Truck Centre (WA) Pty Ltd v Blythe
[2018] WADC 61
•21 MAY 2018
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: TRUCK CENTRE (WA) PTY LTD -v- BLYTHE [2018] WADC 61
CORAM: JUDGE LEVY
HEARD: 30 OCTOBER-3 NOVEMBER & 14-16 NOVEMBER 2017
DELIVERED : 21 MAY 2018
FILE NO/S: CIV 765 of 2014
BETWEEN: TRUCK CENTRE (WA) PTY LTD
Plaintiff
AND
JOHN BLYTHE
Defendant
Catchwords:
Breach of contract - Negligence - Expert opinion evidence - Mechanic's lien - Exemption clause - Liability clause
Legislation:
Nil
Result:
Plaintiff's claim upheld
Defendant liable to pay plaintiff $36,997.28
Defendant's counterclaim dismissed
Representation:
Counsel:
| Plaintiff | : | Mr S J Blyth |
| Defendant | : | In Person |
Solicitors:
| Plaintiff | : | Lewis Blyth & Hooper (Gosnells) |
| Defendant | : | Not applicable |
Case(s) referred to in decision(s):
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd [1983] 1 WLR 964
Briginshaw v. Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Electricity Generation Corp t/as Verve Energy v Woodside Energy Ltd [2013] WASCA 36
Glenmont Investments Pty Ltd v O'Loughlin [No 2] [2000] SASC 429; (2000) 79 SASR 185
Jones v Dunkel (1959) 101 CLR 298
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170
JUDGE LEVY:
An overview of Truck Centre's claim and Mr Blythe's counterclaim
The plaintiff, Truck Centre (WA) Pty Ltd, trading as Truck Centre WA, ran a business involving the sale, supply and service of new and used trucks and buses.
The defendant, John Blythe, is a truck driver. In 2011, he traded under the name 'Quick Brick'. His business ordinarily involved the transportation and cartage of bricks. In addition to driving a truck for the purposes of transporting the bricks, he also ran the business. The truck he drove was a Mack Ultraliner.
On about 14 June 2011, on the instructions of Mr Blythe, Truck Centre installed replacement fuel injectors in the truck. The fuel injectors, supplied by Volvo Group Australia, came with a 12 month warranty. The fuel injectors were faulty. Approximately three months after their installation, the truck's engine failed completely. The engine's failure required it to be complete rebuilt. Mr Blythe took the opportunity at that time to have other work carried out on the truck, namely work on the springs, gearbox and suspension.
There is no dispute that Truck Centre was liable for the faulty fuel injectors. Nor does Truck Centre dispute that the warranty on the fuel injectors extended to carrying out any associated work. What is in dispute is whether Truck Centre is liable for the cost of the complete engine rebuild.
Truck Centre's claim
Truck Centre claims that Mr Blythe breached a contract made between them by failing to pay for the work it carried out in rebuilding the truck's engine, as well as work on the truck's springs, gearbox and suspension. Truck Centre claims that all the work it carried out was authorised by Mr Blythe. Truck Centre claims a total of $37,102.28 (being the amount owed less a deposit of $5,000 paid by Mr Blythe) for work done on the truck pursuant to the contract, together with costs and interest.
Mr Blythe's defence and counterclaim
Mr Blythe denies that he breached the contract and brings a counterclaim against Truck Centre. Mr Blythe claims that the installation of the faulty fuel injectors caused the wider failure of the truck's engine.
Mr Blythe claims that Truck Centre owed him a duty of care to provide good and reasonable service and proper materials. Mr Blythe claims that Truck Centre was negligent when it installed the defective fuel injectors, which he claims ultimately caused the engine's complete failure. It is that negligence that is also at the heart of Mr Blythe's claim for breach of contract arising from an implied term of their agreement that all material supplied by Truck Centre was fit for its purpose and in good working order.
Because of Truck Centre's negligence, and/or breaches, Mr Blythe claims loss and damages associated with the costs of hiring replacement trucks and equipment to carry out his business, as well as the loss of the truck and loss of income in the period between 19 September 2011 and 20 March 2012. Mr Blythe also claims costs and interest.
The net loss of income claimed by Mr Blythe is $66,878.56. The total cost of hiring trucks and equipment claimed by Mr Blythe is $343,040.97 (including a claim for the loss of the truck itself). Mr Blythe also claims legal costs of $181,468.26.
At the heart of Mr Blythe's counterclaim is the issue of whether the faulty injectors were the cause of the truck engine's wider failure. On this issue, he bears the onus of proof on the balance of probabilities. If the faulty fuel injectors were the cause of the complete engine failure, then Truck Centre is liable for the complete engine rebuild as well as the warranty claim.
In his pleaded defence to Truck Centre's claim, Mr Blythe denied he was liable to pay for the work, if any, carried out by Truck Centre on his truck. During the trial however, it was not entirely clear whether Mr Blythe did deny he was liable with respect to Truck Centre's claim for the work carried out on the truck's springs, gearbox and steering. Despite his pleaded defence, at times during the trial he made statements to the effect that he accepted liability for those costs. At other times, particularly when he gave evidence during the trial, his position was that he did not concede liability. Consequently, Truck Centre was required to prove all aspects of its claim against him.
Truck Centre's defence to Mr Blythe's counterclaim
As noted above, Truck Centre accepts that it is liable for the warranty work associated with the faulty fuel injectors and associated parts. However, Truck Centre denies that the faulty fuel injectors caused the wider engine failure. Truck Centre denies that it is liable for any loss or damage, if any, suffered by Mr Blythe.
Truck Centre also relies upon a mechanic's lien claimed over the vehicle due to unpaid work outstanding on the vehicle as at 23 March 2012, being the date that it claims to have terminated the contract with Mr Blythe.
Another issue raised by Truck Centre is that an express term of the agreement made between the parties on 19 September 2011, included a condition that Mr Blythe agreed to release Truck Centre from any earlier claim or claims that it had against Truck Centre. In this regard, Truck Centre relies upon the terms set out on a document known as a 'repair order' signed by Mr Blythe on or about 19 September 2011 (exhibit 2A) to the effect that they were exempt from any harm or damage that arose when they earlier installed the faulty fuel injectors.
For the reasons that follow, I find that Mr Blythe is liable to pay Truck Centre $36,997.28 plus costs and interest and that Mr Blythe's counterclaim be dismissed.
Summary of the issues in this case
The primary issues to be determined in this case are as follows:
Truck Centre's claim against Mr Blythe
(a)Was there a contract between Truck Centre and Mr Blythe in relation to any work carried out on the truck?
(b)What work did Truck Centre carry out on Mr Blythe's truck?
(c)Did Mr Blythe authorise the work?
(d)Did Mr Blythe breach the contract by failing to pay for the work?
Mr Blythe's counterclaim
(a)Did the installation of the faulty fuel injectors in the truck's engine cause the wider engine failure?
(b)If the answer to (a) is 'yes', then has Mr Blythe suffered loss and/or damage as a result of the engine failure?
(c)If the answer to (b) is 'yes', then what is the loss and/or damage he suffered? Can it be quantified?
Background
Before considering either Truck Centre's claim or Mr Blythe's counterclaim, it is necessary to set out some of the background to the issues in dispute, including the truck's history and the relationship between Mr Blythe and Truck Centre.
By June 2011, Mr Blythe had been involved in the trucking industry for many years. He purchased the truck the subject of these proceedings, a Mack Ultraliner, second‑hand. To the best of his memory, he bought the truck in about 2003 (ts 396). He believed it was a 1995 model. Whilst this was not the first truck Mr Blythe had owned, it was his first Mack truck.
Mr Blythe's relationship with Truck Centre, John Ingham and other Mack truck repairers
By 2011, Mr Blythe had a long, and according to him, not always happy association with Mr Ingham and Truck Centre. Truck Centre had previously traded under the name Truck World. Mr Ingham and Mr Blythe had known each other professionally for approximately 20 years.
According to Mr Blythe, he had encountered problems with Truck World in the past. More particularly, he had issues with Mr Ingham who was then one of their diesel mechanics. According to Mr Blythe, Mr Ingham had taken advantage of him in the past. On one occasion, he took his truck (not the truck the subject of these proceedings) to the Kelmscott Licensing Branch to have it passed. Although they had passed the truck, he was required to have the truck accredited via a dealership. Consequently, he took the truck to Truck World to have it accredited. When he collected the truck three days later, Mr Ingham advised him that the truck required work on the brakes and other parts totalling $10,000. Mr Blythe said he was entitled to expect that if the truck had gone over the pits and passed inspection by the Licensing Centre, that the truck had no defects. This event, together with a later issue, caused Mr Blythe to mistrust Truck World and Mr Ingham.
Mr Blythe then ceased using the services of Truck World. Instead, he used the services of a mechanic called 'Harry' who owned 'Mack Attack'. Thereafter, he took his trucks and trailers to Mack Attack for servicing and major repairs. He used the services of Mack Attack until 'Harry' retired in about 2009 or 2010.
After Harry retired, Mr Blythe used the services of 'Mark' who ran a business called 'MJ the Mackman'. MJ the Mackman operated from Mr Blythe's own premises until Mark found bigger premises. Mr Blythe subsequently had a falling out with 'Mark'. According to Mr Blythe, this was because Mark had fitted a faulty engine compressor to his truck. Ultimately, he refused to pay for some of the work and his relationship with 'Mark' failed.
By the time the truck's engine failed completely in September 2011, although Mr Blythe claimed not to know how many kilometres the truck had done, by his own admission it had travelled in excess of 1 million km over its total life. However, as discussed in detail later, Mr Blythe claims that a rebuild of the truck's engine took place in 2009. On Mr Blythe's case, the engine rebuild included replacing the bearings. Despite having travelled in excess of 1 million km over its total life, according to Mr Blythe, when the truck's engine completely failed on 19 September 2011, the rebuilt truck's engine had done no more than about 230,000 km.
The question of whether the truck's engine was rebuilt in 2009 and what, if anything, was done to it, are central to the issues in Mr Blythe's counterclaim. Questions of the credibility of witnesses, particularly Mr Ingham and Mr Blythe, are critical to the determination of all the issues in this case.
According to Mr Blythe, the work carried out on the truck was an 'in‑frame rebuild'. During an 'in‑frame' rebuild, the engine remains in the chassis. In this case, Mr Blythe said that the work carried out included having the pistons, rings, bearings and main bearings replaced (ts 399). This issue is dealt with in detail at [185] ‑ [204] below. Truck Centre does not accept that a rebuild of the engine occurred in 2009.
After the claimed engine rebuild, Mr Blythe said that apart from a slight oil leak that occurred about three months later, it ran beautifully. Around this period he serviced the truck himself. He changed the oil filters and fuel filters. According to him, over the years he had gained a fair bit of experience with trucks.
Worked carried out by Truck Centre on the truck prior to the installation of the faulty fuel injectors in June 2011
In about March 2011, Mr Blythe was about to do a major run to Kalgoorlie in the truck. He thought that it was a good time to have the engine tuned. Having fallen out with 'Mark' from MJ the Mackman, and despite the problems he had with Mr Ingham and Truck Centre in the past, he decided to take the truck to Truck Centre for mechanical work. In addition to having the engine tuned, he instructed Truck Centre to carry out a service on the truck.
A significant amount of time was occupied during the trial dealing with what Mr Blythe instructed Truck Centre to do with respect to the service performed on the truck at that time. In particular, Mr Blythe insisted that he had instructed Truck Centre to check the air cleaner on the Truck. Truck Centre performed a 'Mack A' service, which according to Truck Centre, did not include checking the air filter. Whatever the true position is with respect to this service and the issue relating to the air cleaner, it ultimately is of little consequence as far as Mr Blythe's counterclaim is concerned.
Although Mr Blythe originally claimed, in the alternative, that the damage to the truck was caused by Truck Centre's failure to check and if necessary replace the air cleaner, he ultimately formally abandoned this claim (ts 495). The relevance of this evidence lies elsewhere.
Truck Centre relies upon an invoice and attached documents relating to work carried out by it on the truck between 18 and 23 March 2011 (exhibit 39, being Truck Centre (WA) repair order number 2118557). One of the documents forming part of that exhibit is headed 'Mack Plus Preventative Maintenance Inspection'. Mr Blythe signed the repair order. The document also includes a handwritten notation indicating that Mr Blythe had requested additional work relating to the gear stick.
Ultimately, this evidence is relevant to two questions, being:
1.Whether Mr Blythe later authorised the work on the truck the subject of Truck Centre's claim?
2.How many kilometres the truck had travelled by the time the engine failed in September 2011?
When Mr Blythe signed a repair order for work on the truck in March 2011, the truck had an odometer reading of 16,000 km. Mr Blythe conceded that this meant that the truck had 'clocked' over 1 million km.
At some stage, Mr Blythe took the truck to Truck Centre to have the gearbox serviced. At that time, he was informed by them that they had found a problem with his gearbox (a part called a 'tooth' had been located in the transmission during the service). Ultimately, this issue in part led to Mr Blythe authorising work to be done on his gearbox following the truck's engine failure on 19 September 2011. This issue is further addressed below (see [140] ‑ [146]) in relation to the question of whether the work the subject of Truck Centre's claim was authorised by Mr Blythe and carried out by Truck Centre.
The installation of the faulty injectors in June 2011
In June of 2011, Mr Blythe noticed that the Truck was not performing well. He went to Truck Centre and spoke to one of their employees, Mr Paul Egan. He informed Mr Egan that he believed the truck might have an injector problem. Truck Centre tested the injectors, but told him that they were fine. Despite their advice, Mr Blythe instructed Truck Centre to replace them. He ultimately signed a repair order dated 8 June 2011 authorising Truck Centre to install replacement injectors in the Truck (exhibit 40, Truck Centre WA repair order number 2121293 dated 8 June 2011).
On or about 11 June 2011, Truck Centre replaced the injectors in the Truck. Volvo Group Australia supplied the injectors to Truck Centre. They came with a 12 month warranty. The invoice supplied by Truck Centre to Mr Blythe in relation to this work became exhibit 1.
After having the injectors installed, Mr Blythe took possession of the truck. A day or so later, he noticed that the truck was blowing smoke. The following day he called Truck Centre and spoke to a foreman at Truck Centre called 'Darren'. He told Darren what he had observed. He discussed with Darren the possibility that the problem may lie with the truck's new injectors. According to Mr Blythe, Darren said 'it would be a million to one chance it's the injector' (ts 324).
Mr Blythe returned to Truck Centre a number of times without the issue being resolved. He then took the truck to another company that dealt with Mack trucks and parts, Paganelli. The workshop manager there inspected the truck and found that there was an air cleaner seal missing.
The truck's engine failure on 19 September 2011
By 19 September 2011, the truck's performance had deteriorated. The workshop manager at Paganelli advised Mr Blythe to take it to Truck Centre straightaway. He took the truck to Truck Centre and spoke to Mr Egan and Darren. They told him that they were unable to assist at that moment, but that he should bring the truck back later that afternoon. That day, 19 September 2011, the truck's engine failed completely.
The next day, 20 September 2011, Mr Blythe received a telephone call from Mr Egan who, according to Mr Blythe, said '[y]our turbo's fucked, do you want us to put a new one in it?' (ts 325). In response, Mr Blythe attended Truck Centre and signed a repair order dated 19 September 2011. There is no dispute that the repair order authorised Truck Centre to remove the truck's turbo and send it to a business called Turbotech, so that Turbotech could check the turbo and provide a report.
Mr Blythe personally took the turbo to Turbotech for testing. Turbotech inspected the turbo and found bits of metal falling out and a large piece, believed to be a piece of piston ring, in the turbo. Turbotech advised him that the engine had more problems than just the turbo.
Mr Blythe then rang Mr Egan and advised him what Turbotech had told him. Despite again telling Truck Centre that he thought the injectors were faulty, Truck Centre told him that they needed to check the fuel pump.
Mr Blythe instructed them to take the fuel pump out of the truck. He then took it to United Fuel Injection in Redcliffe. United checked the fuel pump and found it to be working properly. Consequently, Mr Egan telephoned Mr Blythe and admitted that the injectors were faulty. He told Mr Blythe that Truck Centre would supply new injectors and a kit.
The meeting with John Ingham and Paul Egan at Truck Centre
One or two weeks after the truck's engine failed completely, Mr Blythe attended a meeting at Truck Centre's Kewdale workshop where he had a conversation with Mr Egan and Mr Ingham in relation to the truck's engine.
Mr Egan and Mr Ingham showed Mr Blythe the truck's engine which had been taken out of its chassis. Although he could not now recall seeing the actual bearings at that time, Mr Blythe admitted that he did at least see photos of the bearings. Mr Blythe, Mr Ingham and Mr Egan discussed the truck engine's bearings.
There is no dispute that at that time Mr Ingham told Mr Blythe that the main bearings were worn and needed replacing. Mr Blythe conceded that Mr Ingham informed him that:
•He had looked at the main bearings and the main bearing caps and that they had travelled over a million kilometres and were not serviceable;
•The main bearings needed to be replaced and they displayed evidence of normal wear and tear of a vehicle having travelled a million kilometres;
•The bearings had caused metal to go through the motor, therefore the bearing failure was responsible for the problems with the motor, not the faulty injectors; and
•They would have to get the block and crank sent out to be checked.
In addition, Mr Blythe concedes that when Mr Ingham told him at that time that the block and crank needed to be sent away to be checked, he authorised Truck Centre to send the block and crank to R Moore & Sons for testing. Furthermore, he accepted that he understood at that time that he would be liable for the cost associated with having the block and crank tested by R Moore & Sons.
At that stage, despite what he had been told by Mr Ingham, Mr Blythe believed that the injectors had caused the total failure of the engine. In particular, Mr Blythe disputed Mr Ingham's assertion that the bearings had travelled over 1 million km. At the time of their meeting, he told Mr Ingham that it would be 'lucky if it [the engine] had done 200,000 kilometres since it had been rebuilt so the bearings wouldn't have done over a million kilometres' (ts 328).
When Mr Blythe said the engine had been rebuilt, Mr Ingham questioned him about this, requesting that Mr Blythe show him an invoice for the work. Mr Ingham asked him whether the engine had been overhauled with a complete engine kit, and, if it had been a complete overhaul, when the bearings had been replaced? The response from Mr Blythe, according to Mr Ingham, was simply that the 'engine was overhauled' (ts 205). Mr Ingham said that if the engine had been rebuilt as claimed by Mr Blythe, the bearings had not been replaced.
Furthermore, during the discussion he had with Mr Ingham at the Kewdale workshop, Mr Blythe was told that he was going to need an engine rebuild. Mr Blythe does not dispute that Mr Ingham may have told him that the warranty on the fuel injectors would not cover the cost of rebuilding the engine and that the cost, which he would be liable for, would be approximately $30,000. Significantly, and contrary to his written pleaded defence, Mr Blythe conceded that he told Mr Ingham to proceed with an engine rebuild (ts 437).
Testing of the block and crank by R Moore & Sons revealed that it was not serviceable. Mr Blythe believed that although the truck was about 16 years old, it was in good condition and therefore it was worth rebuilding the engine. Mr Blythe sourced his own block and crank from Paganelli. It cost him $13,200. Mr Blythe also conceded that all of this work was necessary to rebuild the truck's engine.
Events subsequent to the meeting at the Kewdale workshop
Mr Fernandes, Truck Centre's service manager, said that in 2011 Mr Blythe was a cash account customer with Truck Centre. At some stage in 2011, on the instructions of Mr Egan, he contacted Mr Blythe and requested that he provide a cash deposit of $5,000. Truck Centre's policy at the time was that any work that was expected to exceed $5,000 required cash account customers to provide a deposit.
On 10 December 2011, Mr Blythe paid $5,000 to Truck Centre by way of a deposit for the works to be undertaken by Truck Centre on his truck. Mr Blythe conceded that the value of the work that he had authorised well exceeded the $5,000 deposit that he paid on 10 December 2011. He made no attempt to pay for any of the work above $5,000.
In December 2011, Mr Blythe received a further estimate from Truck Centre in relation to all work on the truck. The estimate from Truck Centre was in the amount of $105,000. The amount shocked Mr Blythe. He showed the invoice to an associate, Mr Andrew Hughes. Mr Hughes subsequently made a call to Mr Egan on behalf of Mr Blythe querying the estimate. From that point on, Mr Hughes became an advocate for Mr Blythe. Mr Blythe took issue with the estimate. The advice Mr Blythe received from Mr Hughes led him to believe that 'at the time that [he] was getting absolutely ripped off and screwed' by Truck Centre (ts 455).
Mr Hughes introduced Mr Blythe to Mr Robert Sangar, an insurance broker, who also assisted him in attempting to negotiate with Truck Centre.
At around about this time, Mr Blythe spoke to Mr Egan and advised him not to proceed with the work. He told Mr Egan that he was going to get further advice. This was either December 2011 or early January 2012.
At this stage, since Mr Blythe believed that there was nothing wrong with the bearings prior to the replacement of the injectors, his view was that Truck Centre was liable for the wider engine failure.
On or about 8 March 2012, Mr Blythe received a letter from Cornerstone Legal sent on behalf of Truck Centre demanding payment. At this stage, he had not received an invoice for the amount sought. Invoices were subsequently provided to Mr Blythe. He sought legal advice from WHL Legal.
I note that attempts to negotiate a settlement between the parties failed. It is not necessary to consider those negotiations and the evidence relating to them, save to note that Truck Centre was prepared to settle the matter on the basis that Mr Blythe pay them $25,000 in full settlement.
Truck Centre's claim
Truck Centre claims in relation to the amounts set out in two separate invoices addressed to Quick Brick. The first, invoice 2124761‑000001 dated 29 June 2012, is in the sum of $41,574.33 inclusive of GST (exhibit 26). The second, invoice 2134491‑000001, dated 28 February 2014, is for the sum of $2,755.56 (exhibit 28). Of this amount, Truck Centre only claims the sum of $480.05 plus GST which it says relates to relevant truck parts. The balance of the invoice, which is not claimed by Truck Centre, relates to warranty work that was related to the faulty fuel injectors.
The first invoice numbered 2124761‑000001 and dated 29 June 2012 in the sum of $41,574.33 can be broken down into the following categories (excluding GST):
•Parts ‑ $9,979.98
•Labour (Truck Centre labours costs) ‑ $7,614.00
•Other costs (being subcontracted work, plus Truck Centre's mark‑up on the work) ‑ $20,200.80
Each of these subtotals can be further broken down into the following separate categories relating to the various parts of the truck:
•Engine rebuild (including radiator repairs)
•Gearbox
•Steering
•Springs
The full amount claimed by Truck Centre is $42,102.28. When the deposit of $5,000 paid by Mr Blythe to Truck Centre is applied to the full amount, the net amount claimed is $37,102.28.
The evidence relied upon by Truck Centre to prove its claim
Truck Centre relies upon a combination of the evidence from a number of witnesses, together with various documents tendered during the trial, to prove the claim against Mr Blythe. Truck Centre says the combined effect of all the evidence proves the following:
1.that a contract was formed between them and Mr Blythe relating to work carried out by them on his truck;
2.it carried out the work claimed;
3.that the work the subject of its claim was unrelated to the warranty work arising from the installation of the faulty fuel injectors;
4.that the work was necessary to make the truck roadworthy;
5.that Mr Blythe authorised the work; and
6.that he has failed to pay all but $5,000 for the work he authorised pursuant to the contract.
Truck Centre called four of its employees to prove the claim against Mr Blythe.
Terence Philip Sullivan
Terence Phillip Sullivan was truck Centre's general manager. Mr Sullivan gave evidence about Truck Centre's record‑keeping system. Although Mr Sullivan did not join Truck Centre until September 2012, he was very familiar with the record‑keeping systems employed by Truck Centre in the relevant period. He had earlier been involved in the implementation of the system whilst working at Volvo. He was conversant with the system when he later came to be employed by Truck Centre. He was authorised to deal with the records on behalf of Truck Centre. He had checked the records relating to Mr Blythe and Quick Bricks. The record‑keeping system employed by Truck Centre remained unchanged from the time when Truck Centre dealt with Mr Blythe and the time of the hearing.
The record‑keeping system employed by Truck Centre controlled the operations of the business, including selling trucks or parts; the inventory management of those parts; managing the workshop; paying mechanics; compiling work orders to invoice customers and also some of the businesses' time management.
Mr Sullivan gave evidence about the various procedures employed by Truck Centre whereby repair orders and invoices were generated. He also gave evidence about the codes used by Truck Centre, referable to the work reflected on the documents. Mr Sullivan's evidence was supported by both Mr Ingham and Mr Fernandes. Their evidence is considered further below in relation to Truck Centre's practices and procedures.
Mr Sullivan produced numerous documents directly relating to the plaintiff's claim. These documents included invoice 2124761‑000001 dated 29 June 2012 in the sum of $41,574.33 (exhibit 26) and invoice 2134491‑000001, dated 28 February 2014 for the sum of $2,755.56 (exhibit 28). The relevance and importance of these documents is further dealt with at [95] ‑ [108] below. In addition to these documents, some of the other relevant documents tendered through Mr Sullivan are set out and dealt with below. All of these documents are relevant to Truck Centre's claim that the work was authorised, necessary, and carried out by or on behalf of Truck Centre.
Truck Centre WA repair order number 2124761 dated 19 September 2011 (exhibit 2A) and mechanics' notes (exhibit 2B and exhibit 2C)
This document, which was signed by Mr Blythe, has the following words typed onto it: 'remove the turbo' and to 'send it to Turbo Tech' to 'check & report'.
The repair order also has the following handwritten words: 'steering box'; 'front springs'; 'ring John with result' and 'internal gearbox inspection'.
Although Truck Centre concedes that the handwritten notations were not on the repair order when Mr Blythe signed it, nothing ultimately turns on when the notations were placed on the document. It is however necessary to consider whether Mr Blythe authorised the repairs. This issue is considered in detail below.
The repair order is relevant for a number of other reasons. First, it purports to exempt Truck Centre from any previous liability. Secondly, it forms the basis for an express and implied contract authorising Truck Centre to carry out work specifically authorised pursuant to the contract it forms part of, as well as other work that Truck Centre may deem necessary.
Attached to repair order number 2124761 dated 19 September 2011 (exhibit 2A), were two pages of notes. The notes, written by Truck Centre's mechanics, related to the work carried out by the relevant mechanic.
Various internal emails and other documents
Numerous emails sent between Mr Ingham, Mr Egan and Mr Fernandes (exhibits 6, 7 and 12)
These documents are relevant in assisting to determine the nature of any work authorised by Mr Blythe; what work was carried out by Truck Centre, and any relevant parts required to be used in the repairs.
Other relevant documents relating to the work carried out by subcontractors on the instructions of Truck Centre are:
•Various reports in relation to the inspection and results of testing of engine parts (crankshaft, block and conrod) conducted by R Moore & Sons crankshaft inspection report (exhibits 8, 9 & 10);
•R Moore & Sons job estimate for job number 107631 in the sum of $5,285.72 (exhibit 11);
•R Moore & Sons invoice number 107631 in the sum of $790.90 relating to inspecting the block, crankshaft and rod (exhibit 16);
•R Moore & Sons tax invoice number 107905 dated 18 January 2012, the sum of $2,225.77 (exhibit 23);
•Tax invoice from Hydrosteer in the sum of $1485.86 (exhibit 14);
•West Australia Springworks tax invoice number 54888 in the sum of $2,640 (exhibit 20); and
•Browns Radiator Service tax invoice and job report in relation to invoice number G6195 (exhibit 21).
All of these documents are relevant to Truck Centre's claim for work carried out by any third party on its behalf, pursuant to the work it carried out on behalf of Mr Blythe.
The various estimates created by Truck Centre in relation to work to be carried out on the truck in relation to the rebuild of the engine, springs, steering and gearbox are:
•Truck Centre WA estimate number 214761‑000001, dated 19 September 2011 for the amount of $38,300.66 (exhibit 3);
•Truck Centre WA (revised) estimate number 214761‑000001dated 19 September 2011 for the amount sum of $71,284.91 (exhibit 4);
•Truck Centre WA estimate number 0168625 dated 22 November 2011 in the sum of $59,374.06 (exhibit 13);
•Truck Centre WA estimate number 0168976 dated 22 December 2011 in the sum of $22,490.67 (exhibit 22); and
•Truck Centre WA estimate number 0168976 dated 22 December 2012 in sum of $105,172.38 (exhibit 29).
These documents are relevant to the question of what work was ultimately carried out by Truck Centre, and whether Mr Blythe authorised the work.
The tax Invoice relating to work carried out on the truck by Truck Centre prior to the injectors failing, namely Truck Centre workshop tax invoice number 2124761 dated 29 June 2012 in the sum of $41,574.33 (exhibit 26), has wider application to the question of the nature of the relationship between Mr Blythe and Truck Centre, and whether he later authorised the work claimed by Truck Centre.
Photograph of sign in service reception area of Truck Centre WA, Kewdale (exhibit 31)
This photograph was relied upon by Truck Centre to assist in its claim that Mr Blythe knew that Truck Centre would not release the truck until all repairs had been paid in full.
The evidence of John Ingham, Anthony Fernandes and Norman Buckley in relation to the work carried out on the truck
Mr Ingham had been a long‑term employee of Truck Centre. At the time of giving evidence, his current role was product manager for all of Truck Centre's branches. His main office was in Bunbury, but he also had one at the Kewdale premises.
Mr Ingham had more than 31 years' experience with trucks. He was a qualified heavy‑duty mechanic. His background and expertise is considered later (see [215] ‑ [217]) in relation to his expert evidence.
Mr Ingham became involved in the matter when he became aware that Mr Blythe's truck had come in after its engine failed on 19 September 2011. Mr Egan, the service manager for the Kewdale branch, asked him to come and look at the engine to determine what had caused its failure. He did not speak to Mr Blythe at this time. His dealings were with Truck Centre staff.
He inspected the truck's engine. At that time, he formed the view that there appeared to be an injection system failure. The damage he saw caused him to believe that the failure may have been from either the injectors or injector pump. Consequently, it was necessary to have both the injectors and the fuel pump checked.
He later checked the truck's service history with Truck Centre. He became aware that Mr Blythe had earlier instructed Truck Centre to 'replace and supply fuel injectors'. He noted the injectors were fitted in the truck in June 2011. Volvo Group Australia supplied the Bosch made injectors to Truck Centre. They came with a 12 month warranty. When the truck's engine failed, the injectors were still in the warranty period allowed by the manufacturer.
Mr Ingham treated the matter as a warranty claim. He sent an email to Volvo Group Australia regarding the injectors' failure in order to pursue the matter as a warranty claim.
Being a 1991 or 1992 build, Mr Ingham described the truck as middle‑aged'. Although he had not actually worked on the truck, he was familiar with that model of truck.
Like Mr Sullivan, Mr Ingham also gave evidence of the procedures employed by Truck Centre as at September 2011. Routinely, the process involved in servicing or working on a truck involved:
•An adviser taking details of the vehicle, customer and the complaint or reason the vehicle was brought in;
•A 'job card' or 'repair order' being raised, printed off and given to the customer to read and check as to the detail of any work to be carried out on their behalf; and
•The customer signing the repair order before Truck Centre commenced any work on the vehicle.
In September 2011, Anthony Santos Fernandes was also working at Truck Centre's Kewdale premises. He was employed as a service advisor in the service division. His role involved dealing directly with customers. He commenced with Truck Centre in 2007.
Mr Fernandes said that Truck Centre raised work orders as soon as a truck was booked in. The work order constituted the client's instructions with respect to the work that the client required to be carried out on a truck.
Relevant to Truck Centre's claim, it is of note that the repair order dated 19 September 2011 (exhibit 2A) had initial entries typed onto the document. This included a reference for Truck Centre to remove the turbo and send it to Turbo Tech to check and report on. There are also further handwritten entries that had been added later, which on Truck Centre's case amount to additional work that it claims was later authorised by Mr Blythe.
In addition to the repair order dated 19 September 2011 (exhibit 2A) ostensibly authorising Truck Centre to send the turbo to Turbotech for inspection, Truck Centre also relies upon other documents attached to that repair order. This includes the third page of the repair order, being the mechanic's description of the work carried out (exhibit 2C). This is written on the back of the repair order or job card. These notes are generated at the time the relevant mechanic carries out the work. Each of Truck Centre's mechanics had a unique number which was recorded on the document. One of those mechanics, Mechanic 1910, was identified as Mr Gerard Norman Buckley. Mr Buckley also gave evidence at the trial.
Mr Buckley confirmed that he recorded the work he undertook on the truck's gearbox on the back of the repair order dated 19 September 2011 and the notes were his. Mr Buckley, who worked in the component department of Truck Centre, specialised in gearboxes and transmissions. He gave evidence of working on the truck, and in particular, finding that the main shaft gear had a tooth missing. He also noted that the synchro hub assembly was badly worn.
Invoice 2124761‑000001 dated 29 June 2012 in the sum of $41,574.33 inclusive of GST (exhibit 26)
On or about 19 October 2011, following his initial inspection of the engine, Mr Ingham made a subsequent inspection of the engine in the workshop. This was done to determine the extent to which there was a warranty claim and any 'knock‑on' or consequential damage to the engine. This inspection took place in the presence of Mr Blythe. On that day, Mr Ingham estimated that the engine rebuild would take about 120 hours (exhibit 7). He had also sourced a list of parts that he believed would be required to do the job. Mr Ingham said that the hourly charge out rate for labour at that time was $135 per hour (ts 289). Excluding the warranty claim items and work, Mr Ingham estimated that the total engine rebuild would cost about $45,000 ‑ $50,000.
Mr Ingham gave evidence of what was necessary to rebuild the engine including repairs to the crank shaft, cylinder block, cylinder heads, fuel pumps, injectors, and shaft. The main crank bearings were parts involved in the engine rebuild kit. Bearing caps were parts associated with the machining of the block.
With reference to each item of workmanship set out on page 1 of the invoice, Mr Ingham confirmed that he had inspected the vehicle and every item of workmanship recorded on that page had been carried out by Truck Centre or applied to the vehicle.
In relation to page 2 of the invoice, Mr Ingham said that in relation to each item of work recorded there, he had either seen that it had been done or was aware that it had been invoiced or performed by a third party.
In relation to pages 3 ‑ 5 of the invoice, Mr Ingham said they related to the parts required to be applied to the vehicle.
In his evidence, Mr Ingham went through each item on the invoice to identify the work undertaken. The work fell into a number of categories being:
•Warranty work relating to the injectors and turbo
•The engine rebuild, over above the warranty work
•The gearbox
•The springs
•The steering
•The radiator
Mr Ingham identified what work fell under the warranty claim connected to the faulty injectors, as opposed to any other additional work authorised by Mr Blythe outside of the warranty claim. With reference to the estimates provided to Mr Blythe, where the work to be carried out was subject to the warranty claim, no price was recorded on the estimate. Instead, the word 'Warranty' was recorded on the estimate reflecting the fact that Truck Centre did not intend to bill Mr Blythe for that work.
Likewise, with reference to the various invoices relied upon by Truck Centre, where no value was recorded on the invoice in relation to work carried out on the truck, that reflected the fact that the work itemised was warranty work and Mr Blythe was not liable for those items. This work was associated with the faulty injectors.
Not only did Mr Ingham go through every item on the invoice, but also explained its relationship to each of the areas of work undertaken by Truck Centre. The exception to this was in relation to the amount of $105 with respect to tyre repairs for which no evidence was given that connected it to being necessary and authorised repairs.
The invoice included amounts invoiced to Truck Centre in relation to works carried out by third parties on Truck Centre's instructions. Any claim for work not carried out directly by Truck Centre, but instead carried out by subcontractors on Truck Centre's behalf, was supported by third party invoices. They were incorporated into the total amount of the invoice. The work carried out by third parties on behalf of Truck Centre has already been set out at [76] above.
Ultimately, because R Moore & Sons had deemed the original block and crankshaft to be unserviceable, Mr Blythe sourced another crankshaft and a new block from Paganelli. These new parts were also inspected by R Moore & Sons before Truck Centre commenced rebuilding the engine.
According to Mr Ingham, once Truck Centre received Mr Blythe's authority to fix the gearbox, it was necessary to assess the suitability of the clutch assembly. In relation to item VO25123077 'CLUTCH ASSY' for $1446.60, it related to a clutch assembly that had been replaced in the gearbox. I have already noted Mr Buckley's evidence in relation to the work on the gearbox at [94] above.
Invoice 2134491 – 000001, dated 28 February 2014 for the sum of $2,755.56 (exhibit 28)
The second invoice setting out money owed by Mr Blythe to Truck Centre is invoice 2134491‑000001, dated 28 February 2014 for $2,755.56. Of this amount however, Truck Centre only claims the sum of $480.05 plus GST, which it says relates to relevant truck parts. Mr Ingham explained that the only items claimed against Mr Blythe in relation to this invoice were:
•Rod Conn E9 $370.05
•Core Conn Rod E $110.00
These items come to $480.05 plus GST. The balance of the invoice is not claimed by Truck Centre as it relates to warranty work that was the subject of the faulty fuel injectors.
Can the documents be relied upon as being accurate?
Mr Blythe, in cross‑examining Mr Sullivan, properly pointed out some obvious errors in the documentation relied upon by Truck Centre. They included:
•An incorrect recording of the truck's 'mileage' in 2011;
•A reference in a document to the truck being towed in to Truck Centre on 20 September 2011, when the actual date was 19 December 2011; and
•The Browns Radiator Service tax invoice and job report in relation to invoice number G6195 (exhibit 21) included a description of the Mack radiator that it received and repaired, as suiting all Mack Titans and describing it as Mack Titan/Valueliner/Superliner radiator, whereas the truck in question was an Ultraliner.
In relation to the radiator, Mr Blythe at one stage suggested that since the invoice and report provided by Brown's radiator services made reference to a Mack Titan truck, whereas his truck was an Ultraliner, there was therefore no evidence that the radiator that Browns Radiator Service repaired was the radiator that came out of his Truck. There is no merit to this submission when Mr Ingham's evidence is properly analysed.
A radiator is an essential part of the cooling system of a truck. Mr Blythe's truck only had one radiator. At the time Mr Ingham inspected the engine, the radiator had been removed. From his review of the records he noted that the radiator was sent to Browns Radiator Service. He also saw that a radiator came back and been overhauled. He had inspected the overhauled radiator which bore a Browns Radiator sticker. The description of the repair done to the radiator matched the one from the truck, save that it referred to a 'Titan' rather than an 'Ultraliner'. According to Mr Ingham, radiators in the two models were interchangeable. He also inspected the photos taken by Browns of the radiator. They were consistent with the radiator from Mr Blythe's truck.
In my view, none of the errors identified by Mr Blythe are of any real significance. They are minor errors that cannot either individually or in combination lead to a conclusion that the work was not carried out, or was not authorised by Mr Blythe, or did not specifically relate to his truck.
Was the work completed by Truck Centre? Mr Blythe's evidence/position with respect to each item
I have already set out the evidence that supports Truck Centre's claim. Mr Blythe's evidence and position with respect to each item, despite his comments at various times to the effect that he 'had no issue' with the gearbox, steering and springs, did not amount to an unambiguous admission of liability. Consequently, I will consider his position with respect to each item claimed by Truck Centre.
Was the work done on the springs?
Mr Blythe accepted that at some point he had personally looked at the truck and saw that there were 'two springs in there that ... [looked] new'. In relation to the other work on the springs claimed by Truck Centre, he was not sure if it had been completed. Although he thought the parts were new, he was not sure because he could not 'see the stamps on them' (ts 460).
Was the work done on the gearbox?
Because he had not seen the gearbox, Mr Blythe was not prepared to concede that Truck Centre had done the work, but assumed 'the gearbox has been done' (ts 460). He also accepted that he had 'been told the gearbox [had] been done' (ts 460).
Was the work done on the steering box?
Mr Blythe had seen the steering box in the truck and accepted that he had authorised Truck Centre to 'sort the steering box out'. He also accepted that he had seen an invoice from Hydrosteer for work claimed in relation to the steering box. However, his answers fell short of conceding that the work on the steering had been completed.
Was the work done on the engine rebuild?
Mr Blythe disputed that the engine rebuild had been completed (ts 459). His answers in cross‑examination amounted to nothing more than an assertion to the effect that, unless he had personally seen the work occur or had viewed the end product, he was not prepared to concede that it had been done.
None of Mr Blythe's evidence causes me to doubt that the work claimed was done by or on behalf of Truck Centre as claimed. In fact, some of Mr Blythe's evidence assists in proving aspects of Truck Centre's claim, particularly with respect to the steering and springs.
What is the relevance of the various estimates provided by Truck Centre to Mr Blythe?
During the trial, both Truck Centre and Mr Blythe spent some time dealing with the various estimates provided by Truck Centre to Mr Blythe. The various estimates have already been set out at [78] above.
Mr Sullivan explained that Truck Centre created estimates to give to their customers as an indication of what the anticipated cost of the job was likely to be. The estimates remained in Truck Centre's system for six months. The provision of these estimates by Truck Centre to their customers was also part of the process of obtaining their authority to carry out work on their behalf. Customers were provided with the estimates before Truck Centre carried out work on their behalf.
Mr Ingham confirmed what Mr Sullivan had said about Truck Centre's procedures in relation to estimates. He said the estimates were also created by Truck Centre when additional work was required to be carried out. In that situation, the estimates were created after the initial repair order had been created. The information as to what work was required was initially provided by a mechanic to the team leader, who then passed it on to the service adviser. Based upon that information, an estimate was created. The estimates were not an exact figure at the time they were printed. Nor did the date printed on the estimate necessarily reflect when the estimate was actually created. That was because the estimate sometimes reflected the date of the original repair order, rather than the when the estimate was raised.
Both Mr Sullivan and Mr Ingham noted that the estimates were revised from time to time. This sometimes occurred when Truck Centre received invoices for work performed by subcontractors, or when Truck Centre was advised by suppliers of the precise price for parts. Truck Centre revised estimates from time to time to reflect the actual amounts charged or to be charged.
Like Mr Sullivan, Mr Ingham confirmed that estimates were generally provided to customers to check and approve before repairs were carried out. Estimates were handed to the customer by the service department.
The difference between the various estimates
It is obvious that there is a significant difference between the various estimates. Despite some of them bearing the same date and estimate number, a proper analysis of the evidence reveals that the differences do not reflect anything untoward by Truck Centre. For example:
•Estimate 214761‑000001, dated 19 September 2011 is in the amount of $38,300.66 (exhibit 3), whereas the (revised) estimate bearing the same estimate number and date is for the amount sum of $71,284.91 (exhibit 4); and
•Estimate number 0168976 dated 22 December 2011 is in the sum of $22,490.67 (exhibit 22), whereas a later estimate with the same number (0168976) but dated 22 December 2012, is in sum of $105,172.38 (exhibit 29).
There are a number of reasons for the differences. First, some of the changes between exhibit 3 and exhibit 4 were due to the fact that the actual prices, as opposed to the estimated price, had subsequently become known to Truck Centre. In some instances, the price had decreased. In some, there was an increase. In addition, exhibit 4 reflects additional work done or requested by the defendant after the first estimate had been issued. Exhibit 3 records the subtotal of parts on the estimate to be $9,212.92, whereas exhibit 4 records the subtotal of parts on the estimate to be $39,598.98. The difference is obvious given the significantly greater number of parts listed on the latter estimate. In addition, the latter records an increase in labour costs to do the additional work required. The subtotal of the subcontracted work recorded on the estimates as 'other', actually reduced from exhibit 3 to exhibit 4. This reflected the actual costs, as opposed to the estimated costs.
When it comes to the final estimate dated 22 December 2012 for the amount of $105,000, it should be noted that a significant amount of the estimate is made up of parts alone. This figure comes to $62,011.95. The subtotal allowed for labour is $17,500.
Consequently, I am satisfied that the differences and variations in the estimates arose because subsequent estimates reflected either the final prices or additional items added to an earlier estimate as the work progressed, or instructions were received from Mr Blythe for further work to be done.
Truck Centre has satisfied me on the balance of probabilities that the work claimed was completed by it, or by a third party on Truck Centre's behalf.
Did Mr Blythe authorise the work the subject of Truck Centre's claim?
To prove that the work was authorised by Mr Blythe, Truck Centre relies upon a combination of both written and verbal authorisations provided by Mr Blythe. Truck Centre also relies on the business relationship that existed between it and Mr Blythe. In this regard, Truck Centre says that the contract that existed between it and Mr Blythe was partly oral and partly written. So far as it was written, of particular importance is repair order 214761 dated 19 September 2011.
Truck Centre WA repair order number 2124761 dated 19 September 2011 (exhibit 2A) and mechanics' notes (exhibit 2B and exhibit 2C)
It is of note that this document was the first document in time relating to the work carried out by Truck Centre on Mr Blythe's truck. As already note at [69], it was signed by Mr Blythe and included the following typed words 'remove the turbo' and to 'send it to Turbo Tech' to 'check & report'.
On its face, it appears to record Mr Blythe's express authorisation to carry out the tasks identified. No issue was taken by Mr Blythe in that regard. More importantly so far as Truck Centre is concerned, and also noted at [70], handwritten on this document are the words 'steering box', 'front springs', 'ring John with results' and 'internal gearbox inspection'.
Notably, and relevant to the business relationship that existed between Truck Centre and Mr Blythe, customers were required to sign a repair order. In this case, Truck Centre relies upon not only the repair order dated 19 September 2011 (exhibit 2A) which it says contained Mr Blythe's express authorisation to carry out the work it did, but also:
•The repair order dated18 March 2011, signed by Mr Blythe (exhibit 39) authorising the servicing of the truck and further work on the gearstick.
•The repair order date 8 June 2011, signed by Mr Blythe (exhibit 40), authorising the installation of the injectors.
Truck Centre says that the combination of these documents establishes that by September 2011 Mr Blythe well knew that by signing the repair order he was authorising Truck Centre to carry out the relevant work. He was also aware that once the repairs were completed, the vehicle would not be released until payment was made in full.
All three of the repair orders tendered by Truck Centre list the work to be carried out on the truck. Directly above Mr Blythe's signature on the document are the words 'Work Authority'. The following words appear beneath that:
Please execute at my/our cost as soon as you conveniently can the repairs listed (above) also any other work considered essential by workshop management thereto. I/we hereby exempt Truck Centre (WA) Pty Limited, their management, his servants, his agents or subcontractors from any liability, whether caused through negligence, gross negligence or howsoever caused and whether by the management or anyone employed by him for any loss, damage or theft to any article or thing left in our vehicle/boat or whether or not the loss, theft or damage occurred in the workshop or in the premises occupied by Truck Centre (WA) Pty Limited and their car and truck centres on the way to or returning from anywhere necessary for repairs listed (above). I agree any claim for faulty workmanship or negligence is limited solely to the rectification free of cost only on the faulty work and any such claim to be raised within seven days of the return of the vehicle to me/us.
The 'Work Authority' purports to:
1.authorise Truck Centre to carry out any work listed on the document, as well as any other work considered by Truck Centre to be essential; and
2.to exempt Truck Centre or its subcontractors from any liability, including liability arising as a result of its, or any subcontractor's, negligence.
Despite purporting to exempt Truck Centre from any liability, the wording of the Work Authority also appears to acknowledge that Truck Centre may bear some liability, albeit in a limited capacity. That liability purports to be limited to any claim against it for faulty workmanship or negligence and solely to the 'rectification free of cost only on the faulty work' and provided that any claim is raised within seven days of the owner taking possession of the vehicle. In that sense, it is unclear whether the 'Work Authority' is an exemption clause, or a liability clause.
The modern approach to the interpretation of exclusion clauses is based on the concept that the court should give effect to the intentions of the contracting parties who are capable of protecting their own interests and deciding how to allocate risks: Glenmont Investments Pty Ltd v O'Loughlin [No 2] [2000] SASC 429; (2000) 79 SASR 185 [258]. If the clause does represent a 'limitation clause' rather than an exemption clause, then it is relevant to note that 'the courts do not regard limitation clauses with the same hostility as exclusion clauses': Electricity Generation Corp t/as Verve Energy v Woodside Energy Ltd [2013] WASCA 36 (20 February 2013); Ailsa Craig Fishing Co Ltd v Malvern FishingCo Ltd [1983] 1 WLR 964, 966 (Lord Wilberforce), 970 (Lord Fraser).
Despite the wording of the Work Authority, Truck Centre accepts liability for the faulty fuel injectors as well as any associated work. Furthermore, for the reasons that follow, I am not satisfied that the wider engine failure was caused by the faulty fuel injectors. Thus, it is not necessary to consider the effect of the Work Authority for the purposes of determining whether or not Truck Centre was exempted from any liability.
The initial entries typed onto the repair order dated 19 September 2011 (exhibit 2A) included a reference for Truck Centre to remove the turbo and send it to Turbo Tech to check and report on. There is no doubt that Mr Blythe authorised this work. The further handwritten entries added later, on their face amount to additional work that Truck Centre claims was later authorised by Mr Blythe, although not signed for by Mr Blythe. Ultimately, nothing really turns on the fact that Mr Blythe did not sign the repair order after the additional entries were added.
Were the various items specifically authorised by Mr Blythe?
On Mr Blythe's evidence, in 2009 the engine rebuild on his truck cost somewhere between $28,000 and $30,000 (ts 448). In about October 2011, Truck Centre advised him that the engine rebuild alone was going to cost him about $30,000 (ts 449). Thus, Mr Blythe was not only advised, but expected the total works to be undertaken by Truck Centre on the truck, including the gearbox, steering and springs would cost him about $49,000.
In the relevant period, he attended Truck Centre in person. He also accepted that at times he was 'given prices verbally' (ts 451).
Notably, during cross‑examination, Mr Blythe said 'I've never had exception to the springs, the gearbox or the power steering' (ts 452). He also accepted that he was liable to pay Truck Centre for these repairs (ts 453). Whilst Mr Blythe was prepared to pay up to $30,000 for the repair of the gearbox, steering and springs, as well as a further $30,000 to have the engine rebuilt, he was not prepared to pay $105,000 for all the works set out in the final estimate of $105,000.
Did Mr Blythe authorise the engine rebuild?
On the question of whether he authorised the engine rebuild, Mr Blythe said that '[o]n the assumption that the rebuild was going to cost [him] $30,000, yes, [he] authorised for the rebuild to go ahead' (ts 454).
Mr Ingham, in his evidence said that at the meeting he had with Mr Blythe and Mr Egan, Mr Blythe told him to go ahead with the engine rebuild (ts 204 ‑ 205).
So far as the engine rebuild is concerned, Mr Blythe's position was that he had only authorised an engine rebuild on the assumption that it was going to cost about $30,000. He did not want to pay, nor did he authorise work for an engine rebuild amounting to $70,000. Mr Blythe has not been charged $70,000 for the engine rebuild. Although Truck Centre did not complete all the required work on the truck, the total amount claimed by Truck Centre for the work it carried out is $42,102.28. I am satisfied he authorised the work carried out in relation to the engine rebuild.
Did Mr Blythe authorise the work on the gearbox?
Mr Blythe accepted that:
•He authorised Truck Centre to inspect the gearbox to see if they could find where the tooth was missing out of the gearbox (ts 447);
•He was told by an employee of Truck Centre, 'Darren' or Paul Egan that the gearbox needed a rebuild (ts 447); and
•He authorised the gearbox to be rebuilt.
He also thought that, given the estimate provided verbally by Truck Centre, the gearbox would cost him $14,000.
It is of note that at the time Mr Buckley worked on the truck, he recorded on the back of the repair order that he had waited for the 'customer to inspect so that [he] could proceed with full strip of transmission'. Although he could not now recognise Mr Blythe, there is no doubt that the 'customer' was Mr Blythe.
Early on in the trial, Mr Blythe made a statement from the bar table that '[s]ome of the works were authorised by [him]' (ts 202).
In cross‑examination, Mr Blythe said (ts 457):
I didn't have a problem for [sic] them doing the gearbox, because I knew there was a tooth missing.
I am satisfied that Mr Blythe authorised the work on the gearbox.
Did Mr Blythe authorise the work on the springs?
Mr Blythe accepted that he authorised the springs to be rebuilt. He expected that this would cost $3,500 ‑ $4,000 (ts 448). During cross‑examination he said (ts 457):
I didn't have a problem with the springs, because I knew the springs were sagging.
I am satisfied that he authorised the work on the springs.
Did Mr Blythe authorise the work on the steering box?
During cross‑examination, Mr Blythe said (ts 447):
I didn't have a problem with the steering, because I knew the steering box, the hydro steering box was - had a leak in it and needed to be serviced.
He expected this work to cost about $1,500 (ts 448).
I am satisfied that he authorised the work on the steering box.
Did Mr Blythe authorise the work on the radiator?
In relation to the radiator repairs, although there is no direct evidence that Mr Blythe authorised them, it was an important part of ensuring that the truck was roadworthy and serviceable. Mr Ingham said that the radiator works were carried out because it was relevant to the engine rebuild. When an engine is rebuilt, the cooling system of an engine is an essential part of the operation of the engine. It was necessary a necessary part of the engine overhaul to have the cooling system inspected, including inspecting the cooling system and cleaning it if required. If it was unable to be cleaned, the core would be replaced.
In any event, given the content of the repair order signed by Mr Blythe on or about 19 September 2011, including the Work Authority set out on the document, on the evidence of Mr Ingham, even if Mr Blythe did not expressly authorise the radiator repairs, it fell under the category of essential work. The Work Authority signed by Mr Blythe on the original repair order authorised Truck Centre to carry out the work at Blythe's cost. In that regard, it is notable that the opening words of the Work Authority, (which is set out in full at [134] above) are:
Please execute at my/our cost as soon as you conveniently can the repairs listed (above) also any other work considered essential by workshop management thereto.
(emphasis added)
I am satisfied Mr Blythe authorised the work on the radiator.
Was Mr Blythe aware of the terms of payment?
The repair order bears the words 'Cash Account', 'Cash Sale' (twice) in large bold letters, as well as 'Cash Payment'. According to Mr Ingham, these words indicate that Mr Blythe did not have an account with Truck Centre WA. That fact was directly supported by the evidence of Mr Fernandes on the issue. Consequently, once the repairs were carried out, payment in full was required before the truck would be released.
In addition, a sign was prominently displayed in the reception area. The sign was headed 'IMPORTANT NOTICE FOR OUR CUSTOMERS'.
162It then set out further information making it clear that Truck Centre WA may require a deposit from cash customers for large jobs. It also made it clear that 'Trucks [would] only be released once clearance has been given by [their] accounts department' (a photograph of the sign became exhibit 31)
Mr Blythe had been a customer of Truck Centre for some time and had attended there on numerous occasions.
I am satisfied that Mr Blythe was fully aware of the terms, including that the truck would not be released to him until payment had been made in full, or other alternative terms had been agreed between the parties.
Further issues in relation to Mr Blythe's defence to Truck Centre's claim
Mr Blythe's Further Amended Defence and Counterclaim dated 15 December 2016 included a denial that Truck Centre had done any of the work the subject of Truck Centre's claim. Indeed, Mr Blythe's written pleaded position was that 'no work has been undertaken on the truck since 19 September 2011' (see par 8 of Mr Blythe's Further Amended Defence and Counterclaim).
As already noted, at various stages of the trial Mr Blythe tended to suggest that he did not dispute Truck Centre's claim. This was clearly at odds with his pleaded defence. Notably, at one point during the evidence of one of Truck Centre's witnesses, Mr Blythe said:
I'd just like to ask a question, and it doesn't worry me that the witness comes in or anything, but I've already stated that I asked for the gearbox to be repaired and all ‑ a lot of time yesterday was spent on basically the transmission, I believe a lot of time wasted, when I've already openly admitted that I asked for the gearbox to be repaired.
So I don't know why we keep going - still going down this path and we're having now the witness who is the gentleman who did the repairs on the gearbox when I've already stated that I asked for the gearbox to be repaired. I have no problems with that. (ts 255)
However, whilst Mr Blythe at times during the trial tended to accept that he had authorised some of the work claimed by Truck Centre, at other times during the hearing he tended to suggest that he had never authorised any of the work done. For example, in his evidence‑in‑chief in relation to the repair order raised by Truck Centre following the Truck engine's failure on 19 September 2011 (exhibit 2), Mr Blythe pointed out that there was only one signature on that repair order and that the further repairs, which Truck Centre conceded were handwritten on the repair order later, meant that he did not in effect authorise the repairs. He said:
So, my argument is, if I was to authorise something, then I should sign off on it. Because that is open for anyone, even from here on, to get caught the same way. Where there's one signature and they can add to it and basically then someone can get caught saying, 'Well, you signed it, so, you have to pay it'. To me, maybe for their own reference, they need to change their system where you have a signature on every separate thing that you want to have done, because it leaves it way open for this, what's going on now. So I just wanted to bring that to your attention and the court's attention (indistinct). (ts 335)
At other times, although he conceded that he might have authorised some of the work, he did not concede that the work had actually been carried out by Truck Centre.
Given the conflicting positions adopted by Mr Blythe, the court sought to clarify his position. It was pointed out to him that despite his evidence, he had pleaded a complete denial that he had either authorised the work or that Truck Centre had done any of the work claimed. The following exchange took place (ts 492 ‑ 496):
LEVY DCJ: So that's a complete denial that no work was done at all on the truck. Is that still your case?
MR BLYTHE: No, I don't even know if I signed off on those – that statement.
LEVY DCJ: Well, they were filed in the proceedings some time ago.
MR BLYTHE: I only read that the other day myself, your Honour, and sort of queried it. I mean, from the Bar, I mean, as you said from my evidence, when I thought I was going to have to have a rebuild done of approximately $30,000 I discussed with Paul Egan about the springs being reset. I discussed about the Hydrosteer and that but I did ask for, obviously, costs, because you just don't go and get something done without having a cost.
When I was, from what I can remember, given a rough estimate on the price, and I remember the gearbox, I remember that price being 14,000, I do remember that one, and I thought my total might be in the vicinity of between 20 and 30,000 so I thought I'd have to refinance my truck for approximately 60,000, then I did give a verbal go-ahead to get the things done.
LEVY DCJ: Well, I'm simply raising this because, see, Truck Centre's entitled to come along and answer what you have pleaded - set out in your defence and counterclaim.
MR BLYTHE: Ask for answer, sorry?
LEVY DCJ: Is entitled to come along and answer ‑ ‑ ‑
MR BLYTHE: Yes.
LEVY DCJ: ‑ ‑ ‑ what you have put in there. So in other words, until you say 'I'm formally abandoning that aspect of my defence and counterclaim' they are just going to keep going. And it seems to me that given what you have said from the Bar table and in evidence, it seems to be perhaps a waste of time to continue pursuing all of that.
MR BLYTHE: Well, I have no problems in - in admitting that I did ask for those things to be done in an overall context. But, sorry, when the estimate blew out, that's when proceedings came to a halt because ‑ ‑ ‑
LEVY DCJ: Well, all I'm asking, Mr Blythe, is this, that I'm raising what the position is at this stage. The position is the pleadings are still on foot. You seem to be suggesting that you don't have an issue with it, but you still haven't formally abandoned that aspect of it - of your defence.
MR BLYTHE: When you say abandoned, just so I understand, abandoned that I don't admit ‑ ‑ ‑
LEVY DCJ: As a defence.
MR BLYTHE: ‑ ‑ ‑ to ‑ ‑ ‑
LEVY DCJ: Well, look, your - paragraph 8 reads:
Mr Blythe does not admit paragraphs 7 and 8 of the statement of claim and says that no work has been undertaken on the truck since 19 September 2011.
Mr Blythe further says that no estimate or invoice in respect of the liquidated damages in respect of any works had been undertaken since 19 September ‑ ‑ ‑
MR BLYTHE: Well, obviously - sorry.
LEVY DCJ:
‑ ‑ ‑ had ever been issued to Mr Blythe.
MR BLYTHE: Obviously that's incorrect, because we - we know there was work done after 19 September because the truck only arrived on 19 September.
LEVY DCJ: Right. So do you formally concede that the work - I'm not going to put words in your mouth, I'm just asking you, do you formally concede that the work that is claimed by Truck Centre on the steering - the springs and the gearbox, was (a) authorised by you; and (b) completed by Truck Centre?
MR BLYTHE: (a) Yes, it was authorised by me; (b) no, it hasn't been completely completed.
LEVY DCJ: So the work that is claimed ‑ ‑ ‑
MR BLYTHE: It's - it's ‑ ‑ ‑
LEVY DCJ: ‑ ‑ ‑ by Truck Centres and billed or claimed in the tax invoice that they (indistinct) that you do not accept was completed?
MR BLYTHE: It hasn't been completed, your Honour.
LEVY DCJ: Okay. Well, that's your position, so ‑ ‑ ‑
MR BLYTHE: So I'm happy with the fact that there was work undertaken after 19 September. That's - that's incorrect ‑ ‑ ‑
LEVY DCJ: Right.
MR BLYTHE: ‑ ‑ ‑ because obviously the truck only arrived there ‑ ‑ ‑
LEVY DCJ: Okay.
MR BLYTHE: ‑ ‑ ‑ on the 19th. But I haven't even seen the gearbox, I don't know where it is. So the gearbox isn't in the truck.
LEVY DCJ: I'm not asking you to ‑ ‑ ‑
MR BLYTHE: No, no, so the work ‑ ‑ ‑
LEVY DCJ: - - - explain any further.
MR BLYTHE: - - - isn't fully completed, your Honour.
LEVY DCJ: It seems to me that, therefore ‑ ‑ ‑
MR BLYTHE: As - as far ‑ ‑ ‑
LEVY DCJ: - - - the question of authorisation is conceded ‑ ‑ ‑
MR BLYTHE: Yes.
LEVY DCJ: - - - but there is still a live issue as to whether Truck Centre completed the work that they claimed.
MR BLYTHE: I have seen the springs.
LEVY DCJ: I'm just simply asking whether we need to pursue anything further in relation to this or not, and it seems the answer is yes. That you're not yet in - well, you're not going to concede the claim by Truck Centre.
MR BLYTHE: The work hasn't been fully completed, no, your Honour.
LEVY DCJ: Okay. As I say, I'm not for one second going to force you to do anything that you do not want to do or are uncomfortable with or do not believe to be correct.
MR BLYTHE: But I do admit that what you pointed out is incorrect as far as the ‑ ‑ ‑
LEVY DCJ: Okay.
MR BLYTHE: ‑ ‑ ‑ damage in respect of any works that had been undertaken since.
Conclusion as to whether Mr Blythe authorised the work
The combination of all the evidence, including:
•The repair order and attached documents;
•Mr Sullivan;
•Mr Ingham;
•Mr Buckley; and
•Mr Blythe.
leads to the irresistible conclusion that Mr Blythe either expressly, or in the case of the radiator impliedly, authorised all of the work carried out on the truck by Truck Centre.
The relevance of the final invoice in the sum of $105,000
Ultimately, it became clear that Mr Blythe's refusal to pay the amounts claimed by Truck Centre stemmed from Mr Blythe's belief that Truck Centre was grossly overcharging him for the repairs to the truck's engine. According to him, 'there was the ongoing issue of the excess [sic] cost of the rebuild of [his] motor' (ts 453). He was originally told that the cost to rebuild his motor would be '30 to 40 thousand dollars' (ts 453). By December 2011, the estimated cost of the works to be done on the truck had risen to $105,000.
Whilst Mr Blythe was clearly shocked to receive an invoice from Truck Centre in the sum of $105,000, he accepted that the sum of $105,000 included work in relation to 'the gearbox, the springs, the steering and a lot of other things' (ts 452).
Despite the breakdown in relations between Mr Blythe and Truck Centre, at no stage did Mr Blythe ask for the truck back. He accepted that it was 'common knowledge that mechanics can have a lien' (ts 449). He also accepted that he knew that he would have to pay the costs of repairs in the sum of about $49,000 before getting his truck back.
Although Mr Blythe claimed that he only received the estimate in the sum of $105,000 on 22 December 2011, he accepted that he had been given verbal estimates for some of the work that he had authorised (ts 450).
Mr Blythe accepted that he had been 'told that it was going to cost [him] about $30,000 to rebuild the motor but because of the ongoing issues, [he] wasn't going to pay that'. He said that 'I would have been quite happy to pay for the steering and the - and the gearbox and everything else at the time, but I never received this estimate' (ts 469).
Mr Blythe's credibility generally and counsel for Truck Centre's submission that Mr Blythe had authorised the work at a time when he had no intention to ever pay for the repairs
Counsel for Truck Centre pursued a line of cross‑examination of Mr Blyth designed to establish that that not only did he not have the money available to pay for the $60,000 worth of repairs he authorised, but that Mr Blythe's response to the claim was part of a course of conduct he had engaged in for a number of years. It was suggested that Mr Blythe's modus operandi was one whereby he would get people to do work, and would then manufacture a counterclaim or dispute with them and refuse to pay at a time when he knew that he was liable to pay for the goods or services he authorised.
Mr Blythe disputed both contentions. First, he said that he was then in a position to refinance the truck for $60,000 ‑ $70,000. At that time, Mr Blythe did not owe anything to others on the truck. In addition, he had a finance broker, Mr Hughes, who had also offered to lend him $20,000.
The proposition put to Mr Blythe in cross‑examination was that the course he had taken in these proceedings, namely mounting counterclaims when sued by others, was one he had taken on three or four previous occasions. In essence, the proposition was that the counterclaim was not bona fide. Furthermore, counsel for Truck Centre submitted that Mr Blythe had 'never been honest and open with the courts' or his lawyers, and that his pleadings reflected his general approach to claims brought against him.
For the purposes of assessing Mr Blythe's credibility, counsel for Truck Centre submitted that the court could take into account not only how he had conducted his legal defence in these proceedings, but also his course of conduct in other proceedings (ts 637).
Whilst credibility was clearly an issue in this case, the propositions raised by Truck Centre amount to allegations of fraud. Consequently, Truck Centre is required to establish those propositions to the court's reasonable satisfaction based upon 'clear or cogent evidence': Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170, 171, following Briginshaw v. Briginshaw [1938] HCA 34; (1938) 60 CLR 336, 362.
Furthermore, where serious and deliberate dishonesty is alleged, the standard of 'reasonable satisfaction' cannot be arrived at based upon vague allegations lacking in any real detail or specificity: Briginshaw (362).
The propositions put on behalf of Truck Centre were based upon the assertion that Mr Blythe either personally or under his business name, Quick Brick Cartage, had incurred a number of judgment debts. Truck Centre's counsel cross-examined Mr Blythe on those debts as follows:
1.A judgment against Quick Brick Cartage Pty Ltd in relation to City Panel Beaters Truck Repairs Pty Ltd for $14,986 for goods provided, but not paid for. Mr Blythe did not admit this debt and no further proof of it or the circumstances in which it had occurred was led.
2.A judgment against Mr Blythe entered on 16 January 2015, for $13,058.48 in favour of Source Machinery Pty Ltd. This debt related to work done on a machine, which Mr Blythe claimed had not been properly performed. According to Mr Blythe, this involved a dispute about the hours claimed by the judgment creditor. Mr Blythe said he had subsequently paid the debt. No evidence was led as to when the debt was incurred.
3.A judgment debt entered on 5 June 2015 in favour of Ste‑mech, Pty Ltd for $5022. No further evidence was led in relation to the debt or the circumstances relating to it.
4.A judgment debt entered against Mr Blythe in favour of Automotive Holdings Group Ltd in the amount of $36,850. This related to work on Mr Blythe's truck. The debt was incurred in about April or May 2015.
Despite Counsel for Truck Centre's assertions, no evidence was provided that Mr Blythe had made counterclaims against any other party in relation to any of the matters in which a judgment debt had been made against him. There was little or no detail provided about the circumstances in which Mr Blythe incurred these judgment debts.
There is no basis upon which I could conclude that these proceedings were part of a course of conduct whereby Mr Blythe knowingly incurred or authorised these debts at a time when he had no intention to pay them. On the available evidence, I could not conclude that he had previously been deliberately dishonest. Consequently, I am not satisfied that Mr Blythe did pursue a course of conduct whereby he deliberately set about to incur a debt that he never intended to pay. That is not to say that I found Mr Blythe to be a credible witness. For a number of reasons, I found Mr Blythe to be unreliable in many respects, including the manner in which he conducted himself during the trial.
During the trial, Mr Blythe suggested that he had never really had an issue with respect to his liability in relation to payment of the repairs for the gearbox, springs and steering. Yet, he pursued issues as to whether or not the work had been authorised by him, or whether the work had been completed by Truck Centre. When counsel for Truck Centre pointed out to him that his former solicitor, Roger Lewis, had filed an amended defence and counterclaim on his behalf on 16 December 2016, and that since then he had not resiled from his pleadings that he had not authorised the work to be done on any of the four items claimed by Truck Centre, his response was '[I] never read it properly, there you go' (ts 646).
According to Mr Blythe, in the period between 19 September 2011 and 17 February 2012 his gross earnings were $125,486.60 (or $125,485.79 according to the invoices). This amount is derived from the combination of the various tax invoices produced by him, being:
•Gross income he earned from BGC Transport, totalling $26,797.31; and
•Gross income he earned from Atlas Group Pty Ltd, totalling $98,688.48 (exhibit 37.2).
The total amount claimed for the cost of the hire of prime‑movers and a trailer (from Truck World, Groundforce and BGC) in the period between 9 September 2011 and 20 March 2012 is $63,308.15.
In this period of time, in addition to the hire of the prime‑movers and trailers, he claims he also had additional expenses that were associated with the loss of the use of his truck. The evidence supporting these expenses was the bundle of tax invoices and receipts he produced for various repairs and items he purchased. They amount to $23,217.01 in total.
When the total income earned is reduced by his total expenditure, Mr Blythe claims the net profit is $38,961.44. When this is applied to the loss of income from his reduced carrying capacity (a claimed amount of $105,840), his claimed net loss of income in the period is $66,878.56.
His calculation for loss of earnings is flawed. Mr Blythe failed to frankly and properly disclose all the income he earned in the relevant period. During the course of his evidence it became apparent that he had not disclosed additional earnings he had received in his truck‑driving business. This income, paid to Quick Brick Cartage, related to income he earned from transporting furniture. He accepted that there were possibly 90 invoices relating to work he did for Keys Brothers. Ultimately, he produced 16 further invoices evidencing the receipt of an additional $18,497 earned by him in the period between 20 January 2012 to 14 February 2012. If all the missing invoices were accounted for, he accepted it may have increased his earnings by approximately $104,000 over that which he had disclosed. Mr Blythe's explanation for not disclosing this income was that it did not relate to the cartage of bricks, therefore he did not believe it was relevant. I reject his evidence on this point. It was directly relevant to the assessment of any loss he suffered.
Furthermore, although he produced various financial statements including Profit and Loss Statements for the years ending June 2010 ‑ June 2013, he failed to produce any income tax returns for the relevant period. This was despite the fact that he was put on notice about his failure to do so during cross-examination. It is also worth noting that for the year ending 30 June 2012, Mr Blythe's gross receipts increased by $71,375.92 when compared to the year ending 30 June 2011. In the year ending 30 June 2013, his gross receipts were $948,079.21. This represented an increase of $568,723.87 as compared to gross receipts for the year ending 30 June 2011. Whilst merely looking at the gross receipts does not necessarily allow a proper conclusion to be drawn as to whether his financial position was better or worse following the truck's engine failure, it does tend to undermine Mr Blythe's contention that the loss of his truck meant he had a reduced earning capacity. In the absence of his tax returns or other evidence properly explaining the information contained in the profit and loss statements, it is not possible to determine whether he did in fact suffer a loss attributable to the truck's failure in the relevant period.
The loss of his truck
There are a number of other issues that preclude any proper assessment of any loss he may have suffered. For example, he claimed the cost of the depreciation the truck, as well as the loss of the truck itself.
The claimed loss of his truck was put at $60,000. As to the value of the truck, the evidence to support this is a printout from an online website advertising the sale of three Mack Ultraliner trucks being a 1987 model, and two 1996 models (exhibit 38). The advertised price for these trucks ranged between $60,000 and $70,000. No expert valuation of his truck was provided. At best, the advertisements are nothing more than an indication of the truck's value. There is not only no proper valuation of the truck, but simply no evidence of any depreciation of its value.
More importantly, his claim for the loss of the truck is erroneous. He is still the owner of the truck.
Legal fees
There was no evidence in relation to his claim for legal fees.
How long would the warranty work alone have taken? Is Mr Blythe entitled to some compensation for the period the truck was off the road because of the faulty injectors?
Although this issue was not expressly pursued by Mr Blythe, given the evidence given by Mr Ingham and Mr Blythe it is nonetheless reasonable to consider whether Mr Blythe is entitled to some compensation for the period the truck was off the road because of the faulty injectors.
At the time that the truck's engine failed, Mr Blythe knew that the steering and the springs needed repairs or maintenance. Since the truck was going to be off the road anyway due to the engine rebuild, he took the opportunity to get this additional work done on the truck (ts 624, 648 ‑ 649). Mr Blythe knew that the rebuild of the engine was going to take about five weeks.
It is of note that although all the work required to be undertaken on the truck would have taken weeks to complete, Mr Ingham estimated that the warranty work alone would have been completed within five days (ts 240). According to Mr Ingham, the engine rebuild alone would have taken about 120 hours, less time required for any warranty work.
Save for the suggestion in cross‑examination of Mr Blythe that the rebuild alone was going to take about five weeks (ts 648 ‑ 649), the only other estimates of time given to do any of the work was that given by Mr Ingham, being 120 hours for the engine rebuild and the warranty work.
I am satisfied on the balance of probabilities that the truck would have been off the road for at least two weeks. I note Mr Ingham's evidence that the warranty work would have taken five days. What is not clear however, is whether the warranty work would have extended the period that the truck would have been off the road, or whether the five days for the warranty work would have been completed concurrently with the other work. In the absence of any specific evidence on this issue, it is not possible to determine whether Mr Blythe lost the opportunity to work for a period of five days, or whether any costs he incurred are referable only to the warranty work.
Final conclusions
Truck Centre's claim
Truck Centre has proved all of the following on the balance of probabilities:
1.At all relevant times a contract existed between Truck Centre and Mr Blythe in relation to the work carried out on the truck.
2.Truck Centre completed all of the work claimed, or the relevant work was completed by an appropriate third party on Truck Centre's instructions.
3.Mr Blythe authorised all of the claimed work, save for work relating to tyre repairs in the amount of $105.
4.Mr Blythe breached the contract by failing to pay for the balance of the work undertaken by Truck Centre over and above the amount of $5,000, namely $36,997.28 ($37,102.28, less $105).
Mr Blythe's counterclaim
Mr Blythe has failed to prove, on the balance of probabilities, the following:
(a)that the installation of the faulty fuel injectors in the truck's engine caused the wider engine failure; or
(b)he suffered loss and/or damage solely attributable to the faulty fuel injectors.
Consequently, Truck Centre's claim is allowed. Mr Blythe is liable to pay Truck Centre the amount of $36,997.28. Mr Blythe's counterclaim is dismissed. I will hear the parties further in relation to the final orders to be made and the issue of costs and interest.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DR
ASSOCIATE TO JUDGE LEVY18 MAY 2018
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: TRUCK CENTRE (WA) PTY LTD -v- BLYTHE [2018] WADC 61 (S)
CORAM: JUDGE LEVY
HEARD: 30 OCTOBER - 3 NOVEMBER, 14-16 NOVEMBER 2018
DELIVERED : 21 MAY 2018
PUBLISHED : 23 MAY 2018
FILE NO/S: CIV 765 of 2014
BETWEEN: TRUCK CENTRE (WA) PTY LTD
Plaintiff
AND
JOHN BLYTHE
Defendant
Catchwords:
Calderbank offer - Indemnity costs - Interest
Legislation:
Nil
Result:
Defendant liable to pay plaintiff's costs, plus indemnity costs and interest
Representation:
Counsel:
| Plaintiff | : | Mr S J Blyth |
| Defendant | : | In Person |
Solicitors:
| Plaintiff | : | Lewis Blyth & Hooper (Gosnells) |
| Defendant | : | Not applicable |
Case(s) referred to in decision(s):
Calderbank v Calderbank (1976) Fam 93
Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)
Truck Centre (WA) Pty Ltd v Blythe [2018] WADC 61
JUDGE LEVY:
On 21 May 2018 I published Truck Centre (WA) Pty Ltd v Blythe [2018] WADC 61 setting out my reasons for allowing Truck Centre's claim in the sum of $36,997.28 and dismissing Mr Blythe's counterclaim. I then heard submissions from the parties in relation to costs and interest.
Counsel for Truck Centre submitted that, in addition to being entitled to ordinary costs against Mr Blythe, Truck Centre should also be awarded indemnity costs against Mr Blythe following a Calderbank offer made by it to him on 7 July 2017. Truck Centre also seeks an order for interest. I have already made orders for costs and interest. These are my full reasons for doing so.
The Calderbank offer
Counsel for Truck Centre provided to the court a copy of an email dated 7 July 2017 from Lewis Blyth & Hooper, solicitors for Truck Centre, sent to Mr Blythe's then lawyer, Roger Lewis. Another email, dated the same date, also provided to the court, confirmed that the first email was read by Mr Lewis that day. The email from Lewis Blyth & Hooper contained a Calderbank offer made to Mr Blythe in the following terms:
Dear Roger
On a without prejudice basis save as to costs and pursuant to the principles in the 'Calderbank' case, the plaintiff makes the following settlement proposal, which is open to be accepted in writing by 5 p.m. Friday, 21 July 2017, namely:
1.The plaintiff's claim be dismissed.
2.The defendant's counterclaim be dismissed.
3.Any costs orders in the proceedings be discharged and each party to bear their own costs of the action and the counterclaim.
4.The defendant shall, at his own cost, and by no later than 5 PM 28 July 2017, collect his truck the subject of the proceedings, and associated truck parts, and on the basis that the truck and the parts are received by the defendant on an as is/where is basis, with there being no liability on the part of the plaintiff to the defendant, whatever may be the state or condition of the defendant struck an associated parts.
5.The settlement terms referred to above shall be the subject of a Minute of Consent Orders to be prepared by the plaintiff's solicitors to be signed by the parties and filed with the court by close of business 28 July 2017.
The making of an offer of compromise in the form of a Calderbank letter (See Calderbank v Calderbank (1976) Fam 93) in circumstances where the offeree does not accept the offer and ultimately ends up worse off than if the offer had been accepted, is a matter to which the court may have regard when deciding whether to depart from the usual course of ordering costs to a successful party. All the circumstances must be considered. The mere fact that the offeree ends up worse off than if the offer had been accepted, does not of itself warrant departure. The question is whether a party's rejection of a Calderbank offer was unreasonable in all the circumstances: Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115 [17] (Buss JA).
In Ford Motor Company of Australia Ltd v Lo Presti, Buss JA summarised some of the principles relating to Calderbank offers. In considering whether to apply the Calderbank offer, the court needs to consider whether the rejection of the Calderbank offer by a party was unreasonable. In that regard, Buss JA noted the following points at [18] ‑ [19]:
The mere fact that the recipient of a Calderbank offer is ultimately worse off than he or she would have been had the offer been accepted, does not mean that its rejection was unreasonable.
The question of whether the conduct is 'reasonable' or 'unreasonable' involves matters of judgment and impression. In deciding whether the rejection of a Calderbank offer was unreasonable, ordinarily, the court should have regard to, the following:
(a)the stage of the proceeding at which the offer was received;
(b)the time allowed to the offeree to consider the offer;
(c)the extent of the compromise offered;
(d)the offeree's prospects of success, assessed as at the date of the offer;
(e)the clarity with which the terms of the offer were expressed; and
(f)whether the offer foreshadowed an application for ... indemnity costs in the event of the offeree's rejecting it.
The Calderbank offer in relation to Truck Centre's claim
The Calderbank offer was made to Mr Blythe on 7 July 2017. The email made it clear that he was allowed a period of two weeks to consider its contents. If accepted, it completely released Mr Blythe from any liability for the costs of any repairs that had already been completed by Truck Centre. It is unambiguous in its terms and foreshadows the fact that Truck Centre would, if successful, seek to rely upon it in the event that it was rejected. It followed earlier negotiations between the parties to settle. Those earlier negotiations, which are briefly discussed at [58] of the primary judgment, included an offer made by Truck Centre that Mr Blythe pay them the sum of $25,000 in full settlement of the matter. The Calderbank offer was even more favourable to Mr Blythe than the earlier settlement offer. Had he accepted the Calderbank offer, he would have walked away from legal proceedings with his truck and no liability for the outstanding debt owed to Truck Centre. Mr Blythe had ample opportunity to inspect the truck to ensure that the various parts and work claimed by Truck Centre had in fact been done. He was also in possession of the various estimates and invoices setting out the work done on his truck. He was personally aware that at least some of the work on his truck had been completed, having viewed parts of the truck.
Mr Blythe's pleaded defence was significantly different to the way in which he ultimately ran his case. Whilst he went some way to admitting that the work in relation to the gearbox, steering and springs was both authorised by him and completed by Truck Centre, for the reasons set out in the primary judgment those qualified concessions fell short of conceding Truck Centre's claim. It was therefore necessary for Truck Centre to prove each and every aspect of its claim.
When the contents of the email are considered, Mr Blythe is now clearly worse off that he would have been had he accepted the offer made on 7 July 2017. Furthermore, his rejection of the Calderbank offer was plainly unreasonable when viewed in the context of Truck Centre's claim against him and the evidence to support it.
The Calderbank offer in relation to Mr Blythe's counterclaim claim
In relation to Mr Blythe's counterclaim, his case always depended upon his ability to prove that the truck's engine was rebuilt in 2009. He was put on notice about that fact as early as late September or early October 2011 when he met with Mr Ingham at Truck Centre's Kewdale premises and discussed the issue. As has been noted at [197] in the primary judgment, apart from Mr Blythe's assertion that the engine rebuild occurred, no further evidence was produced by him either before the trial or during it. It cannot be said that his prospects of succeeding on the counterclaim had any real chance of succeeding in the absence of that evidence. His expert witnesses, Mr Simms and Mr Hughes, conceded this deficiency.
Furthermore, Mr Hughes, was permitted to give evidence during the trial but did so having failed to provide any real outline of what his evidence would be. This put Truck Centre at a disadvantage. In addition, the material that Mr Blythe sought to rely upon at the trial in relation to his claim for damages was not produced in the normal way in advance of the trial. Most of it was produced for the first time after the trial commenced. The material relied upon to prove the damages claimed was itself deficient. The material was incapable of proving that he had sustained a loss of income, or other losses claimed by him.
In the absence of any evidence to support his contention that the engine had been rebuilt in 2009, his counterclaim was doomed to fail. His rejection of the Calderbank letter was therefore unreasonable in the circumstances.
Indemnity costs orders principles
In Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) the court comprising Pullin JA and Kenneth MartinJ summarised the principles relating to the making of indemnity costs orders in litigation may be briefly summarised, as follows:
1.A superior court, in its inherent jurisdiction, may make an indemnity costs order (see also Supreme Court Act 1935 s 37, and Legal Profession Act 2008 s 280);
2.An indemnity costs order departs from the usual costs disposition order, whereby costs are awarded on a party/party basis: EMI Records Ltd v Ian Cameron Wallace Ltd [1983] Ch 59.
3.The court's discretion as to the making of an indemnity costs order is a discretion that must be exercised judicially. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397, 400 Woodward J said:
Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases, where 'there is some special or unusual feature in the case to justify the court exercising its discretion in that way'. (emphasis added)
4.To obtain an indemnity costs order, it is not the case that the successful party needs to show a collateral purpose, or establish some species of fraud against the unsuccessful party. In J‑Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 303 French J by reference to the observations of Woodward J in Fountain Selected Meats, said:
It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.
5.Furthermore, in Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (Unreported, FCA, 3 May 1991) (referred to by Ipp J in Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190, 191) French J observed:
The categories in which the discretion may be exercised are not closed.
6.Competing principles need to be balanced in assessing the making of a potential award of indemnity costs. In Quancorp Pty Ltd v MacDonald [1999] WASCA 101 [7], Wheeler J observed:
On the one hand, a party should not be discouraged, by the prospect of an unusual costs order, from persisting in an action where its success is not certain. Uncertainty is inherent in many areas of law, and the law changes with changing circumstances. It is inappropriate that a case be too readily characterised as 'hopeless' so as to justify an award of indemnity costs to the successful party. However, where a party has by its conduct unnecessarily increased the cost of litigation, it is appropriate that the party so acting should bear that increased cost. Persisting in a case which can only be characterised as 'hopeless' is an example of the type of conduct which may lead the court to a view that the party whose conduct gave rise to the costs should bear them in full.
7.An indemnity costs order may be appropriate in situations which are shown to involve some element of improper, or at least unreasonable, conduct by a party or the party's legal advisers: see Colgate‑Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, 233 (Sheppard J), referred to by Pullin J in Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [9].
8.A properly crafted special costs order may obviate the need for an indemnity costs order, where components of cost scale items are allowed above the applicable scale ceiling: see Flotilla [20] ‑ [24].
9.An indemnity costs order may not be appropriate if the claimed costs would be likely to be recovered under the standard order for party and party costs, or under a special order raising or removing a scale ceiling allowance: Flotilla [11]. In Unioil (No 2) (193), Ipp J observed:
However, counsel for the plaintiffs was unable to identify any costs so incurred that would not be covered by an order for party and party costs. An order for indemnity costs on this ground is therefore not warranted.
10.Nonetheless, an indemnity costs order will constitute an appropriate sanction marking the disapproval of improper or unreasonable conduct: see Brookvista Pty Ltd v Meloni [2009] WASCA 180 [32], Flotilla [25]. In Flotilla Pullin J said [26]:
A solicitor should not, in my view, resort to an application for an indemnity costs order merely to secure the recovery which could be achieved by a properly formulated special costs order, unless the unsuccessful party's conduct is genuinely to be impugned by the successful party.
In my primary judgment I set out the overwhelming evidence produced by Truck Centre to prove its claim. I also noted that Mr Blythe, whilst not conceding Truck Centre's claim, made comments to the effect that he never took issue with the fact that the work was carried out by Truck Centre. I have also noted the fact that his counterclaim was doomed to fail in the absence of evidence.
Furthermore, the manner in which he conducted the trial makes it appropriate to mark this court's disapproval of his unreasonable conduct by allowing an order for some of Truck Centre's costs to be on an indemnity basis.
Conclusions on the question of costs
For the above reasons, Mr Blythe is liable to pay Truck Centre's party/party costs in relation to both its claim against Mr Blythe and its defence of Mr Blythe's counterclaim up to 7 July 2017. In addition, Mr Blythe is liable for indemnity costs in relation to Truck Centre's claim and defence of the counterclaim commencing from 7 July 2017 onwards.
Truck Centre's claim for interest
In relation to the question of interest, Truck Centre seeks interest from Mr Blythe on the debt from the date it formally demanded payment from Mr Blythe, namely the letter of demand sent to his lawyers on 8 March 2012. However, the actual invoice setting out the amount claimed by Truck Centre was not prepared and sent to Mr Blythe until 29 June 2012. Consequently, interest will be awarded in favour of Truck Centre, accruing from 29 June 2012 being the date of the invoice, not the date of the letter of demand.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DR
ASSOCIATE TO JUDGE LEVY23 MAY 2018
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