Magistrates Court appeal - Moneylending - Pawnbroking - Damage to property (motor vehicle) held as security for loan - Bailment - Contract - Negligence - Alleged breach of duties

Magistrates Court (Civil Proceedings) Act 2004 (WA)

Pawnbrokers and Second-hand Dealers Act 1994 (WA)

Brocklehurst v Wolinski [2015] WADC 36

Hobbs v Petersham Transport Co Ltd [1971] HCA 26; (1971) 124 CLR 220

Tottenham Investments Pty Ltd v Carburettor Services Pty Ltd (1994) Aust Torts Reports 81-292

Ward v West Coast Suzuki Marine Pty Ltd [2021] WADC 37

1. On 6 June 2024, Ms Ball commenced proceedings in the Magistrates Court against the respondent for loss and damage alleged to have been sustained to her 2014 Toyota Camry vehicle (Vehicle), in March 2023.
2. The respondent owns and operates a moneylending, or 'pawnbroking', business. The proceedings arise after Ms Ball attended the respondent's place of business on 7 December 2022 to obtain a loan of $2,500.00 and gave her Vehicle as security. The parties agreed that:

(a) the respondent was to have possession of the Vehicle until it was redeemed by Ms Ball, or, if not redeemed by Ms Ball by 7 March 2023, the respondent was entitled to sell the Vehicle, and

(b) Ms Ball could redeem the Vehicle by paying the loan amount plus interest[1] on or before 7 March 2023.

1. In the early hours of 23 February 2023 the Vehicle, stored in the respondent's yard, was badly damaged by vandals, driven out of the yard and left abandoned in a car park nearby.
2. During a telephone conversation on 3 March 2023 (Telephone Call), the respondent says he informed Ms Ball of the damage to the Vehicle. He suggested Ms Ball could repay the loan and pay the interest to redeem the Vehicle, and then make a claim against her insurance for the damage. Alternatively, that she not repay the loan nor pay any interest and not redeem the Vehicle.
3. Ms Ball disputed the respondent's version of the Telephone Call. She contended that the respondent informed her that he was unable to return the Vehicle because it had been stolen and damaged beyond reasonable repair.[2]
4. Ultimately, Ms Ball did not repay the loan, pay any interest and did not redeem the Vehicle, and, on 9 March 2023, the respondent sold the Vehicle for $2,500.00.

(a) the respondent owed her a duty at common law, or pursuant to the agreement, to take reasonable precautions to store the Vehicle securely to prevent theft and damage;

(b) the respondent failed to retain possession and storage of the Vehicle to enable return of the Vehicle to her in accordance with its duties, and that on or about 3 March 2023 the respondent repudiated the agreement; and

(c) she ultimately sustained loss and damage of $19,670.00 (plus interest and costs) by reason of the respondent's failures.[3]

1. She alleged that the respondent was in breach of the agreement by failing to store the Vehicle to enable return of it to her, or alternatively, the respondent breached its duty of care in failing to safely and securely store the Vehicle to prevent loss and damage.
2. The claim was litigated over two days in the Magistrates Court with multiple witnesses called. On 18 November 2024, the Magistrate delivered a decision dismissing Ms Ball's claims against the respondent.
3. Ms Ball lodged an appeal on 6 December 2024 in this court. The appeal was heard by me on 15 April 2025.
4. For the following reasons, the appeal will be dismissed.

1. The Magistrates Court transcript of 18 November 2024 sets out the decision and reasons the subject of this appeal (Reasons). The Reasons reflect that the respondent accepted that it owed Ms Ball a duty of care to properly secure the Vehicle. The Magistrate crystallised Ms Ball's claim as being, in essence, whether the respondent took reasonable steps to discharge that duty, and otherwise, whether it had fulfilled its bailment and contractual duties owed.[4]
2. Ultimately, the Magistrate was not satisfied, when considering the respondent's duties under contract, negligence or bailment law, that any duty was breached. She reasoned that Ms Ball had not identified any acts or omissions alleged to amount to a breach, save that the Vehicle was left unlocked in the respondent's yard, and an allegation that the key for the Vehicle should have been, but was not, properly secured.[5]
3. As a matter of fact, not the subject of challenge, the Vehicle was kept unlocked in the yard. The respondent adduced evidence as to the reason for that and why that was not unreasonable.[6] This was accepted by the Magistrate, that:

(a) a locked vehicle in the yard exposes it to the risk of damage when intruders enter the yard in search of valuables;

(b) to avoid damage to windows and locks, vehicles are left unlocked as a matter of practice;[7] and

(c) to guard against the stealing of a vehicle, they are secured with a wheel clamp.[8]

1. Further, in relation to the Vehicle in this case, the Magistrate was satisfied that it was stored in a secured yard with a high perimeter fence and a large 4WD blocking the gate to the premises.[9] Further, that the Vehicle 'key fob' was in a locked safe inside a building at the yard and not in the Vehicle.[10]
2. Finally, the Magistrate found that Ms Ball adduced little evidence as to the value of the Vehicle, or its condition. Ms Ball asserted it was 'in good condition', with only a little 'dint' [sic].[11] She produced the odometer reading for the Vehicle being 148,688 km at the time of the agreement between the parties.[12] Ms Ball otherwise sought to rely on a car valuation 'Redbook' entry.[13]
3. In the end, the Magistrate found that the only evidence as to the value of the Vehicle at the relevant time came on behalf of the respondent 'from a person who regularly visited the yard and was familiar with vehicles'.[14] This meant that, even if the Magistrate was persuaded that Ms Ball had otherwise established her claims in either bailment, contract or negligence, the quantum of the loss had not been established to the requisite standard.[15]

1. The appeal is brought pursuant to Part 7 of the Magistrates Court (Civil Proceedings) Act 2004 (WA) (MCCP Act). It is by way of rehearing. To succeed in her appeal, Ms Ball must demonstrate error in the court below - either a legal, factual or discretionary error.[16] This appeal must be decided by me on the material and evidence that was before the Magistrates Court.[17]
2. In an original Notice of Appeal filed on 6 December 2024, there were 10 grounds alleging error by the Magistrate.
3. On 23 January 2025, Ms Ball filed an application to amend the Notice of Appeal, this time alleging 23 errors by the Magistrate.
4. After several procedural hearings conducted in this appeal, on 4 March 2025 Ms Ball filed a further minute of proposed amended grounds of appeal, setting out nine proposed grounds of appeal.
5. Orders were made on 11 March 2025 to adjourn that application to the hearing of the substantive appeal. I grant leave in respect of five grounds of appeal, being consistent with the manner they were crystallised and addressed at the hearing, and as set out below, in Part F.

1. On 7 December 2022, Ms Ball attended the respondent's place of business to obtain a small cash loan. She agreed to hand over the Vehicle in exchange for a loan of $2,500.00 plus interest.
2. The respondent prepared a 'pawn ticket' (Ticket) and handed it to Ms Ball for review. Ms Ball signed the Ticket, handed over the 'key fob' for the Vehicle, and received $2,500.00 cash.
3. Among other things, the Ticket set out the following, under the heading 'conditions of contract':[18]

(a) if no monies were received by 7 March 2023 the Vehicle may be sold by the respondent,

(b) the respondent was not liable for any loss or damage to the Vehicle stored on the premises 'howsoever caused', and

(c) it was Ms Ball's responsibility to ensure adequate insurance covering loss or damage to the Vehicle.

1. During the period after Ms Ball gave the Vehicle over, it was stored on premises owned by the respondent. While on the respondent's premises, in terms of security precautions:

(a) the 'key fob' was kept in a locked safe in a building;[19]

(b) the Vehicle was parked in an outdoor yard on the premises, with an electric gate, razor wire on the fencing, and closed-circuit television monitoring;

(c) the respondent parked a 4WD vehicle on the driveway parallel to the electric gates at night times and over weekends;

(d) the building where the safe was located had an alarm system; and

(e) the Vehicle itself was fitted with a wheel clamp.[20]

1. In the early hours of 23 February 2023, the Vehicle, while in the respondent's possession, was damaged by vandals. CCTV revealed that three persons broke in and entered the yard at around 2.10 am. In relation to the Vehicle the subject of these proceedings, they:

(a) used tools to interfere with the wheel clamp, then subsequently removed the wheel and replaced it with the spare tyre; and

(b) exited the yard in the Vehicle by repeatedly ramming it into the 4WD parked across the driveway, pushing it out onto the road and across the median strip.

1. At the trial, the respondent adduced evidence that he was requested by police later that day not to contact Ms Ball about the incident because she was a 'person of interest' in relation to the incident and police would contact her directly.
2. In the meantime, on 3 March 2023, after receiving a message from Ms Ball, the respondent telephoned Ms Ball. The respondent gave evidence that:[21]

(a) Ms Ball had enquired as to 'how much' she would have to pay to redeem the Vehicle, and, when informed her of the total loan repayment including interest, she stated that she would need more time to pay;

(b) he then enquired as to whether police had been in contact with her, to which she said 'no' and he told her that the Vehicle had been damaged and abandoned nearby;

(c) he informed her she could repay the loan and redeem the Vehicle and then make a claim against her insurance for the repairs, or keep the money and not redeem the Vehicle after which the respondent would sell it; and

(d) Ms Ball told the respondent it could keep the Vehicle, and she would not repay the loan amount.

1. At trial, it was Ms Ball's evidence that:[22]

(a) during the Telephone Call, she told the respondent that she wanted to attend on 7 March 2023 to pay the $4,750.00 and to collect the Vehicle;

(b) the respondent enquired as to whether police had contacted her, to which she responded, 'No - why?', and he then said words to the effect that the Vehicle had been stolen and used in an armed robbery and damaged;

(c) he further stated to the effect that 'the Vehicle [was] severely damaged or write off [sic] and [she] should claim on [her] insurance', to which she replied she did not have insurance and that it was the respondent who should claim it on insurance; and

(d) she stated that if the respondent could not return the Vehicle to her to drive, then she would need to use the $4,750.00 to put towards a new vehicle, and in reply, the respondent said: 'it's up to you'.

1. Ultimately, Ms Ball did not redeem the Vehicle, and on 9 March 2023, the respondent sold it.

1. At the appeal hearing, Ms Ball's counsel focused on several key errors alleged to constitute a miscarriage of justice:[23]

(a) an error of fact in finding that the respondent had not repudiated and Ms Ball had not terminated the contract, and an error in finding Ms Ball had elected not to redeem the Vehicle (by keeping the money) being an election open to her under the agreement;

(b) as to the application and operation of s 65 of the Pawnbrokers and Second-hand Dealers Act 1994 (WA) (the Act), and that the Magistrate erred in concluding that the limitation of liability clause on the Ticket was simply 'poor practice' rather than a breach of statutory obligations;

(c) a mixed error of law and fact in finding that the practice of leaving cars unlocked was reasonable, which Ms Ball asserted was 'contrary to case law and evidence';

(d) error of fact in finding that the respondent had taken reasonable steps to secure the Vehicle; and

(e) the Magistrate erred in dismissing Ms Ball's evidence as to quantum, and as to her credibility in favouring the respondent's evidence without sufficient basis.

1. At the hearing, Ms Ball's counsel indicated that the proposed amended grounds of appeal (nine in total) fell into those five errors. Given that, and given the way the parties approached and argued those matters at the hearing, that is the basis upon which I have considered and determined the appeal.

Ground 1: The agreement and alleged repudiation and termination

1. The appellant alleges that the Magistrate 'incorrectly inferred' that Ms Ball had elected not to pay the respondent. However, as contended by the respondent, there is no basis to contend that the finding was by way of an inference. The Magistrate's finding was based on an uncontested fact being that the Vehicle was kept as a pledge, in circumstances where it had been accepted that the (re)payment in respect of that pledge was not made and that it was not made on the claimant's election.[24]
2. Either way and ultimately, in her reasons, the Magistrate concluded that the respondent had not repudiated the contract, and as a result, Ms Ball had not terminated the contract. There is no error in the Magistrate's reasoning or conclusion in that respect, in circumstances where the Magistrate found as a matter of fact that:

(a) during the Telephone Call (and thereafter) Ms Ball was provided two options. One being to repay the loan plus interest and redeem her Vehicle. Alternatively, keep the loan money, pay no interest, and the respondent would be entitled to sell the Vehicle; and

(b) the respondent did not repudiate the agreement, because both options under the agreement were still available and Ms Ball made an election. When Ms Ball did not repay the loan and redeem the Vehicle, she did not terminate the contract. This was an election for a 'compromised settlement',[25] being to keep the cash and forfeit her Vehicle in accordance with the terms.

1. On appeal, Ms Ball contended that she never elected to 'settle' the matter and that the respondent did not have any right to sell the Vehicle. Further, that the respondent only acquired the right to sell the Vehicle if it was not in breach of the agreement or the Act.[26] Ms Ball further:

(a) alleged that in the Telephone Call she was informed that the Vehicle had been 'written off', and contended that this amounted to a repudiation of the agreement; and

(b) that as a result, she terminated the agreement by refusing to repay the loan and interest.

1. However, Ms Ball's decision not to repay the loan and redeem the Vehicle, was a matter contemplated under the terms of the agreement. The Magistrate made no error in finding that her election not to do so was not a termination of the agreement. The Magistrate made findings of fact in relation to the Telephone Call which are contrary to Ms Ball's claims. Those findings were open to the Magistrate based on the evidence adduced at trial in relation to that Telephone Call.
2. As to whether the respondent's performance of the agreement was defective, depends upon the scope and content of any duty owed under the agreement. Then, once the applicable standard has been determined, whether any duty has been breached is, in essence, a question of fact. Those matters are dealt with below, in ground 4.

Ground 2: Section 65 of Pawnbrokers and Second-hand Dealers Act 1994 (WA) and the exclusion clause

1. In the proceedings, Ms Ball contended that the respondent owed her a duty of care and that it could not contract out of the duty owed to her as a bailee in possession of a chattel. She contended that s 65 of the Act invalidated the respondent's attempt to contract out of statutory and common law duties owed to Ms Ball when contracting with her. However, the operation of s 65 of the Act and the lawfulness of the exclusion clause in the Ticket do not appear to be relevant to Ms Ball's proceedings and this appeal. The respondent in the proceedings and in the appeal always made clear that it did not rely on the exclusion clause to escape liability.[27]
2. Rather, the issue that arose for determination on Ms Ball's claims were not whether a duty was owed by the respondent (because this was conceded), but rather, the scope and content of that duty and then ultimately, whether reasonable steps were taken by the respondent (or, in the case of its duty as a bailee, the respondent failed to demonstrate it took reasonable steps) to avoid the risk of harm arising in respect of the Vehicle.
3. The respondent's position always was, simply, that it neither breached the duty it owed, being to take reasonable steps to safely and securely store the Vehicle either in negligence or as a term of the agreement. The respondent at no stage in its defence sought to escape liability for loss or damage by reason of the exclusion clause in the Ticket that the respondent was not liable for any loss or damage to the Vehicle stored on the premises 'howsoever caused'. As the exclusion clause was not relied on by the defendant to escape liability, its lawfulness or validity in the circumstances does not appear to properly fall to be considered by me in this appeal.

Ground 3: Alleged breach of bailor's duty to take care of the Vehicle - practice of leaving cars unlocked was not reasonable

(a) the existence of a bailment relationship obliged the respondent to take good care of the Vehicle, and

(c) that she is entitled to compensation for the damage as a result.

1. She then contended that as a bailee, the respondent was 'required to return goods in the condition in which they were bailed, subject to reasonable wear and tear'.[28] She further then suggested, the respondent owed a duty to return the car undamaged in any way pursuant to contract law or s 65 of the Act.[29] However, the relevant test in respect of the duty of a bailee of goods is to take such care of the goods as is reasonable in the circumstances.[30] Relevantly, the bailee bears the onus of disproving negligence, and, in deciding what is reasonable, regard must be had to the difficulty and expense of the possible precautions. In this case, if the respondent did not return goods or they were returned damaged, the onus is on the respondent to disprove negligence.[31]
2. Of course, the respondent did neither, it did not 'not return the goods', nor did it return damaged goods. Ms Ball had elected to keep the loan money and not even attempt to redeem the Vehicle. Notwithstanding Ms Ball's election, I approach the matter on the basis that in the present case, the onus is on the respondent to demonstrate that it took reasonable precautions to keep the Vehicle safe.
3. In the proceedings and on appeal, it was the respondent's case that as a matter of fact, the Vehicle was left unlocked in the yard. This fact itself was not the subject of challenge by Ms Ball. However, the respondent's contentions as to the reason for that and why it was not unreasonable was challenged on appeal.
4. At trial, it was found that the precautions that the respondent took included the securing of the Vehicle with a wheel clamp,[32] storage of the Vehicle in a yard with a high perimeter fence, locked gate, and a large 4WD blocking the gate.[33] Finally, that the Vehicle 'key fob' was in a locked safe inside a building at the yard and not in the Vehicle.[34] The finding that the 'key fob' was in a location away from the Vehicle was a matter challenged by Ms Ball in the proceeding and on appeal.
5. Ms Ball conceded in the court below that the success or otherwise of her claim came down to a question of fact, being the separation (or not) of the Vehicle from its 'key fob'.[35] In the end result, that appeared to be the only matter which might affect whether the respondent was negligent. The respondent, having established all other steps were taken was obliged to establish that the 'key fob' was not in fact left in the Vehicle.
6. On appeal, Ms Ball argued that the evidence demonstrated that the leaving of the Vehicle unlocked created a foreseeable risk leading to theft, and that the Magistrate failed to apply the correct 'standard of care' in such circumstances. The respondent adduced evidence of this fact being reasonable practice and evidence as to why it was done. Ms Ball failed to adduce any evidence contrary to those matters and failed to establish that the standard was other than as contended for by the respondent.
7. I accept the respondent's submission that the standard applied by the Magistrate was that the respondent was required to exercise reasonable care to secure the Vehicle in its possession, which she positively found the respondent had done.

Ground 4: Alleged breach of duty of care and 'reasonable steps'

1. Ms Ball agreed in the proceedings that the success or otherwise of her claim came down to a question of fact, being the separation (or not) of the Vehicle from its 'key fob'.[36] That is:

(a) if as a matter of fact, the Vehicle was kept unlocked in the yard with the key fob in the Vehicle then, notwithstanding the other safety or security measures, that would be a breach of the respondent's duty; and

(b) however, if, as the respondent contended, the Vehicle was unlocked but the key fob removed from the Vehicle and kept elsewhere in a safe in a building on the premises, that precaution, together with the other (uncontested) precautions taken by the respondent were sufficient to discharge its duty.

1. The respondent adduced evidence at trial as to the location of the key fob, being safely locked away in a safe in a building with an alarm system. Further, that it was still in the safe when the Vehicle was subsequently recovered by the police.[37]
2. To the contrary, Ms Ball did not adduce evidence as to where the key fob was at the time of the theft, and at most suggested an inference could be drawn that the key fob must have been accessible, and not properly secured, because the Vehicle had been operational.[38] I note, however, that the Magistrate considered and assessed a possible inference that the key fob must have been located in or nearby the Vehicle and concluded that the evidence established that it was not the case.[39] There is no appellable error identified by Ms Ball in relation to that conclusion.

Ground 5: Evidence as to loss and Ms Ball's credibility

1. At trial, Ms Ball disputed that the Vehicle could be started without the 'key fob' being in very close range and the battery was very low. She contended that the Magistrate erred in making findings of fact that were contrary to her assertions. Secondly, she contended that that the Magistrate erred in finding that the estimated value of the Vehicle was not supported or established by any independent evidence before the Magistrate.
2. About relevant matters of fact and as to Ms Ball's evidence, while the Magistrate concluded that she was an honest witness, she found there were inconsistencies in her evidence which affected her reliability, including in respect of her ability to recall various material conversations: both as to the content as well as to timing. And Ms Ball's recollections were independently contradicted by telephone records tendered by her.[40] Insofar as any ground of this appeal purports to be one of a challenge on credibility findings made, Ms Ball has failed to demonstrate any error in the Magistrate's evaluation of the witnesses.

1. Ultimately, Ms Ball has failed to demonstrate any legal, factual or discretionary error by the Magistrate. The Magistrate made findings of fact based on the evidence adduced at the trial, which were reasonable. The existence and scope of the duty were set out, and the reasons in support of the findings as to the precautions taken by the respondent were clear.
2. Having regard to the measures taken by the respondent to secure the Vehicle, I can find no error in the reasoning or conclusion that there was no failure on its part to exercise reasonable care, nor any breach of its duty to keep the Vehicle secure. I agree that Ms Ball has failed to discharge her onus in respect of any claims. As the Magistrate identified, a proper exercise of any duty of care does not require the elimination of all possible risks. There are questions of reasonableness and foreseeability to be considered, and all of this is to be assessed on the civil standard of proof of the balance of probabilities.
3. The appeal will be dismissed.
4. I will hear from the parties as to final orders and costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

[1] The terms of the agreement included that interest on the loan sum was $750.00 per month for a term of three months.

[2] Appeal Book of Documents (AB), Statement of General Procedure Claim, page 549; Magistrates Court transcript (MC ts) MC ts 13 - ts 14 (17 June 2024).

[3] AB, Statement of General Procedure Claim.

[12] AB, Statement of Intended Evidence of a Witness, pages 552, 556; MC ts 64 (17 June 2024).

[16] Brocklehurst v Wolinski [2015] WADC 36 [13] - [15]; Ward v West Coast Suzuki Marine Pty Ltd [2021] WADC 37 [7].

[17] MCCP Act s 40(4)(a). The court can give leave to admit other evidence, but only in exceptional circumstances: MCCP Act s 40(4)(b), s 40(5).

[18] AB, Instant Cash Pawn Ticket, page 567.

[19] That was a fact which was disputed by Ms Ball.

[20] The other security precautions were taken by the respondent were not challenged by Ms Ball, just the location of the Vehicle's 'key fob'.

[21] AB, Statement of Intended Evidence of a Witness, pages 693 - 698; MC ts 120, MC ts 125 (17 September 2024).

[22]AB, Statement of Intended Evidence of a Witness, page 563; MC ts 17 - ts 20 (17 June 2024).

[23] District Court transcript (DC ts) DC ts 53 (15 April 2025).

[24] MC ts 43, MC ts 49 (17 June 2024).

[26] Written Reply Submissions filed 9 April 2025, page 5, par 15.

[27] MC ts 7 (17 June 2024); DC ts 89 (15 April 2025).

[29] Appellant's Outline of Submissions, page 27, par 10.

[30] Tottenham Investments Pty Ltd v Carburettor Services Pty Ltd (1994) Aust Torts Reports 81-292 [61,553] - [61,554].

[31] Hobbs v Petersham Transport Co Ltd [1971] HCA 26; (1971) 124 CLR 220, 233, 240.

[37] AB, pages 693 - 735 (being pars 26, 28 and 65 of Statement of Intended Evidence of a Witness).