeding be summarily dismissed or, alternatively, permanently stayed under Rule 23.01 of the County Court Civil Procedure Rules 2008 on the ground that it did not disclose a cause of action, was frivolous or vexatious or was an abuse of process of the Court. Secondly, Ford sought summary judgment pursuant to s.62 and s.63 of the Civil Procedure Act 2010 (Vic) on the ground that the plaintiff’s claim had no real prospects of success. Thirdly, Ford sought orders that the whole of the plaintiff’s Statement of Claim be struck out pursuant to Rule 23.02 of the County Court Civil Procedure Rules 2008 on the grounds that it did not disclose a cause of action, was frivolous or vexatious, or was otherwise an abuse of process of the Court.

The Nature of Mr Skinner’s Proceeding

3          Mr Skinner alleges that Ford in 2000 supplied him a defective, untested commercial vehicle, a Transit Hordern 6 x 2 AU Ford. The defective nature of the vehicle resulted in the loss of a contract with a transport company, TDG Logistics Ltd, to deliver products to supermarkets and the forced sale of two rental properties.

4          Mr Skinner’s claim is in debt. It is based on Invoice No. 068, which he sent to Ford on 14 September 2010. The invoice was described as “for the supply of an untested, defective, new commercial vehicle”. The vehicle was described as a “1999 Ford Falcon AU Cab Chassis”. The invoice sought the following sums of money from Ford:

(a) Loss of sub-contract (TDG Transport) $406,000

(b)	Loss of rental income (Sunbury Home)	$85,800
(c)	Loss of rental income (Romsey Home)	$46,800
(d)	Ford Credit payments (Contract No 1687513)	$14,259
(e)	Costs to date (Sept 2010)	$95,000

(f) Interest to date at 3 per cent (Sept 2010) $194,357

Sub-total for the supply of Defective Vehicle: $842,216

GST $84,221

Total for the Supply of Defective Vehicle:	$926,437
=======

5          Mr Skinner pleads that Ford’s accounts payable department supplied him with a reference number and a vendor code so that he could re-issue the invoice with a purchase order number. He alleges that he requested a valid purchase number, but received a response that the invoice was not valid and that future correspondence would be ignored.

6          The second part of Mr Skinner’s pleading alleges that in 2003, in connection with proceedings he commenced in this Court against Knox Ford, a mediation was conducted and a settlement reached through his solicitors, by which he was paid $3,000 for the supply of his untested, defective commercial vehicle. He pleads that “this settlement was not in full satisfaction of the relief sought in the Statement of Claim, but was proportionate to Knox Ford’s liability for the supply of my untested, defective commercial vehicle”. He states that the amounts claimed in Invoice No. 068 represents the unpaid amount for the loss of the TDG sub-contract and the loss of income from two rental properties, Ford Credit payments, costs to date and interest. The TDG sub-contract was listed on the initial sales documents in order to obtain the vehicle. The two rental properties were used as additional collateral to obtain the vehicle at the point of sale. The invoice also “is a demand to claim the unpaid amount of the Slater and Gordon statement of claim submitted to the County Court”.

7          Mr Skinner contends that the amount of Invoice No. 068 sent to Ford represents a loss of commercial opportunity in accordance with authorities, including Burns v MAN Automotive (Aust) Pty Ltd [1] and Hawkins v Clayton.[2]

[1] (1986) 161 CLR 653

[2] (1988) 164 CLR 539 and Donoghue v Stevenson [1932] AC 562

8          Mr Skinner also described the invoice to Ford as a demand to claim the unpaid amount of the Slater & Gordon Statement of Claim in the previous County Court proceedings, when seen in light of the High Court decision of Baxter v Obacelo Pty Ltd[3] and under current proportionate liability legislation.

[3] (2001) 205 CLR 635

9          Mr Skinner filed a number of affidavits in connection with this application. I have read them and take them into account. In his affidavit of 12 February 2011, he describes the debt represented in the invoice, as a “debt under law that is yet to be satisfied”.

10        Ford’s arguments in support of its Summons are that:

(a)	the Statement of Claim does not disclose a cause of action;
(b)	the proceeding is statute-barred, in that the cause of action did not accrue within six years before its commencement;
(c)	the subject matter of, and claims made, in the proceeding have been dealt with and/or determined in previous proceedings commenced by Mr Skinner, and therefore he is estopped from commencing this proceeding and continuing to prosecute it;
(d)	Mr Skinner has not supplied any valid tax invoice to it and it has no liability under the Invoice.

Previous Proceedings

11        It is appropriate to set out details of the proceedings Mr Skinner commenced following acquisition of the vehicle.

12        In 2001, Mr Skinner commenced proceedings in this Court against B S Stillwell Motor Company Pty Ltd in respect of issues arising out of, and relating to, his purchase of the vehicle pursuant to a hire purchase agreement dated March 2000. By the Terms of the Settlement dated 2 October 2003, the parties agreed that the proceeding would be struck out with no order as to costs: B S Stillwell agreed to indemnify Mr Skinner in respect of his obligations arising out of the hire purchase agreement with Ford Credit and to pay him $3,000. Mr Skinner agreed to take steps to transfer the vehicle into the name of B S Stillwell.

13        In 2005, Mr Skinner commenced proceedings against his solicitors, Slater & Gordon Pty Ltd, in the Victorian Civil and Administrative Tribunal (“VCAT”) under the Fair Trading Act 1999, alleging, in essence, that he was provided unsatisfactory and negligent service, resulting in the dispute settling at mediation for a figure far less than would have been achieved had Slater & Gordon performed its duties in a proper fashion. VCAT dismissed the proceedings, finding that there was no negligence, breach of duty of care or misleading or deceptive conduct in the way Slater & Gordon handled Mr Skinner’s claim.[4]

[4]             Skinner v Slater & Gordon Pty Ltd - VCAT 24 May 2007

14        In 2007, Mr Skinner commenced a second proceeding in VCAT against Ford Motor Company of Australia Pty Ltd and Ford Credit Australia Ltd, claiming damages based on breaches of the Fair Trading Act 1999. VCAT dismissed the proceeding on the ground that the Ford Motor Company of Australia Ltd was not a party to any contract with Mr Skinner.[5]

[5]             Skinner v Ford Motor Company of Australia Ltd and Anor - VCAT 11 June 2008

15        In 2008, Mr Skinner commenced proceedings against Ford Motor Company of Australia Ltd in the Federal Magistrates’ Court of Australia, alleging that by its agent, Knox Ford (B S Stillwell Motor Company Pty Ltd), Ford Motor Company had made representations that were false and untrue concerning the vehicle. In 2009, the Federal Magistrates’ Court dismissed the proceeding, because the claim was statute-barred.[6] An application for leave to appeal that decision was dismissed by the Federal Court of Australia.[7]

[6]             Skinner v Ford Motor Company of Australia Ltd [2009] FMCA 924

[7]             Skinner v Ford Motor Company of Australia Ltd [2009] FCA 1554

16        In 2010, Mr Skinner sought to commence a second proceeding in the Federal Magistrates’ Court against Ford Motor Company of Australia Ltd. The Registrar refused to accept the application for filing. An application to review the Registrar’s decision was dismissed on 5 May 2010.[8]

[8]             Skinner v Ford Motor Company of Australia Ltd [2010] FMCA 321

17        Mr Skinner then commenced this proceeding on 14 December 2010.

Mr Skinner’s Case

18        Mr Skinner’s affidavits give the following features of his claim:

(a)	That the amounts in Invoice No. 068 are for testing services which he provided for the vehicle that he obtained from B S Stillwell.
(b)	That the vehicle he purchased was one of four prototype demonstrator vehicles designed for display at motor shows. It was defective and he has suffered the losses set out in Invoice No. 068. He states that Ford failed to disclose that, in effect, he was testing its vehicle.
(d)	That the settlement in 2003 did not settle his claims against Ford contained in Invoice No. 068. The settlement did not refer to the loss of the TDG sub-contract, the loss of the rental properties or the payments to Ford Credit.
(e)	He relies on the proportionate liability legislation.

19        Mr Skinner’s Statement of Claim in the Federal Magistrates’ Court proceeding provides a detailed account of his claim against Ford and of his performance requirements for the vehicle. It also gives details of his damages and of the sale of the two rental properties in connection with the payment of legal fees.

20        During the hearing, Mr Skinner challenged Ford to produce the test data for the vehicle. In his affidavit of 12 February 2011, Mr Skinner stated:

“I say that the invoice I have sent is invalid only on the basis that Ford and Norton Gledhill can prove that my vehicle was in fact a safe tested commercial vehicle.”

21        Mr Skinner also argued that Ford was estopped from denying his invoice because it did not reject it.

22        In his affidavits and previous Statement of Claim, Mr Skinner gave a detailed description of the proceedings that he had brought against Ford.

Ford’s Case

23        Ford relied on affidavits from Ms R Goodger, its legal counsel and Mr M Sullivan, of Norton Gledhill, its solicitor.

24        Ford’s submissions referred to the previous proceedings commenced by Mr Skinner.

25 Ford submitted that no debt was owing and that the creation of an invoice for amounts, the subject of previous damages claims, could not give rise to any legal obligation. Secondly, Ford argued that the claim was statute-barred pursuant to s.5 of the Limitation of Actions Act 1958 (Vic), because it was brought after the expiration of six years from the date on which the cause of action accrued. Thirdly, and connected with the first matter, it submitted that the proceeding failed to identify any conduct giving rise to a cause of action. Fourthly, it submitted that the principles stated in Port of Melbourne Authority v Anshun Pty Ltd[9] applied, because the present claim should have been brought in one of the earlier actions. It was also submitted that this proceeding was an attempt to re-litigate a dispute or issue, which has been resolved in earlier proceedings.

[9] (1981) 147 CLR 589

Relevant Test to Apply

26        The traditional tests to be applied under Rule 23.01 were considered in General Steel Industries Inc v Commissioner for Railways (NSW)[10]. They include that the proceeding is:

“… so obviously untenable that it cannot possibly succeed [and]

manifestly groundless …" [11]

[10] (1964) 112 CLR 125

[11]           (Supra) at 129

27 Section 62 of the Civil Procedure Act 2010 provides a test on a summary judgment application by a defendant that the plaintiff’s claim has “no real prospect of success” (cf Spencer v Commonwealth of Australia[12]). The effect of s 76 of the Civil Procedure Act is that that test applicable in this case, because the Court has not begun to hear and determine the proceeding.

[12] (2010) 241 CLR 118 at 53

Conclusion

28 Mr Skinner seeks to rely on the delivery of an invoice to establish a debt. The mere delivery of an invoice does not create a debt. The debt must pre-exist the invoice. The elements of the debt claimed in the Invoice are related to claims for damages made by Mr Skinner in earlier proceedings. There is no basis, at any level of argument, for a claim that Ford owes Mr Skinner the debt that is claimed. Ford’s treatment of the Invoice does not alter that conclusion. Therefore this proceeding has no real prospect of success within s 62 of the Civil Procedure Act.

29        I would have reached the same conclusion if I had applied the test, that the proceeding was so obviously untenable that it could not possibly succeed.

30        I would also add that the Statement of Claim does not plead the facts necessary to plead a claim in debt – the service of an Invoice does not give rise to that cause of action.

31 Secondly, it seems from all the material, that save for the question of costs and interest, which are ancillary to the principal amounts claimed, that the real cause of action on which the debt claim is based, involves the supply of the truck in 2000 and the failure of that truck and the loss of the rental properties. All of those events occurred more than six years before this proceeding was commenced in 2010. The defects to the vehicle became apparent in 2000 and the properties were sold by March 2004. Therefore, even though the proceeding is described as one for a debt, in essence, any cause of action arising from the facts underpinning the debt claimed in the Invoice, is barred pursuant to s.5(1) of the Limitation of Actions Act 1958.

32        Mr Skinner argued that he was entitled to rely on the proportionate liability legislation contained in provisions such as Part 1VAA of the Wrongs Act 1958 and s.87CG(1) of the Trade Practices Act 1974. His claim is based on a liability which in part was met pursuant to the settlement reached in 2003. As Sundberg J stated in Skinner v Ford Motor Company of Australia Ltd,[13] that settlement followed a mediation and the proceeding was struck out by consent with no order as to costs. In those circumstances, the proportionate liability legislation does not apply for want of judgment recovered. In addition, his Honour considered that the proportionate liability provisions did not provide any assistance to Mr Skinner in displacing the statutory limitation period.

[13] [2009] FCA 1554

33 The claim for debt is not a claim which comes within the proportionate liability regime: see s.24AF of the Wrongs Act dealing with the application of Part 1VAA. Also, this is not a claim that came within Part VIA of the Trade Practices Act 1974.

34        Sundberg J considered that the decision in Baxter v Obacelo Pty Ltd[14], upon which Mr Skinner relied, did not assist him. I am of the same view. That decision considered the statutory provisions dealing with the bringing of more than one action in respect of damages as a result of a tort. This claim for a debt is not such an action.

[14]           (Supra)

35        In view of my conclusions, I do not base my decision on Ford’s argument that the principles of res judicata, abuse of process, or an estoppel, prevent Mr Skinner’s present claim, because he did not include it in the earlier proceedings eg the second VCAT proceeding or, the Federal Magistrates’ Court proceedings. However, I will state my view on this issue. There was no reason why the claim could not have been so raised, if any debt were said to exist. The debt did not come into existence only at the time of the Invoice. Applying the principles discussed in Port of Melbourne Authority v Anshun Pty Ltd[15], the invoice claim should not be permitted to be raised now, because its subject matter was so relevant to the previous proceedings against Ford, that it was unreasonable not to rely on it.

[15] (1981) 147 CLR 589 at 602

36        I have considered whether in reality Mr Skinner’s claim should be regarded as one in damages against Ford for breach of contract. However, as has been determined in earlier proceedings, there is no privity of contract between Mr Skinner and Ford and a claim in contract cannot be brought. It is may be because of this that Mr Skinner sought to bring this proceeding as a debt claim by sending an invoice. He is unable to do that because no debt exists.

37        The proceeding should therefore be dismissed under Rule 23.01 of the County Court Civil Procedure Rules 2008 and under s.62 of the Civil Procedure Act 2010.

- - -