Arraj v Sime Darby Motors Retail Australia Pty Ltd trading as Parramatta BMW - [2024] NSWDC 78 - NSWDC 2024 case summary — Zoe

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Arraj v Sime Darby Motors Retail Australia Pty Ltd trading as Parramatta BMW

[2024] NSWDC 78

District Court of NSW|2024-03-07

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At a glance

Source facts

Court

District Court of NSW

Decision date

2024-03-07

Source

Original judgment source is linked above.

Judgment (23 paragraphs)

[1]

Solicitors: Blackstone Waterhouse (Plaintiff) HWL Ebsworth (Defendant) File Number(s): 2022/249559

[2]

Introduction

The plaintiff Mr Simon Arraj is an enthusiastic collector of BMW cars. The defendant Sime Darby Motors Retail Australia Pty Ltd trading as BMW Parramatta (BMW Parramatta) is a dealer in BMW cars. BMW Parramatta operated its business pursuant to a BMW Dealer Agreement made with BMW Australia Ltd (BMW Australia).
In 2022 a new BMW motor vehicle became available, although only in very limited numbers. The new vehicle was a 2022 BMW M4 CSL (2022 CSL). The letters "CSL" were only rarely part of the model name of any BMW cars. The designation CSL conveyed to BMW aficionados that the car was a special edition performance model and that it was only made in very limited numbers worldwide.
Mr Arraj already owned a 2003 CSL and he was very keen to acquire a 2022 CSL for his BMW collection. Besides the 2003 CSL, Mr Arraj already had a BMW X5, which was his everyday car.
Mr Arraj applied to BMW Australia to purchase one of the very limited number of 2022 CSLs imported into Australia. His application to purchase a 2022 CSL was unsuccessful. Mr Arraj has brought these proceedings against BMW Parramatta alleging a breach of contract.
After Mr Arraj missed out on a 2022 CSL, he sought one in the secondary market. The price he had to pay was more than the price payable for a new 2022 CSL, had he been successful in his application to BMW Australia. Mr Arraj claims the difference between the cost of his vehicle and a new 2022 CSL for which he applied. There are also incidental damages sought relating to increased stamp duty payable on his more expensive second-hand 2022 CSL.

[3]

The Contract Alleged

In par 3 of the Amended Statement of Claim filed on 25 July 2023 Mr Arraj pleads that the offer which led to the formation of a contract occurred as follows: "3 On or about 4 March 2021, the Plaintiff offered to lend to the Defendant his 2003 CSL for display at the Defendant's dealership in exchange for the Defendant promising: a. to offer the Plaintiff a new motor vehicle, being a 2022 BMW M4 CSL ('2022 CSL'), for purchase at its retail price; and/or b. to ensure that the Plaintiff had priority over other customers for the purpose of offering him a 2022 CSL for purchase at its retail price; and/or c. to ensure the Plaintiff was offered for purchase at its retail price the first 2022 CSL allocated for sale to customers of the Defendant. Particulars The offer was in writing and contained in emails from the Plaintiff to members of the Defendant's staff, which emails appear in the chain concluding with the email from the Plaintiff to Mahdi Majzoub and Nathan Gispan (copied to Kristina Pobre) timestamped Thursday, 4 March 2021 at 3:48 PM."
In par 4 of the Amended Statement of Claim Mr Arraj pleads that the acceptance of the offer occurred as follows: "4 On or about 5 March 2021, the Defendant accepted the Plaintiff's offer pleaded in paragraph 3 above. Particulars The offer was accepted in writing, being an email from Mahdi Majzoub of the Defendant to the Plaintiff and Nathan Gispan (copied to Kristina Pobre) timestamped Friday, 5 March 2021 11:20AM."
In par 5 of the Amended Statement of Claim Mr Arraj pleads that as a result of the offer and acceptance asserted, he and BMW Parramatta entered into a contract as follows: "5 By reason of the matters in paragraphs 3 and 4 above, on or about 5 March 2021, the Plaintiff and Defendant entered into a contract, the terms of which included that the Plaintiff would provide the Defendant with his 2003 CSL for display in its dealership and, in return, the Defendant would do the following: a. offer the Plaintiff a 2022 CSL for purchase at its retail price; and/or b. ensure that the Plaintiff had priority over other customers for the purpose of offering him a 2022 CSL for purchase at its retail price; and/or c. ensure the Plaintiff was offered for purchase at its retail price the first 2022 CSL allocated for sale to customers of the Defendant."

[5]

The Offer Alleged by the Plaintiff

As recited above, Mr Arraj pleads that his offer was made on 4 March 2021. It was entirely in writing and was contained in a chain of emails concluding with an email from Mr Arraj dated 4 March 2021. The email chain is to be found at B1/18-21.
All of the emails in the chain have the subject "Re: BMW E46 M3 CSL". This is a reference to the 2003 CSL already owned by Mr Arraj.
The first email in the chain is dated 4 January 2021 and is from Mr Arraj to Mr Mahdi Majzoub. Mr Majzoub was the General Sales Manager at BMW Parramatta. According to his affidavit (A/276) he has worked in various roles in the car industry for 22 years.
The email said: "Hi Mahdi, Good to meet you yesterday. As discussed, I own an Australian delivered (1 of 23) BMW E46 M3 CSL. The car is immaculate with only 30,000 kms. This is a very special and unique car. Your marketing team may consider having this car on display at your showroom for the M3/M4 launch or some other event. Not many people have ever seen an E46 CSL and there is no doubt the car will generate traffic into the dealership. I'm also interested in attending drive days at Sydney Motor Sport Park. Again, happy to bring the CSL. Regards SIMON ARRAJ"
The next email in the chain is also dated 4 January 2021. It responds to the first email. Mr Majzoub sent the email to Mr Arraj with a copy to Ms Pobre, who was a marketing manager for BMW Parramatta. Mr Majzoub said: "Hi Simon, Very nice to meet you too Simon. Our marketing team will be in touch regarding your amazing M3. I have added you to the list for the all new M3 and M4 launch. Regards, Mahdi Majzoub"
Mr Arraj replied by an email dated 11 January 2021 to Mr Majzoub, with a copy to Ms Pobre. Mr Arraj said: "Hi Mahdi, I am happy to work out an arrangement to have my CSL parked in your showroom. BMW have intimated they are likely to produce the next CSL based on the new M3/M4. I will be buying one of these (once released). Please let me know when you receive updates or confirmation of the next CSL. Regards, Simon"
It is noted that at this time it was not even known that, if there was to be a new CSL, it would be derived from the M3 or M4 model.
The next email was dated 25 February 2021 from Mr Arraj to Mr Majzoub with a copy to Ms Pobre. Mr Arraj said: "Hi Mahdi, I can arrange for my CSL to be dropped off to your showroom next Wednesday (3/3) in the morning. Please call me to discuss logistics and an arrangement that will work for all parties. Regards, Simon"
The next email is dated 1 March 2021 from Mr Arraj to Mr Majzoub with a copy to Ms Pobre. Mr Arraj said: "Hi Mahdi, The eagle will land this Wednesday morning. Please call me to discuss. Simon"
The next email in the chain was sent at 3.48pm on 4 March 2021 from Mr Arraj to Mr Majzoub. It was also sent to Mr Nathan Gispan (another manager at BMW Parramatta) with a copy to Ms Pobre. Mr Arraj said: "Hi Nathan, Great to meet you today and thanks again for moving my CSL to the mezzanine level of the showroom A few things we need to address: • Car is not to be moved under any circumstances • I have insurance in place. Given the car is in your showroom, will your blanket insurance [policy cover the car • Priority order for the new BMW CSL. Please confirm I will receive the first car allocated to Parramatta BMW • Track days. I have not received confirmation for the 18 March 2021 event • Remuneration and merchandise Regards, Simon"

[6]

The Acceptance Alleged by the Plaintiff

Mr Arraj pleads that the offer contained in the email dated 4 March 2021, which was the end of an email chain, was accepted by an email sent by Mr Majzoub to Mr Arraj at 11.20am on 5 March 2021. That email was also sent to Mr Gispan and Ms Pobre. To respond to the five dot points raised in Mr Arraj's email dated 4 March 2021 (said to be the offer) Mr Majzoub reproduced those five dot points in his email and responded to each in red text. This has been faithfully reproduced at B1/19. All of the words which appear below, after a dash which follows each of the five dot points raised by Mr Arraj, contains the response of Mr Majzoub to those dot points.
The email reads as follows: "Hi Simon, Thank you again for having your CSL at our dealership. It looks amazing! In response to your points, please see below: • Car is not to be moved under any circumstances - Confirming this will be adhered to. • I have insurance in place. Given the car ins in your showroom, will your blanket insurance [policy cover the car] - No, as discussed our Insurance will not cover for your CSL • Priority order for the new BMW CSL. Please confirm I will receive the first car allocated to Parramatta BMW - Confirmed of course. • Track days. I have not received confirmation for the 18 March 2021 event - Kristina will send you emails on the track day. • Remuneration and merchandise - Regarding remuneration, we had discussed there will be no payment of sorts. Please pay me a visit at your convenience to discuss merchandise. Kind regards, Mahdi Majzoub"
It is noted that Mr Majzoub said that there was to be "no payment of sorts" for the 2003 CSL being on display at BMW Parramatta. This is relevant to the discussion below regarding consideration for the pleaded contract.
It is also noted that the contract alleged was for Mr Arraj to "receive the first car allocated to BMW Parramatta". The evidence shows that no car was ever "allocated to BMW Parramatta".
There were some minor matters sorted out between Mr Arraj and Mr Majzoub by a subsequent email sent on 5 March 2021. These do not form part of the alleged contract. By an email sent at 12.37pm on 5 March 2021 Mr Arraj raised with Mr Majzoub whether BMW Parramatta would cover the cost of insurance for the 2003 CSL, a blue slip and a washer fluid container. By an email sent at 1.01pm on 5 March 2021, Mr Majzoub told Mr Arraj that those three incidental matters were "approved and confirmed".

[8]

There Was No Intention to Create Legal Relations

It is trite law that for there to be a binding contract, the parties must have intended to create legal relations. I find that there was no such common intention.
Mr Arraj approached BMW Parramatta with a proposal for his 2003 CSL to be put on display in the dealership. That was not something which the defendant sought. When the proposal was first made, there was no discussion about a wider arrangement. Mr Arraj had in mind that he could use this offer in pursuit of the purchase of a 2022 CSL, if and when such a car ever became available (A/45, pars 8, 9). His initial discussion with Mr Majzoub did not involve any mention at all of the future 2022 CSL (A/45, par 11). Mr Arraj was simply hoping to "plant the seed" (A/45, par 9) in the hope that it might give him some chance of purchasing the rumoured CSL (A/45, pars 8, 9).
In the email dated 4 January 2021 (B1/21), discussed above, there was no mention of the new CSL. In the email dated 11 January 2021 (B1/20) Mr Arraj did say, speaking of the next CSL "I will be buying one of these (once released)". No doubt every car dealer wishes that they had a dollar for every time they have heard this said by a customer.
In a conversation between Mr Arraj and Mr Majzoub (which is not pleaded as part of the contract) there was a query by Mr Arraj whether in exchange for him lending his 2003 CSL to BMW Parramatta, the defendant would promise "to offer me one for purchase when they are released" (A/47, par 18; A/291 par 110). It is noted that the proposal at that stage was not for BMW Parramatta to ensure that the plaintiff had priority over other customers, as pleaded in the Amended Statement of Claim (A/7).
The following emails dated 25 February 2021 and 1 March 2021 (B1/20), discussed above, concern the delivery of the 2003 CSL to the dealership and say nothing about purchasing the new CSL.
The email on 4 March 2021 (B1/19-20) said that one of the five dot points "we need to address" included: "Priority order for the new BMW CSL. Please confirm I will receive the first car allocated to Parramatta BMW"
To this Mr Majzoub responded in the email dated 5 March 2021 (B1/19): "Confirmed of course"
What must be kept in mind here is that these two gentlemen were talking about a chimera, a car which did not yet exist, and which Mr Arraj had heard about online and through word of mouth. The five dot points in the email may have been linked in the mind of Mr Arraj, but there is nothing in the wording of the email to suggest that there was a mutual understanding reached that somehow the display of the 2003 CSL was to take place on condition that Mr Arraj was to receive the first car allocated to BMW Parramatta. The line in the email about the "priority order" (whatever that may mean) and the "first car allocated" was no more than Mr Arraj saying, as he had said in the earlier conversation, words to the effect of, "I intend to buy this car, if it is ever released". The line in the email relied upon by Mr Arraj, taken in context, was no more than Mr Arraj trying to "plant the seed" to improve his chances to obtain a rare and valuable car and to, in effect, jump the queue.
Mr Arraj took other steps to improve his chances. He offered the 2003 CSL to two other dealers for display, but they were not interested (B1/154). He paid deposits at two other dealers, in addition to the $5,000 deposit collected by BMW Parramatta as part of the 2022 CSL allocation process conducted by BMW Australia (B1/154). In the same way, and for the purposes of enhancing his allocation prospects, Mr Arraj was "talking up" to Mr Majzoub his determination to buy a new CSL. In speaking to Mr Majzoub, and in sending his emails, Mr Arraj was trying to establish a connection with BMW Parramatta to improve his chances of obtaining a 2022 CSL.
I find that neither Mr Arraj nor Mr Majzoub (speaking for BMW Parramatta) intended to create legal relations by the 5 March 2021 email. For this reason, the contract claim fails.

[9]

There Was No Offer and Acceptance

It is trite law that unless there is offer and acceptance, there is no contract.
As recited above, the proposal to display the 2003 CSL at BMW Parramatta came unbidden from Mr Arraj, to "plant the seed" to enable him to purchase a new CSL, if and when it was released for sale. The 2003 CSL was delivered to BMW Parramatta and was put on display (and had been moved to the mezzanine floor), before Mr Arraj raised by email (keeping in mind that the pleaded contract was contained in the 5 March 2021 email) his proposal that he would receive the first car allocated to BMW Parramatta.
The email from Mr Arraj dated 4 March 2021 does not say that there is a linkage between the administrative arrangements for displaying the car (not moving it and insurance) and an obligation to supply a new CSL.
Nor, crucially, does the email speak in the usual language of contract, even one expressed in an email (in this case between business savvy people), and say that there is an offer which can be accepted. Instead, there are "a few things we need to address".
The inclusion in the email of "remuneration" as a topic which the parties still need to address is a further indication that Mr Arraj was not making an offer that the 2003 CSL could be displayed (particularly since it was already on display) as part of a binding contractual arrangement for BMW Parramatta to supply a new CSL, if such a car was ever built and if such a car was ever allocated to BMW Parramatta. The pleaded case of Mr Arraj (see par 5 of the Amended Statement of Claim at A/7) is that the remuneration for allowing the display of the 2003 CSL was that he would obtain a priority allocation of the future CSL. It does not make sense to include a discussion of "remuneration" when, according to the plaintiff's case, his offer already set out the remuneration he was to receive, which was a priority allocation.
It is not hard to understand why Mr Arraj was seeking to "plant the seed" with BMW Parramatta. He had no track record with them. He had never purchased a car from them. He walked in off the street and made an unsolicited offer to provide his 2003 CSL for display. He was taking a first step to establish a relationship with BMW Parramatta (as he did with other dealers) in order to have a better chance of being allocated a 2022 CSL. There is nothing wrong with that. But saying that he is going to purchase a car, which did not yet exist and which was not yet available, did not elevate his request to be given priority, to a contract to obtain such priority.
For those reasons I find that there was no offer and acceptance, and thus no contract as alleged by Mr Arraj.

[15]

BMW Parramatta New Vehicle Contract for the 2022 CSL

When Mr Arraj first spoke to Mr Majzoub, in March 2021, about his interest in purchasing a 2022 CSL, such a vehicle did not exist. Both Mr Arraj and Mr Majzoub had become aware of the stated aim of BMW to produce a new CSL model, by social media and the internet. When Mr Arraj first approached Mr Majzoub, Mr Majzoub and Parramatta BMW were under the impression that the standard vehicle protocol would apply (ie Parramatta BMW would be responsible for assigning a vehicle).
On 24 November 2021 Mr Arraj signed a Parramatta BMW New Vehicle Contract (B1/77). While Mr Arraj signed the document on 24 November 2021, it was never signed on behalf of BMW Parramatta. The car was not even described as a "CSL" in that Contract. Instead, it was said to be a model "G82-M4 Competition Coupe". A purchase price of $249,999.99 was stated in the Contract. This was a complete guess on the part of BMW Parramatta, and the eventual price for a 2022 CSL was over $300,000. Naturally, because the car did not then exist, the Contract contained no registration, VIN number, engine number or production date. There were no details about the colour and the trim on the car.
In no way can this document be regarded as a binding agreement between the plaintiff and the defendant. The plaintiff does not sue upon it. Nor can it be regarded as a document which somehow subsumed or superseded any original arrangement between the plaintiff and the defendant (assuming that a contract was reached for the purposes of this analysis of breach).
When Mr Arraj did sign this Contract, he sought confirmation that his deposit would be fully refunded in the event that BMW Parramatta could not secure an allocation (B1/68). It is noted that expectation of a refund of the deposit reflects the belief or assumption at that time of both parties that allocation to BMW Parramatta of a 2022 CSL was not a certainty. In other words, Mr Arraj well understood that BMW Parramatta could not guarantee that he would receive the 2022 CSL, as BMW Parramatta had no certainty that it would have even one 2022 CSL to offer for sale.

[16]

BMW Australia Process for the Allocation of the 2022 CSL

Mr Majzoub said in his affidavit A/285, par 62) that he received a bulletin from BMW Australia regarding the allocation process for the 2022 CSL. He received this document on 9 May 2022. A copy of the bulletin is at C/220. The accompanying email, addressed to all "Dealer Partners" said that the attached bulletin contained information on the 2022 CSL "Customer Allocation Process". The synopsis in the email said: "• Applications to obtain a vehicle allocation for the M4 CSL will be exclusively available to customers who have been identified as a VIP Prospect. • Dealers must submit any dealer prospects by COB May 16 to their Area Manager in order for their prospects to be included in the application process. • Prospects will be sent a web application form to be completed by 27 May 11:59pm AEST."
The "Customer Allocation Process" for the 2022 CSL is set out at C/225. That page says: "M4 CSL CUSTOMER ALLOCATION PROCESS As demand for the M4 CSL is extremely high and the allocation of vehicles is strictly limited, we will be reaching out to our most loyal BMW customers to provide them with the opportunity to be considered an allocation for a M4/CSL vehicle. To note: • These customers have been identified via our BMW AU CRM database, taking into consideration a wide range of ownership factors, including lifetime spend with the BMW brand, previous M models owned and current M models in ownership. • We are aware many prospects have already placed interest with your dealerships, so with the assistance of your Area Manager, your prospects will be given the opportunity to be part of the application process."
That same page contained a flow chart with details of the application process. The first box in the flow chart said: "PROSPECTS IDENTIFIED Via CRM Database and Dealer Submissions sent to Area Manager (Area Manager to share with BMW AU)."
Thereafter the boxes covered the following steps, in order: 1. Final Prospect List Confirmed. 2. VIP Email Sent to Prospects. 3. Form Application Period. 4. Applications Close. 5. Panel Review. 6. Allocation Announced to Customers.
In the box headed "PANEL REVIEW" the following was stated: "BMW Australia conducts executive panel review of all applications received via the form to identify M4 CSL customer allocations."
Dealers were also informed by the bulletin what they had to do if they had prospects who were interested in the 2022 CSL (C/226). Dealers were told that any prospective CSL customers should be notified to the Area Manager by 16 May 2022. This would allow the prospects to begin their own application process and submit their web application form. Dealers were required to send the following information for each prospect: 1. First name. 2. Last name. 3. Email. 4. Mobile. 5. Postcode.
The dealers were told: "Once your prospect has submitted their application, M4 CSL allocation updates will be communicated by BMW Australia."
Mr Majzoub said in his affidavit (par 65) that he had a conversation with Mr Arraj following receipt of the bulletin from BMW Australia. Mr Majzoub said that he explained to Mr Arraj that BMW Australia had introduced a new process to allocate the 2022 CSL and that Mr Arraj would soon receive a link to put his name forward to be considered for an allocation. Mr Arraj in his affidavit dated 23 November 2023 said that he was not aware of any special arrangements that went on involving BMW Australia as to how vehicles were to be allocated (A/84, par 10).
What did occur was that Mr Arraj took steps to express his interest in the 2022 CSL directly to BMW Australia.
On 13 May 2022 Mr Joel Shashoua, the Dealer Principal at BMW Parramatta, sent an email to Mr Majzoub with an attached spreadsheet. Mr Shashoua said it was the "M4 CSL List". He invited Mr Majzoub to discuss the list to make sure he was happy with it. That email is at B1/116 and the spreadsheet sent to Mr Majzoub for discussion is at B1/117-120. The spreadsheet has been redacted. What can be seen is that Mr Arraj was the second name on the "M4 CSL Interest Form - Parramatta BMW". There are names below Mr Arraj but they were all redacted.
On 16 May 2022 Mr Shashoua sent an email to Mr Jason Kavanagh at BMW Australia (B1/122). He attached the M4 CSL List for Parramatta BMW. The actual list, which is in the form of a spreadsheet, is at B1/123 (in redacted form). The original bulletin from BMW Australia concerning the allocation process required five pieces of information to be submitted about each prospect (ie first name, last name, email, mobile and postcode). The version sent by BMW Parramatta to BMW Australia contained a sixth column headed "Comments CONFIDENTIAL".
The first name on the list has been completely redacted, but the confidential comments relating to that customer read "VIP customer - preference". The second name on the list has not been redacted. It is the name of Mr X, who was eventually allocated a 2022 CSL, his name having been put forward by BMW Parramatta. After that prospect's formal details, the comments are "VIP customer - preference".
The third name on the list has been redacted and the comment there is "Friend of DP". Mr Shashoua in his oral evidence indicated that this was a reference to himself as "Dealer Principal". He said that he disclosed that to BMW Australia so there could not be a perception of conflict of interest.
The fourth name on the list was that of Mr Arraj. There were no comments against his name.
The next name below Mr Arraj has been redacted. The comment there is "Got M5CS and trying to sell 'as new', will try to sell CSL". Apparently this was something that BMW Australia wanted to avoid.
As a result of BMW Parramatta submitting the name of Mr Arraj to BMW Australia, Mr Arraj received an email from BMW Australia sent on 20 May 2022 (B2/124). This email was headed "Your M4 CSL VIP Application Form". It contained a picture of the new CSL and invited Mr Arraj to submit a VIP application by clicking a link.
Mr Arraj did click the link and made a web application to BMW Australia.
Prior to submitting his application, Mr Arraj sent an email to Mr Majzoub at 12.33pm on 20 May 2022 (B1/152), requesting Mr Majzoub to send pictures of the 2003 CSL when it was in the Parramatta BMW showroom. Mr Arraj said: "I need these for my application to BMW Australia for the new CSL".
Mr Arraj wrote a two-page essay about why he should be chosen to be allocated a 2022 CSL (B1/154-155). He was required to submit this as part of the application process.
In the two-page 1,000-word essay, Mr Arraj said the following: "For many years I have been waiting for BMW to release a new CSL. To this extent I have been liaising with BMW dealers since 2020 to keep me updated and try and lock in an allocation. I can provide email correspondence confirming the same. To improve my chances of owning the new CSL I placed a deposit with: • Canterbury BMW (where I service my X5) • Gold Coast BMW (where I purchased the X5) • Parramatta BMW (where my E46 CSL was on display)"
The essay also refers to the display of Mr Arraj's 2003 CSL at BMW Parramatta from March 2021 to June 2021. Mr Arraj said that "no fee was charged to the dealership". He also said: "I offered other dealers the opportunity to display the car, but all were limited with their floor space".
He concluded his application essay as follows: "I understand BMW will only be manufacturing 1,000 CSL models. Whilst not confirmed, it has been intimated the allocation to Australia will be circa 20 vehicles. I would be honoured and privileged if I were given the opportunity to purchase one of these iconic cars."
I accept the submission of counsel for the defendant that it is hard to understand why, if Mr Arraj believed he had a binding agreement for the allocation of 2022 CSL by BMW Parramatta, he participated in the application process to BMW Australia in the first place. It is even harder to understand why, when he did lodge an application, he did not say words to the effect of: "Please be advised that I have a binding contract with BMW Parramatta for the supply of the first car allocated to them, and I expect to receive one."
Instead, Mr Arraj participated in the BMW Australia application process, and the words he chose in his two-page essay gave every indication that he knew he was entering a competitive process seeking the allocation of a vehicle by BMW Australia, rather than insisting upon performance of a contract to supply a 2022 CSL by BMW Parramatta.
Mr Arraj had some technical problems in getting the material through to BMW Australia and sought the assistance of Mr Majzoub. Mr Majzoub gave him assistance to make sure that the application went through to BMW Australia. Mr Majzoub contacted Mr Kavanagh at BMW Australia forwarding the two-page essay and the photographs of the 2003 CSL.
Having lodged his application with BMW Australia, Mr Arraj started emailing Mr Majzoub to see if there was any news "on car allocation and delivery times" (B1/167).
On 2 June 2022 Mr Dan Mortley (digital marketing specialist employed by BMW Australia) sent an email to "BMW Marketing Managers, Sales Managers, Dealer Principals and General Managers". He set out a timetable for the balance of the application process which was: 1. Thursday 2 June 2022 - shortlist presented to executive panel for further shortlisting. 2. Monday 6 June 2022 - final customer allocations confirmed by executive panel. Dealers notified by Area Managers of successful applicants. 3. "WC 6 June - once successful applicants notified and confirmed, area managers to notify dealers of all unsuccessful applicants. Dealers advised to share news to customers prior to receiving BMW Australia email. 4. Friday 10 June 2022/Monday 13 June 2022 - successful and non-successful applicants officially notified via email from BMW Australia.
By an email dated 7 June 2022 sent at 6.17pm (B1/170) Mr Jason Kavanagh of BMW Australia advised, inter alia, Mr Shashoua, that the process would be extended for another 24 hours.
By an email (B1/171) dated 9 June 2022 Mr Kavanagh advised Mr Shashoua and Mr Majzoub as follows: "Morning Gents I'm happy to advise that [Mr X] has been successful in his application to purchase an M4 CSL. The screening process went through a rigorous two panel assessments, including one compromising the CEO and two GMs and the allocations were awarded based on the individuals [sic] history with the BMW AU."
At 7.18pm on 15 June 2022 Mr Arraj sent an email to Mr Majzoub (B1/174) asking "any update from BMW Australia on the allocation of the new CSL?"
On that same date at 9.04pm (B1/174) Mr Majzoub sent an email back to Mr Arraj saying: "BMW AUS will be contacting customers directly".
A short time later at 9.17pm on 15 June 2022 Mr Arraj sent an email to Mr Majzoub (B1/174) saying: "I've heard nothing. Should I have received a call by now?"
At 12.23pm on 16 June 2023 Mr Arraj sent an email to Mr Majzoub saying: "Any update from BMW Australia?"
Mr Majzoub said in his affidavit (A/288, par 89) that he called Mr Arraj later that day to inform him he had not been successful in his application for the 2022 CSL.
Over the next few days, after being notified that the application to BMW Australia had been unsuccessful, Mr Arraj sent numerous emails and texts to Mr Majzoub, but also to Mr Kavanagh of BMW Australia and (via LinkedIn) to Mr Wolfgang Buechel, who was the CEO of BMW Australia (B2/215A). To Mr Buechel, Mr Arraj said (B2/285): "I respect BMW's decision, but it would be remiss of me to hide my disappointment. If there is anything that can be done to reverse this decision, I am open to discussion."
I accept the submission of counsel for the defendant that submission of the application form to BMW Australia, and the subsequent correspondence complaining about that decision, sent to BMW Australia, is a further indication that Mr Arraj well knew that the application process for a 2022 CSL was one managed and controlled by BMW Australia, and that BMW Australia was the entity which had the power to allocate these cars, not BMW Parramatta.

[17]

Internal Emails at BMW Australia

After Mr Buechel received the LinkedIn message from Mr Arraj, he sent an email on 17 June 2022 to Mr Rene Gerhard, Director Sales at BMW Australia and Mr Alex McLean, General Manager - Marketing at BMW Australia (B2/217). Mr Buechel said: "Hi guys, another message on LinkedIn. Where was this guy in your list? His profile does read quite good. Can someone contact him from our side, please?"
Later on 17 June 2022, Mr McLean sent an email to Mr Gerhard (B2/216) as follows: "I've forwarded to Brett… but I am confident we have selected great owners already. There will always be prospects who are disappointed."
Later on 17 June 2022, Mr Gerhard sent an email to Mr McLean (B2/216) in which he said: "But we had allocated one are to Parramatta, didn't we?"
Also on 17 June 2022, Mr Gerhard sent an email to Mr Brett Waudby of BMW Australia with a copy to Mr McLean (B2/220). Mr Gerhard said: "Hi mate, Quick one on Paramattas customer complaint in regards of the M4 CSL. I'd change the tonality and wording now slightly towards that we had allocated one car to P and it's their call not ours. They had given us a ranking of customers by priority and obviously that customer wasn't their No. 1. @Alex: Am I wrong? Rene"
On 17 June 2022 at 6.15pm Mr Gerhard sent an email to Mr Buechel and Mr McLean (B2/224). Mr Gerhard said: "We'll get in touch with him. But we had allocated a car to Parramatta and according to their priorities this guy wasn't No. 1. I'm afraid we won't be able to make everybody happy this time… (at least not with M4 CSL)."
On 20 June 2022 Mr Majzoub sent an email to Mr Arraj (B2/231) asking for the account details of Mr Arraj to refund the deposit. Mr Majzoub said: "I'm sorry that you haven't been allocated a CSL".
On 22 June 2022 Blackstone Waterhouse, solicitors for Mr Arraj, wrote to Mr Shashoua as follows (B2/232): "We act for Simon Arraj. Mr Arraj, on 24 November 2021 ordered a BMW 3 series M4 CSL coupe mode G82. At the time of the order, the vehicle being a limited production model with the possibility of later being considered a potential "classic" vehicle, our client was specifically informed that he would have delivered to him the first vehicle allocated to your dealership by BMW Australia (the vehicle distributors). That fact had earlier been confirmed in writing by you. Instead, on 16 June 2022 our client was informed by you that, contrary to your specific representation to our client, the first vehicle to be allocated to you (and, so far as we are aware, the only one), has contrary to the assurance to our client been allocated to someone else. Unless there is some other explanation, the facts described above can only lead to a conclusion that you have been guilty of misleading and deceptive conduct contrary to s18 of the Australian Consumer Law and have a potential liability in damages if the vehicle is not delivered as promised. Our client still wishes to take delivery of the model that has been ordered. Given the representation that was made, please explain where and when this can take place. We await your reply."
That letter, sent on the instructions of Mr Arraj, clearly indicates that the agreement which Mr Arraj asserted he had with BMW Parramatta was that Mr Arraj would have delivered to him "the first vehicle allocated to your dealership by BMW Australia". The evidence clearly establishes that no vehicle was ever allocated by BMW Australia to the BMW Parramatta dealership. It is also noted that Mr Arraj had instructed that he ordered the 2022 CSL on 24 November 2021. This was the date of the "placeholder" purchase agreement. Very sensibly, counsel for Mr Arraj at the hearing disavowed the notion that this was a binding agreement. However, the letter does not assert that the 5 March 2021 email was the contract. If that email was so important in Mr Arraj's mind, one would have expected him to instruct the solicitors to at least mention it in their letter.

[18]

Consideration of the BMW Australia Internal Emails

One possible reading of the BMW internal emails suggests that BMW Parramatta did have a car allocated to it, which it failed to offer for sale to Mr Arraj (assuming that it had a contractual obligation to do so). For reasons set out below I reject that interpretation of the emails.
No oral evidence was called from any person at BMW Australia. I reject the submission by counsel for Mr Arraj that BMW Australia is in the camp of the defendant and so I should draw the inference that the failure to call any of those people means that their evidence would not have assisted the case of the defendant. While Mr Shashoua accepted that BMW Australia was a business partner of BMW Parramatta, the evidence in the form of the 199-page Dealership Agreement (C/1-199) shows that these were two commercial entities dealing with each other at arm's length. BMW Australia expected to make money by distributing BMW cars to its dealer, and BMW Parramatta expected to make money by selling those cars. BMW Parramatta was not an agent or an offshoot of BMW Australia. In those circumstances I draw no inference against either party arising from the failure to call witnesses from BMW Australia.
The court is therefore left to do the best it can in understanding the BMW Australia internal emails. I accept the evidence of both Mr Majzoub and Mr Shashoua who said that the allocation of the 2022 CSL was taken completely out of their hands and was handled by BMW Australia.
Further, the emails sent by BMW Australia to both BMW Parramatta, and to Mr Arraj personally, are all to the effect that BMW Australia is setting the ground rules for the 2022 CSL allocation process and is running that process.
Mr Gerhard said in his email (B2/216): "But we had allocated one car to Parramatta, didn't we?". I take this to mean no more than words to the effect: "We did allocate one car to a customer who was nominated on a list put forward to us by BMW Parramatta". This is what happened (B1/123).
In his next email (B2/220) Mr Gerhard said: "I'd change the tonality and wording now slightly towards that we had allocated one car to P and it's their call not ours." This is followed by the sentence: "They had given us a ranking of customers by priority and obviously that customer wasn't their No. 1".
As to the first sentence, I cannot work out why Mr Gerhard said that BMW Australia "had allocated one car to P" because all the evidence shows that BMW Parramatta was never allocated a car to sell as it saw fit. If Mr Gerhard meant: "We allocated one car to a customer of P" then that makes sense, because that is what happened.
As to the second sentence in this email, it is correct that BMW Parramatta did provide their own ranking of customers by priority. Mr X was one of two customers described by BMW Parramatta as "VIP Customer - priority". This is not surprising for the following reasons: 1. BMW Australia's criteria for assessing applications focussed upon "lifetime spend with the BMW brand, previous M models owned and current M models in ownership". 2. The evidence showed that Mr X owned a limousine hire company and had bought five cars from BMW Parramatta. He had also bought BMW cars from other dealers, something which would have been known to BMW Australia from its database. 3. By contrast, Mr Arraj was not a VIP Customer. He had never bought a car from BMW Parramatta. He had bought an X5 from another dealer. He owned no current M models. His 2003 CSL was purchased on the secondary market. He most certainly was not a VIP Customer.
Any notion that BMW Parramatta had an obligation to give Mr Arraj priority in the application process is without foundation. Even if he was entitled to a "priority order", the words used in the 5 March 2021 email, that was in relation to ordering a 2022 CSL from BMW Parramatta which BMW Parramatta had the power to sell to the public. That never happened.
There is a further point to be made. The comments made in the spreadsheet did not determine which of the names put forward by BMW Parramatta was successful in being allocated a car. The selection was done entirely by the panels at BMW Australia. They did not have to accept any name advanced by any dealer. This is demonstrated by the fact that BMW Parramatta put forward two names as "VIP Customer - priority", but only one was chosen.
I cannot understand why Mr Gerhard said: "It's their call not ours". The evidence shows that it was always BMW Australia's call and it was never BMW Parramatta's call.
Finally, when Mr Gerhard spoke of changing the tonality and wording, I presume he was suggesting how to respond to the complaint of Mr Arraj. Wiser heads prevailed and no such response was ever sent.
Mr Gerhard sent another email (B2/224) saying: "But we had allocated a car to Parramatta and according to their priorities this guy wasn't No. 1." Once again Mr Gerhard was saying two things: 1. We did allocate a car to a customer of BMW Parramatta. 2. Mr Arraj wasn't the number 1 priority customer nominated by BMW Parramatta.
I find that none of the internal BMW Australia emails have the effect urged by counsel for Mr Arraj. Whatever looseness of expression is in the emails does not overcome the evidence about the 2022 CSL cars being allocated by BMW Australia, and not by BMW Parramatta.
These emails do not alter the conclusion which I have reached on the legal issue of whether (assuming there was an enforceable contract) there was a breach. The claim of Mr Arraj fails, among other reasons, because he has failed to prove a breach.